A study of investment pattern of ICICI Bank customers

8/20/2019 A study of investment pattern of ICICI Bank customers

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Chapter – 1

INTRODUCTION

An investment is the employment of funds with aim of achieving income and growth in valuethe main characteristics of investment are waiting for a reward. Investment is the allocationof monetary resources to assets that are expected to yield some gain or positive return over agiven period of time. Investment aims at multiplication of money at higher or lower ratesdepending upon whether it is long term or short term investment and whether it is risky orrisk-free investment. Investment activity involves creation of assets or exchange of as- setswith profit motive. “An investment in knowledge pays the best interest”. From the people

point of view, the investment is a commitment of a person‟s funds to derive future income inthe form of interest, dividends, rent, premium, pension benefits or appreciation of the value of

their principle capital.

Most of the investments are considered to transfers of financial assets from one person toanother. Various investment options are available with differing risk-reward trade -offs. Anunderstanding of the core concepts and a thorough analysis. Investment refers to the conceptof deferred consumption which may involve purchasing an asset, giving a loan or keepingfunds in a bank account with the aim of generating future returns. An understanding of thecore concepts and a thorough analysis of the options can help investor create a portfolio thatmaximizes returns while minimizing risk exposure.

Savings form an investment part of the economy of any nation. With the savings invested invarious options available to the people, money acts as the driver for growth of the country.Indian financial scene too presents a plethora of avenues the investor. Through certainty notthe best or deepest of market in the world, it has reasonable options for an ordinary man toinvest his savings.

One need to invest and earn return on their idle resources and generate a specified sum ofmoney for a specific goal in life and make a provision for an uncertain future. One of theimportant reasons why one needs to invest wisely is to meet the cost of inflation. Inflation isthe rate at which the cost of living increases.


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OBJECTIVE OF STUDY

The objective of the study is to find out investment pattern of the investor towards the

banking products

To study on why most of the customers are not investing money in stock market?

Which banking products they more prefer?

Analysing the factors that affect investment pattern of investors and other investment

criteria provide the valuable insights.


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SCOPE OF STUDY

The project aimed at studying the investor preference towards banking products and share

market. For this reason investor opinions were collected and common view found out.

This was done with the help of questionnaire.

Questionnaire was filled by the investor of ICICI Bank (Ulhasnagar Branch – Chopda

court).

Sample size has been taken 228.

The analysis is based on primary as well as secondary data.

This analysis would be focusing on the information from the customers about their knowledge,

perception and behavior on different financial product.


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Chapter – 2

LITERATURE REVIEW

Fama (1972) developed methods to find out the observed return due to the ability ofthe fund manager to invest in the right stocks at a given level of risk from that of

predictions of price movements in the market.

D.N.& Rao, S.B, (2010) carried out a study, on the investment patterns of the five investor

groups in eight different fund categories; studied the portfolios of the investor groups

and identified the dominant investor groups as

per investment size and folios. Important

findings are (a)

Corporates are the dominant investor group with a share

of almost 48% of

the total investment (AUM) in the industry and prefer non-equity funds which offer high

security & liquidity while the next dominant investor group was the Retail investors‟ group

with 24% of the total investment.

Jack Miller, in his work published on June 03, 2010, talked about how investors make

investment decisions. He broke the process of decision making in pulling the buy or sell

trigger. According to him investors made the investment decisions in the ways like simple

screening, then lateral recommendation, followed by piggy bank investing.


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Chapter – 3

COMPANY OVERVIEW

ICICI Securities Ltd is an integrated securities firm offering a wide range of servicesincluding investment banking, institutional broking, retail broking, private wealthmanagement, and financial product distribution.

ICICI Securities sees its role as 'Creating Informed Access to the Wealth of the Nation for itsdiversified set of client that includes corporates, financial institutions, high net-worthindividuals and retail investors.

Headquartered in Mumbai, ICICI Securities operates out of 66 cities and towns in India andglobal offices in Singapore and New York.

ICICI Securities Inc., the step down wholly owned US subsidiary of the company is a

member of the Financial Industry Regulatory Authority (FINRA) / Securities InvestorsProtection Corporation (SIPC). ICICI Securities Inc. activities include Dealing in Securitiesand Corporate Advisory Services in the United States.

ICICI Securities Inc. is also registered with the Monetary Authority of Singapore (MAS) andoperates a branch office in Singapore.

ICICI Direct Brokerage Charges 2015

Trading Account opening charges (one time) Rs.975 Trading Annual maintenance charges: Rs.0 Demat Account Opening charges (one time) Rs.100 Demat Account Annual Maintenance Charges Rs.500 ( Rs.0/- for 1st year with 3 in 1

Account)

ICICI offers 2 types of brokerage plans to its customer:

1. I-Secure Plan ( Flat brokerage Plan)This plan offers flat brokerage irrespective of turnover value. This plan is suitable fortraders/ investors looking at secured and fixed brokerage.

2. I-Saver Plan ( Variable brokerage plan)

This plan offers brokerage based on the trading volume i.e. high brokerage for lowvolume and low brokerage for high volume trades. This plan suitable fortraders/investors who trade in high volumes and can benefit low brokerage.

http://www.finra.org/http://www.sipc.org/http://www.mas.gov.sg/http://www.mas.gov.sg/http://www.sipc.org/http://www.finra.org/


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ICICI Direct Cash Brokerage Plan

I - Saver Plan I - Secure Plan

Total Eligible

Turnover (Percalendar

Quarter)

Brokerage (%)

Effective

Brokerage onIntraday Square

off

Total EligibleTurnover (Per

sale Quarter)

Brokerage (%)

Effective Brokerage onIntraday Square off

Above Rs. 5 Cr. 0.25 0.125%Irrespective ofturnover

0.55 0.275%

Rs.2 Cr. to 5 Cr. 0.30 0.150%

Rs.1 Cr. to 2 Cr. 0.35 0.175%

Rs.50 Lakhs to 1Cr.

0.45 0.225%

Rs.25 Lakhs to 50Lakhs

0.55 0.275%

Rs.10 Lakhs to 25Lakhs

0.70 0.350%

ICICI Direct Future & Future Plus Brokerage

I - Saver Plan / I - Secure Plan

For Equity/Currency Futures Equity Future and Future Plus Currency Futures

Total Eligible

Turnover per month Brokerage

(%) Brokerage on Second leg of

Intraday square off (per lot) Brokerage on Second leg of

Intraday square off (per lot)

Above Rs. 20 Crores 0.030 Rs.15/- Rs.10/-

Rs.10 Crores to 20Crores

0.035 Rs.15/- Rs.10/-

Rs.5 Crores to 10Crores

0.040 Rs.15/- Rs.10/-

Less than Rs.5 Crores 0.050 Rs.15/- Rs.10/-

ICICI Margin & Margin Plus Trading Brokerage


Total Eligible Turnover per month Brokerage (%)

Above Rs. 20 Crores 0.030

Rs.10 Crores to 20 Crores 0.035

Rs.5 Crores to 10 Crores 0.040

Less than Rs.5 Crores 0.050


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ICICI Direct Options Brokerage


Brokerage in Options Total Eligible

Lots per month Flat brokerage per

contract lot (Rs.) Brokerage on Second leg of Intraday

square off (per lot)

Above 600 65/- Rs.15/-

301-600 70/- Rs.15/-

151-300 75/- Rs.15/-

61-150 85/- Rs.15/-

0-60 95/- Rs.15/-

ICICI Direct Advantages

1. 3-in-1 account integrates your banking, broking and demat accounts. All accounts arefrom ICICI and very well integrated. This feature makes ICICI the most interesting

player in online trading facility. There is absolutely no manual interfere require. This istruly online trading environment.

2.

Unlike most of the online trading companies in India which require transferring money tothe broker‟s pool or towards deposits, at ICICI Direct you can manage your own demat

and bank accounts through ICICI direct.com. Money from selling stock is available inICICI bank account as soon as the ICICI directs receive it.

3.

Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes allfrom one website. General Insurance is also available from ICICI Lombard.

4. Trading is available in both BSE and NSE.

5.

Low bandwidth website is available for slow internet connection or for trading formmobile devices.


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ICICI GROUP OVERVIEW

ICICI Group offers a wide range of banking products and financial services to corporate andretail customers through a variety of delivery channels and through its specialized group

companies and subsidiaries in the areas of personal banking, investment banking, life andgeneral insurance, venture capital and asset management. With a strong customer focus, theICICI Group Companies have maintained and enhanced their leadership positions in theirrespective sectors.

ICICI Bank is India's second-largest bank with total assets of Rs.4736.47 billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs.64.65 billion (US$ 1,271 million) for theyear ended March 31, 2012. The Bank has a network of 2,791 branches and 10,021 ATMs inIndia, and has a presence in 19 countries, including 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 headquarteredin the United Kingdom. ICICI Prudential Life was amongst the first private sector insurancecompanies to begin operations in December 2000 after receiving approval from InsuranceRegulatory Development Authority (IRDA). ICICI Prudential Life's capital stands atRs.47.91 billion (as of March 31, 2012) with ICICI Bank and Prudential plc holding 74% and26% stake respectively. For FY 2012, the company garnered Rs.140.22 billion of total

premiums and has underwritten over 13 million policies since inception. The company hasassets held over Rs.707.71 billion as on March 31, 2012.

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 atMarch 31, 2012 and Fairfax Financial Holdings Limited, a Canada based USD 30 billiondiversified financial services company engaged in general insurance, reinsurance, insuranceclaims management and investment management. ICICI Lombard GIC Ltd. is the largest

private sector general insurance company in India with a Gross Written Premium (GWP) ofRs.5,358 crore for the year ended March 31, 2012. The company issued over 76 lakh policiesand settled over 44 lakh claims and has a claim disposal ratio of 99% (percentage of claimssettled against claims reported) as on March 31, 2012.

ICICI Securities Ltd is the largest integrated securities firm covering the needs of corporateand retail customers through investment banking, institutional broking, retail broking and

financial product distribution businesses. Among the many awards that ICICI Securities haswon, the noteworthy awards for 2012 were: Asia money `Best Domestic Equity House for2012; 'BSE IPF D&B Equity Broking Awards 2012' under two categories:- Best EquityBroking House - Cash Segment and Largest E-Broking House; the Chief Learning OfficerAward from World HRD Congress for Innovation in Learning category. IDG India's CIOmagazine 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 Fameaward was additionally conferred in 2012.

ICICI Securities Primary Dealership Limited (‘I-Sec PD’) is the largest primary dealer inGovernment 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 mobilization, portfolio management services and

http://www.icicibank.com/http://www.icicibank.com/http://www.iciciprulife.com/http://www.iciciprulife.com/https://www.icicilombard.com/https://www.icicilombard.com/http://www.icicisecurities.com/http://www.icicisecurities.com/http://www.icicisecuritiespd.com/http://www.icicisecuritiespd.com/http://www.icicisecuritiespd.com/http://www.icicisecuritiespd.com/http://www.icicisecuritiespd.com/http://www.icicisecuritiespd.com/http://www.icicisecurities.com/https://www.icicilombard.com/http://www.iciciprulife.com/http://www.icicibank.com/


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research. One of the first entities to be granted primary dealership license by RBI, I-Sec PDhas made pioneering contributions since inception to debt market development in India. I-SecPD 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 underdiscretionary portfolio management.

I-Sec PD‟s leadership position and research expertise have been consistently recognized bydomestic and international agencies. In recognition of our performance in the Fixed Incomemarket, 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 Magazine‟s annual triple a CountryAwardsRanked volume leader - by Greenwich Associates in 2010 Asian Fixed-Income InvestorsStudy. 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 assetunder management of Rs. 688.16 billion and a market share (mutual fund) of 10.34% as onMarch 31, 2012. The Company manages a comprehensive range of mutual fund schemes and

portfolio management services to meet the varying investment needs of its investor‟s through117 branches and 196 CAMS official point of transaction acceptance spread acrossthe country.

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

http://www.icicipruamc.com/http://www.icicipruamc.com/http://www.iciciventure.com/http://www.iciciventure.com/http://www.iciciventure.com/http://www.icicipruamc.com/


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Chapter – 4

PROJECT

Approaching the walking Customer in ICICI Bank

Taking interview of walking Customers in Bank

Fill up questionnaire form from the customers

Giving information about ICICI Securities products to the customer

Create awareness among customers about ICICI Securities and product

Get questionnaire filled by ICICI Branch staff.

Create awareness of I Direct a/c in the bank and encourage ICICI Bank employees to

sell product.

Create awareness of SFA entry in branch

Identifying problems being faced by customers

Study the investment pattern of ICICI Group Customers

Study on Why most of the customers are not investing money in stock market

To analyse report the investment pattern of investors

To Draw conclusion and suggestions


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Chapter – 5

RESEARCH METHODOLOGY

Type of research: This is a descriptive research where survey method is adopted to

collect primary information from the investors using different scales as required and

the required secondary information for the analysis.

Primary Data a questionnaire schedule was prepared and the primary data was

collected through survey method.

Sample Size of 228 customers has been taken.

Secondary Data from Company website and other websites.

Investment pattern of investors on different products research work will be carried on

the basis of structured questionnaire. The study is restricted to the customers of the

ICICI Group.

Techniques for data analysis the analysis of data collection is completed and

presented systematically with the use of Microsoft Excel and MS-Word. The some

tools which were used for presentation is Pie charts.


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Chapter – 6

ANALYSIS AND INTERPRETATION

Particulars No. of respondents Percentage of respondents

Saving account 162 71

Fixed Deposit 35 15

Mutual Fund 14 6

Recurring Deposit 11 5

Share Market 4 2

SIP 2 1

Analysis and Interpretation:

From the above pie chart ICICI Customers more prefer Saving A/C is 71% and 15%

Customers are investing in FD. 6%, 5%, 2% and 1% are investing Mutual Fund, Recurring,

Share Market and SIP respectively.

71%

15%

5%6%

1%

2%

Investment pattern in ICICI GROUP

Saving A/C Only Fixed Deposit Recurring Deposit Mutual Fund SIP Share Market


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Which of the following products of ICICI you are using currently?


Male Female Male Female

Saving account 156 22 82 60

Fixed Deposit 19 11 10 30

Mutual Fund 7 2 4 5

Recurring Deposit 5 2 3 5

SIP 3 0 1 0

Home Loan 1 0 0 0


It is found that most of the Male customers prefer saving account i.e. 82%. 10% & 3%

customers are investing in FD and RD on which they will get fixed rate of interest.4%customers invested in mutual funds and rest of the others in SIP etc.

10% 4%3%

1%

0%

82%

Male

Fixed Deposit

Mutual Fund

Recurring Deposit

SIP

Home Loan

Saving A/C Only


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It is found that 60% Female customers has only saving A/C but Here Female customers are

more prefer FD i.e. 30% as compare to Male i.e. 10%. 5% customers are investing in mutual

Fund and Recurring Deposit.

30%

5%

5%

60%

Female

Fixed Deposit

Mutual Fund

Recurring Deposit

Saving A/C Only


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Do you invest in stock market?

Option No. of respondents Percentage of respondents


Yes 19 4 10 11

No 172 33 90 89


It is found that here nearly same percentage of Male & Female customers about invests in

stock market or not. It shows that low awareness of customer about stock market compare to

other banking products.

10%

90%

Male

Yes

No

11%

89%

Female

Yes

No


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If no, please specify the reason:



Lack of interest 87 12 50 39

Lack of Knowledge 47 9 27 29

Looks Risky 32 9 19 29

Invest in property 5 0 3 0

Others 2 1 1 3


From the above table we get to know that 50% male customers are not interested to invest instock market. 27% of customer doesn‟t have knowledge about stock market. 19% customers

feel that stock market is risky.3% customers invested in property.


From the above table we get to know that 39% Female customers are not interested to invest

in stock market. 29% of customer doesn‟t have knowledge about stock market. 29%

customers feel that stock market is risky. 3% customers have other reason but here female

customers are investing money in property.

50%

27%19%

3%

1%

Male

Lack of Interest

Lack of knowledge

Looks Risky

Invest in property

Others

39%

29%29%

3%

Female

Lack of Interest

Lack of Knoweldge

Looks Risky

Other


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Do you know considering your FD/RD/SIP/Home Loan you are eligible

for 100% discount on ICICI Direct opening fees?


Yes 12 5

No 216 95


From the above table and diagram it is found that only 5% of customers aware about 100%

discount on ICICI direct account opening fees if they are using FD/RD/Home loan/SIP. 95%

of customers are not aware about this offer.

5%

95%

Yes

No


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Chapter – 6

CONCLUSION

The individual investor still prefers to invest in financial products which give risk free returns

like Fixed Deposit, Recurring Deposit Life Insurance etc.

Customer feels share market is very risky hence they don‟t like to invest in stock market.

Only 10% of ICICI Customers are investing money in stock market and others are not

because they are not interested, feel risky and Customer has very low knowledge about the

share market.

In bank, Staff more focus on other product like Life Insurance, Fixed Deposit, Mutual Fund

etc. but no one pitch the I-Direct Product.

One I-Direct employee should be presented at every branch to encourage customer to invest

money in share market and solve queries of customers on the spot.


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SUGGESTION

FOR COMPANY:

Company should decrease the account opening charges so that more & morecustomers can be attracted.

Annual charges should be decrease because the other companies have very less annualcharges.

Need at least one staff to be present at every ICICI Bank for product information togive customer on the spot.

Awareness should be created among the people about this new type of technology(Online trading) with the help of seminar and expert session.

Pamphlet should be kept on every desk in branch

The company should try to bring in the notion of customer orientation i.e. give thecustomer what they require, only then can it grow and reach the highest level ofcustomer satisfaction.

FOR CUSTOMER:

Customer should not worry about brokerage part because services are far better anddifferent types of products are there in the company.

ICICIDirect.com is part of ICICI Group & this group is trusted by millions of people.


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BIBLIOGRAPHY

www.icicisecurities.com

www.icicigroupcompanies.com

http://www.theglobaljournals.com/ijar/file.php?val=January_2015_1421737901__79.pdf

http://www.icicisecurities.com/http://www.icicigroupcompanies.com/http://www.theglobaljournals.com/ijar/file.php?val=January_2015_1421737901__79.pdfhttp://www.theglobaljournals.com/ijar/file.php?val=January_2015_1421737901__79.pdfhttp://www.icicigroupcompanies.com/http://www.icicisecurities.com/


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QUESTIONNAIRE

1.

How long have you been banking with ICICI Bank?

0 - 6 Month 6 Months – 3 Year > 3 Year

2.

Which of the following products of ICICI you are using currently?

Home Loan FD RD SIP Mutual Fund

3.

Do you invest in stock market?

Yes No

4.

If no, please specify the reason:

Lack of knowledge Lack of interest Looks Risky Invest in

property Other

5.

If yes then kindly tell about current broker?

Name of the broker:

6.

Are you satisfied with your broker service?

Yes No7. Are you satisfied with your current brokerage plan?

Yes No

8.

Do you know considering your FD/RD/SIP/Home Loan you are eligible for

100% discount on ICICI direct account opening fees?

Yes No

Name: Date:

Sile ID: Contact No:

Interviewer ID:

A study of investment pattern of ICICI Bank customers

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