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INTRODUCTION TO INDIAN FINANCIAL MARKETS

A financial market is an organized trading platform for exchanging financial


instruments under a regulated framework The participants of the financial
markets are borrowers (issuers of financial instruments or securities), lenders
(investors or buyers of financial instruments) and financial intermediaries
that facilitate investment in financial instruments or securities. The financial
markets comprise two markets (A) Money markets, which are regulated by
the Reserve Bank of India (RBI) and (B) Capital markets, which are regulated
by the Securities Exchange Board of India (SEBI) and.

Financial Markets
(A) Money Markets
Money markets is the collective name given to the various firms and
institutions that deal in the various grades in near money The definition
implies that the money market caters to short-term demand and supply of
funds. The major participants of the money market are as follows:
Lenders: Lenders include the regulator RBI, commercial banks and brokers.
These participants facilitate the expansion or contraction of money in the
market
Borrowers: Borrowers include commercial banks, stock brokers, other
financial institutions, businesses houses and governments provide financial
instruments to other investors depending upon the money borrowed from
lenders
Accordingly, the characteristics of money market include the following:

Short-term The instruments in the money market have maturities mostly


less than a year and cater to short-term demand and supply of funds.
Highly liquid The money market is considered highly liquid wherein
securities (financial instruments) are purchased and sold in large
denominations to reduce transaction costs[4] (because they are a close
substitute to cash)[5]. The market distributes and redistributes cash
balances in accordance to the liquidity needs of the participants
Safe The instruments are considered safe with RBI playing a pivotal role in
monitoring regulating and managing monetary requirements of all
participants.
Lower returns The transactions are on a same-day-basis and the returns on
these investments accordingly, are low.
Institutional investors Retail or individuals investors cannot directly
participate in money markets. The money market mainly caters to
institutional investors who require instant cash for running their operations in
the financial system. However, retail or individual investors indirectly
participate in money markets by lending money to institutions (large
corporations and government) through bonds to gain high returns.
Monetary policy The money markets are governed and influenced by
changes in the monetary policy. For example, changes in interest rates
announced by RBI play a critical role in determining liquidity requirements in
the overall financial system
Interrelated sub-markets The money market consists of the following
interrelated markets[6]:
Call money market
Commercial bill or Bill market
Treasury bill market
Commercial Paper (CP) market
Certificates of Deposits (CD) market
Each and every abovementioned sub-market is characterised with different
money market instruments with different maturities offered in
mostly different trading platforms and cater to different borrowers/
lenders with the objective of maintainingdifferent liquidity requirements. For
example, in the call money market, banks borrow call money / notice money
from other banks and non-banks to maintain CRR[7]requirements[8]. The
exchange occurs in Over-the-Counter (OTC) market (without brokers) and the
maturity period of call money instruments vary between one day and a
fortnight.
(B) Capital Markets
Capital market is an organized mechanism for effective and smooth transfer
of long-term capital money or financial resources from borrowers (corporates
/ government) to lenders. This market enables channelizing of savings from
investors to raise productive capital for borrowers, which in turn provides
higher returns to investors for their investments through relevant profits.
The securities or issues or instruments in capital markets include equity and
debt securities. Capital markets (equity and corporate debt) in India are
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predominantly regulated by the SEBI. However, government securities (in the


debt market) are regulated by the RBI. Based on the aforementioned
description, following are some characteristics identified for the capital
markets:
Primary and secondary securities To raise productive capital, lenders issue
and/or trade financial securities (instruments) through primary and
secondary markets. Primary markets deal with issuance of new capital (or
financial securities), whereas the secondary market (or stock market) deals
with buying and selling of already existing securities that are listed on the
stock exchanges Primary and secondary markets are inter-dependent and
important for creation of long-term funds in the capital markets. For the new
issues or securities introduced and sold by the lenders in the primary
markets, the proceeds of the same go directly to the lenders (to raise
capital). These proceeds are however, dependent upon favourable
macroeconomic conditions of an economy. Subsequently, these issues are
traded in the secondary market (or stock exchanges) that also provide the
basis for determining possible prices of primary issues. Thus, depth and
performance of the secondary markets depends upon the new issues /
securities in the primary markets because the larger number of new
securities issued in primary markets lead to availability of larger number of
instruments for trading in secondary markets. Thus, the primary markets
facilitate liquidity in the secondary markets further leading capital formation.
The secondary market can also divert funds to the primary market for new
issues of large size and bunching of large issues also affecting the stock
prices. Lenders can raise its capital in primary markets either through any of
the following public issue, rights issue, bonus issue and private placement
(Private placement is securities to sold to few select investors like large
banks, insurance companies, mutual fund companies, etc). The
interrelationship between primary and secondary markets lead to provision
of long-term securities to raise capital.
Risk-returns Capital markets are characterised with equity and debt
instruments that allow diversification of risks between high-risk equity
instruments and low-risk debt instruments. Nevertheless, capital markets are
considered as high-risk markets in comparison to money markets.
Low-information and transaction costs The capital markets are mostly
transparent and information about the trends in the market is available and
accessible in comparison to money markets. Also, due to ease in availability
and accessibility of long-term securities, transaction costs are comparatively
lower than money markets. For example, retail investors can invest in stock
markets through a dematerialised account provided by banks.
Retail & institutional The capital markets is an inclusive market that
enables all kinds of investors to invest and gain higher returns. The investors
include individual or retail investors, small-medium-large businesses,
financial or non-financial institutions and government
Capital allocation Capital markets are a medium of efficiently allocating
capital in the system through a competitive pricing mechanism
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(C) Linkages between money and capital markets


There are significant linkages between money and capital markets and are
discussed as follows
Involvement of financial institutions (and regulators) exists in both the
markets. Financial institutions act as intermediaries and facilitators of shortterm and long-term liquidity requirements of all kinds of investors (individual,
corporations and governments)
Capital and money markets involve trading of a variety of financial
instruments for a specific time period and investors depending upon the
nature of investment and risks further leading to risk diversification
Short-term funds raised in the money market are used to provide liquidity for
long-term investments and redemption of funds raised in the capital market
For the development of financial markets, development of money markets
generally precedes the development of capital market
Characteristics of financial markets

Financial Markets
The description of capital and money markets leads to understanding the
following characteristics of financial markets:
Financial markets enable large volume of transactions and mobilize financial
(short-term and long-term) resources at real-time basis through investments
in stocks, bonds and money
Financial markets generate a scope of arbitrage across different markets.
This implies, that investors can take advantage of price differences across
different markets and diversify risks
Financial markets are characterised with volatility directed by trade of large
volume of securities. Mostly, these markets are influenced by
macroeconomic and political changes in India and the world
Markets are dominated by financial intermediaries who take investment
decisions as well as risks on behalf of depositors (savers)
Financial markets are also characterised by externalities. An externality
refers to cost or benefit that are not transmitted by prices but influenced by
a stakeholders actions in the financial markets leading to market failures.
For example, speculation in prices of stock markets could affect the workings
of the money market
Domestic financial markets are also becoming integrated with global
financial markets that not only enables capital mobility at a global level but
spread of risks across the globe
FINANCIAL SYSTEM & THE ECONOMY
An economy consists of two kinds of economic structures that encompasses
the financial system Savings structure and Borrowing Structure

Savings structure
The savings structure in an economy consists of savers or entities that save
in the form of financial assets (deposits, life insurance, etc) or cash balances.
Savings can be estimated as the remainder or surplus from incomes earned
after expenditures (food, rent, home supplies, etc). This surplus or savings
can be directed in the form of financial assets or withheld as cash.
Savers or entities that save can be further categorised into the following:
Household sector The household sector include individuals, unincorporated
businesses, farm production units and non-profit businesses. Savings for the
household sector is mostly in financial such as includes deposits, life
insurance, shares & debentures, provident and pension fund, loans for
durables and real estate.

Savings Structure: Household Sector

ICICI bank
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 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 fee-based services, and access to the vast talent pool
of ICICI and its subsidiaries.

HISTORY OF ICICI BANK


In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with
ICICI Bank. 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.
ICICI Group offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and
through its specialised group companies and subsidiaries in the areas of
personal banking, investment banking, life and general insurance, venture
capital and asset management. With a strong customer focus, the ICICI
Group Companies have maintained and enhanced their leadership positions
in their
ICICI Bank is India's second-largest bank with total assets of Rs. 4,736.47
billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs. 64.65 billion
(US$ 1,271 million) for the year ended March 31, 2012. The Bank has a
network of 2,791 branches and 10,021 ATMs in India
ICICI Prudential Life Insurance is a joint venture between ICICI Bank, a
premier financial powerhouse, and Prudential plc, a leading international
financial services group headquartered in the United Kingdom. ICICI
Prudential Life was amongst the first private sector insurance companies to
begin operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA). ICICI Prudential Life's capital
stands at Rs. 47.91 billion (as of March 31, 2012) with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. For FY 2012, the
company garnered Rs.140.22 billion of total premiums and has underwritten
over 13 million policies since inception.
ICICI Lombard General Insurance Company, is a joint venture between ICICI
Bank Limited, India's second largest bank with consolidated total assets of
over USD 91 billion at March 31, 2012 and Fairfax Financial Holdings Limited,
a Canada based USD 30 billion diversified financial services company
engaged in general insurance, reinsurance, insurance claims management
and investment management. ICICI Lombard GIC Ltd. is the largest private
sector general insurance company in India with a Gross Written Premium
(GWP) of Rs. 5,358 crore for the year ended March 31, 2012. The company
issued over 76 lakh policies and settled over 44 lakh claims and has a claim
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disposal ratio of 99% (percentage of claims settled against claims reported)


as on March 31, 2012.
ICICI Securities Ltd is the largest integrated securities firm covering the
needs of corporate and retail customers through investment banking,
institutional broking, retail broking and financial product distribution
businesses. Among the many awards that ICICI Securities has won, the
noteworthy awards for 2012 were: Asiamoney `Best Domestic Equity House
for 2012; 'BSE IPF D&B Equity Broking Awards 2012' under two categories:Best Equity Broking House - Cash Segment and Largest E-Broking House; the
Chief Learning Officer Award from World HRD Congress for Innovation in
Learning category. IDG India's CIO magazine has recognized ICICI Securities
as a recipient of CIO 100 award in 2009, 2010, 2011 and 2012. I-Sec won this
awards 4 times in a row for which the CIO Hall of Fame award was
additionally conferred in 2012.
ICICI Securities Primary Dealership Limited (I-Sec PD) is the largest primary
dealer in Government Securities. It is an acknowledged leader in the Indian
fixed income and money markets, with a strong franchise across the
spectrum of interest rate products and services - institutional sales and
trading, resource mobilisation, portfolio management services and research.
One of the first entities to be granted primary dealership license by RBI, I-Sec
PD has made pioneering contributions since inception to debt market
development in India. I-Sec PD is also credited with pioneering debt market
research in India. It is one of the largest portfolio managers in the country
and amongst PDs, managing the largest AUM under discretionary portfolio
management.
I-Sec PDs leadership position and research expertise have been consistently
recognised by domestic and international agencies. In recognition of our
performance in the Fixed Income market, we have received the following
awards:
Best Domestic Bond House in India - 2007, 2005, 2004, 2002 by Asia
Money
Best Bond House - 2009, 2007, 2006, 2005, 2004, 2001 by Finance Asia
Best Domestic Bond House 2009 by The Asset Magazines annual Triple A
Country Awards
Ranked volume leader - by Greenwich Associates in 2010 Asian Fixed-Income
Investors Study. Ranked 5th in Domestic Currency Asian Credit with market
share of 4.5%, Only Domestic entity to be ranked.
Best Debt House in India 2012 by EUROMONEY
ICICI Prudential Asset Management is the third largest mutual fund with
average asset under management of Rs. 688.16 billion and a market share
( mutual fund ) of 10.34% as on March 31, 2012. The Company manages a
comprehensive range of mutual fund schemes and portfolio management
services to meet the varying investment needs of its investors through117
branches and 196 CAMS official point of transaction acceptance spread
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across the country.


ICICI Venture is one of the largest and most successful alternative asset
managers in India with funds under management of over US$ 2 billion. It has
been a pioneer in the Indian alternative asset industry since its
establishment in 1988, having managed several funds across various asset
classes over multiple economic cycles. ICICI Venture is a wholly owned
subsidiary of ICICI Bank.

PRODUCTS OFFERED BY ICICI GROUP


Funds & Investments
We understand that your investment goals and risk appetite change over
time. To meet these evolving financial needs, we offer you a diverse range of
investment products.
Mutual Funds
Investment in Mutual Funds* is important to build an ideal and balanced
portfolio. We help you identify the appropriate mix of Mutual Fund Schemes
as per your risk appetite and financial goals, be it equity funds, where you
look for growth and capital appreciation, or debt funds for capital
*Mutual Fund investments are subject to market risks. Please read the offer
documents of respective schemes carefully before investing.
Portfolio Management Services*
ICICI Bank Wealth Management will assist you for Portfolio Management
Services (PMS) like Equity based Products, Commodity based Products, Index
linked Products etc. by referring to our partner Asset Management
companies.
Alternative Investments
We help you broaden your investment avenues by offering you Alternative
Investment products like Residential & Commercial Real estate services**,
Real Estate Funds & Private Equity*, through our partners.

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Deposits
ICICI Bank Wealth Management brings you a wide range of competitively
priced deposit products that offer you safety of investment and steady
growth of your portfolio.
What's more, you can now invest in Deposits through our 24x7 channels:
Internet Banking, Phone Banking & at select ATMs
Product Offered by ICICI Prudential Asset Management Company Ltd
Equity Funds
Balanced/Hybrid Fund
Debt Funds
Fund of Funds
Exchange Traded Funds
Equity Funds
ICICI Prudential Dynamic Plan
ICICI Prudential Dynamic Plan is an Open-ended Diversified Equity
Fund that aims to make the most of market changes. Given the
dynamic nature of the markets, the fund has the ability to attack by
taking aggressive asset calls in equity and equity related securities.
On the flip side it may also adopt a defensive strategy by investing
in debt, money market instruments and derivatives as and when
markets get overvalued.

Fund Returns

1 mth
(%)

3 mth
(%)

6 mth
(%)

1 yr
(%)

2 yr
(%)

3 yr
(%)

5yr
(%)

1.8

5.6

24.5

48.9

26.4

22.1

16.2

ICICI Prudential Focused Bluechip Equity Fund


ICICI Prudential Focused Bluechip Equity Fund is an Open-ended
equity scheme that aims for growth from a focused and optimally
diversified portfolio.It invests in equity and equity related securities
of companies belonging to the large cap domain.
1 mth
(%)

3 mth
(%)

6 mth
(%)
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1 yr
(%)

2 yr
(%)

3 yr
(%)

5yr
(%)

Fund Returns

1.6

7.9

25.7

44.9

24.3

20.8

16.1

ICICI Prudential Value Discovery Fund


ICICI Prudential Value Discovery Fund is an Open-ended Diversified
Equity Fund, which aims to invest stocks available at a discount to
their intrinsic value, through a process of Discovery. The process
involves identifying companies that are well managed,
fundamentally strong, and are available at a price, which can be
termed as a bargain.

Fund Returns

1 mth
(%)

3 mth
(%)

6 mth
(%)

1 yr
(%)

2 yr
(%)

3 yr
(%)

5yr
(%)

1.7

11.4

46.5

86.8

36.9

31.5

21.8

ROLE OF ICICI BANK AS AN ADVISOR


ICICI Bank's Small Enterprises Group's (SEG) Investment Banking team is
dedicated to provide you niche and exclusive investment banking services.
The ICICI Bank Edge
Capitalraising
At times for a growing company, the amount of capital that a promoter can
infuse in the business becomes limited. Businesses can be self sufficient for
capital needs in their nascent and initial growth phases. However to meet
expansion and growth plans, external capital is imperative. We at ICICI Bank,
with our lending experience, fully understand this and help clients raise
equity to fund growth. We have developed a strong network of domestic and
international investors who are keen to partner with such success stories in
India and these players solicit our advice for investing into such companies. .
Buy and sell advisory

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Inorganically adding growth to a business or hiving off non-core activities or


opportunity to realize right value for the business created or an instance of
taking a company to a bigger scale are the ways to strategize today. We at
ICICI Bank provide assistance on both buy side and sell side transaction. With
a large client franchise built, more than 10,000 asset clients and
international linkages in developed economies, ICICI Bank can bring in the
best synergy partner to conclude a sell side or buy side advisory assignment.
Specialsituation solution
Backed by institutional legacy, in-depth understanding and linkages with key
stakeholders in the process of turnaround, ICICI Bank's Investment Banking
team can design solutions for special situations like CDR, BIFR, OTS, etc.
Count on us to turn around the capital structure of your company and bring
in additional capital for growth.

ICICI SECURITIES LAUNCHES INVESTMENT ADVISORY


SERVICES
MUMBAI: ICICI Securities has launched its investment advisory services
under the newInvestment Advisors Regulations of 2013 issued by the Sebi
and hopes to break even in a few months, a top company official has said.
As per the company, the new advisory services covers financial planning,
investment portfolio evaluation, quarterly reviews along with ongoing
advisory support.
"We have launched the advisory services under which a comprehensive
financial planning will be provided to customers. We are a 15-people team
now, which will be increased to 25 going ahead. We hope that this new
segment will be profitable in couple of months," Investment Advisory
Services head Abhishake Mathur said.

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At times for a growing company, the amount of capital that a promoter can
infuse in the business becomes limited. Businesses can be self sufficient for
capital needs in their nascent and initial growth phases. However to meet
expansion and growth plans, external capital is imperative. We at ICICI Bank,
with our lending experience, fully understand this and help clients raise
equity to fund growth. We have developed a strong network of domestic and
international investors who are keen to partner with such success stories in
India and these players solicit our advice for investing into such companies. .

CORPORATE SOCIAL RESPONSIBILITY


Corporate social responsibility (CSR, also called corporate
conscience, corporate citizenship or sustainable responsible business/
Responsible Business) is a form of corporate self-regulation integrated into
a business model. CSR policy functions as a self-regulatory mechanism
whereby a business monitors and ensures its active compliance with the
spirit of the law, ethical standards and international norms. With some
models, a firm's implementation of CSR goes beyond compliance and
engages in "actions that appear to further some social good, beyond the
interests of the firm and that which is required by law." CSR aims to embrace
responsibility for corporate actions and to encourage a positive impact on

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the environment and stakeholders including consumers, employees,


investors, communities, and others.
The term "corporate social responsibility" became popular in the 1960s and
has remained a term used indiscriminately by many to cover legal and moral
responsibility more narrowly construed.
Proponents argue that corporations increase long term profits by operating
with a CSR perspective, while critics argue that CSR distracts from business'
economic role. A 2000 study compared existing econometric studies of the
relationship between social and financial performance, concluding that the
contradictory results of previous studies reporting positive, negative, and
neutral financial impact, were due to flawed empirical analysis and claimed
when the study is properly specified, CSR has a neutral impact on financial
outcomes.
Critics questioned the "lofty" and sometimes "unrealistic expectations" in
CSR. or that CSR is merely window-dressing, or an attempt to pre-empt the
role of governments as a watchdog over powerful multinational
corporations.Political sociologists became interested in CSR in the context of
theories of globalization, neoliberalism and late capitalism. Some sociologists
viewed CSR as a form of capitalist legitimacy and in particular point out that
what began as a social movement against uninhibited corporate power was
transformed by corporations into a 'business model' and a 'risk management'
device, often with questionable results.[9]
CSR is titled to aid an organization's mission as well as a guide to what the
company stands for to its consumers. Business ethics is the part of applied
ethics that examines ethical principles and moral or ethical problems that
can arise in a business environment. ISO 26000 is the recognized
international standard for CSR. Public sector organizations (the United
Nations for example) adhere to the triple bottom line (TBL). It is widely
accepted that CSR adheres to similar principles, but with no formal act of
legislation.
Business dictionary defines CSR as "A companys sense of responsibility
towards the community and environment (both ecological and social) in
which it operates. Companies express this citizenship (1) through their waste
and pollution reduction processes, (2) by contributing educational and social
programs and (3) by earning adequate returns on the employed resources."
A broader definition expands from a focus on stakeholders to
include philanthropy and volunteering.

Consumer perspectives
Most consumers agree that while achieving business targets, companies
should do CSR at the same time. Most consumers believe companies doing
charity will receive a positive response. Somerville also found that
consumers are loyal and willing to spend more on retailers that support
charity. Consumers also believe that retailers selling local products will gain
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loyalty. Smith (2013) shares the belief that marketing local products will gain
consumer trust. However, environmental efforts are receiving negative views
given the belief that this would affect customer service. Oppewal et al.
(2006) found that not all CSR activities are attractive to consumers. They
recommended that retailers focus on one activity. Becker-Olsen (2006) found
that if the social initiative done by the company is not aligned with other
company goals it will have a negative impact. Mohr et al.(2001) and Groza et
al. (2011) also emphasise the importance of reaching the consumer.
Scope
Initially, CSR emphasized the official behavior of individual firms. Later, it
expanded to include supplier behavior and the uses to which products were
put and how they were disposed of after they lost value.
Ethics training
The rise of ethics training inside corporations, some of it required by
government regulation, has helped CSR to spread. The aim of such training is
to help employees make ethical decisions when the answers are unclear. The
most direct benefit is reducing the likelihood of "dirty hands fines and
damaged reputations for breaching laws or moral norms. Organizations see
increased employee loyalty and pride in the organization. Common actions
Common CSR actions include:
Environmental sustainability: recycling, waste management, water
management, renewable energy, reusable materials, 'greener' supply chains,
reducing paper use and adopting Leadership in Energy and Environmental
Design (LEED) buildind standards.
Community involvement: This can include raising money for local charities,
providing volunteers, sponsoring local events, employing local workers,
supporting local economic growth, engaging in fair trade practices, etc.
Ethical marketing: Companies that ethically market to consumers are placing
a higher value on their customers and respecting them as people who are
ends in themselves. They do not try to manipulate or falsely advertise to
potential consumers. This is important for companies that want to be viewed
as ethical.

THE ROLE OF BANKS IN CORPORATE SOCIAL


RESPONSIBILITY

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Management without caring needs and expectations of stakeholders in a


community will not
be competitive compared with those who do in the 21st century. Demand for
accountability
and transparency from both public and private sectors has become soaring.
In the olden days,
management is seeking for survival and profits. Nowadays, management
concerns managing
financial and non-financial results with awareness of risk and maintenance of
transparency.
As a result, corporate social performance (CSP) has possessed equal
importance of corporate
financial performance (CFP).
The term Stakeholder has been put into todays management vocabulary.
In fact, it
provides a full picture for management to map their ought to be
obligations and as well
as their need to be customers requirements. Having a stakeholder
map, it can widen the
horizon of marketers in the sense of making them realize the importance of
social
responsibility; and the need of fulfilling requirements of customers and the
society.
Stakeholders do not want to have any undesirable events found in the
market. Issues that they
1 The role of banks in are concerned are things that affect their health and
safety. Products or services that consist of misleading messages in
advertisements are especially the worry of the public. They want to get a real
message from marketers, instead of marketing gimmicks. Hence, marketers
should develop an awareness of social responsibility when devising
marketing campaigns Schermerhorn (1999) has stated clearly that the main
purpose of management is to
induce a positive impact on human behavior in an organization. The control
of human
behavior can be found during the activities of planning, organizing, leading
and controlling.
Management of an organization can have internal and external control on
human behavior.
For the internal one, management can arrange appropriate training for staff
in order to make
them have self-discipline and commitment towards an organization. For the
external control,
proper supervision strategies can be used to limit staffs behavior.

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In order to manage peoples behavior successfully internally and externally,


Drucker
(2006) mentioned that realization of common goals and common values with
ongoing
training and timely responses to change were fundamental in management.
In short, what we
have learnt from Drucker is that management is about handling human
beings, integrating
variables, unifying objectives, developing people toward common objectives
for results.
Market standing, innovation, productivity, development of people, quality,
financial
results all are crucial to a companys performance and indeed to its
survival. (Drukcer,
2006)
So, a manager needs to managing people, process and resources for results
and for
fulfilling requirements of stakeholders for quality. Quality concepts have been
spread across
industries and countries. Current practice of achieving quality in
manufacturing and servicing
industries is obtaining ISO 9000 and other industry-related certificates. How
about quality
standard used in banking industries? What are the common practices for
banking
organizations to prove their quality service? According to Kothari (2006),
quality includes
fulfilling a set of inherent characteristics, meeting stated or implied needs or
expectations,
conforming to specifications; and moving towards customer satisfaction.
Bornman (2004)
mentioned that there were many attempts to define quality.
One of the definitions used in managerial literature is that quality is the
extent to
which the product meets the demands; another is customer satisfaction
2. Organizational Culture and Committed Staff for Quality
In order to gain trust from the public, organizations shall not only provide
quality products
and services, but also develop responsible and ethical staff. Empowerment is
important in
establishing open organizational culture. Management shall have trust on
their staff for policy
involvement and decision-making. Empowerment not only means staff
involvement in
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devising organizational policies, but also delegation and participation in


decision-making.
Open management style should let employees have freedom in decisionmaking so as
to increase their productivity and quality of work. Instrumental management
style no longer
survives in a world which focuses on values, workplace democracy and
employee
empowerment.
Michalos (2006) has claimed that commitment of staff is crucial and shall be
supported with actions for reflection. Experience learning and experiencing
personal
satisfaction from living can let both organizations and employees grow for
betterment. 105 S. Yeung
Betterment for staff and organizations can help establish positive
organizational culture to
provide quality for customers, and more importantly, to gain confidence from
the public.
"Only when we can satisfy our customers' demands, we can teach our
colleagues
various creative ways of dealing with our customers. This will enable us to
foster a positive
feedback cycle to serve our customers better. When our colleagues learn,
they contribute at
the same time and our customers benefit. We then fulfill our responsibilities
towards the
society, the region and our country.(Tsai et al., 2006).
According to Harrison (2000), the main factors affecting a person's
performance are
"knowledge, skill, motivation and environment". He pointed out people not
perform well
were usually caused by: inadequate information or reference materials; poor
working
environment or inadequate tools; poor incentives; lack of knowledge; lack of
skill; and poor
motivation.
Harrison brought up the point that the powerful thing that drove people
behavior was
self-image. In fact, ISO 9001: 2008 can act as a catalyst to strengthen the
image of
involvement of staff and "transparent". Besides, concepts like "corporate
social
responsibility" (CSR) and "ethics" have also become a fundamental part of
the future
development ISO 9001: 2008.
19

5. Role of Banks in Corporate Social Responsibility (CSR)


Taking deposits, granting loans and providing complementary services are
the core
business of banks. No matter what kinds of countries, what kinds of culture,
and what kinds
of banking products and investors, banks need to be responsible for their
customers in a
social responsible way.
From literature, global regulations imposed for banks is holding reserve
against loans
and achieving AAA grade ratings. In the past years, some banks tried to
bundle up loans to
private customers and companies, and selling these to one another on the
inter-bank market.
According to Mcllroy (2008), these securitised loans are often referred as
asset-backed
securities (ABSs) and are then sold on as more complex financial instruments
as collaterised
debt obligations (CDOs). As the loans were removed from the banks balance
sheet, the
banks were able to make further advances. The issue has been raised since
then is on the
security of loans, transparency of risk to investors, and regulations involved
in further
advances. As a socially responsible bank, it not only executes lawful banking
practice, but
also practices wisely and prudentially with close supervision of transactions
for providing
customer confidence under prosperous and glooming economic conditions.

20

CSR AND CORPORATE GOVERNANCE IN BANKING SECTOR IN INDIA


Corporate Social Responsibility (CSR), also known as corporate responsibility
corporate
citizenship, responsible business, sustainable responsible business (SRB), or
corporate social
performance is a form of corporate self regulation integrated into a business
model. 1 CSR
policy basically works as a standard of built-in, self-regulating mechanism
and ensure their
harmony with law, ethical standards, and international norms.
The three keys to an effective CSR policy are commitment, clarity and
congruence with
corporate values. Clarity is all-important because social responsibility is a
broad term, and it
needs to be debated and hammered out to meet each companys
circumstances. Congruence
is about ensuring that the companys attitude to its responsibilities towards
society is
consistent with the way in which it runs the whole business, i.e. its values
and culture.
An important aspect of corporate social responsibility is Sustainable
Development. It is
broadly defined as the advancement of economic development while
maintaining the quality
of environmental and social systems. Incorporating Environmental & Social
(E&S) issues
21

into development is important because environmental resources provide a


basis for social and
economic development. The principles of sustainable development are
important in all
industrial and commercial sectors, as all activities have the potential to
influence social and
environmental welfare quality. The financial sector is of particular
importance, as this sector
is able to affect many projects and the development trends that result from
them.
There is much that the financial sector can do to assist efforts to achieve
sustainability.
Internal efforts to make day-to-day operations cleaner, more efficient and
supportive of social
structures can help. Integrating various issues into strategic operations is
also important. In
this way, financial institutions not only ensure that internal activity is
sustainable, but they
can also help financing itself to have more sustainable development.
RBI guidelines on CSR:
To highlight the role of banks in corporate social responsibility the RBI
circulated a notice on
December 20, 2007 for all the scheduled commercial banks, with title
Corporate Social
Responsibility, Sustainable Development and Non-Financial Reporting Role
of
Banks.2
1
A letter to all scheduled banks excluding the RRBs from the Chief General
manager (P. Vijaya Bhaskar) of the
Reserve bank of India on 20th December,2007.
The Times Of India ,Article Indian Banks Beyond CSR, June 16,2008CSR and
Corporate Governance in Banking Sector in India
Major issues discussed in the notice were regarding 1. Corporate Social Responsibility
2. Sustainable Development
3. Non-Financial Reporting.
Briefing about the corporate social responsibility program to other member
commercial
banks RBI followed many international initiatives to highlight the importance
of this notice
like:
1. United Nations Environment Program Finance Initiative (UNEP FI)
2. Global Reporting Initiative (GRI)
3. International Finance Corporation
22

4. The Equator Principles


5. Declaration on Financial Institutions.
Apart from these international initiatives, RBI report also talked about other
important and
urgent issues regarding
1) Global warming & extent of problem,
2) Stern Review The Economics of Climate Change
3) The Happy Planet Index,
4) The Kyoto Protocol.
The concern of RBI is also inclined to other activities like FT Sustainable Banking Awards The FT Sustainable Banking Awards to acknowledge the progress that banks
have made in
integrating social, environmental and corporate governance objectives into
their operations
while maximizing shareholder value. The goal is to highlight initiatives that
work and to
reward progress on the journey toward sustainability.
Carbon Trade
The concept of carbon credit came into vogue as a part of an international
agreement
popularly known as Kyoto Protocol (KP). The KP aims to tackle global
warming by setting
target levels for nations to reduce greenhouse gas emissions worldwide. The
scheme allows
developed nation polluters to fund emissions cuts in developing countries,
which is cheaper
than cutting emissions at home.CSR and Corporate Governance in Banking
Sector in India
Indian Scenario
India acceded to the KP in August, 2002. India is in a position to reap
maximum benefits
from the global carbon trade. India, being a developing country, is exempted
from the
requirements of adherence to the Kyoto Protocol. However, it can sell the
Carbon Credit to
the developed countries.
RBI focuses on CSR:
RBIs assistance to Mahindra & Mahindra Financial Services Ltd for the year
2008 the
Company has complied with all the applicable regulations of the Reserve
Bank of India

23

(RBI). RBI then assisted it by providing additional provisioning for Non


Performing Assets
(NPAs) at a faster rate than that prescribed by RBI for NBFCs. In the earlier
years also the
company continued to involve itself in social welfare initiatives by
contributing to recognized
charitable Institutions, which specifically benefit the economically
disadvantaged and
socially weaker sections of the society.During the year 2008, the Company
contributed Rs.
81.1 lacs towards Corporate Social Responsibility to various institutions for
charitable
purposes.
Use multiple channels to expand outreach3
Banks do not exist in a vacuum. They make a large contribution to the
country's GDP growth,
meet the demand of the growing middle class, contribute to infrastructure
spending, and
reach out to the semi-urban and rural areas so, when it comes to social
responsibility banks
need to move beyond a straitjacketed understanding of the 'corporate social
responsibility.
The mindset RBI follow is that a deposit account is the gateway to financial
inclusion and its
approach is to connect people and use multiple channels to expand
outreach.
Responsible Corporate Citizens
Taking in consideration wide concerns on climate change and global
warming, Reserve Bank
of India (RBI) asked banks to go green by taking effective steps to further the
cause of
sustainable development. The banks are advised to implement suitable and
appropriate plan
of action toward helping the cause of sustainable development. RBI also
asked banks to place

24

Some recent initiatives by Indian Banks


In order to address ecological and environmental concerns, Reserve Bank of
India has
decided to go for energy efficient buildings. Bureau of Energy Efficiency has
awarded
the first star rating labels to the Banks building at Bhubaneswar and New
Delhi. The
four buildings located at Bhubaneswar, Chennai, Kochi, Kolkata are
recognized as 5star building under the rating system.
Small Industries development bank of India (the prime financer to small and
medium scale industries) has also incorporated environmental and social
aspects in its
core business activities so as to ensure sustainable development. It is
providing
concessional and liberal credit to medium and small scale industries which
are
initiating energy saving projects and are adopting pollution control measures.
State Bank of India (SBI), the oldest bank has also adopted green banking
initiatives in its lending operations. Recognizing the warning of global
warming bank

25

has decided to initiate urgent measures to combat the climate change


through
envisaging two pronged approach viz. i) to reduce the Banks own carbon
footprint
and ii) to sensitize the Banks clients to adopt low carbon emission practices.
ICICI
bank has shown its commitment to corporate environmental stewardship and
extended
a great support to clean technology projects. It has also liberalized credit to
zero
emission vehicles. IDBI has set up carbon desk. IDBI has come forward to join
hands
with Smile Foundation in social development initiatives. The bank has
contributed 14
personal computers to Smile Foundation which have been utilized in four
different
projects being implemented through as many partners in Delhi and NCR. YES
BANK,
Indias fourth largest private sector Bank, in association with CARE India, a
humanitarian relief and development NGO working in India for more than 60
years,
has launched Indias first Social Deposit Account (SDA). The Social Deposit
Account
(SDA) is an evolution of the regular Fixed Deposit account where customers
have the
option of donating their interest income to a social cause through CARE
India. It also
won Best CSR Practice Award in March 2011. Axis Bank Foundation (ABF)
aspires
to contribute in the areas of education and healthcare. It has set up various
programmes
which provide educational support, in order to meet these goals. Balwadisthe
Foundation has identified the need to focus on early childhood programs for
2 - 6 year
olds. As part of our initiatives to support education, we help develop learning
places
for young children living in large urban slum clusters so that it creates a
strong
foundation and inculcates social and cultural awareness in them. HDFC Bank
has
been working with NGOs for providing non formal vocational and technical
education860 Deepika Dhingra & Rama Mittal
programs as well as skill up gradation courses to enable sustainable
employment and
income generation for economically weaker sections.
26

A ROAD WAY TO CORPORATE SOCIAL RESPONSIBILITY: A CASE STUDY


OF
ICICI BANK
A. Introduction
Corporate Social Responsibility (CSR) has been a long-standing commitment
at ICICI Bank and
forms an integral part of our activities. The Banks contribution to social
sector development
includes several pioneering interventions, and is implemented through the
involvement of
stakeholders within the Bank and the broader community. The Bank
established the ICICI
Foundation for Inclusive Growth (ICICI Foundation) in 2008 with a view to
significantly expand the
activities in the area of CSR. Over the last few years ICICI Foundation has
developed significant
projects in specific areas, and has built capabilities for direct project
implementation as opposed
to extending financial support to other organisations.
The objective of the Bank is to pro-actively support meaningful socioeconomic development in
India and enable a larger number of people to participate in and benefit from
Indias economic
progress. This is based on the belief that growth and development are
effective only when they
result in wider access to opportunities and benefit a broader section of
society. The aim is to
identify critical areas of development that require investments and
intervention, and which can
help to realise Indias potential for growth and prosperity.
The Corporate Social Responsibility Policy (CSR Policy) of the Bank sets out
the framework
guiding the Banks CSR activities. The Policy also sets out the rules that need
to be adhered to
while taking up and implementing CSR activities.
B. Scope of Corporate Social Responsibility policy

27

The policy would pertain to all activities undertaken by the Bank towards
fulfilling its corporate
social responsibility objectives. The policy would also ensure compliance with
section 135 of the
Companies Act, 2013 (CA2013/Act) and would include the activities as
covered under Schedule
VII to the Act and the Companies (Corporate Social Responsibility Policy)
Rules, 2014 and as
amended from time to time.
C. Governance structure
The Corporate Social Responsibility Committee (CSR Committee) is the
governing body that will
articulate the scope of CSR activities for the Bank and ensure compliance
with the CSR Policy.
The CSR Committee would comprise of three or more Directors including at
least one
independent Director. The Bank has a CSR Committee which is duly
constituted in accordance
with the provisions of the Act with respect to its composition and terms of
reference.
D. Operating framework
1. The CSR Committee has duly formulated the CSR policy which has been
approved by the
Board as prescribed under CA2013. The CSR plan would operate as
prescribed by the CSR
Committee and under its supervision
2. Activities undertaken by the Bank may include projects being
implemented directly by the
Bank as well as contributions to ICICI Foundation and other eligible entities
with track record
and standing in line with regulation and as may be decided by the CSR
Committee from time
to time.
3. The responsibility for implementation of identified activities/ projects shall
be as per the
organisational structure approved by the Managing Director & CEO.
4. Funds would be disbursed in accordance with the directions of the CSR
Committee.
E. Monitoring
28

The CSR Committee shall ensure a transparent monitoring mechanism for


CSR activities.
1. The CSR Committee shall review the progress of CSR activities at least
twice a year, including
the annual review.
2. The Board of Directors shall review the progress of CSR activities at least
annually.
3. The activities of ICICI Foundation for Inclusive Growth (ICICI Foundation)
would also be
overseen by the Governing Council of ICICI Foundation.
F. Disclosure
The Bank shall include in its annual report, commencing with the annual
report for the year ending
March 31, 2015, the disclosures as prescribed under Companies Act, 2013
and the rules as
amended from time to time.
The above information shall also be displayed on the Banks website.
G. Corporate Social Responsibility Activities
The CSR Committee of the Bank would consider and approve the projects or
programmes that
the Bank should undertake as CSR in India.
The Banks primary focus areas for CSR activities are:
1. Education (Schedule VII (ii) promoting education, including special
education and employment enhancing vocation skills especially among
children, women, elderly and the differently abled and livelihood
enhancement projects)
Education represents a critical area of action to realise Indias growth
potential as also make it
inclusive, by enabling children from all sections of society to have access to
quality basic
education that equips them for taking up higher education or job-oriented
skill training. At the
same time, Indias institutions of higher learning also require investment in
capacity building to
support Indias growing and evolving needs and become global centres of
excellence.
The Bank, both directly and through ICICI Foundation, will continue to work
with various bodies
including state governments and other not-for-profit organisations to improve
the quality of
education in government and municipal schools, which account for the vast
majority of schoolgoing
29

children in the country. ICICI Bank will continue to work with institutes of
higher education
for focused capacity-building in specified disciplines, particularly finance &
management.
2. Health care
(Schedule VII (i) Eradicating hunger, poverty and malnutrition, promoting
preventive healthcare
and sanitation and making available safe drinking water; (iii) Promoting
gender equality,
empowering women, setting up homes and hostels for women and orphans,
setting up old age
homes, day care centres and such other facilities for senior citizens and
measures for reducing
inequalities faced by socially and economically backward groups; (x) Rural
development projects)
The healthcare challenge in India spans a number of dimensions, including
access to affordable
healthcare for the poor; awareness of health issues & available facilities/
benefits among the less
privileged segments of society and specific vulnerable sections of the
population; and child
malnutrition, which impairs the capacity of a child to lead a healthy and
productive life.
Addressing this challenge is essential to achieve the objective of inclusive
growth.
The Bank and ICICI Foundation will continue to focus on developing
innovative models with the
potential to scale up and bring about improvements in the delivery of
healthcare to the
marginalised segments of society and other appropriate measures to
promote health care.
3. Skill development and sustainable livelihoods
(Schedule VII (ii) promoting education, including special education and
employment enhancing
vocation skills especially among children, women, elderly and the differently
abled and livelihood enhancement projects; (iii) Promoting gender equality,
empowering women, setting up homes and hostels for women and orphans,
setting up old age homes, day care centres and such other facilities for
senior citizens and measures for reducing inequalities faced by socially and
economically backward groups)
Enabling Indias youth to gain skills that can provide employment is key to
realising the potential of Indias demographic dividend and driving inclusive
growth. Improving employability of the youth from lower-income sections of
society is hence an important focus area. 6
30

The ICICI Academy for Skills has been set up across the country to provide
job-oriented skill
training to youth. Several centres have been set up across the country. In
this initiative, ICICI
Foundation is also leveraging the skills and training capabilities of large
corporates in developing
training modules in their respective domains. ICICI Foundation is also liaising
with corporates and
businesses to get the trained youth employed, through a job portal. ICICI
Bank will continue to
develop the ICICI Rural Self Employment Training Institutes.
4. Financial inclusion
(Schedule VII (iii) Promoting gender equality, empowering women, setting up
homes and hostels
for women and orphans, setting up old age homes, day care centres and
such other facilities for
senior citizens and measures for reducing inequalities faced by socially and
economically
backward groups (x) Rural development projects).
The Bank strongly believes that to improve the overall economic condition of
the low-income
Population and to empower them with means to overcome adversities or
inequalities, access to
Financial services are an important factor.
The Bank would continue to focus on expanding its reach and its initiatives in
this area include
Using various channels like branches and business correspondents, and
leveraging technology,
To make banking services accessible to low-income groups and the rural
population, including
The urban poor and migrant workers.
5. Support employee engagement in CSR activities
The Bank supports the involvement of its employees in CSR activities. The
Bank will encourage
employees to participate in CSR activities of the Bank and ICICI Foundation.
6. Capacity building for corporate social responsibility
ICICI Foundation will continue to promote incubation of expertise for
implementing corporate
social responsibility initiatives. It will also work towards providing a platform
for organisations
engaged in social initiatives, and discussion & thought leadership on critical
challenges to
inclusive growth. The Bank and ICICI Foundation will continue to support
initiatives that promote
31

individual and corporate philanthropy.


7. Other areas
ICICI Bank will continue to provide support to specific needs such as during
natural disasters,
through financial as well as logistical support. The CSR Committee of the
Bank may choose to
select areas in addition to those specified above in the course of fulfilment of
the CSR objectives
of the Bank as may be decided by the CSR Committee from time to time.

ICICI Bank Ltd


CSR activities:
Message from the Chairman
At the ICICI Group, we view our social initiatives and our ethical standards as
core elements of the foundation we are building for our growth. During the
year, we have sought to take our social initiatives to the next level through
the establishment of The ICICI Foundation for Inclusive Growth. We believe
that this will significantly expand the ICICI Groups activities in the area of
corporate social responsibility, philanthropy and community development.
The Foundation will seek to catalyse and accelerate social and economic
inclusion by bridging economic and human development gaps.The ICICI
Group will continue to leverage growth opportunities in India and overseas,
seek to make a significant contribution to the integrated development of our

32

country and build a platform for sustained growth that will create value for
our stakeholders.
ICICI Banks Read to Lead initiative aims to bridge gaps in the access to
formal schooling for a large number of children from disadvantaged
backgrounds. This initiative aims to reach out to 100,000 children through
different voluntary organizations, facilitating formal schooling, bridge
courses, and supplementary teaching-learning material. For children like
Riya, formal education is now a reality
The Foundations mission is to improve the incomes of the low-income
households in India. It believes that improving market access for low income
households is the only sustainable way to bring about increase in their
incomes and therefore it principally focuses its attention on redressing
market failures which constrain them.
However, low income households are often not able to access even well
functioning markets because they lack the necessary physical capacity and
education due to lack of access to healthcare and schooling. It is also
possible that even well-developed markets may not provide a level playing
field for low income households. Also in the long-run markets may pursue
strategies that are not environmentally sustainable. Driven by these
concerns, the Foundations is actively mentoring institutions that work on
these defined focus areas:
Markets: The Foundation focuses on facilitating universal access to finance
to make markets more responsive to the needs of the poor and to link with
low-income households both as producers and consumers. This is done
through developing appropriate channels, business models and back-ends
for financial services access. It also supports research and model building for
expanding financial services access. The Foundation works closely with and
mentors the IFMR Foundation (www.ifmrfoundation.org.in) and its partners to
fulfill its own mission of increasing the incomes of low income households in
a sustainable manner. It is the Foundations belief that addressing financial
market failures substantively will have an impact on the access of low
income households to a variety of other markets including healthcare,
schooling and drinking water.
Human Capacity:
A focus on fundamental human capacities such as health and education is
crucial for people to reach their full potential and lead productive lives. Child
survival and early childhood development are amongst the most urgent
development challenges facing Indiatoday.
The Foundation works closely with the ICICI Centre for Child Health &
Nutrition (ICCHN) (http://www.icchn.org.in/), an interdisciplinary funding and
research centre focused on the health and nutrition of vulnerable women,
33

infants and young children in India. Working in partnership with


governments, Civil Society Organisations (CSOs)/Non-Governmental
Organisation (NGOs), research institutions and the private sector, ICCHN
concentrates on developing, evaluating and mainstreaming a range of
community based and health system strategies to achieve scaled and
sustainable improvements in health and nutrition. A population of 2.7 million
has been impacted through ICCHNs partners and interventions. Further,
through its partnerships, ICCHN has supported state-wide public-health
capacity building efforts in Chhattisgarh, Bihar, Jharkhand and Orissa for
quality improvements
Promoting Inclusive Growth
Under the National Rural Health Mission (NRHM), as well as a city-wide effort
in Mumbai. ICCHNs support has enabled five of its partners to grow into
important resource institutions for the health sector.
In the field of education the ICICI Foundation supports the ICICI Centre for
Elementary Education (ICEE) (www.icee.org.in), which strives to play a
catalytic role in improving the provision and quality of elementary education.
It enters into partnerships with voluntary organisations working in education
that have experience in teachers education, curriculum development,
material development, educational research and running schools for
marginalized communities and implementing large programmes. Working
with these CSOs/NGOs, ICEE seeks to energise the existing government
network of educational institutions at the district, state and national levels.
Bodies like the State Councils of Educational Research and Training (SCERTs)
and the District Institutes of Education and Training (DIETs) in several parts of
the country form a part of this engagement. In its endeavour to improve the
quality of elementary education, ICEE has reached out to nearly 6 million
children through curricular reform. About 45,000teachers have been trained.
It has partnerships with state governments of Bihar, Rajasthan, Chhattisgarh,
Madhya Pradesh and Gujarat.
Sustainability:
Promoting environmental sustainability and the growth of a strong civil
society are crucial requisites for inclusive growth. Towards this end, the
Foundation has partnered with the Environmentally Sustainable Project
Finance (ESPF)(http://ifmr.ac.in/cdf/project_finance.htm) research team at the
Centre for Development Finance at IFMR, in order to foster markets for
delivering high quality, environmentally sustainable infrastructure, goods
and services. Its work is focussed on the areas of sustainable development,
climate change, responsible investment and accountability. Towards building
an effective civil society, the Foundation is actively mentoring CSO Partners
(www.csopartners.org.in), a resource centre to strengthen CSOs which
includes NGOs engaged in the task of social change and economic
development and local self government organizations such as Gram
Panchayats. CSO Partners seeks to facilitate strategic partnerships between
34

CSOs and experienced service providers with whomit is in the process of


building partnerships, in various areas, including fund-raising, financial
management, volunteering, organisational governance, communications,
accounting, human resources, legal aid and accounting. Its current partners
include: GiveIndia (www.giveindia.org), Mitra (www.mitra.org.in),
Infochange(www.infochangeindia.org), Governance Matters
(www.governancematters.in) and MAM movies(www.mammovies.com).
The ICICI Group believes that inclusive growth is essential to the sustainable
and healthy growth of the economy.The ICICI Group is committed to create
conditions for the empowerment of low-income Indians and to facilitate
inclusive growth.

ICICI Bank opens training academy as part of CSR activities


ICICI Bank has opened a skill training academy in Jaipur as part of
its Corporate Social Responsibility (CSR) efforts, to provide vocational
35

training to youth from economically weaker section of the society.


"The vocational training course will provide sustainable livelihood
opportunities to the beneficiaries," ICICI Bank Managing Director and Chief
Executive Chanda Kochhar said in Jaipur.
'Around 62 per cent of total population is in the productive age
group of 15-59 years. Over 60 per cent of our population will be in
the productive age group till at least 2060.'
"The launch marks the next step in our strategy to promote inclusive growth
in India, will train 5,000 youth at nine training centres across the country in
the first year of operation," she said, adding, the academy aims to train
15,000 youth across the country by 2016.
The courses offered will include selling skills, office administration and web
design for graduates; and electrical & home appliance repair, refrigeration &
air-conditioning repair, and diesel generator & pump repair for Class X
passouts, Kochhar said, adding that the courses will be of about 12 weeks
duration.
'Our youth in the age group of 18 to 30 years constitutes about 24
per cent of the total population. There are some critical challenges
we need to address'
She said the bank is already close to the target ofspending 2 per cent of
average profits on activities relating to CSR that has been mandated in the
new Companies' law.
"We are very close to this target as we have been expanding to new
initiatives over time. The formal reporting on the per cent of profit used for
CSR would be started from next year," she said.
'About 25 per cent of the incremental global workforce over the
next two decades will come from india. This poses a significant
challenge for the country in terms of job creation and the immediate
need for skill building'
Apart from Jaipur, Kochhar said, the skill development centres would be set
up in Coimbatore, Chennai, Hyderabad, etc through the ICICI Foundation.
The bank is setting up residential centres in Jaipur, Sangli and Coimbatore
and non-residential centres in Bangalore, Chennai, Hyderabad, Jaipur and
Pune. The bank is also exploring the possibility of a centre in eastern India,
Kochhar said.
'We must significantly expand vocational education focused on
specific job skills'
"In the last five years, we have significantly expanded our efforts with a
sharp focus on four key areas that are essential enablers for widespread

36

participation in economic opportunities in the country education, healthcare,


skill development for sustainable livelihoods and financial inclusion," she
said.
ICICI Bank vows focus on infrastructure, youth and social
responsibilities
MUMBAI: As it completes 60 years of the group's existence tomorrow, ICICI
Bank has identified infrastructure building, a young population and social
fibre of the country as its three focus areas going ahead.
The group would focus on creating new products for the youth of the country
and further tap the potential of technology going forward, while partnering in
the government's infrastructure building initiatives, ICICI Bank's chief Chanda
Kochhar said.
Speaking about the three biggest focus areas for the group going ahead,
Kochhar said ICICI would also focus on its social responsibilities as a national
institution and partner the government in areas like skill development.
The ICICI Group would tomorrow complete 60 years of its existence since the
erstwhile ICICI Ltd was set up in 1955.
The Industrial Credit and Investment Corporation of India (ICICI) was
originally set up as an Indian financial institution at the initiative of the World
Bank, the Government of India and representatives of Indian industry to
provide project financing to Indian businesses.
It later got merged with ICICI Bank which was set up in 1994.
"Going forward, as India gets back to its next round of growth, we are looking
forward to partner in the government's infrastructure building initiatives,"
Kochhar told PTI in an interview.
"The second focus area going forward will be partnering the government and
the people of India in reaping the demographic dividend which still remains
untapped to a large extent.
"The true potential of India's demographic dividend has not been yet fully
realised and we will focus on creating products for the youth of our country
and further tap the potential of technology.
"Thirdly, we will look at our social responsibilities as a national institution and
would look at partnering in areas like skill development," said Kochhar, who
began her career with ICICI Ltd in 1984 as a management trainee and has
been instrumental in shaping the retail banking sector in India.
Talking about the three biggest 'high points' of the group in 60 years of its
existence, Kochhar said, "It's been a great journey for ICICI in the last 60
years and one of the major high points clearly has been that as an
institution, we have played a major role in nation building, including by way
of our participation in building infrastructure."
"Be it roads, power, highways, telecom and manufacturing, ICICI has been a
partner in almost all areas of infrastructure building exercise," she said.

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"In the second major high point, we participated in catalysing the consumer
demand in the country, including by way of retail loans for housing, auto and
a whole lot of other purposes.
The third major high point has been technology, being an underlying feature
for all banking services that we offer," Kochhar said.
Incidentally, Prime Minister Narendra Modi on Friday asked banks to become
'agents of social transformation'.
Speaking at a function to dedicate a 'digital village' developed by ICICI Bank
in Gujarat, Modi said banks need to take up social causes and adopt a
charter for the nation's development.
ICICI Bank was earlier a wholly-owned subsidiary of the erstwhile ICICI Ltd,
whose 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. The parent
firm later merged with the bank.
While ICICI Ltd was formed in 1955, just about seven years after India's
independence, it got a new lease of life in 1971, when the company hired a
group of young management school graduates, including K V Kamath, then
24-years old.
Kamath later went on to head the bank and is currently serving as Chairman
of the bank.
Kochhar also joined the group as a trainee in 1984 and went on to hold
several senior positions before being drafted in 1993 to a core team to set up
ICICI Bank.
She was elevated to the Board of Directors of ICICI Bank in 2001 and was
instrumental in establishing ICICI Bank during the 1990s, and subsequently
headed the infrastructure finance and corporate banking business inICICI
Limited.
She became Joint MD and CFO in 2007 and continued in that role before
becoming Managing Director & CEO of ICICI Bank in 2009.
Now, she is responsible for the bank's diverse operations in India and
overseas and also chairs the boards of the bank's principal subsidiaries,
which include life and general insurance companies.
ICICI Bank is now India's largest private sector bank with total assets of Rs
5,94,642 crore (USD 99 billion) as on March 31, 2014 and profit after tax of
Rs 9,810 crore (USD 1.6 billion) for the year ended March 31, 2014.
It has a network of 3,845 branches and 12,012 ATM's across India.
Some of the CSR initiatives already undertaken by the Bank are
providing
Solar street lights and Hand pumpsets in Rural areas.

38

Rain water harvesting mechanism / equipments agriculture /


drinking water /
development of the area.
Ambulances to Hospitals catering to economically challenged
sections of the
society, rural areas, etc..
Ultra-modern medical equipments to Family Planning Centres and
other
hospitals.
Wheel chairs to physically challenged sportspersons and others.
Gensets for running equipments in hospitals for the Cancer
patients.
Construction of classrooms for the economically challenged
students of the
society.
Support to orphaned / blind students requirements.
Vehicles for institutions providing food / mid-day meal to
government /local
bodies schools catering to poorer sections of the society

CONCLUSION
Banking sector is highly contributing towards the Corporate Social
Responsibilities for the benefit of society along with their basic banking
services, ICICI is a emerging private sector bank which is stepping positively
towards the social banking apart from earning the profit, ICICI is increasing
their amount of expenditure as the year possess, by seeing its contribution in
the year 2013 we can say that this Bank can give a tough competition to
other private sector banks. The Bank must try to increase the amount of
expenditure in the future which will shows a positive attitude by the banking
sector. The concept of CSR is now turning in to the
act in the year 2013, supported by the government. Banks can play an
important role in the growth of nations economy ,when the people get
additional support in the form of different social programmes then their
standard of living will raise and it help in making a developed nation. The
banks must focus on making the people aware about what they are doing for
them so that they can get the benefit from such CSR initiatives. Banking
sector in India is showing interest in integrating sustainability into their
business models but its CSR reporting practices are far from satisfaction.
There are only a few banks which report their activities on triple bottom line

39

principles. As a matter of fact, the standards for rating CSR practices are less
uniform in comparison to that for financial rating. This leads to problem in
comparison of corporate houses and determining the CSR rating. The study
found out that among the reporting banks also, some banks are making false
gestures in respect of their efforts for socio environmental concerns. Most of
the Banks use CSR practices as a marketing tool and many are only making
token efforts towards CSR in tangential ways such as donations to charitable
trusts, NGOs, sponsorship of events, etc. Very few banks have a clearly
defined CSR philosophy. Mostly banks implement CSR in an ad-hoc manner,
unconnected with their business process and dont state how much they
spend on CSR activities. Further voluntary actions are required to be taken
by the financial bodies to ensure the socio-environmental feasibility of
projects to be financed. Indian banking sector must also portray their socially
responsible behaviour through integrating triple bottom line
principle.Financial Institutions can do a lot to assist efforts for social
responsibility and achieve sustainability. Banks must also provide appropriate
training
to its employees on environmental and social risks in lending to ensure that
climate change is taken into account in corporate banking decisions.

Bibliography

http://www.aebrjournal.org/uploads/6/6/2/2/6622240/4.shirley.pdf

http://www.virtusinterpress.org/IMG/pdf/CORPORATE_SOCIAL_RESPONSI
BILITY_IN_BANKS_AN_INTERNATIONAL_OVERVIEW.pdf

http://www.emeraldinsight.com/doi/abs/10.1108/17471110710840233

http://shodh.inflibnet.ac.in/bitstream/123456789/131/2/02_introduction
.pdf

http://www.ripublication.com/gjfm-spl/gjfmv6n9_08.pdf

http://businesstoday.intoday.in/story/icici-bank-opens-trainingacademy-as-part-of-csr-activities/1/199196.html

40

http://articles.economictimes.indiatimes.com/2015-0104/news/57663583_1_chanda-kochhar-icici-bank-icici-group

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