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INDIAN BANKING

..
..SECTOR.

MACRO ANALYSIS

The banking system remains, as always, the most dominant segment of


the financial sector.

Indian banks continue to build on their strengths under the regulators


watchful eye and hence, have emerged stronger.

The banking sector in India has made significant progress in the last five
years the growth is well reflected through parameters including
profitability, annual credit growth, and decline in non-performing assets
(NPAs)

Growth in the sector has been favored by factors including low defaulter
ratio, strong economic growth, central banks regular intervention and preemptive adjustment of monetary policy.
The policy makers for the banking sector, which comprise the Reserve
Bank of India (RBI), Ministry of Finance and related government and
financial sector regulatory entities, have made several notable efforts to

What Is PESTEL
Analysis

POLITICAL FACTORS AFFACTING


BANKING SECTOR.
To what degree a government intervenes in the economy. Ex-tax policy,
labor law, environmental law, trade restrictions, tariffs, and political stability.
Some of the major political factors affecting the Banking industry are:
Focus on regulation of government
Budget and budget measures
Foreign Direct Investment limits

FORGIEN DIRECT
INVESTMENT LIMITS
The move to increase Foreign Direct Investment FDI limits to 49 percent from 20
percent during the first quarter of this fiscal came as a welcome announcement to
foreign players wanting to get a foot hold in the Indian Markets by investing in willing
Indian partners who are starved of net worth to meet CAR norms.
Ceiling for FII investment in companies was also increased from 24.0 percent to 49.0
percent and have been included within the ambit of FDI investment
BUDGET MEASURES
Increase Farm Credit
Subvention of 1% to be paid as incentive to farmers
Debt Waiver for Farmers
Setting up of separate task force for those not covered under the debt waiver
scheme

Economical factor

SOCIO-CULTURAL
FACTOR
It includes cultural aspects and health consciousness, population growth
rate, age distribution, career attitudes and emphasis on safety. This could be
classified into:
TRADITIONAL MAHAJAN PRATHA
Before the birth of the banks, people of India were used to borrow money
local money lenders, shahukars , shroffs.
They were used to charge higher interest and also mortgage land and
house. But after emergence of banks attitude of people was changed and
they have started lending from the banks
CHANGE IN LIFE STYLE

Life style of India is changing rapidly.

They are demanding high class products. They have become more
advanced. People needs and wants are increasing day by day. And this has

CONTI
POPULATION
Increase in population is one of he important factor, which affect the
private sector banks. Banks would open their branches after looking into
the population demographics of the area. Never branches are coming to
serve the increasing population. This incentive to banks comes on the
back of the continuing need to open more branches in these States in
order to ensure more uniform spatial distribution
LITERACY RATE
Literacy rate in India is very low compared to developed
countries.illiterate
people hesitate to transact with banks. So, this
impacts negatively on banks. But there is positive side of this as well i.e.
illiterate people trust more on banks to deposit their money, they do not
have market information .Opportunities in stocks or mutual funds

LEGAL FACTOR
There are two major factors determining the legal aspects of the Banking Industry
:
In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of India (RBI) "to regulate, control, and inspect the banks in India .
The Banking Regulation Act also provided that no new bank or branch of an
existing bank could be opened without a license from the RBI, and no two banks
could have common directors The Reserve Bank of India (RBI) will intervene to
smooth sharp movements in the rupee and prevent a downward spiral in its
value, but will balance this with the need to retain reserves in the event of
prolonged turbulence

ENVIRONMENTAL
FACTOR

Indian economy has registered a high growth for last three years and is
expected to maintain robust growth rate as compare to other developed
and developing countries.

Banking Industry is directly related to the growth of the economy . The


growth rate of different industries were : Agriculture : 18.5%Industry :
26.3%Services : 55.2%
It is great news that today the service sector is contributing more than half
of the Indian GDP. It takes India one step closer to the developed
economies of the world. Earlier it was agriculture which mainly contributed
to the Indian GDP.
This increases the avenues of investment by the industrial sector . This
would further increase the borrowings by the industries leading to the

INDUSTRY ANALYSIS
The Indian banking system consists of 27 public sector banks, 20 private
sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban
cooperative banks and 93,550 rural cooperative banks, in addition to
cooperative credit institutions. The Indian banking sectors assets reached
US$ 1.8 trillion in FY15 from US$ 1.3 trillion in FY10, with 70 per cent of it
being accounted by the public sector.
Total lending and deposits increased at a compound annual growth rate
(CAGR) of 20.7 per cent and 19.7 per cent, respectively, during FY07-14
and are further poised for growth, backed by demand for housing and
personal finance. Total asset size of banking sector assets is expected to
increase to US$ 28.5 trillion by FY25. Deposits have grown at a CAGR of
13.6 per cent during FY0515 to an estimated US$ 1.48 trillion in FY15.
Deposit growth has been mainly driven by strong growth in savings amid
rising disposable income levels.

Indian banks are increasingly focusing on adopting integrated approach to


risk management. Banks have already embraced the international
banking supervision accord of Basel II. According to RBI, majority of the
banks already meet capital requirements of Basel III, which has a deadline
of March 31, 2019. Most of the banks have put in place the framework for
asset-liability match, credit and derivatives risk management
Rising incomes are expected to enhance the need for banking services in
rural areas and therefore drive the growth of the sector; programmes like
MNREGA have helped in increasing rural income aided by the recent Jan
Dhan Yojana. The Reserve Bank of India (RBI) has relaxed its branch
licensing policy, thereby allowing banks (which meet certain financial
parameters) to set-up new branches in tier-2 to tier-6 centers, without
prior approval from RBI. It has emphasised the need to focus on spreading
the reach of banking services to the un-banked population of India.

Categorization
Reserve
Bank of
India
Regional
Rural
Banks

Cooperative
Banks

Commerci
al Banks

Regional Rural Banks


The Regional Rural Banks or RRBs mobilize financial resources from
rural / semi-urban areas and grant loans and advances mostly to small
and marginal farmers, agricultural laborers and rural artisans.
For example:
Andhra Pradesh Gramin Vikas Bank
Jammu Rural Bank
Nagaland Rural Bank

Co-operative Banks
A co-operative bank is a financial entity which belongs to its members, who
are at the same time the owners and the customers of their bank. Cooperative banks are often created by persons belonging to the same local or
professional community or sharing a common interest.
For Example:
The Goa State Co-operative Bank Limited
The Gujarat State Co-operative Bank Limited
The Haryana State Co-operative Bank Limited

COMMERCIAL BANK
A commercial bank is an institution which accepts
deposits, makes business loans and offers related services.
A

few examples of Commercial Banks are listed as follows:


Canara Bank,
IDBI,
Syndicate Bank,
Standard Chartered, etc.

Commercial Bank

Public Bank
Public sector banks are those banks
in which there are numerous partners
or shareholders, and they elect from
their own body a certain number,
who are in trusted with its
management.
For e.g.
Allahabad Bank,
Bank Of Baroda,
Oriental Bank of Commerce, etc.

Private Bank
Private sector banks are those
banks in which there are but
few partners, and these attend
personally to its management
For e.g.
HDFC Bank
ICICI Bank

CONTANTS

Bank
History of Bank
Types of Bank Sectors
Definition of Public Sector Banking
Definition of Private Sector Banking
Definition of Cooperative Sector Banking
Rural Banking
Foreign Banks in India

CONT

Top 10 Banks in India

Co-operative banking structure in India.

Differences Between Public & Private Sector Banks

Main Competitors

Present Scenario

ICICI BANK (Private Sector Bank)

BANK
The word of bank is derived from the Italian banca, which is derived
from German and mean bench.
The term bankrupt and broke is similarly derived from banca rotta.
Which refers to an out of business bank, having its bench physically
broken.
Money lenders in Northern Italy originally did business in open areas
or big open rooms with each lender working from his own bench or
table.

HISTORY OF BANK
Banking in the modern sense of the word can be traced to medieval and early
Renaissance Italy, to the rich cities in the north like Florence, Venice and Genoa.
The Bardi and Peruzzi families dominated banking in 14th century Florence,
establishing branches in many other parts of Europe. Perhaps the most famous
Italian bank was the Medici bank, set up by Giovanni Medici in 1397.
The earliest known state deposit bank, Banco di San Giorgio (Bank of St.
George), was founded in 1407 at Genoa, Italy.

LIST OF BANKS IN INDIA


1 Nationalized banks

1.1 Central bank


1.2 State Bank of India & associates (also nationalized)
1.3 Nationalized banks
1.4 Old private sector banks
1.5 New private sector banks
1.6 Foreign banks operating in India

2 Co-operative Banks

2.1 Scheduled Urban Co-operative Banks


2.2 Non-Scheduled Urban Co-operative Banks
2.3 Indian Banks with business outside India
2.4 Foreign banks with business in India

2.4.1 Foreign Banks with Representative Offices

NATIONALIZED BANKS
Central bank
Reserve Bank of India
State Bank of India & associates (also nationalized)
State Bank of Hyderabad
State Bank of Indore (now merged into state bank of India)
State Bank of Mysore
State Bank of Patiala
State Bank of Saurashtra (Now merged into State Bank of India)
State Bank of Travancore
SBI is a nationalized bank.

Cont
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
IDBI Bank
Indian Bank
Indian Overseas Bank

FOREIGN BANKS
OPERATING
IN
INDIA

ABN AMRO Bank N.V.

Abu Dhabi Commercial Bank


American Express Bank
Arab Bangladesh Bank
Bank International Indonesia
Bank of America NA
Bank of Bahrain and Kuwait B.S.C.
Bank of Ceylon

PUBLIC SECTOR
BANKS
All government owned banks fall in this variety.
Besides the Reserve Bank of India, the State Bank of India and its
associate banks and about 20 nationalized banks, all comprises of the
public sector banks.
Many of the regional rural banks that are funded by the government
banks can also be clubbed in this genre.

PRIVATE SECTOR
BANKS

A new wave in the banking industry came about with the private sector banks
in India.
With policies on liberalization being generously taken up, these private banks
were established in the country that also contributed heavily towards the
growth of the economy and also offering numerous services to its customers.
Some of the most popular banks in this genre are: Axis Bank, HDFC Bank,
ICICI Bank, Kotak Mahindra Bank and SBI Commercial and International
Bank.
The Foreign Banks in India like HSBC, Citibank, and Standard Chartered
bank etc can also be clubbed here.

COOPERATIVE BANKING SECTOR


Cooperative banks are owned by their customers and follow the cooperative principle
of one person, one vote.
Unlike credit unions, however, cooperative banks are often regulated under both
banking and cooperative legislation.
They provide services such as savings and loans to non-members as well as to
members and some participate in the wholesale markets for bonds, money and even
equities.
Many cooperative banks are traded on public stock markets, with the result that they
are partly owned by non-members.

RURAL BANKING
Rural banking in India started since the establishment of banking sector in India. Rural Banks
in those days mainly focussed upon the agro sector.
The Haryana State Cooperative Apex Bank Ltd. commonly called as HARCOBANK plays a
vital role in rural banking in the economy of Haryana State and has been providing aids and
financing farmers, rural artisans, agricultural labourers, entrepreneurs, etc. in the state and
giving service to its depositors.
National Bank for Agriculture and Rural Development (NABARD) is a development bank in
the sector of Regional Rural Banks in India. It provides and regulates credit and gives service
for the promotion and development of rural sectors mainly agriculture, small scale industries,
cottage and village industries, handicrafts.

FOREIGN BANKS IN INDIA


Foreign Banks in India always brought an explanation about the prompt
services to customers. After the set up foreign banks in India, the banking
sector in India also become competitive and accurative.
New policies are introduced by RBI for them The policy conveys that
foreign banks in India may not acquire Indian ones (except for weak banks
identified by the RBI, on its terms) and their Indian subsidiaries will not be
able to open branches freely.

TOP 10 BANKING IN PUBLIC & PRIVATE


SECTOR BANKING
1. HDFC Bank
2. State Bank of India (SBI)
3. Kotak Mahindra Bank
4. ICICI Bank
5. AXIS BANK

CO-OPERATIVE BANKING STRUCTURE IN INDIA


IS DIVIDED INTO FIVE
1. Primary Urban Co-operative Banks.
2. Primary Agricultural Credit Societies.
3. District Central Co-operative Banks.
4. State Co-operative Banks.
5. Land Development Banks.

DIFFERENES BETWEEN PUBLIC & PRIVATE


SECTOR BANKS
Public Sector bank means any Government Sector Bank/Institute that goes
public... means that issues it share to general public.. It also has a greater
share of government(more than 50%) so that the main motto of social
welfare other than Maximising Profit remains.

Where as Private Sector Banks are those Banks where the management is
controlled by Private individuals and Government does not have any say in
the management of these banks. Maximising profit is the basic motto.

MAIN COMPETITORS FOR BANKING


SECTOR
Post offices.
Mutual fund
Share market
Insurance.
Money lenders
Family and friends

PRESENT SCENARIO
Banking industry has been undergoing a rapid transformation. Banks today are
market driven and market responsive.
With the entry of new players and multiple channels, customers (both corporate
and retail) have become more discerning and less "loyal" to banks.
This makes it imperative that banks provide best possible products and services
to ensure customer satisfaction.
They have been managing a world of information about customers - their
profiles, location, needs, requirements, cash positions, etc.

CONT
They are focusing on region-specific campaigns rather than national
media campaigns as effective strategy for a diverse country like India.
Customer-centricity also implies increasing investment in technology.
Apart from the Mobile Banking, including of SMS Banking, Net
Banking and ATMs are the major steps taken by the banks in India
towards modernization.

SERVICES GIVEN BY BANKS


Demat account
Lockers
Cash management
Insurance product
Mutual fund product
Loans
ECS(Electronic clearance system)
Taxes

INTRODUCTION
Industrial

Credit and Investment Corporation of


India (ICICI) is the second largest bank.
It was incorporated in Baroda on 5th jan1994
The chairman of the company is Mr. K.V. Kamath
and the MD & CEO is Chanda D. Kochhar.

MISSION
WE will leverage our people, technology, speed and
financial capital to:
Be the banker of first choice for the customers by delivering high
quality, world class products and services.
Expand our frontiers of our business globally.
Play a pro active role in the full realization of India's potential
Maintain a healthy financial profile and diversify our earnings
across business and geographies.
Maintain high standards of governance and ethics.
Contribute positively to the various countries and markets we
operate.
Create value for our stakeholders.

Organization Structure
Mr. Chanda D Kochhar
-----------CEO and
Managing Director
Mr. K V Kamath
----------Chairman
Sandeep Bakshi
----------Deputy Managing
Director
N.S.Kannan
----------Executive Director & CFO
K. Ramkumar
----------Executive Director
Mr. Narendra Murkumbi
-----------Director
Mr. Madhabi Puri Buch
-----------Executive
director
Mr. P M Sinha
-----------Director
Mr. M K Sharma
-----------Director
Mr. Sonjoy Chatterjee
----------Executive
director
Mr. Anupam Puri
----------Director
Mr. T S Vijayan
-----------Director
Mr. N Vaghul
----------Director
Mr. Marti G Subrahmanyam
----------Director

HISTORY
ICICI

was originally promoted in 1994 by ICICI ltd.


ICICIs shareholding in ICICI bank was reduce to
46% through a public offering of shares in India in
1998.
ICICI was formed 1955 at the initiative of world
bank, the government of India and representative
of Indian industry.

BANKING BUSINESS
STRUCTURE
Retail

Banking Group - has been organized


into four geographies for retail sale and
service architecture.

Wholesale banking group consist of


corporate banking group, commercial banking
group and etc.

ICICI Allied Services


ICICI

Prudential Life Insurance Ltd.

ICICI Lombard General Insurance

Ltd.
ICICI Securities Ltd.

ICICI prudential
ICICI

Prudential Life Insurance Company is a joint venture


between ICICI Bank and Prudential plc. which is a British
company.
ICICI

Prudential began the operations in December 2000.

ICICI

prudential is having product portfolio which consists


several plans
e.g. Education insurance plan, Wealth creation plan, Lifetime gold
plan, Invest shield cash bank, etc.
ICICI

Prudential has been voted as India's Most Trusted Private


Life Insurer for three consecutive years.

ICICI lombard
I.

ICICI Lombard GIC Ltd. is a joint venture


between ICICI Bank Limited and Fairfax
Financial Holdings Limited.

II. ICICI Lombard allows


.Car Insurance,
.Health Insurance,
.Travel Insurance, etc

instant policy issuance

ICICI Securities
Limited
ICICI Securities Limited is a share broking firm which provides
Demat account service for share trading on NSE and BSE.
Customers can buy and sell shares through their demat
account which provides online services.
It also has team of research experts which guides the
customers regarding share market scenario and also suggest
which share they should buy or sell.

ICICI branches
ICICI branches are open at the following
states:

Assam
Andhra Pradesh
Bihar
Chandigarh
Chhattisgarh
New Delhi
Goa
Gujarat
Haryana

Himachal Pradesh
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur

Meghalaya
Orissa
Pondicherry
Punjab
Rajasthan
Tamil nadu

PRODUCT PORTFOLIO

ICICI OFFERS

DEPOSIT

CARD

LOAN

LIFE
INSURANCE

Types Of Accounts:

Saving
account

Life plus
senior
citizen
saving
account

Young
star
saving
account

Recurring
Deposits

Fixed
Deposits

LOANS
Home Loans
Personal Loans
Car Loans
Commercial Vehicle Loans
Farm Equipment Loans
Business Installment
Loans

CARDS
Credit
Card

Merchant
Services

Commerc
ial Cards

Travel
Card

Debit
Card

Growth & Development

1. The industry currently is in a transition phase


2. In a span of just four years, ICICI Bank has emerged as a consumer
banking behemoth. With a retail book of over Rs 56,000 crore (Rs 560
billion) and a market share that is the envy of competition -- it has a
share of over 30 percent -- ICICI Bank today has reached a commanding
position
3. ICICI bank now is widely seen as a sophisticated bank able to take on
many global banks in the Indian market. The bank is expanding in
overseas markets.
4. The global opportunity spectrum is changing dramatically, and in the
next 3 years, our global business will contribute one-third of our book
--topline and bottomline. Today it's about 10-12 per cent. The NRI is a
great customer and the other is the Indian corporate who is globalising -either in the trade business or is setting up businesses abroad.

Awards
ICICI BANK has received 2010 world finance UK award
for :
I. Excellence in remittance business, worldwide.
II. Excellence in NRI services, worldwide.
III. Excellence in private banking business , APAC region.
ICICI bank UK ,Hi SAVE has been awarded best online savings account
provider 2010 ,by your money direct consumer awards, UK .
ICICI Bank UK, Hi SAVE has been commended for best internet account
provider 2010 and fixed rate account provider 2010 by money facts , an
independent consumer finance leading aggregator.
For the sixth time in a row, ICICI bank has received the most preferred auto
loan brand in the financial services category at CNBC consumer awards.

Achievements

1. In 1991, ICICI become the first Indian company and the first bank or
financial institution from non Japan asia to be listed on the NYSE.

2. ICICI Bank and two-wheeler maker TVS MOTOR CO. , are the two Indian
firms selected for the 2008 symantic visionary awards for the way they
secure and manage system and information.

3. As against the capital to risk weighted assets ratio (CRAR) of the ICICI
bank at 13.97%, the SBI had a CRAR of 12.64% and HDFC 13.60%.

ICICI bank has won the best local bank by trade and

ICICI bank has won the best trade finance bank and best foreign exchange
bank , India at the finance asia country awards for achievement, HONG KONG.

ICICI bank wins the Asian banker award for the best banking security system.

ICICI BANK was awarded the Asian banker achievement award 2009 for cash
management in India.

Future prospects of ICICI bank


To be the leading provider of financial services in India and a major global
bank.
To be the preferred brand for total financial and banking solutions for both
corporates and indiiduals
To be the dominant Life, Health and Pensions player built on trust by worldclass people and service.
This we hope to achieve by:

Understanding the needs of customers and offering them superior


products and service.
Leveraging technology to service customers quickly, efficiently and
conveniently.
Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policyholders.
Providing an enabling environment to foster growth and learning for

Indias future in banking


industry
1. The industry currently is in a transition phase
2. In a span of just four years, ICICI Bank has emerged as a consumer banking
behemoth. With a retail book of over Rs 56,000 crore (Rs 560 billion) and a
market share that is the envy of competition -- it has a share of over 30 percent -ICICI Bank today has reached a commanding position
3. ICICI bank now is widely seen as a sophisticated bank able to take on many
global banks in the Indian market. The bank is expanding in overseas markets.
4. The global opportunity spectrum is changing dramatically, and in the next 3
years, our global business will contribute one-third of our book --topline and
bottomline. Today it's about 10-12 per cent. The NRI is a great customer and the
other is the Indian corporate who is globalising -- either in the trade business or is
setting up businesses abroad.

THANK
YOU !!