A

Industrial Training Report

On

“Rural Finance Provided by ICICI BANK”

Submitted in partial fulfillment for theAward of degree of

Bachelor of Business Administration

University of Kota , Kota (Raj.).

Academic Session 2013-2014

Submitted to: - Submitted by:-

Mrs. ISHA AGARWAL Mr. PARVENDRA NIRALALecturer (MIMT) BBA-IInd YEAR

MODI INSTITUTE OF MANAGEMENT AND TECHNOLOGY, KOTA

Affiliated To University Of Kota, Kota (Rajasthan)

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ACKNOWLEDGEMENT

I express my sincere thanks to my project guide Mrs. ISHA AGARWAL,

Deptt. Lecturer of Management Studies, for guiding me right form the

inception till the successful completion of the project. I sincerely

acknowledge her for extending their valuable guidance, support for

literature, critical reviews of project and the report and above all the

moral support. She had provided to me with all stages of this project.

I would also like to thank the supporting staff Management Department,

for their help and cooperation throughout our project.

Name of the Students

PARVENDRA NIRALA BBA-IInd YEAR

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PREFACE

Customer plays an important role in the success or failure of any business

be it product or service industry. For the success of the business one should

satisfy the customer according to their expectations & needs. In short, we can

say that one should know the level of satisfaction which the consumers achieve

after using the product. Gauging the level of customer satisfaction & its

determinants is critical for every organization. Marketers can use such data to

retain customer & operate more efficiently & effectively.

In this economic era for tightening Business nuts and bolt of any company

industries or enterprises. It is necessary to measure its market position in a

certain time interval with the ever changing theories and the concept of market.

For this assessment, we need the robust methodology of survey. Although

survey does not reveal the absolute solution of any objective, but it provides the

inclination towards a good out put.

In the course of Bachelor In Business Administration

(B.B.A.), every student required to undergo application based summer

internship after the completion of one year (two semester). During the winter

internship every student comes to know about the marketing and the real

situation of the market.

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EXECUTIVE SUMMARY

ICICI Bank is one of the largest bank networks in the country. The ICICI

Group has been in existence since 1955 when ICICI Ltd., was created. ICICI

Prudential started in 2002 as subsidiary of ICICI Ltd., Today ICICI Bank has a

customer base of 4 million with total assets exceeding Rs.1, 00,000 Cr. making

it the 2nd largest bank industry in the country.

The Banking sector, after the opening up, provides greater opportunities.

Several global players have emerged and the market has changed significantly.

In the changed scenario, the expectation is that the low Insurance premium as a

percentage of GDP prevailing in India will improve and will offer better

opportunities to the insurance players.

Banking sector is one of the key areas where enormous business

potential exists.

In the Banking sector State Bank of India (SBI) is the major player. The

SBI has 2050 branches. It is constituted in to seven Zones. Currently there are 5,

60,000 Customer agents in India. Banking is another segment, which has been

growing at a faster pace.

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Table of contents

Chapter 1 Industry Profile

Chapter 2 Company Profile

Chapter 3 Project Profile

Chapter 4 Research Mythology

Chapter 5 Fact & Finding

Chapter 6 SWOT Analysis

Chapter-7 Conclusion

Chapter-8 Suggestion

BIBLIOGRAPHY

Annexure

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Chapter 1Industry Profile

INTRODUCTION OF INDIAN BANKING SYSTEM

A HISTORICAL PERSPECTIVE

The earliest banks in India can be traced to the three presidency banks (in Bengal, Mumbai, and

Chennai) in the early 1980s. Subsequently with the emergence of several small banks in the country,

the number of banks had gone up 105 by December by 1934. In 1921, the three-presidency banks

were merged into the imperial bank of India, which, apart from usual commercial operations, also took

over certain central banking functions. Since the Reserve Bank of India was established as a full –

fledged central bank of the country in 1935.

The Imperial bank of India was nationalized and came to be known as the State Bank of

India the establishment of the state bank of India was one of the significant steps taken by

the government of India to control its expanding economy.

The banking system witnessed a steady growth during the post- independence period and

by the mid- sixties the system has become fairly strong and compact. However several

deficiencies in their functioning were noticed, mainly in terms of geographical coverage and

credit deployment. The network of branches of various banks covered only a limited

segment of the population in major cities while the rural areas and semi- urban areas were

totally neglected. it was also noticed that substantial gaps in credit deployment existed in

financing agriculture, small - scale industry and self - employed persons. Further, the

ownership pattern of banks showed the concentration of economic power in few hands

DEFINITION OF BANKING

In Section 5(b) of the Banking Regulations Act, 1949. “Banking” is defined as accepting for

the purpose of lending and investments, deposits of money from the public, repayable on

demand or otherwise, and withdraw able to cheque, draft, order or otherwise.”

DEVELOPMENT OF BANKING IN INDIA

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Banking activities are performed in India since ancient times. Moreover some of the banking

activities performed in ancient times are still performed in modern days also. In ancient time,

when Indians left their homes for pilgrimages or business for long period of time, they

deposited their money and valuables for sale keeping with persons of repute. Over time, a

practice developed to lend a part of such money deposited the needy persons to earn or

interest or usury as it was called then. The person with whom money was deposited for safe

custody enjoyed a good reputation and was an indispensable pillar of ancient Indian Society.

In this way, the banking activities were performed by an individual or group of individual

privately in India since ancient times.

Banking activities existed in India even before the vedic times, where giving and taking of

Credit in one form of the other was where giving and taking of Credit in one form of the other

was prevalent the ancient Hindu Literature and Scriptures refer to the money lending

activities. Mostly of books are in Sanskrit and Pali language. In the ancient times, the main

functions of the banks relating to individual or the state in the times of crises.

Although the origin of the banking in India was in the form of money lending business, the

transition from money lending to formal banking took place in 2nd century. All banking

activities were under the control of Private Sector. The persons who performed banking

activities were known as shreslities. Nagar Seths, Sharaf and Ehietties. These names are

still popular in modern India.

East India Company established banks on the pattern of European Style. Consequently,

such banks and Government treasuries expanded and the role of indigenous banks decline

in the Indian Economy. English Agency Houses were created back to the last quarter of 18 th

Century.

The English Agency Houses in Calcutta and Mumbai began to serve as a banker of the East

India Company. They finance the movement of crops, issued paper money and passed the

way for establishment of joint stock banks. The earliest of these was established in 1770 by

one of the Agency Houses in Calcutta and its business was closely connected with other

houses. But it was wound up in 1832. when the firm of Alexander and Company, with which

it was intimately connected, failed. The Bengal bank and the General Bank of India was

established in 1784 and 1786 respectively.

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Private SectorBanks

AssociationSBI&Associated

BankNationalized

RRB’s

BankPrivate

ForeignBank

CLASSIFICATION OF BANKS

Structure of scheduled

Commercial Banks

Public Sector Banks

DEVELOPMENT OF PRIVATE SECTOR BANK

With the increase of wealth and Commerce in Europe, private Bankers established

themselves in all the principle cities and towns. They received money on deposit, they

managed the money to such borrowers as could give the necessary security and they

brought and sold bill of exchange, billion and coin.

The development of business of banking can mainly be attributed to the London Goldsmiths

during the reign of queen Elizabeth. They used to receive their customers’ valuables and

funds for safe custody. Their receipts acknowledging the same in the course of time became

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payable to the bearer on demand and hence enjoyed considerable circulation. The

Goldsmith used to deposit their funds/reserves in the exchequer and under the care of the

Government.

However, the ruin of Goldsmiths proved as turning point in the English Banking. It let to the

growth of private banking and establishment of Bank of England in 1694, is the prototype

and exemplar of all our modern banks; its history, therefore, will deserve the particular

attention.

Bank of England derived huge profits from the circulation of it. The other private English

Bankers issued their own notes, payable on and these notes according to the credit of the

issuers, obtained a great circulation in the neighborhood of the bankers who issued them.

REGIONAL RURAL BANKS

The RRBs were established with a view to combining the local feel and familiarity with rural

problems. The RRBs are primarily sponsored by the commercial banks. The primary

objectives of these banks are:

Providing credit for agricultural purposes to small entrepreneurs engaged in trade

and industry and other productive activities in rural areas.

To cater the needs weaker sections of the community.

CURRENT SCENARIO

The Indian has finally worked up to the competitive dynamics of new Indian

market and is addressing the relevant issues take on the multifarious challenges of

globalization. Banks that employ IT solutions are perceived to be futuristic and proactive

players capable of meeting the multifarious requirement of large customer base. Private

Banks have been fast on the uptake and are reorienting their strategies using the Internet as

a medium.

The Indian banking has come from a long from being a sleepy business

institution to a highly proactive and dynamic entity this transformation has been largely

brought by the large dose of liberalization and economic reforms that allowed exploring new

business opportunities rather than generating revenues from conventional streams.

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The Indian industry has confidently hit the growth trial that pick in activity is

best reflected in the banking sector which after all is as candid a mirror of a country’s

economy as you could ever find. Most of the Indian financial intermediaries have been

keeping pace with the deepening market economy, riding the opportunity that come along

with reforms even as they brace themselves for increased competition both foreign and

private by strengthening prudential norms and leveraging technology to ensure that growth

engine hums smoothly along

The essential function of a bank is to provide services related to the storing of

value and the extending credit. The evolution of banking dates back to the earliest writing,

and continues in the present where a bank is a financial institution that provides banking and

other financial services. Currently the term bank is generally understood an institution that

holds a banking license. Banking licenses are granted by financial supervision authorities

and provide rights to conduct the most fundamental banking services such as accepting

deposits and making loans. There are also financial institutions that provide certain banking

services without meeting the legal definition of a bank, a so called non-bank. Banks are a

subset of the financial services industry.

The word bank is derived from the italian banca, which is derived from

German and means bench. The terms bankrupt and "broke" are 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.

Typically, a bank generates profits from transaction fees on financial services or the interest

spread on resources it holds in trust for clients while paying them interest on the asset.

Services typically offered by banks

Although the type of services offered by a bank depends upon the type of bank and the

country, services provided usually include:

Directly take deposits from the general public and issue checking and saving

accounts.

Lend out money to companies and individuals (see money lender)

Cash checks.

Facilitate money transactions such as wire transfers and cashiers checks

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Issue credit cards, ATM, and debit cards and online banking.

Storage of valuables, particularly in a safe deposit box.

Types of banks

There are several different types of banks including:

Central banks usually control monetary policy and may be the lender of last resort in

the event of a crisis. They are often charged with controlling the money supply, including

printing paper money. Examples of central banks are the European Central Bank and the US

Federal Reserve Bank.

Investment banks underwrite stock and bond issues and advice on mergers.

Examples of investment banks are Goldman Sachs of the USA or Nomura Securities of

Japan.

Merchant banks were traditionally banks which engaged in trade financing. The

modern definition, however, refers to banks which provide capital to firms in the form of

shares rather than loans. Unlike Venture capital firms, they tend not to invest in new

companies.

Private banks manage the assets of the very rich. An example of a private bank is the

Union Bank of Switzerland. Savings banks write mortgages exclusively.

Offshore banks are banks located in jurisdictions with low taxation and regulation, such

as Switzerland or the Channel Islands. Many offshore banks are essentially private banks.

Commercial banks primarily lend to businesses (corporate banking)

Retail banks primarily lend to individuals. An example of a retail bank is Washington Mutual

of the USA. Universal banks engage in several of these activities. For example, Citigroup, a

large American bank, is involved in commercial and retail

Lending; it owns a merchant bank (Citicorp Merchant Bank Limited) and an investment bank

(Salomon Smith Barney); it operates a private bank (Citigroup Private Bank); finally, its

subsidiaries in tax-havens offer offshore banking services to customers in other countries.

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Banks are prone to crisis

The traditional bank has an inherent tendency to crisis. This is because the bank borrows

short term and lends leveraged long term. The sum of deposits and the bank's capital will

never equal more than a modest percentage of the loans the bank has outstanding.

Even if liquidity is not a concern, if there is no run on the bank, banks can simply choose a

bad portfolio of loans, and lose more money than they have. The US Savings and Loan

Crisis in the late 1980s and early 1990s is such an incident.

Role in the money supply

A bank raises funds by attracting deposits, borrowing money in the inter-bank

market, or issuing financial instruments in the money market or a securities market. The

bank then lends out most of these funds to borrowers. However, it would not be prudent for a

bank to lend out all of its balance sheet. It must keep a certain proportion of its funds in

reserve so that it can repay depositors who withdraw their deposits. Bank reserves are

typically kept in the form of a deposit with a central bank. This behavior is called fractional-

reserve banking and it is a central issue of monetary policy. Some governments (or their

central banks) restrict the proportion of a bank's balance sheet that can be lent out, and use

this as a tool for controlling the money supply.

Even where the reserve ratio is not controlled by the government, a minimum figure will still

be set by regulatory authorities as part of banking supervision.

Regulation

The combination of the instability of banks as well as their important facilitating role in the

economy led to banking being thoroughly regulated. The amount of capital a bank is

required to hold is a function of the amount and quality of its assets. Major banks are subject

to the Basel Capital Accord promulgated by the Bank for International Settlements. In

addition, banks are usually required to purchase deposit insurance to make sure smaller

investors are not wiped out in the event of a bank failure. Another reason banks are

thoroughly regulated is that ultimately, no government can allow the banking system to fail.

There is almost always a lender of last resort—in the event of a liquidity crisis (where short

term obligations exceed short term assets) some element of government will step in to lend

banks enough money to avoid bankruptcy.

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Chapter 2

COMPANY PROFILE

HISTORY OF ICICI BANK

1955 : The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated

at the initiative of the World Bank, the Government of India and representatives of Indian

industry, with the objective of creating a development financial institution for providing

medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami

Mudaliar elected as the first Chairman of ICICI Limited.

ICICI emerges as the major source of foreign currency loans to Indian industry. Besides

funding from the World Bank and other multi-lateral agencies, ICICI was also among the first

Indian companies to raise funds from international markets.

1956: ICICI declared its first dividend of 3.5%.

1958: Mr.G.L.Mehta appointed the second Chairman of ICICI Ltd.

1960: ICICI building at 163, Back bay Reclamation, inaugurated.

1961: The first West German loan of DM 5 million from Kredianstalt obtained.

1967: ICICI made its first debenture issue for Rs.6 crore, which was oversubscribed.

1969: The first two regional offices in Calcutta and Madras set up.

1972: The second entity in India to set up merchant banking services. :  Mr. H. T. Parekh

appointed the third Chairman of ICICI.

1977: ICICI sponsored the formation of Housing Development Finance Corporation.

Managed its first equity public issue

1978: Mr. James Raj appointed the fourth Chairman of ICICI.

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1979: Mr. Siddharth Mehta appointed the fifth Chairman of ICICI.

1982: ICICI became the first ever Indian borrower to raise European Currency Units. :  ICICI

commences leasing business.

1984: Mr. S. Nadkarni appointed the sixth Chairman of ICICI.

1985: Mr. N.Vaghul appointed the seventh Chairman and Managing Director of ICICI.

1986: ICICI became the first Indian institution to receive ADB Loans. ICICI, along with UTI,

set up Credit Rating Information Services of India Limited, India's first professional credit

rating agency. :  ICICI promotes Shipping Credit and Investment Company of India

Limited. :  The Corporation made a public issue of Swiss Franc 75 million in Switzerland, the

first public issue by any Indian entity in the Swiss Capital Market.

1987: ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth

Development Corporation (CDC), the first loan by CDC for financing projects in India.

1988: Promoted TDICI - India's first venture capital company.

1993: ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan set

up. :  ICICI Asset Management Company set up.

1994: ICICI Bank set up.

1996: ICICI Ltd became the first company in the Indian financial sector to raise GDR. : 

SCICI merged with ICICI Ltd. :  Mr. K. V. Kamath appointed the Managing Director and CEO

of ICICI Ltd

1997: ICICI Ltd was the first intermediary to move away from single prime rate to three-tier

prime rates structure and introduced yield-curve based pricing. :  The name The Industrial

Credit and Investment Corporation of India Ltd changed to ICICI Ltd. :  ICICI Ltd announced

the takeover of ITC Classic Finance.

1998: Introduced the new logo symbolizing a common corporate identity for the ICICI Group.

:  ICICI announced takeover of Anagram Finance.

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1999: ICICI launched retail finance - car loans, house loans and loans for consumer

durables. :  ICICI becomes the first Indian Company to list on the NYSE through an issue of

American Depositary Shares.

2000: ICICI Bank became the first commercial bank from India to list its stock on NYSE. : 

ICICI Bank announces merger with Bank of Madura.

2001: The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI

Bank.

2002: ICICI Ltd merged with ICICI Bank Ltd to create India’s second largest bank in terms of

assets. ICICI assigned higher than sovereign rating by Moody’s. : ICICI Bank launched

India’s first CDO (Collateralized Debt Obligation) Fund named Indian Corporate

Collateralized Debt Obligation Fund (ICCDO Fund). : "E Lobby", a self-service banking

centre inaugurated in Pune. It was the first of its kind in India. : ICICI Bank launched Private

Banking. : 1100-seat Call Centre set up in Hyderabad : ICICI Bank Home Shoppe, the first-

ever permanent aggregation and display of housing projects in the county, launched in

Pune, : ATM-on-Wheels, India’s first mobile ATM, launched in Mumbai.

2003 : The first Integrated Currency Management Centre launched in Pune. : ICICI Bank

announced the setting up of its first ever offshore branch in Singapore. : The first offshore

banking unit (OBU) at Seepz Special Economic Zone, Mumbai, launched. : ICICI Bank’s

representative office inaugurated in Dubai. : Representative office set up in China. : ICICI

Bank’s UK subsidiary launched. : India’s first ever "Visa Mini Credit Card", a 43% smaller

credit card in dimensions launched. : ICICI Bank subsidiary set up in Canada. : Temasek

Holdings acquired 5.2% stake in ICICI Bank. : ICICI Bank became the market leader in retail

credit in India.

2004 : Max Money, a home loan product that offers the dual benefit of higher eligibility and

affordability to a customer, introduced. : Mobile banking service in India launched in

association with Reliance Infocom. : India’s first multi-branded credit card with HPCL and

Airtel launched. : Kisan Loan Card and innovative, low-cost ATMs in rural India launched. :

ICICI Bank and CNBC TV 18 announced India’s first ever awards recognizing the

achievements of SMEs, a pioneering initiative to encourage the contribution of Small and

Medium Enterprises to the growth of Indian economy. : ICICI Bank opened its 500th branch

in India. : ICICI Bank introduced partnership model wherein ICICI Bank would forge an

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alliance with existing micro finance institutions (MFIs). The MFI would undertake the

promotional role of identifying, training and promoting the micro-finance clients and ICICI

Bank would finance the clients directly on the recommendation of the MFI. : ICICI Bank

introduced 8-8 Banking wherein all the branches of the Bank would remain open from 8a.m.

to 8 p.m. from Monday to Saturday. : ICICI Bank introduced the concept of floating rate for

home loans in India.

2007: First rural branch and ATM launched in Uttar Pradesh at Delpandarwa, Hardoi. :

"Free for Life" credit cards launched wherein annual fees of all ICICI Bank Credit Cards were

waived off. : ICICI Bank and Visa jointly launched mChq – a revolutionary credit card on the

mobile phone. : Private Banking Masters 2007, a nationwide Golf tournament for high

networth clients of the private banking division launched. This event is the largest domestic

invitation amateur golf event conducted in India. : First Indian company to make a

simultaneous equity offering of $1.8 billion in India, the United States and Japan. : Acquired

IvestitsionnoKreditny Bank of Russia. : ICICI Bank became the largest bank in India in terms

of its market capitalization. : ICICI Bank became the first private entity in India to offer a

discount to retail investors for its follow-up offer.

2008: ICICI Bank became the first Indian bank to issue hybrid Tier-1 perpetual debt in the

international markets. : ICICI Bank subsidiary set up in Russia. : Introduced a new product -

‘NRI smart save Deposits’ – a unique fixed deposit scheme for nonresident Indians. :

Representative offices opened in Thailand, Indonesia and Malaysia. : ICICI Bank became

the largest retail player in the market to introduce a biometric enabled smart card that allow

banking transactions to be conducted on the field. A low-cost solution, this became an

effective delivery option for ICICI Bank’s micro finance institution partners. : Financial

counseling centre Disha launched. Disha provides free credit counseling, financial planning

and debt management services. : Bhoomi puja conducted for a regional hub in Hyderabad,

Andhra Pradesh.

2009: ICICI Bank‘s USD 2 billion 3-tranche international bond offering was the largest bond

offering by an Indian bank. : Sangli Bank amalgamated with ICICI Bank. : ICICI Bank raised

Rs 20,000 crore (approx $5 billion) from both domestic and international markets through a

follow-on public offer. : ICICI Bank’s GBP 350 million international bond offering marked the

inaugural deal in the sterling market from an Indian issuer and also the largest deal in the

sterling market from Asia. : Launched India’s first ever jewellery card in association with

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jewelry major Gitanjali Group. : ICICI Bank became the first bank in India to launch a

premium credit card -- The Visa Signature Credit Card. : Foundation stone laid for a regional

hub in Gandhinagar, Gujarat. : Introduced SME Toolkit, an online resource centre, to help

small and medium enterprises start, finance and grow their business. : ICICI Bank signed a

multi-tranche dual currency US$ 1.5 billion syndication loan agreement in Singapore. : ICICI

Bank became the first private bank in India to offer both floating and fixed rate on car loans,

commercial vehicles loans, construction equipment loans and professional equipment

loans. : In a first of its kind, nation wide initiative to attract bright graduate students to pursue

a career in banking, ICICI Bank launched the "Probationary Officer Programme". : Launched

Bank@home services for all savings and current a/c customers residing in India : ICICI Bank

Eurasia LLC inaugurated its first branch at St Petersburg, Russia.

2008 : ICICI Bank enters US, launches its first branch in New York : ICICI Bank enters

Germany, opens its first branch in Frankfurt : ICICI Bank launched iMobile, a breakthrough

innovation in banking where practically all internet banking transactions can now be simply

done on mobile phones. : ICICI Bank concluded India's largest ever securitization

transaction of a pool of retail loan assets aggregating to Rs. 48.96 billion (equivalent of USD

1.21 billion) in a multi-tranche issue backed by four different asset categories. It is also the

largest deal in Asia (ex-Japan) in 2008 till date and the second largest deal in Asia (ex-

Japan & Australia) since the beginning of 2009. : ICICI Bank launches ICICIACTIVE -

Banking Interactive Service - along with DISHTV, which will allow viewers to see information

about the Bank's products and services and contact details on their DISHTV screens. : ICICI

Bank and British Airways launch co-branded credit card, which is designed to earn

accelerated reward points to the card holders with every British Airways flight or by spending

on everyday purchases : ICICI Bank Board appoints Mr K. V. Kamath as non-executive

Chairman and Ms Chanda Kochhar as Managing Director & CEO effective May 1, 2009,

while the existing non-executive Chairman Mr N Vaghul retires after completing his term on

April 30, 2009 2009 : ICICI bank ties up with BSNL Cell One for bill payments, it will facilitate

bill payment for BSNL Cell One users through www.icicibank.com across all the 27 circles of

BSNL. : ICICI Bank Limited acting through its Hong Kong Branch (ICICI Bank) signed an

agreement on Export Credit Line totaling up to US$100 million with the Japan Bank for

International Cooperation (JBIC) which constitutes the international wing of Japan Finance

Corporation. : ICICI Bank Limited acting through its Hong Kong Branch (ICICI Bank) signed

a loan agreement with the Export-Import Bank of China (China Exim) for USD 98 million

under the Two- step Buyer Credit (Export Credit) arrangement. ICICI Bank is the first Indian

Bank to have entered into this arrangement with China Exim : ICICI Bank with Singapore

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Airlines launched “ICICI Bank Singapore Airlines Visa Platinum Credit Card”, the Card has

exclusive privileges especially designed for the members.

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Chapter 3

Project ProfileICICI Rural Finance

While these design principles may be consistent with many on-ground configurations

pursued by other institutions, ICICI Bank has chosen the following:

1. ICICI Bank and its Group Companies to be the providers of deposit taking and insurance

services and therefore warehouse all the attendant risks. Since as on June 30, 2012 its

assets are USD 70 billion and its net worth exceeds USD 5 billion and its rating is AAA it is in

a good position to absorb these risks. As on date, ICICI Bank has built a portfolio exceeding

Rs.17,000 crore in rural finance of which Rs.2,800 crore is to low-income families and has a

customer base exceeding 2.8 million clients.

2. Develop a relationship with a network of local institutions (both urban and rural), which

could be cooperative banks, producer cooperatives, non-bank finance companies and not-

for-profit civil society organizations to actually distribute these services. A combination of

these partner institutions, rural hub branches at a cluster level and agents (such as tractor

dealers) appointed by the bank represent the core of its ‘No White Spaces’ strategy that

aims to cover 200 districts by 2012. Under this strategy, the bank plans to have at least one

touch point (collectively referred to as ICICI Bank Grameen Kendras which may belong to

ICICI Bank or to partners) every 3-5 kilometers in rural and semi-urban areas. If the model

succeeds this implies that the number of ICICI Bank Grameen Kendras capable of offering a

reasonably complete suite of financial services would exceed 50,000 (or 1 for every 11 to 13

villages) by March 2011 and the customer base could exceed 28 million by 2012.

3. For the lending business, use the "partnership model" to build incentive compatibility with

the local institution that is delivering this specific financial service. This design draws on the

separation of functions discussion in the preceding section.

The partnership model leverages the local information and cost structure of a local financial

institution in order to unlock the financing ability latent in the commercial banking sector. The

model has been designed with the feature of the local institution sharing risk with the bank

so that there is careful origination and supervision on an ongoing basis.

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4. For deposit taking work with a variety of local institutions to provide these services under

the Business Correspondent model. Business Correspondents are agents identified by the

bank to provide basic banking services such as opening bank accounts, collecting savings

deposits offering insurance products in rural areas. ICICI Bank takes full responsibility for its

correspondent’s business conduct. The bank has already launched this service in Orissa

and Andhra Pradesh.

5. Similarly in insurance, ICICI Bank and its group companies ICICI Prudential Life Insurance

Company and ICICI Lombard General Insurance Company work with local institutions for

design and delivery of insurance products - under the banc assurance model these policies

will be sold at the ICICI Bank Grameen Kendras. Given the peculiar challenges of health

insurance delivery, it has worked with hospital networks and third-party administrators to

coordinate quality of health care as well.

6. In order to facilitate better price discovery and price risk management for farmers, ICICI

Bank co-promoted the National Commodity and Derivates Exchange (NCDEX) jointly with

National Bank for Agriculture and Rural Development (NABARD), the National Stock

Exchange (NSE) and Life Insurance Corporation (LIC). NCDEX along with its affiliate

National Commodities Management Services Limited (NCMSL) is attempting to improve

access to price derivatives for farmers, facilitate commodity based finance through banks,

provide weather stations and improve the warehousing infrastructure.

7. For its work in product development, ICICI Bank has combined its expertise in financial

engineering with the insights generated by its partners and allied research institutions. To

date, ICICI Bank and its group companies have designed and are taking to scale products

including the following:

(a) index-based rainfall insurance

(b) catastrophic health insurance

(c) working capital facilities for agriculture traders

(d) working capital facilities for craftspeople and artisans

(e) take-out finance for start-up local financial institutions

(f) warehouse receipt based financing

(g) credit to low income households through partnership model

(h) savings to low income households through banking correspondent model

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8. It is ICICI Bank’s belief that in order to improve efficiencies in financial intermediation,

especially in the context of small unsecured loans, the role of technology

is crucial. ICICI Bank’s initiatives in technology may be broadly thought of in two categories:

1. Front-end technology investments – this includes issuance of smart cards with unique

identifiers to its clients that help the client track financial services usage data on a real-time

basis as well as sharing of credit information across ICICI Bank’s network. 2. Back-end

technology investments – this relates to investment in creating better core banking systems

among its partner institutions. This enables more efficient data capture and sharing and

reduces margin of error on transactions. ICICI Bank has collaborated with FINO; a company

that seeks to provide front-end (smart card, point-of-sale terminals), back-end (banking

software, performance management and reporting, MIS) and information services (credit

bureau) to community based financial institutions and is now looking to partner with

NABARD, State Bank of India and the Credit Information Bureau of India Limited (CIBIL) to

try and see if FINO could, as in the case of NCDEX, become a provider of these technology

services on a system wide basis particularly to cooperative bank and non-bank finance

companies engaged in the business of lending to and collecting savings from small

borrowers. The participation of the RBI and NABARD in some

of these initiatives that have a systemic benefit would be an accelerator of access to finance.

9. ICICI Bank is conscious that working in rural India and with poor households is fairly

uncharted territory. It has tried to base its growth strategies on systematic results of what

works at household and local economy levels. In order to catalyst high-quality work in this

area, it works closely with research centers that systematically research issues related to

access to finance. These centers are housed within the Institute for Financial Management

and Research (IFMR) and they seek to provide thought leadership to all institutions working

in this field.

Corporate Supply-Chain Links

ICICI Bank's agri-banking has created an interface between rural areas and mainstream

financial service providers to maximize outreach and leverage technology.

This reduces the cost of finance delivery, devises customized solutions and offers complete

supply-chain solutions for the corporate partner.

The Bank acts as a cohesive partner between corporate and rural aggregators (like co-

operatives, MFIs, NGOs). These aggregators have the inherent strength of grass root

relationships in the rural domain.

Services Offered

21

Also, there is a range of financial products for these aggregators and their members,

which have been developed by the bank. Advantages offered to clients

Aids the corporate to establish a supply chain in the rural domain.

Helps market the corporate products in rural areas.

Facilitates economic development and employment in rural areas

Farmer Service Centres

India's rural revolution has come through co-operatives in sectors such as milk and sugar.

The Bank has initiated measures to convert these district level co-operatives into full-fledged

Farmer Service Centers (FSC) by clubbing them with other co-operative societies.

Services offered by the FSCs

One-point service providers to farmers. The Bank provides credit assistance to farmers

utilizing the infrastructure of the FSC.

       • The FSC would also help strengthen the supply chain.

       • This would include an alliance with a number of crop output companies (multi-

nationals, exporters and retailers) who would assure off-take and prices to farmers.

       • On the other end of the spectrum, through its relationship with a number of agri-input

companies, the Bank can also bring in input companies so that the entire input requirement

(fertilizer, seed, pesticide) of farmers could be provided under one roof.

FSC initiatives undertaken by various private sector companies have resulted in substantial

value addition at the farm end. The Bank has played a key role in conceptualizing,

developing and implementing the FSC model with various partners.

The Sugar Sector

ICICI Bank has strong ties with the sugar sector. It finances both the sugarcane farmer and

the sugar industry. We structure products at very competitive rates to meet the needs of the

cane growers and the processors.

For the Sugar Industry

Regular commercial banking facilities are available for the sugar industry. We offer the

industry banking services like working capital finance, term loans, forex assistance, etc.

Know more about Transaction Banking

22

For Farmers

The bank provides Corporate-linked Agricultural loans to farmers associated with sugar

companies. The association may be in form of an agreement to buy agricultural inputs or sell

their produce to the sugar company.

Salient features of the loan

The loan is for 12-18 months depending on the duration of the crop

Loans are disbursed either in the form of agricultural inputs or a combination of

agricultural inputs and cash.

The amount of loan sanctioned would depend on the area of sugarcane cultivation.

Repayment of principal and interest would be in the form of

deductions by the sugar company when it makes cane payments

to farmers.

Eligibility criteria

Land ownership by the farmer

Consistent supply of cane to the sugar company for the last three years.

Registered member of the sugar company.

The farmer should have an assured irrigation facility

The Plantation Sector

The importance of the plantation sector can be understood from the fact that 15% of

agricultural export earnings come from crops like tea, coffee and rubber - although these

industries occupy only one percent of the total plantation area.

Plantations have lengthy gestation period lasting four to five years, which distinguish their

financial needs. Having long-term industry relations with the plantation industry, ICICI Bank

has developed especially structured products.

       • Long-term loans for capital expenditure on plantations and

        processing facilities.

       • Short-term loans for working capital requirement of the

        plantations and the processing factories.

       • Bills Discounting, Bank Guarantees and Packing Credit facilities

        for exporters.

       • Cash management service for domestic marketers.

       • Real time remittance services for Auction Houses, Brokers and

        Exporters

23

       • Dealer financing through Bills Discounting for domestic

        marketers.

The Seeds Sector

Agricultural inputs are an important part of the Bank's agenda in rural banking. In the

seeds sector, it have the following products for our clients

Organizer of finance

Seed organizers undertake seed production on behalf of the seed company. Short-term

loans are extended for seed cultivation or against stocks held by seed organizers

pending the seed-certification process.

The Bank provides financial assistance to seed organizers on a recommendation and

letter of comfort given by seed companies. The credit limit depends on the value of the

seeds to be procured by the seed company from the seed organizer.

The seed company has to make payments directly to the bank on the due date from

payments due to the organizer, and this arrangement is to be confirmed by the seed

company.

Regular working-capital financing

The working capital required for seed companies is seasonal and varies depending

upon the crop portfolio and seasonality. Working capital assessment for seed

companies is done by the cash-flow method. The regular working capital assistance

may be in the form of cash credit or working capital demand loan. Any fluctuations in the

working capital could be structured as cash credit. The balance could be structured as a

working capital demand loan, which is a revolving credit for a fixed tenor with a

minimum stipulated withdrawal.

24

Short-term loans for peak working capital requirements

Short-term loans for tenures of three to six months to support peak season

requirements can be given during the Kharif and Rabi seasons. The loans are for a

fixed period and are to be repaid at the end of the season. This facility can be availed of

by the seed company to make farmer payments during peak seasons.

The Fertilizer Sector

Fertilizer companies require high working capital due to the seasonal nature of their

sales and the long credit period given to farmers. The industry is characterized by an

established distributor and dealer network, which forms the backbone of the dispersed

sales network. We have developed products in conjunction with fertilizer companies to

suit the needs of their channel partners.

Dealer financing

This product provides short-term finance to dealers of fertilizer companies to make

purchases of products from companies. The finance is to meet the requirements for the

inventory-holding period of the dealer, i.e. typically up to 90 days. Financing to the

dealers would be made on one of the following bases

       • Financial recourse in the nature of a Corporate Guarantee for the

        overall arrangement

       • Non-Financial Recourse in the nature of Letter of Comfort for the overall

arrangement (Stop supply, etc.).

Securitization of Receivables for companies

Many fertilizer companies provide 90-day credit to dealers. These book debts can be

securitized to provide liquidity to a company. The pricing and structure of the transaction

is worked out on a case-to-case basis.

Infrastructure

The Bank has a strong presence in Agri-infrastructure financing. Areas include financing

of various agricultural projects in the agri- infrastructure sector like:

       • Warehouses / God owns

       • Silos

       • Cold Chains

25

       • Refrigerated Transport Infrastructure

       • Development of Market Yards

       • Agri-Business Clinics

       • Value Addition Farm Centers

       • Food Parks

       • Agri-Export Zones, etc

We are actively involved in conceptualizing and structuring innovative and customized

financial products for infrastructure projects, based on the projects' arrangement with

private and public enterprises. The Bank jointly works with various warehousing

corporations, private infrastructure participants, government bodies and corporate

across the country.

Market Federations

The Bank works with State-level Market Federations (Markfeds) at various platforms

and has several products and services designed for them.

Working Capital

Working Capital facilities designed to take care of the day-to-day business requirements

of the organization.

In accord with the domestic trading business of MARKFED, the Bank provides cash

credit and other customized short-term products

Short-term financing of Fertilizer Distribution

Distribution of fertilizers is a core function of each Markfed.

Strong demand for fertilizers arises at the onset of the Rabi and Kharif seasons, which

coincide with the requirement of funds.

We structure this short-term fund requirement at competitive rates. It replaces the regular

and expensive cash-credit limits.

Long-term Fund Requirement for Expansions/ New Projects

The Bank provides medium-term and long-term funds for new projects and/or expansions.

We structure the loan so as to reduce the risk and transfer the benefit to the client.

Converting the Marked structure into Farmer Service Centers

Each State Marketing Federation has a wide distribution network at the district level. This

26

is called "The District Co-operative Marketing Society" and "The Primary Agricultural

Credit Society (PACS)" network. These are made use of in distributing agricultural inputs

to farmers.

The Bank helps convert them into Farmer Service Centres to offer a single window service

to farmers

Cash Collection and Disbursement

Regional offices of MARKFED have collections from and payments to their district level

co-operatives.

We provide a solution that would take care of both cash collection and disbursement.

Our solution will provide the following benefits:

       • Reduced time for cash collection and disbursement

       • Provide instantaneous funds transfer from/ to district level

        branches and the head office.

       • Customized MIS reports, giving the status of cash collected and

        disbursed from each centre, and various other customized

        reports.

       • Our network of 500+ branches and extension counters

        provides a technologically advanced network at numerous towns.

The Food Processing Sector

Food processing is one of the fastest growing sectors of the Indian economy. The Bank

works with various companies, both established and new, in this sector.

The products offered are:

Working Capital Finance

Working capital finance takes care of the daily business requirements of the organization.

The bank provides pre-/ post- shipment credits, cash credits and a bill purchasing/

discounting facility based on the requirements of the company.

Term Loans

The Bank gives loans of various tenures according the requirement of the company.

We provide short-term funds to take care of any seasonal requirement and medium-term

and long-term funds for new projects, expansions and upgrading of plants.

Agricultural Commercialization and Enterprise Program

These are USAID funds managed by the Bank. The main purpose is to improve the investment

environment for private agri-business in post-farm horticulture.

27

The focus is primarily on promoting agri-business innovations and diversity. Activities covered are

fresh and processed fruit and vegetables, herbal products, spices, fruit- and vegetable-based

processed foods, flowers and foliage.

Rural Educational Institutions

Education is the cornerstone of development. ICICI Bank provides loans to rural

educational for investment in infrastructure with an objective to increase their enrolment of

students and

provide better facilities.

The product caters to the need of privately run educational institutions/ trust/ societies for

addition or expansion in infrastructure like adding new class rooms, lab facilities,

residential facilities for students/ teachers, transportation, establishing a new school/

college etc by an existing institution.

No White Spaces

In order to scale up our outreach to the under-served population in rural areas, we have

adopted the 'No White Spaces' (NWS) strategy for our retail business.

We intend to cover the selected areas in rural India so that there is an ICICI Bank

customer touch-point within a radius of 10km of a customer -- thus leaving 'no white space'

in those locations.

This strategy aims to bring holistic banking to the doorstep of our rural customer in the

following manner:

       • Developing and providing products customized to different

         customer segments - agri- trader, processors, farmers and

         entrepreneurs in semi-urban and rural areas.

       • Channels customized to these customer segments.

       • Agri-solutions towards all stages of the agri-value chain

By 2008, the Bank would extend its initiatives to 450 districts.

In addition to its branch infrastructure, the Bank has evolved a network of non-branch channels

to penetrate into rural areas not yet covered

28

3. PRODUCT OFFERED BY ICICI BANK TO RURAL PEOPLE

1. RURAL SAVINGS ACCOUNT.

You can approach us through your local Business Correspondent. Rural Savings Account is

a Zero balance account and hence there is no minimum balance requirement. Interest

earned on your Rural Savings Account balance shall be credited to your account on a half

yearly basis in the months of September and March. You can change the nominee(s) by

making a declaration to that effect, in the appropriate form, which is available with the

Business Correspondent.

Features

The Rural Savings Account will be available through Business Correspondents.

The account is zero balance with no initial deposit.

The Customer is provided with an E-passbook.

All transactions in the accounts are done only after a biometric authentication.

Nomination facility is available.

Interest is payable half-yearly.

29

Chapter 4Research Mythology

TITLE OF THE STUDY

The title of the study is “Rural finance provided by ICICI bank”

DURATION OF THE STUDY

I have been assigned a project on the “Rural finance provided by ICICI bank” as a part of our course curriculum.The duratiion of the research was 30 Days.

OBJECTIVE OF THE STUDY

"Creating awareness about ICICI Rural Loans and to know the people behavior

towards ICICI and to determine the market potential in Rural areas."

TYPE OF RESEARCH

It refers to the search for knowledge. It can be defined as scientific and systematic

search for pertinent information on a specific topic. It is careful investigation or

inquiry through search for new facts of any branch of knowledge.

Research plays an important role in the project work. The results of the

project are completely based upon the research of the facts and figures collected

through the different ways of research. That is why it is also called a movement from

known to unknown. Research is the original contribution to the existing stock of

knowledge. This section includes the overall research design, the sampling

procedure, the data collection method, the field method, and analysis and

procedure.

RESEARCH is a scientific and systematic search for pertinent information on a

specific topic. It is also said to be the pursuit of truth with the help of study,

30

observation, comparison and experiment. research methodology is a way to

systematically solve the research problem.

Research design: -

A research design is a framework or blueprint for conducting the marketing

research project. It details the procedures necessary for obtaining the required information,

and its purpose is to design a study that will test the hypotheses of interest, determine

possible answers to the research questions, and provide the information needed for decision

making. Conducting exploratory research, precisely defining the variables, and designing

appropriate scales to measure them are also a part of the research design. The issue of

how the data should be obtained from the respondents (for example, by conducting a survey

or an experiment) must be addressed. It is also necessary to design a questionnaire and a

sampling plan to select respondents for the study.

Research can classify in one of three categories:

Exploratory research

Descriptive research

Causal research

These classifications are made according to the objective of the research. In some cases

the research will fall into one of these categories, but in other cases different phases of the

same research project will fall into different categories.

Exploratory research has the goal of formulating problems more precisely, clarifying

concepts, gathering explanations, gaining insight, eliminating impractical ideas, and

forming hypotheses. Exploratory research can be performed using a literature

search, surveying certain people about their experiences, focus groups, and case

studies. When surveying people, exploratory research studies would not try to

acquire a representative sample, but rather, seek to interview those who are

knowledgeable and who might be able to provide insight concerning the relationship

among variables. Case studies can include contrasting situations or benchmarking

against an organization known for its excellence. Exploratory research may develop

hypotheses, but it does not seek to test them. Exploratory research is characterized

by its flexibility.

31

Descriptive research is more rigid than exploratory research and seeks to describe

users of a product, determine the proportion of the population that uses a product, or

predict future demand for a product. As opposed to exploratory research, descriptive

research should define questions, people surveyed, and the method of analysis prior

to beginning data collection. In other words, the who, what, where, when, why, and

how aspects of the research should be defined. Such preparation allows one the

opportunity to make any required changes before the costly process of data

collection has begun.

There are two basic types of descriptive research: longitudinal studies and

cross-sectional studies. Longitudinal studies are time series analyses that make repeated

measurements of the same individuals, thus allowing one to monitor behavior such as

brand-switching. However, longitudinal studies are not necessarily representative since

many people may refuse to participate because of the commitment required. Cross-

sectional studies sample the population to make measurements at a specific point in time. A

special type of cross-sectional analysis is a cohort analysis, which tracks an aggregate of

individuals who experience the same event within the same time interval over time. Cohort

analyses are useful for long-term forecasting of product demand.

Here I use descriptive type of research design

SAMPLE SIZE AND METHOD OF SELECTING SAMPLE

Sample size: -

Sampling is simply the process of learning about population on the basis of

learning about population on the basis of a sample drawn from it. The primary objective of

the sampling survey is to obtain accurate and reliable information about universe with

minimum cost, time and energy and to set out the limits of accuracy of such estimates.

For sampling I have chosen non-probability sampling technique.

Non probability sampling is based on the personal judgment. Under this

method a desired number of sample units are selected deliberately depending upon the

object of the enquiry so that only the important items representing the true characteristics of

the population are included in the sample.

32

Non-probability sampling is of two types:- purposive sampling quota

convenience sampling

I have chosen convenience sampling under non-probability sampling

technique keeping all constrains in mind a sample size of 100 people is selected from

Jaipur. This sample contains a mix type of customer (Servicemen, student and

businessmen) so as to remove any type be biased results. Research for the Importance of

the Brand image of the company’s which is kept in mind by customers while buying any

product. It was very difficult to get the actual feedback from the customer. That’s why I have

designed a Questionnaire for the customers. As customer is king of the market. Today every

product is made according to desire or need of the company. And customers have varied

taste. Only consumers’ satisfaction can predict the actual scenario of the market.

Method of selecting sample: - Two methods of collecting data used for this research are as

follows: -

PRIMARY DATA – Data is collected primarily through personal contact,

meeting, interview and questionnaire with the concerned authority of the organization

and respondents’.

SECONDARY DATA – Data are collected through secondary modes such as

various published data, reports, related books and websites.

SCOPE OF STUDY

The scope of the project during the research and study will be focused on the following

parameters:

33

To know consume preference regarding Rural Finance

To know what features and services attract the customers

Effect of brand image (ICICI)in buying behavior

Impact of advertisement in buying behavior

Impact of celebrity endorsement in buying behavior

Effect of family &friends in buying behavior (Focus group)

LIMITATION OF STUDY

1. Rural area is scattered.

2. Language barrier.

3. Level of literacy was less.

4. Proper sources are not available.

5. People do not belief on outsiders.

6. People are not aware about ICICI bank.

7. Lack of advertising.

34

DATA ANALYSIS AND INTERPRETATION

GROWTH OF ICICI BANK

Performance Review – Quarter and year ended March 31, 2013

• 29% year-on-year increase in standalone profit after tax to 8,325 crore (US$ 1.5 billion) for

the year ended March 31, 2013 (FY2013) from ` 6,465 crore (US$ 1.2 billion) for the year

ended March 31, 2012 (FY2012)

• 21% year-on-year increase in standalone profit after tax to 2,304 crore (US$ 424 million)

for the quarter ended March 31, 2013 (Q4-2013) from ` 1,902 crore (US$ 350 million) for the

quarter ended March 31, 2012 (Q4-2012)

• 26% year-on-year increase in consolidated profit after tax to 9,604 crore (US$ 1.8 billion)

for FY2013 from ` 7,643 crore (US$ 1.4 billion) for FY2012

• Consolidated return on equity of 14.7% for FY2013 compared to 13.0% for FY2012

• 38 basis points improvement in full year net interest margin to 3.11% for FY2013

• Net non-performing asset ratio at 0.64% at March 31, 2013

• Strong capital adequacy ratio of 18.74% and Tier-1 capital adequacy of 12.80%

• Dividend of ` 20.00 per share proposed

The Board of Directors of ICICI Bank Limited (NYSE: IBN) at its meeting held at Mumbai

today, approved the audited accounts of the Bank for the year ended March 31, 2013.

Summary Balance Sheet

Rs. croreAt

March31, 2012

December31, 2012

March31, 2013

Capital and LiabilitiesCapital 1153 1153 1154Employee stock 2 4 4

35

options outstandingReserves and surplus

59250 65961 65548

Deposits 255500 286418 292614Borrowings (includes subordinated debt)1

140165 147149 145341

Other liabilities 32999 26654 32134Total Capital and Liabilities

489069 527339 536795

AssetsCash and balances with Reserve Bank of India

20461 21778 19053

Balances with banks and money at call and short notice

15768 19351 22365

Investments 159660 166842 171394Advances 253728 286766 290249

Fixed assets 4615 4619 4647Other assets 34937 27983 29087Total Assets 489069 527339 536795

1. Borrowings include preference share capital of ` 350 crore. 2. Prior period figures have been regrouped/re-arranged where necessary.

All financial and other information in this press release, other than financial and other This release does not constitute an offer of securities.

For further press queries please call Sujit Ganguli at 91-22-2653 8525 or email ganguli.sujit@icicibank.com.

For investor queries please call Rakesh Mookim at 91-22-2653 6114 or email ir@icicibank.com.

36

Chapter 5Fact & Finding

1. No of people in a sample is 100 out of them 21% are between age of 25-35, 27%

are between 35-45 , 32% are between 45-55 and rest are of above age of 55.

2. Regarding the profession 34% people are doing the farming work. And after them

25% & 12% people are doing the business of dairy and poultry farming respectively.

21% people are Govt employees and rest 8% belong to other professions.

3. The above graph is showing the income level of people the highest no of population

41% are earning more than 200000rs per annum.

4. After the independence still the highest no of population (32%) is taking loan from

money lenders. After them highest no loan are taken 26% from Govt banks. After

them Gramine banks come.

5. Purpose of loan is still the tractor which is taking the highest place 37%. Seeds and

dairy equipment comes after them at 24% & 16% respectively. And others reasons

stand on 23% which includes home, motorcycle, jeeps, mini vans etc.

6. 67% people do still not believe in private banks and they are not willing to take loan

from them.

7. The highest No. of people 32% are take loan for more than 5 years. After time

interval for which people took loan is 3-5 years. That is 31% of respondents. Rest

are of 23% and 14% are took loan for 2-3 and 1-2 years respectively.

8. Before taking loan people 34% people look in to brand and 25% look for service.21%

looks for interest rate and rest people look into other features.

9. People are still preferring the SBI as there main bank to take loan.10. 83% people still not aware about ICICI rural loans.

11. People who are aware about ICICI rural loans out of them 21% will get knowledge

from friends.

12. Lack of advertisement is main causes why people are not aware about ICIC loans.

37

SWOT ANALYSIS

A. STRENGTHS

ICICI Bank has excellent brand awareness and high quality image.

ICICI Bank has excellent market coverage all over the world and covers a

lot on the globe.

The company stands No. 1 in infrastructure.

Advanced Technology

Providing innovative products & Services

Vast pool of skilled manpower

B. WEAKNESS

ICICI Bank's product line is not clearly positioned compared with HDFC and

IDBI

It needs a unique selling proposition.

Too many competitors

High cost of funds

Low international credit ratings and Bureaucratic procedures

C. OPPORTUNITIES

Consumers are showing increased interest in some good schemes of ICICI

Bank.

Company develops a device for measuring illumination level.

Liberalization of the economy

Growing banking sector

Use of foreign earnings for investment in foreign activities

ICICI uses technology to provide value-added service to its customers. For

ICICI; technology is an integral part of their business

38

D. THREATS

Expansion always brings high risk with itself so that is to be checked and

expected returns are not guaranteed.

Major prolonged economic depression in financial expansion in rural areas.

Domestic political dominance

ICICI bank has a tough competition to be faced by various financial

institutions Among its top competitors are HDFC Bank, Bank of Baroda,

Bank of India Oriental Bank of Commerce etc.,

Competitors superiority in services and operations

39

CONCLUSION

While these design principles may be consistent with many on-ground configurations

pursued by other institutions, ICICI Bank has chosen the following:

1. ICICI Bank and its Group Companies to be the providers of deposit taking and insurance

services and therefore warehouse all the attendant risks. Since as on June 30, 2012 its

assets are USD 70 billion and its net worth exceeds USD 5 billion and its rating is AAA it is

in a good position to absorb these risks. As on date, ICICI Bank has built a portfolio

exceeding Rs.17, 000 crore in rural finance of which Rs.2, 800 crore is to low-income

families and has a customer base exceeding 2.8 million clients.

2. Develop a relationship with a network of local institutions (both urban and rural), which

could be cooperative banks, producer cooperatives, non-bank finance companies and not-

for-profit civil society organizations to actually distribute these services. A combination of

these partner institutions, rural hub branches at a cluster level and agents (such as tractor

dealers) appointed by the bank represent the core of its ‘No White Spaces’ strategy that

aims to cover 200 districts by 2012. Under this strategy, the bank plans to have at least one

touch point (collectively referred to as ICICI Bank Grameen Kendras which may belong to

ICICI Bank or to partners) every 3-5 kilometers in rural and semi-urban areas. If the model

succeeds this implies that the number of ICICI Bank Grameen Kendras capable of offering a

reasonably complete suite of financial services would exceed 50,000 (or 1 for every 11 to 13

villages) by March 2012 and the customer base could exceed 28 million by 2012.

3. For the lending business, use the "partnership model" to build incentive compatibility with

the local institution that is delivering this specific financial service. This design draws on the

separation of functions discussion in the preceding section.

The partnership model leverages the local information and cost structure of a local financial

institution in order to unlock the financing ability latent in the commercial banking sector. The

model has been designed with the feature of the local institution sharing risk with the bank

so that there is careful origination and supervision on an ongoing basis.

4. For deposit taking work with a variety of local institutions to provide these services under

the Business Correspondent model. Business Correspondents are agents identified by the

bank to provide basic banking services such as opening bank accounts, collecting savings

40

deposits offering insurance products in rural areas. ICICI Bank takes full responsibility for its

correspondent’s business conduct. The bank has already launched this service in Orissa

and Andhra Pradesh.

5. In order to facilitate better price discovery and price risk management for farmers, ICICI

Bank co-promoted the National Commodity and Derivates Exchange (NCDEX) jointly with

National Bank for Agriculture and Rural Development (NABARD), the National Stock

Exchange (NSE) and Life Insurance Corporation (LIC). NCDEX along with its affiliate

National Commodities Management Services Limited (NCMSL) is attempting to improve

access to price derivatives for farmers, facilitate commodity based finance through banks,

provide weather stations and improve the warehousing infrastructure.

6. For its work in product development, ICICI Bank has combined its expertise in financial

engineering with the insights generated by its partners and allied research institutions. To

date, ICICI Bank and its group companies have designed and are taking to scale products

including the following:

(a) index-based rainfall insurance

(b) Catastrophic health insurance

(c) Working capital facilities for agriculture traders

(d) Working capital facilities for craftspeople and artisans

(e) Take-out finance for start-up local financial institutions

(f) Warehouse receipt based financing

(g) Credit to low income households through partnership model

(h) Savings to low income households through banking correspondent model

41

SUGGESTIONS AND RECOMMENDATIONS

Firstly I could observe that the general level of awareness among the people regarding

ICICI RURAL FINANCE brand is low, therefore the brand should focus on advertising both

at the central as well as local Level.

We know that the products and services offered by the company are the best but more or

less similar are offered by other company as well, so promotional campaigns are must in

this era of stringent competition.

We know that in this world of intense competition everyone is trying to prove itself best its

respective field therefore we can conclude that there is always an edge of improvement and

hence the brand should work on that. Establish and coordinate business relation with big

corporate houses across the country .ICICI can improve upon its efficiency by not changing

its staff frequently. By doing this company can continue to create, maintain and grow strong

relationship with its existing customers. Idea behind this is that staff which is already working

for company is well acquainted with the nature and wants of the existing customers.

The rural finance concept must be specifically promoted. The general perception of

rural finance has to change in India before progress is made in this field. People

should not be afraid to invest money in insurance and must use it as an effective tool

for tax planning and long term savings.

ICICI RURAL FINANCE could tap the rural markets with cheaper products and

smaller policy terms. There are individuals who are willing to pay small amounts as

interest rates but the plans do not accept interest below a certain amount. This was a

general conclusion drawn during prospecting clients.

ICICI should chalk out some programs to create general awareness regarding its

presence and various services of the company.

Today is the era of competition. In order to increase the company network (In terms

of clients and business volumes) an aggressive approach is required.

The Bank should recruit more number of marketing personnel so that they can cover the

whole of the city and nearest villages of Jaipur. Personal marketing can be one of the

methods of modes of taking people into confidence.

ICICI should try to make its promotional activities more effectively.

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It can use industrial magazine media as an advertising tool for approaching is market

segment.

Try to reduce hidden charges so as to satisfy the customers more effectively.

It should regularly conduct market research and surveys for knowing customers

better and for facing threat from competitors.

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BIBLIOGRAPHY

Books:

Barley, Fundamental of investment, pearson third edition

Haugen, Morden investment theory, pearson sixth edition

Mathew,M J, Fundamental of insurance, Tmh second edition

Web sites:

www.cgap.org

www.icici.com

www.rbi.org

www.indiacore.com

www.icicibank.com

Magazines:

Business Today

Business India

Economic Times

Material provided by the company

Business World

Search Engines:

www.google.com

www.yahoo.com

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