22806040 Universal Banking IDBI1

8/9/2019 22806040 Universal Banking IDBI1

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IDBI was set up under an Act of Parliament as a wholly-owned

subsidiary of Reserve Bank of India in July 1964. In February

1976, the ownership of IDBI was transferred to Government of

India.

In January 1992, IDBI accessed domestic retail debt market for

the first time with innovative Deep Discount Bonds and registered

path-breaking success. In December 1993, IDBI set up IDBI

Capital Market Services Ltd. as a wholly-owned subsidiary to

offer a broad range of financial services, including Bond Trading,

Equity Broking, Client Asset Management and Depository

Services. In September 1994, in response to RBI's policy of

opening up domestic banking sector to private participation, IDBI

in association with SIDBI set up IDBI Bank Ltd.

IDBI Bank


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Overview of development banking in India

Th

e

concept of development banking rose only after

Second World War , Successive of the Great Depression in 1930s.

The demand for reconstruction funds for the affected nations

compelled in setting up a worldwide institution for

reconstructions. As a result the IBRD was set up in 1945 as a

worldwide institution for development and reconstruction. This

concept has been widened all over the world and resulted in

setting up of large number of banks around the world which

coordinating the developmental activities of different nations

with different objectives among the world.

The course of development of financial institutions and

markets during the post-Independence period was largely guided

by the process of planned development pursued in India with

emphasis on mobilisation of savings and channelising investment to

meet Plan priorities. At the time of Independence in 1947, India

had a fairly well-developed banking system. The adoption of bank

dominated financial development strategy was aimed at meetingthe sectoral credit needs, particularly of agriculture and industry.

Towards this end, the Reserve Bank concentrated on regulating

and developing mechanisms for institution building. The

commercial banking network was expanded to cater to the

requirements of general banking and for meeting the short-term

working capital requirements of industry and agriculture.

Specialised development financial institutions (DFIs) such as the

IDBI, NABARD, NHB and SIDBI, etc., with majority ownership ofthe Reserve Bank were set up to meet the long-term financing

requirements of industry and agriculture. To facilitate the growth

of these institutions, a mechanism to provide concessional finance

to these institutions was also put in place by the Reserve Bank.


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The first development bank In India incorporated

immediately after independence in 1948 under the Industrial

Finance Corporation Act as a statutory corporation to pioneer

institutional credit to medium and large-scale. Then after in

regular intervals the government started new and differentdevelopment financial institutions to attain the different

objectives and helpful to five-year plans.

The early history of Indian banking and finance was

marked by strong governmental regulation and control. The roots

of the national system were in the State Bank of India Act of

1955, which nationalized the former Imperial Bank of India and

its seven associate banks. In the early days, this national system

operated along side of a large private banking system. Banks were

limited in their operational flexibility by the governments desire

to maintain employment in the banking system and were often

drawn into troublesome loans in order to further the

governments social goals.

The financial institutions in India were set up under the

strong control of both central and state Governments, and the

Government utilized these institutions for the achievements inplanning and development of the nation as a whole. The all India

financial institutions can be classified under four heads according

to their economic importance that are:

All-India Development Banks,

Specialized Financial Institutions,

Investment Institutions,

State-level institutions,

Other institutions.


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Industrial Development Bank

of India (IDBI)The Industrial Development Bank of India (IDBI) was

established on July 1, 1964 under an Act of Parliament as a wholly

owned subsidiary of the Reserve Bank of India. In February 1976,

the ownership of IDBI was transferred to the Government of

India and it was made the principal financial institution for

coordinating the activities of institutions engaged in financing,

promoting and developing industry in the country. AlthoughGovernment shareholding in the Bank came down below 100%

following IDBIs public issue in July 1995, the former continues to

be the major shareholder (current shareholding: 58.47%). During

the four decades of its existence, IDBI has been instrumental

not only in establishing a well-developed, diversified and efficient

industrial and institutional structure but also adding a qualitative

dimension to the process of industrial development in the country.

IDBI has played a pioneering role in fulfilling its mission of

promoting industrial growth through financing of medium and long-

term projects, in consonance with national plans and priorities.

Over the years, IDBI has enlarged its basket of products and

services, covering almost the entire spectrum of industrial

activities, including manufacturing and services. IDBI provides

financial assistance, both in rupee and foreign currencies, for

green-field projects as also for expansion, modernisation and

diversification purposes. In the wake of financial sector reforms

unveiled by the Government since 1992, IDBI evolved an array of

fund and fee-based services with a view to providing an

integrated solution to meet the entire demand of financial and

corporate advisory requirements of its clients. IDBI also provides


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indirect financial assistance by way of refinancing of loans

extended by State-level financial institutions and banks and by

way of rediscounting of bills of exchange arising out of sale of

indigenous machinery on deferred payment terms.

IDBI has played a pioneering role, particularly in the pre-

reform era (1964-91),in catalyzing broad based industrial

development in the country in keeping with its Government-

ordained development banking charter. In pursuance of this

mandate, IDBIs activities transcended the confines of pure long-

term lending to industry and encompassed, among others,

balanced industrial growth through development of backward

areas, modernisation of specific industries, employment

generation, entrepreneurship development along with support

services for creating a deep and vibrant domestic capital market,

including development of apposite institutional framework.

In September 2003, IDBI diversified its business domain

further by acquiring the entire shareholding of Tata Finance

Limited in Tata Home finance Ltd., signaling IDBIs foray into the

retail finance sector. The fully-owned housing finance subsidiary

has since been renamed IDBI Home finance Limited. In view ofthe signal changes in the operating environment, following

initiation of reforms since the early nineties, Government of India

has decided to transform IDBI into a commercial bank without

eschewing its secular development finance obligations. The

migration to the new business model of commercial banking, with

its gateway to low-cost current, savings bank deposits, would help

overcome most of the limitations of the current business model of

development finance while simultaneously enabling it to diversifyits client/ asset base. Towards this end, the IDB (Transfer of

Undertaking and Repeal) Act 2003 was passed by Parliament in

December 2003. The Act provides for repeal of IDBI Act,

corporatisation of IDBI (with majority Government holding;


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current share: 58.47%) and transformation into a commercial

bank. The provisions of the Act have come into force from July 2,

2004 in terms of a Government Notification to this effect. The

Notification facilitated formation, incorporation and registration

of Industrial Development Bank of India Ltd. as a company underthe Companies Act, 1956 and a deemed Banking Company under

the Banking Regulation Act 1949 and helped in obtaining requisite

regulatory and statutory clearances, including those from RBI.

IDBI would commence banking business in accordance with the

provisions of the new Act in addition to the business being

transacted under IDBI Act, 1964 from October 1, 2004, the

Appointed Date notified by the Central Government.

IDBI has firmed up the infrastructure, technology platform and

reorientation of its human capital to achieve a smooth transition.

On July 29, 2004, the Board of Directors of IDBI and IDBI Bank

accorded in principle approval to the merger of IDBI Bank with

the Industrial Development Bank of India Ltd. to be formed

incorporated under the Companies Act, 1956 pursuant to the IDB

(Transfer of Undertaking and Repeal) Act, 2003 (53 of 2003),

subject to the approval of shareholders and other regulatory and

statutory approvals. A mutually gainful proposition with positive

implications for all stakeholders and clients, the merger process

is expected to be completed during the current financial year

ending March 31, 2005.

IDBI would continue to provide the extant products and

services as part of its development finance role even after its

conversion into a banking company. In addition, the new entity

would also provide an array of wholesale and retail banking products, designed to suit the specific needs cash flow

requirements of corporates and individuals. In particular, IDBI

would leverage the strong corporate relationships built up over

the years to offer customised and total financial solutions for all


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corporate business needs, single-window appraisal for term loans

and working capital finance, strategic advisory and Hand-holding

support at the implementation phase of projects, among others.

IDBIs transformation into a commercial bank would

provide a gateway to low-cost deposits like Current and Savings

Bank Deposits. This would have a positive impact on the Banks

overall cost of funds and facilitate lending at more competitive

rates to its clients. The new entity would offer various retail

products, leveraging upon its existing relationship with retail

investors under its existing Suvidha Flexi-bond schemes. In the

emerging scenario, the new IDBI hopes to realize its mission of

positioning itself as a one stop super-shop and most preferred

brand for providing total financial and banking solutions to

corporates and individuals, capitalising on its intimate knowledge

of the Indian industry and client requirements and large retail

base on the liability side.

IDBI upholds the highest standards of corporate

governance in its operations. The responsibility for maintaining

these high standards of governance lies with its Board of

Directors. Two Committees of the Board viz. the ExecutiveCommittee and the Audit Committee are adequately empowered to

monitor implementation of good corporate governance practices

and making necessary disclosures within the framework of legal

provisions and banking conventions.

The Industrial Development Bank of India Limited commonly

known by its acronym IDBI is one of India 's leading private banks.

It was established in 1964 by an Act of Parliament to provide

credit and other facilities for the development of the fledgling


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Indian industry. It is currently the tenth largest development

bank in the world. Some of the institutions built by IDBI are The

National Stock Exchange of India (NSE), The National Securities

Depository Services Ltd . (NSDL) and the Stock Holding

Corporation of India (SHCIL). Today, IDBI Bank has a network of161 branches, 369 ATMs, and 8 Extension Counters spread over

95 cities.

Vision Statement:"To be trusted partner in progress by leveraging quality human

capital and setting global standards of excellence to build the

most valued financial conglomerate".

"One of the key differentiators that IDBI Bank found in Finacle

universal banking solution was its new generation technology and

its use of the web paradigm. With features like Straight-

Through-Processing, 24x7 banking, e-Xtensibility tool kit, Finacle

has indeed proved to be the right choice. With Finacle poweringour core banking operations, we have been able to bring down our

End of Day processing time by more than 80%."

Sanjay Sharma, Vice President & Head- Product Development

Group, IDBI

Bank.

Banks

Policy:1. Gifts & donations:


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The Director/ officer/ employee of IDBI Ltd. shall not

solicit or accept any gifts/donations of more than modest

value from a constituent of IDBI Ltd. or from any

subordinate employee or from existing/ potential clients or

third parties having business dealings with IDBI Ltd.

2. Gender friendly workplace:

As a good corporate citizen, IDBI Ltd. is committed to a

gender friendly workplace. IDBI Ltd. demands,

demonstrates and promotes professional behaviour and

respectful treatment of all employees.

3. Prohibition against participation in politics and standing forelection:

No employee shall take an active part in politics or in any

political demonstration, or stand for election as member of a

Municipal Council, district Board or any other Local Body or

any Legislative Body.

4. Protection of Banks Assets:

The assets of IDBI Ltd. shall not be misused but employed

for conducting the business for which they are duly

authorised.

Management & Organization

IDBI is a Board-managed organization. The responsibility for the

day-to-day management of operations of the Bank is vested with

the Chairman & Managing Director and two Deputy Managing


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Directors, who draw upon the support and expertise of a cross-

disciplinary Top Management Team. As on March 31, 2006, IDBI

had a combined employee base of 4548, including professionals

from the fields of accountancy, management, engineering, law,

computer technology, banking and economics.

Preamble

:IDBI Ltd. is committed to creating long term economic value for

all its stakeholders, including shareholders, depositors,

customers, employees and the society as a whole. IDBI Ltd. is

committed to maintaining high standards of ethical and

professional conduct in all its corporate activities.This Code of Conduct and Ethics outlines the overall standards

that shall guide the actions of IDBI Ltd. and its Directors,

officers and employees.

1. National Interest:

IDBI Ltd. shall continue to be committed in all its actions to

benefit the economic development of the nation and shall

not engage in any activity that would adversely affect such

objective.

2. Financial Reports & records:

IDBI Ltd. shall continue to prepare and maintain its accounts

fairly and accurately in accordance with the accounting and

financial reporting standards which represent the generally

accepted guidelines, principles, standards, laws and

regulations of the country. Internal accounting and audit

procedures shall fairly and accurately reflect all of IDBI

Ltd. business transactions and disposition of assets.

3. Corporate disclosures & practices:


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IDBI Ltd. shall continue to abide by the corporate disclosure

practices as specified by the appropriate external

regulatory authorities.

Shareholders:IDBI Ltd. is committed to enhance shareholder value and

shall comply with all regulations and laws that govern

shareholders' rights. The Board of Directors' of IDBI Ltd. shall

duly and fairly inform its shareholders about all relevant aspects

of the organisation business and disclose such information in

accordance with the respective regulations and agreements. Every

employee shall also be responsible.

Ethical Standards:

A Director/ Officer/ Employee of IDBI Ltd. shall conduct

all the dealings on behalf of IDBI Ltd. with professionalism,

honesty, integrity and high moral and ethical standards.

Every Director/ Officer/ Employee of IDBI Ltd. shall beresponsible for the implementation of and compliance with

the Code in his/ her professional environment, be fair and

take action not to discriminate, honour confidentiality and

strive to achieve more specific professional responsibilities.

Insider Trading:

Insider Trading involves the improper use of non - public

price sensitive information when dealing in securities. Specified


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employees are prohibited from engaging in insider trading as

detailed in the Code of Conduct for Prevention of Insider Trading.

Quality of Products & Services:

1. IDBI Ltd. shall continue to be committed to creating new

industry standards of excellence in customer service. IDBI

Ltd. shall provide innovative and superior quality customer

service consistent with the requirements of the customers

for their satisfaction.

2. Corporate Opportunity: A Director/ Officer/ Employee mustnot deprive IDBI Ltd. of an opportunity that belongs to

IDBI Ltd., for his/ her own/other's advantage, if he/she is

in a position of diverting the corporate opportunity for own

benefit or to others to the detriment of IDBI Ltd. A

Director/ Officer/ Employee must not compete with IDBI

Ltd. in respect of any business transaction.

3. Health, Safety & Environment: IDBI Ltd. shall strive to

provide a safe and healthy working environment at its work

places and comply, in the conduct of its business affairs,

with all regulations regarding the preservation of the

environment of the territories it operates in.

4. Corporate Social Responsibility: IDBI Ltd. shall continue to

be committed to be a good corporate citizen not only in

compliance with all relevant regulating laws and regulations

but also by actively assisting in the improvement of the

quality of life of the people in the communities in which it

operates with the objective of making them self reliant.


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Competition:

1. IDBI Ltd. shall market its products and services on its own

merits.

2. Equal-Rights: IDBI Ltd shall continue to provide equalopportunities to all its employees and all qualified applicants for

employment without regard to their race, caste, religion, colour,

ancestry, marital status, sex, age, nationality, disability etc.

Applicable laws, rules, and guidelines of Government of India/ any

other Competent Authority in this regard shall also be observed

for this purpose. Employees of IDBI Ltd. shall be treated with

dignity and in accordance with the IDBI Ltd. policy to maintain a

work environment free of sexual harassment, whether physical,verbal or psychological. Employee policies and practices shall be

administered on a non-discriminatory basis in all matters relating

to recruitment, training, compensation, benefits, promotion,

transfers and all others terms and conditions of employment.

3. Prohibited business: IDBI Ltd. shall not enter into any kind of

business with any company / organisation / entity, of which any of

its directors of is a proprietor, partner, director, a manager,employee or guarantor or in which one or more directors of IDBI

Ltd. together hold substantial interest. Substantial interest, in

relation to any company / organisation / entity, means any

beneficial interest held by one or more of the directors of IDBI

Ltd. or by any relative of such director, whether singly or taken

together, in the shares of the company / organisation / entity,

the aggregate amount paid up on which either exceeds five lakh of

rupees or 5% of its paid-up share capital, whichever is lesser.

Public Representation of the Company & the Group:

1. IDBI Ltd. honours the information requirements of the

public and its stakeholders. All its external communication will


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be only by officials/ directors authorized for the purpose. The

information for the public constituents and stakeholders, duly

approved by the Compliance Officer or other authorised

official, as the case may be, shall be disseminated through any

of the following media:

-The Accreted newspaper publications,

- Web casting on official web site,

- Press handouts & press releases,

- Audio and audio-visuals prepared for the specific purpose.

2. Use IDBI Ltd. Logo & Trademark used:

Director/ Officer/ Employee shall not use the name of IDBI

Ltd., its logo or trademark for personal benefit or for the

benefit of persons / entities not forming part of the IDBI

Group.

Conflict of Interest:

The Directors/ officers/ employees of IDBI Ltd. shall always

conduct themselves in an honest and ethical manner and in the

best interest of the Bank. Towards this, the directors, officers

and employees of IDBI Ltd. shall endeavour to avoid situations

that may lead to an actual or potential conflict between person's

private interest and the interest of the Bank, including its

affiliates and employees.

Ethics & Compliance Committee:

The Ethics and Compliance Committee comprising few

independent directors of the Board, an Executive Director, Chief


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Vigilance Officer of IDBI Ltd. and the Compliance Officer and

any other officer so nominated, will oversee the compliance of the

Code of Conduct and Ethics.

IDBI have been providing many services to its customers. It

divides its services into two divisions:

1. Retail Banking Services.

2. Corporate Banking Services.

The following are the Retail Banking Services:

Deposits:The bank provides normal Savings Bank Accounts, Current

Accounts, Fixed Deposits, and Pension Accounts. But it also

provides special accounts like Suvidha plus Fixed Deposits

accounts & Sabka Accounts.

Loans:The bank provides various loans like:

1. Home Loans.

2. Loans against home.

3. Education Loans.

4. Personal Loans.

5. Security Loans.

Easy

Payments:


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Bank provides its customers with a facility of easy bill

payments. It provides facility of payment of tax, Stamp Duty,

Easy Fill, Online Transfer, etc.

Money

Transfer:Sending money within India has never been this simple,

convenient, fast and safe! IDBI's Card to Card Money Transfer

facility; a first-of-its-kind money transfer service in India is the

absolute way to send money anywhere, anytime to any Visa Debit

or Credit cardholder in India. Bank's customers can now transfer

money from their Bank account or Visa card to any other Visa

debit or credit card across the country through this service.

Funds can be transferred to any debit or credit card in

India.

Sender needs to know only the card number of the

beneficiary.

Can be accessed using ATM, Internet Banking or through

the branch.

Funds will be transferred within 2-3 working days.

Cheaper, faster and more convenient than Demand Drafts,

telegraphic transfers and Payable-At-Par cheques.

No geographical limitation within India.

Beneficiary location need not be known.

Funds will be transferred within 2-3 working days.

Payment of credit card bills.

Transfer Funds


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We can use Internet Banking, ATMs or branches for transferring

money across the country. The only information we need to know

is the 16-digit card number of the transferee. To carry out a

transfer, simply log on to IDBI's Internet Banking at

www.idbibank.com, or visit the nearest IDBI ATM or branch andtransfer the required amount. The money is directly credited into

the recipient's card, no matter where he is. For any further

assistance, click here to call our phone banking numbers nearest

to your location.

Investment:

We believe that all investors share a common goal, regardless

of their objectives: superior and sustained returns with a tight

control over risk. Meeting your long-term investment goal is

dependent on a number of factors: your investment capital, your

expected rate of return, inflation, taxes and your investment time

horizon. To meet your requirements, we offer you investment

options based on your risk tolerance and return expectations.

Relationship Managers are equipped to advise you on various

investment avenues after thoroughly understanding your

investment profile. They then help you with your investments and

subsequently support you by tracking your investments on a

regular basis.

Mutual

Funds:Mutual funds offer a simple and effective way to diversify your

investment without the hassles of tracking individual stocks on a

daily basis. Click here for more details on the options we offerGoI 8.0% Savings (Taxable) Bonds. 8% GoI Savings Bonds is a

good option for investors looking for high yielding risk free

instruments.

Capital Gain bonds:


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Invest your long-term capital gains on sale of your asset in the

specified assets.

InsuranceServices:IDBI brings to you Birla Sun Life Insurance, one of the

leading providers of life insurance products. To invest in an

insurance policy, just walk into any of our branches and meet our

Certified Insurance Officer. After studying your profile, short-

term and long-term needs and your plans for the future, he will

recommend a policy that's best for you.

NRIa/c:Being an NRI (non-resident Indian) and privy to special

benefits and privileges in India, its only but natural to expect

world class levels be it banking or any other service. Welcome to

IDBI, where you are treated as special and your needs exclusive.

While we offer basic NRI banking products like Non Resident

Rupee Checking Account, Non Resident Rupee Term Deposits and

Foreign Currency Non Resident Deposit, we realise that your

requirements are manifold. Hence, we provide seasoned banking professionals to handle your queries and offer value added

services. The value-added services we provide range from answers

to online tax and foreign exchange related queries and needs with

special emphasis on FEMA guidelines issued by The Reserve Bank

of India from time to time. Our International Debit Card is

designed to offer you the convenience of accessing your funds

with us from any ATM and also pay for your purchases from any

merchant establishments across the world. You can avail of ouradvanced funds transfer facility to transfer funds from your

account to that of your family members' account held with any

IDBI branch across India. Our other services, such as providing

free nomination and mandate facility enables hassle free banking


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operations to your family member authorised by you to operate

your account. We provide high-end solutions such as high yielding

foreign exchange products, wealth management and insurance.

Non-Resident External (NRE)Repatriable account for your investment needs access your

account anytime, anywhere with Internet Banking, shop at more

than 8.3 million locations and withdraw funds in 140 countries

Non-Resident Ordinary (NRO)

An account for your local income and expenses, access your

account at more than 250 ATM's across the country, pay yourbills in India from anywhere in the world.

FCNRRetain your funds in foreign currency, no exchange risk;

earn attractive returns on your fund.

Foreign Exchange

Services:

Spot Contracts:

Spot contract is the simplest and most common foreign

exchange transaction very widely used by the corporates to cover

their receivables and payables. It is a commitment by the client

to buy or sell one currency against another at a fixed rate for

delivery two business days after the transaction.

Example: Say an Indian company wants to pay its overseas supplier

in US dollars 5 MM. Using a Spot Contract it purchases dollars

for immediate (2 business days). It has funds delivered to the


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supplier's Bank Account overseas. The exchange rate is fixed by

the current market. The equivalent Indian Rupees is debited to

the company's account.

Forward Contracts:With Forward contracts, you can negotiate a rate today to

exchange foreign currency on a future date. Forward contract is a

contract to buy or sell currency on a future date at a

predetermined rate. The rate on the forward exchange contract

is based on the spot rate and the differential in interest rates

between the two markets involved. This type of transaction helps

you manage your foreign exchange risk because, by setting the

exchange rate in advance, you eliminate the uncertainty related to

fluctuations in the currency until the time you pay for it or

receive it.

Example: Say, an Indian company has an import payable USD 5

million in three months from a US exporter. The company must

protect itself from an adverse fluctuation in the exchange rate of

USD/INR.

Through a forward contract, the company "locks-in" an

exchange rate today, and buys USD against INR for delivery 3

months in the future. With the forward contract the company

protects itself against downside risk, the possible depreciation of

INR in three months. There is no upside potential, however, if the

INR appreciates, the company is committed to the terms of the

contract.

Forward cover decisions.

Outright forward contracts.

Forward to forward.

Currency switching.


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De-link cross from INR.

Cover USD/INR exposure.

Cover cross exposure.

Partial cover.

Fixed date - FC deliverable at a fixed date.

Option forward:

Deliverable during a specified period.

Maximum one calendar month.

Last date holiday and declared holiday.

Deliverable preceding working day.

Forward RateAgreements:A forward rate agreement is a financial contract between a

bank and the customer to exchange interest payments for a

"notional principal" amount on settlement date, for a specified

period from start date to maturity date. Accordingly, on the

settlement date, cash payments based on contract (fixed) and the

settlement rate, are made by the bank and the customer. The

settlement rate is the agreed benchmark or reference rate prevailing on the settlement date. Forward rate agreement

provides means for hedging the interest rate risk arising on

account of lending or borrowing made at fixed or variable interest

rates.

Currency

Swaps:A foreign exchange transaction in which a bank agrees to

exchange specified amount of one currency for another currency

at a fixed price, i.e., the bank and the customer agree to


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exchange payment streams or cash flows both in terms of

principal and interest. Simply stated, currency swap is an

extended forward contract and normally for periods beyond one

year. An Indian company that has raised the borrowing in foreign

currency can exchange the same for the equivalent INR therebymatching foreign currency liabilities. There will be series of

forward contracts for both principal and interest payments at the

agreed exchange rate over the period of the loan/borrowing.

The company will have to execute ISDA documentation with the

bank.

PhoneBanking:At IDBI, we endeavour to raise the bar to meet the rising

requirements of our customers, by providing quality products and

services to suit varied banking needs. Our Phone Banking service

is yet another, technology and customer centric step in that

direction.

IDBI's Phone Banking service enables you to access

authentic, instantaneous information on your account balances and

transactions. The service is available totally free of cost round

the clock, 365 days a year.

To view the different services that are available through our

Phone Banking facility, click here. A telephone and your 4-digit

TIN (telephone identification number) is all that you need to

access your account.

SMS

Banking:Business is on the move and so are the people who conduct it. For

you to enjoy banking convenience while on the move, IDBI is here

with its SMS Banking facility. Our SMS banking initiatives permit


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you to access your Bank account and carry out various banking

transactions and inquires.

NON-WAP Enabled Mobile Phones:If you have a non-WAP enabled mobile phone, you can use

the SMS facility and conduct the following operations using the

messaging services of your service provider.

Balance enquiry.

Last three transactions.

Cheques payment status.

Cheques book.

Statement request.

Demat - free balance holding.

Demat - last two transactions.

Bill payment.

WAP Enabled MobilePhonesIf you are WAP enabled mobile phone user, you can do

interactive banking with us. If you need to draw cash while you

travel, your mobile will indicate to you the nearest IDBI branch

and its phone number. Transactions using WAP are WAP-WTLS

compliant (meaning you have the comfort of transacting at the

highest level of security standard available internationally).

Account

Alert:IDBI's new Account Alert service gives you all this and more.

With Account Alert, your bank account transaction information

will be delivered to you automatically, wherever you are. No more

visiting the bank branch or ATM to check routine things like


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account balances, cheques clearance, verification of ATM

transactions, bill payment verifications, etc. Account Alerts allows

you to monitor filely any type of activity on your accounts, and be

notified by e-mail or cell phone SMS as and when they are

executed.

Gold

cardThe card can be used to transact at IDBI ATMs and 13,000

VISA/Plus ATMs in India and for making purchases at 1.2 lac Visa

locations. It is having International validity. The Gold Debit Card

can also be used abroad to make purchases at 13 million merchant

locations and withdraw local currency at 8.5 lac Visa/Plus ATMs.

It also helps for Petrol surcharge waiver*: Currently, there is a

surcharge of 2.5% at all petrol pump transactions. This petrol

surcharge will be waived off for transactions carried out on the

Gold Debit Card. It also provides Insurance cover*: You can

withdraw cash upto Rs. 75,000 and make purchases worth Rs.

75,000 in a day. IDBI has tied up with various merchant

establishments. You can avail of attractive discounts at these

merchant establishments by making purchases through the Gold

Debit Card. The details will be sent across to you from time to

time.

Debit cum creditcardThis card enables you to access your IDBI account from

anywhere in the world, anytime of the day or night. It not only

lets you withdraw money from any of our ATMs (Automated Teller

Machines) and our associated bank's ATMs, but also empowers


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you to shop, dine and travel without the worry of carrying cash

with you all the time.

GiftcardThe IDBI GiftCard allows your loved one to purchases goods

and services at over 1.8 lac merchant establishments in India that

accept Visa cards. No heartaches of being bound to specific

stores with gift vouchers. The GiftCard can be used more than

once giving you the flexibility to shop at will from different

stores and at different times.

World currency

cardThe World Currency Card is a prepaid multi currency card

that provides you the convenience of making purchases and

withdrawing cash while travelling almost anywhere abroad. The

Card does away with the inconvenience of carrying travellers

cheques, is much safer than carrying foreign currency and is more

economical than credit cards.

SAFEDEPOSIT:The Safe Deposit Locker facility offers invaluable safety

for you valuables. We also have on offer a variety of sizes to fit

your requirements. The deposit lockers can be operated at your

convenience during our extended banking hours. We provide the

maximum safety to your valuables that are placed in our Safe

Deposit Lockers. For opening a locker all you have to do is:

Open a savings bank account with Rs 5,000.

Pay a one time administrative charge (non refundable)

including legal fees/stamp paper charges.


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Pay only one year's rent in advance upfront. No additional

fixed deposit required.

Services that are provided in Corporate Sector are:

Home / Project Finance

Scheme:Project finance involves providing credit and other

facilities to a borrower with a credit rating normally of 'A' or

'BBB' (provided adequate mitigants are in place), for setting up

new projects, expansion, diversification and modernisation of

existing industrial units. While considering the project for

assistance, IDBI evaluates technical feasibility, commercial and

economic viability and financial soundness of the project. The

interest rate and other fees for credit and other facilities would

be based on creditworthiness of borrower, rating, risk perception,

tenure of loan / facilities and other relevant factors. The

repayment of the loans and facilities is normally fixed on case to

case basis depending on projected cash flow of the borrower.

Technology Upgradation Fund Scheme:

The Government of India introduced the Technology

Upgradation Fund Scheme (TUFS) for Textile and Jute

Industries, which is valid upto March 31, 2007. The Scheme is

intended to facilitate induction of state-of-the-art or near state-

of-the-art technology in Textiles Industry. Existing units with or

without expansion and new units are eligible under TUFS.


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IDBI is a Nodal Agency for textile industry (Non-SSI Sector).

Normally the project would be evaluated as per project finance

norms. The rate of interest is normal applicable rates prevailing

at the time of sanction / execution of loan documents. However,

Government of India (GoI), Ministry of Textiles (MoT), givesinterest reimbursement of 5% p.a. to eligible projects sanctioned

assistance under TUFS. As regards FC Loan, GoI, MoT provides a

cover for actual adverse exchange fluctuations not exceeding 5%

from the base rate (the base rate being the weighted average

rate covering all disbursements of the loan) or cost of forward

cover premium limited to 5% p.a. on the base rate of exchange, as

an option, to be exercised only once in each Financial Year.

Corporate Loan:

Under the Corporate Loan Scheme, IDBI provides rupee

and/or foreign currency loans to corporates with minimum 5 years

of operations, continuous profits for the last 2 years with credit

rating normally 'A' or 'BBB' (provided adequate mitigants are in

place) and satisfactory track & credit record with lenders for

normal capital expenditure, working capital margin, shortfall in

working capital and general corporate purposes, including

expenses on Voluntary Retirement Scheme and business

acquisition where no tangible asset creation is envisaged. The

interest rate would be based on creditworthiness of borrower,

rating, risk perception, tenure of loan and other relevant factors.

The repayment period for the loans would normally not exceed 5

1/2 years.

Treasury Product Facility (TPF):


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Under the Treasury Product Facility, IDBI provides

rupee and/or foreign currency loans to well performing corporates

with credit rating of minimum 'AA minus', 5 years of operations

and satisfactory track & credit record, for providing finance for

general corporate purposes with fund requirement of short termnature. Assistance under the scheme would be minimum Rs.10 cr.

The interest rate would be based on creditworthiness of

borrower, rating, risk perception, tenure of loan and other

relevant factors. The repayment period would not exceed 18

months.

Film

Financing:IDBI provides finance for production of feature films as

defined under the Cinematograph (Certification) Rules, 1983.

Advertisement films, short films, documentaries etc. are not

eligible for financing. A corporate entity, promoted by reputed

producers, backed by established directors & other technicians

and possessing satisfactory track record are eligible to avail

assistance under the scheme. In case the entity is recentlycorporatised, track record of the main promoter(s) is considered.

Assistance would be not less than Rs.2 crores and not exceeding

50% of the estimated cost of the film. Interest rate would be

cap rate in the prevailing interest rate band.

Direct Discounting of Bills:

For financially sound machinery / equipment manufacturer,

who wish to promote sales, IDBI provides deferred credit facilityfor sale / purchase of indigenous machinery / equipment under its

easy to operate direct discounting scheme. Assistance would be

100% of the total value (including insurance, taxes & freight).

Interest rate / discount rate would be as prevalent at the time of


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discounting of bills, depending on monthly / quarterly / half-

yearly/ yearly payments and according to temporal profile of bills.

Scheme for Lending to Real Estate Sector:

IDBI provides finance in the form of project funding and

securitization of lease rentals, to a borrower (promoter group in

case of SPV), with continuous profit for the last 3 years, internal

rating of 'A' and above, for productive construction activity in

real estate. Assistance would be in the form of term loans and

total term loans including IDBI loan should not exceed 30% of the

project cost. For projects exclusively for lease out, the ceiling on

total loans will be 60% of project cost. Interest rate would bebased on creditworthiness of borrower, rating, risk perception,

tenure of loan and other relevant factors. The assistance would

be short to medium term in nature not exceeding 5 years. As

regards securitization of lease rentals, the strength of the lessee

and lesser would be assessed on the basis of financials,

reputations, track record and cash flows. The exposure would be

on the basis of present value of lease rentals of maximum 7 years

excluding expenses (like TDS, maintenance, property tax andadjustment of advance payment) or 60% of the property value

less advanced payment received from the lessor, whichever is

lower.

Rehabilitation Finance Department:

IDBI has in its portfolio certain potentially viable, weak

and sick companies, which can be revived by way of

merger/takeover. Rehabilitation Finance Department (RFD), a

specialized department, created to achieve the said objective, is

on the lookout for resourceful parties interested in

takeover/merger or joining in as co-promoter. Industry-wise

classification of such companies is given ahead. Industries, where


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companies are presently available, are given. In addition, IDBI has

in its portfolio, other companies which can be revived by

undertaking various measures such as strengthening of

management, Upgradation of technology, infusion of fresh funds,

etc. IDBI would like to interact with potential investors / clientswho may be interested in takeover, merger or joining as co-

promoters etc. in order to achieve the said objectives.

Forex Services / Treasury:General corporate purposes with fund requirement of short term

nature. The eligibility criteria are:

Past Performance.Well performing corporate with minimum 5 years of

operations and satisfactory track & credit record with

lenders.

Credit Rating: Minimum 'AA-' (read as 'double A minus')

Net Worth: Not less than Rs.25 crores (only equity and free

reserves to be included).

Long Term Debt to Equity Ratio: Maximum 1.25:1

Current Ratio: Minimum 1.1:1Terms of assistance.

Nature of Assistance.

Rupee and Foreign Currency Loan:

Extent of Assistance: Minimum Rs.10 crore

Interest Rate on Rupee Loan: Fixed or floating rate, as per

creditworthiness of borrower, rating, risk perception, tenure ofloan and other relevant factors. Interest rate to be reset for

longer maturity loans. Interest Rate on Foreign Currency Loan:

Normally floating rate based on LIBOR plus a fixed spread


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according to creditworthiness of borrower, rating, risk

perception, tenure of loan and other relevant factors.

Repayment period: Maximum upto 18 months with call / put option

where considered necessary.

Security for the assistance:Demand Promissory Note.

Power of Attorney in favour of IDBI to create charge on

assets / Undertaking to create charge on assets of the

company in the event of default.

Any other acceptable security.

CommercialPaper: IDBI subscribes to bonds, debentures and other debt

instruments. The applicable coupon rate or purchase price would

vary based on the issuer, rating assigned and tenure of the

instrument. The issuer or holder of the instrument or the

arranger to the issue may place the instrument with IDBI.

1. Bonds: IDBI subscribes to bonds issued mainly by banks or

public sectors units. Bonds may be secured or unsecured.

2. Debentures: IDBI subscribes to tradable debentures of short

to medium term maturity issued by corporates. The debentures

should be rated by rating agencies accredited by SEBI/RBI.

INRDerivatives:

1. Interest Rates Swaps (DRS)IDBI contracts to exchange a fixed interest rate liability for a

floating interest rate liability or vice versa, on behalf of its

clients. The principal amount is not exchanged, with only the

differences in cash flows being settled. Capital adequacy norms as


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per RBI guidelines are being followed. Benchmark rates from NSE

MIBOR, Reuters MIBOR, T-Bills rates are normally used.

2. Rupee-Dollar Interest Rate and Currency Swap

IDBI enters into agreements involving exchange of liability in USDollars for a liability in Indian rupees or vice-versa, and may also

include exchange of fixed rate liability for floating rate liability

or vice-versa. Swaps are used for hedging currency and/or

interest rate risk, or for liability management.

3. Forward Rate Agreements (FRA's)

IDBI offers FRA's, which are contracts to exchange interest

payments for a specified period starting from a pre-specified

start date in the future. These instruments are used to manage

interest rate risk.

4. Forward Contracts

IDBI enters into agreements to exchange a predetermined

amount of one currency for another at a specific rate of

exchange on a specified future date. These instruments are

generally used to hedge against exchange rate fluctuations.

Overnight Index

Swaps:An Overnight Index Swap (OIS) is a fixed/floatinginterest rate swap with the floating rate tied to a daily overnight

rate reference. The term of the swap generally ranges from one

week to one year.


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ecent developments

:To meet emerging challenger and to keep up with reforms in

financial sector, IDBI has taken steps to reshape its role from a

development finance institution to a commercial institution. With

Industrial Development Bank (Transfer of Undertaking and

Repeal) Act, 2003 , IDBI attained the status of a limited company

viz. "Industrial Development Bank of India Limited" (IDBIL).

Subsequently, the Central Government notified October 1, 2004

as the 'Appointed Date' and RBI issued the requisite notification

on September 30, 2004 incorporating IDBI Ltd. as a 'scheduled

bank' under the RBI Act, 1934. Consequently, IDBI, the erstwhile

Development Financial Institution of the country, formally

entered the portals of banking business as IDBIL from October 1,

2004, over and above the business currently being transacted. As

of July,2006 the employees association of the IFCI have sought

its merger with the Bank.

PhishingThe Phishing email may also direct you to a spoofed website or

pop-up window, which looks exactly like the real site. Phishing is an

increasingly common type of scam in which personal data such as

credit card numbers and online banking passwords are stolen for

fraudulent use.


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The fraudster sends "spoofed" emails that appear to come from a

legitimate website that you have online dealings with such as a

bank, Credit Card Company or an ISP - any site which requires

users to have a personal identity or account. The email may ask

you to reply with your account details in order to "updatesecurity" or for some other reason.

Sites login page, but has been set up for the sole purpose of

stealing personal information. Unsuspecting people are then often

fooled into handing over credit card numbers, passwords or other

personal details.

If you are using Internet banking or any other online account, you

should be aware of these attacks and how to protect against

them.

The following points may help you protect yourself:

1. Never respond to emails that request personal information. At

IDBI, we would never ask for your personal details through an

email. Nor would we ask for your password through any means,

online or offline. If any of our bank personnel asks you for your

password, do not disclose it and report him or her immediately to

us.

2. Keep your password top secret and change them often.

Changing passwords often helps in protecting your account even if

inadvertently you may have disclosed it to someone.

3. Never use cyber cafes to access your online accounts at cyber

cafes may be infested with viruses and Trojans that can captureand transmit your personal data to fraudsters. The easiest way to

grab information is key logging software. Beware of typing

passwords on unknown PCs.


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4. Keep your computer secure Some Phishing emails or other spam

may contain software that can record information on your

internet activities (spyware) or open a 'backdoor' to allow hackers

access to your computer (Trojans). Installing anti-virus software

and keeping it up to date will help detect and disable malicioussoftware, while using anti-spam software will stop Phishing emails

from reaching you. It is also important, particularly for users with

a broadband connection, to install a firewall. This will help keep

the information on your computer secure while blocking

communication from unwanted sources. Make sure you keep up to

date and download the latest security patches for your browser.

If you don't have any patches installed, visit your browser's

website, for example users of Internet Explorer should go to the

Microsoft website.

5. Check the website you are visiting is secure Before submitting

your bank details or other sensitive information there are a

couple of checks you can do to help ensure the site uses

encryption to protect your personal data:

If the address bar is visible, the URL should start with https://

(s for secured) rather that the usual http://.

If the address bar is not visible as in our Internet Banking

website, look for a lock icon on the browser's status bar. You can

check the level of encryption, expressed in bits, by hovering over

the icon with your cursor. Note that the fact that the website is

using encryption doesn't necessarily mean that the website is

legitimate. It only tells you that data is being sent in encryptedform.


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6. Validate the SSL Certificate if you are in any doubt, click on

the lock icon at the bottom of the secured page. This opens up a

new window, displaying the SSL certificate information. Ensure

that there is no Red Cross mark preceding the title Certificate

Information. It should also be Issues to: www.idbibank.co.in. Youcan get more information by clicking on the other tabs in the

certificate window.

Following the above steps would help you in protect yourself.

However, please remember, fraudsters are always trying to stay a

step ahead. To ensure that you remain protected at all times

never let anyone know your PINS or passwords, do not write

them down

do not use the same password for all your online accounts

Avoid opening or replying to spam emails as this will give the

sender confirmation they have reached a live address.

Above all, use common sense when reading emails. If something

seems implausible or too good to be true, then it probably is.

ACBI awards for IDBI & WR:

Industrial Development Bank of India Limited (IDBI)

bagged three coveted awards at the 46 Annual Awards night,th

organized by the Association of Business Communicators of India


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(ABCI) on January 12, 2007 in Mumbai. Shree Vayam, the House

Journal of IDBI, was awarded the prizes in three individual

categories: Edwin Fernandes for Features (English), Gulabchand

Yadav for Features (Hindi), & Sushmita Vazirani for Features

(Photo). His Excellency S. M. Krishna, Governor of Maharashtra,presided as Chief Guest & presented the Elite categories award

to the prizewinners.

A fter going through all these services provided by Idbi

Bank, we can conclude that IDBI is one of the fast going Universal

Banks in India. We expect that the information provided by us

was satisfactory.

Reference:- Idbi.com

- Google.com

- Indian Financial Systems

- Indian History of Banking

- DNA Newspaper

*****


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22806040 Universal Banking IDBI1

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