ICICI Bank

Introduction:
ICICI Bank is an Indian multinational banking and financial services company headquartered
in Mumbai, Maharashtra, India. As of 2014, it is the second largest bank in India in terms of
assets and market capitalization. It offers a wide range of banking products and financial services
for corporate and retail customers through a variety of delivery channels and specialized
subsidiaries in the areas of investment banking, life, non-life insurance, venture capital and asset
management. The Bank has a network of 4,050 branches and 12,642ATMs in India, and has a
presence in 17 countries including India.
ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab
National Bank and Bank of Baroda. The bank has subsidiaries in the United Kingdom and
Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Dubai
International Finance Centre and China; and representative offices in United Arab Emirates,
South Africa, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also
established branches in Belgium and Germany.

PEST ANALYSIS:
Political:
Political environment of any country deeply affects all the sectors of that country and banking is
no exception. With favorable and stable political environment, the banking sector is able to
mobilize funds more efficiently then otherwise. The unstable political environment risks the
ability to screen the good from the bad, creating credit risks for the bank. It also affects the
investment due to future uncertainty. One must note that the political instability of the country
affect directly the banking sector in India
Weakness in Indian political system affects the economic flexibility. Coalition politics results
into delayed decision making and implementations due to diversified interest of different
political group and come to an agreement. Despite of all this, there are high hopes with respect to
the steps that government can take to boost up the economy and the banking sector.
Monetary policy of RBI has been restrictive over last couple of years with more intervention by
RBI into money market. This was more on account of inflationary pressure that the economy was
facing. Inflation was a major concern as the same remained into double digit owing to increasing
food and fuel prices and later due to manufacturing sector. RBI has made many changes into
repo and reverse repo rate to curb inflation and ease the pressure

Economic Environment:
India's economic flexibility is obstructed by its weak economic structure, with very low per
capita GDP. However, this risk is partially covered with the growth prospectus that India has and
with its characteristic of being a well-diversified economy. It is clear that the fiscal deficit
constraints the governments ability to stimulate growth by fiscal policies. Further, Indian
economy is into expansion mode together with private sector growth. The Indian private sector
has not taken the benefit of Indias absolute credit growth. The increase in private sector credit
has been very nominal over last few years. With the limitation of fund raising options in India,
banks have provided important role in financing private sector. The fiscal deficit is also concern
for the Indian economy; however the demand growth will offset the current account deficit to
certain extent that occurs majorly because of the oil prices.
There is high credit risk in Indian banking sector owing to the not-so-developed legal framework
that results into delayed payments and lower recovery.

Social Environment:
India has been on growth track and banking being an integral part of economy it has to adjust
itself so as to compliment and supplement the growth of the economy. Despite enormous growth,
Indian rural segment have largely deprived with the basic banking facility. Rural market, wherein
fortune lies for any sector, has largely remained untapped. Farmers and small businessman have
to take loans from local vendors. The tech-savvy consumer provides opportunity as well as poses
challenges in the banking system. The consumers are looking for electronic modes of fund
transfer along with the personal touch and experience. In the information age, the young
generation keep themselves updated and makes informed decision. They now take their own
decision and manage their own finances well.

Technological environment:
With the technological advancement, banking has seen vital changes in operations and has now
focused on customer centric approach, universal banking, ATMs, internet banking, interactive
kiosks, core banking, ERP, etc. and improved efficiency and productivity. Banks are now
focusing on cashless, paperless and hassle-free working. As per KPMG, non-cash payment
comprised of 91% in value terms compared to 88% in 2010. Also, the payments made through
cheques have also come down.
Establishment of computers, internet connectivity, RTGS and NEFT, MICR Cheques, ECS were
all significant milestones in past decade. The continuous advancement in technology changed the
way the bank interacts with consumer. Now, we have the virtual banking concept to roll out in
market wherein the products or services are available only on electronic modes and these are
competitively and attractively priced so as to invite customer to non-branch banking world,
thereby reducing costs. With digitalization of transactions, wireless transfer of funds, paper less
culture, etc. the banks have opportunity of improving the overall productivity, reduce cost and
provide better customer service.