A RESEARCH PROJECT ON

COMPREHENSIVE STUDY OF IDBI

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE REQUIREMENT OF

MASTERS DEGREE IN BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF:

SUBMITTED BY:

Mrs. SHELLY GOSSAIN

AANCHAL NARANG

Lecturer, MBA department

MBA/05/15

Mr. S.K. NARANG

Professor, MBA department

N.C. COOLEGE OF ENGINEERING, ISRANA, PANIPAT

(KURUKSHETRA UNIVERSITY, KURUKSHETRA)

INDEX
S NO.

TOPIC

PAGE NO.

EXECUTIVE SUMMARY

INTRODUCTION OF COMPANY

INTRODUCTION OF STUDY

11

OBJECTIVE OF STUDY

46

RESEARCH METHODOLOGY

47

ANALYSIS & INTERPRETATION

49

ADVANTAGES

51

LIMITATIONS

52

SUGGESTIONS

53

10

CONCLUSION & FINDING

54

11

RESEARCH METHODOLGY

55

ACKNOWLEDGEMENT

It was great experience of undergoing winter project on COMPREHENSIVE STUDY OF IDBI. I

got a chance to learn about IDBI and its strength.
I wish to express my deep sense of gratitude to my reverend guide Ms. SHELLY GOSSAIN
who through his benevolent guidance has enabled me to accomplish my project. She has been great
source of inspiration to me, all the way. Without her keen interest, incessant encouragement and
invaluable suggestions this report could not have attained its present shape with zeal and enthusiasm.
I convey my heartful affection to all those people who helped and supported me during the
course, for completion of my Project Report.

Special thanks to:

Mr. S.K. Narang
Professor, MBA Dept.
Ms Puja Walia Mann
HoD MBA Dept

EXECUTIVE SUMMARY
The study was undertaken to study in detail the various policies and schemes of IDBI,
IDBI venture capital and IDBI comparison is done with other banks.

WHAT THIS PROJECT INCLUDES

This project includes all the services provided by IDBI:

RETAIL BANKING

CORPORATE BANKING

RETAIL BANKING "is typical mass-market banking where individual customers use
local branches of larger commercial banks. Services offered include: savings and
checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth."
Banking services for individual customers.

CORPORATE BANKING includes Project Financing which involves providing credit

and other facilities to a borrower, for setting up new projects, expansion, diversification
and modernization of existing industrial units; Technology Upgradation Fund Scheme
The Government of India introduced the Technology Upgradation Fund Scheme (TUFS)
for Textile and Jute Industries, which is valid upto March 31, 2007; Corporate Loan, etc.
The research design is Descriptive. The data used is secondary data. The judgment
sampling is used to conduct the research.

IDBI is leader in Film Financing; size of the loan can't be less than Rs 40 million and
anything above Rs 200 million will have to be backed by a completion guarantee. And
last year decided to double its exposure limit to Rs 2 billion.
It is the only bank that provides Rediscounting facility to other commercial bank.
It also promotes Venture capital.
This study has been conducted with the help of material and information provided
by the companys website.
Some limitation may be there in a study of this nature because some
confidential data may create problem.

INTRODUCTION OF THE COMPANY

Todays IDBI is one of the Indias largest banks. It has essayed a significant role in the
countrys Industrial and economic progress for over 40 years- first as a development
financial institution and now as full service commercial bank and now as full service
commercial bank.
Headquarters in Mumbai, the commercial capital of the country. IDBI has been
consistently delivering superior products across convenient delivery channels and always
provide efficient services to its retail and corporate customer.

VISION
To be trusted partner in progress by leveraging quality human capital and setting
global standards of excellence to build the most valued financial conglomerate"

PHASES OF IDBI
IDBI was established in 1964 by parliament as a wholly owned subsidiary of RBI. In
1976 the banks ownership was transferred to the government of India.
IDBI has provided assistance to development related projects and contributed
to building up substantial capacities in all major industries in India. It has played a
dominant role in balanced industrial development.
In 1992, IDBI transferred its International Finance Division to Export- Import
bank of India, which was a wholly owned corporation of Government of India under
Export Import Bank of India Act, 1982.

IDBI set up the Small Industries development Bank of India (SIDBI) as a

wholly owned subsidiary to cater to small industries. In 2001 IDBI reduced its
shareholding in SIDBI to 49 percent.
IDBI has engineered the development of Capital Market through helping in
setting up of the securities Exchange Board of India (SEBI), National Stock Exchange
(NSE), credit Analysis and Research analysis, Investor Services of India etc.
In 1992 IDBI accessed the domestic retail market for the first time by issuing
innovative bonds known as Deep discount Bonds. These bonds were highly popular
among Indian investors.
In 1994, the IDBI act was amended to permit public ownership upto 49 percent.
In July 1995, it raised over Rs 20 billion in its first initial offering (IPO) of equity, there
reducing government stock to 72 percent. In June 2000, a part of government
shareholding was converted into preference capital. This capital was redeemed in March
2001, which led to a reduction in government stake. The government stake currently is 58
percent.
In august 2000, IDBI became the first All India Financial institution to obtain
ISO 9002: 1994 Certification for its treasury operations.
IDBI has undertaken several initiatives to reposition itself as universal Bank. In
April 2001, IDBI appointed Boston consulting group India private limited as consultant
to draw up a roadmap for conversion into Universal bank.

SUBSIDIARIES

IDBI CAPITAL MARKET SERVICES LIMITED

IDBI HOMEFINANCE LTD

IDBI INTECH LTD

BRANCH NETWORK

NO OF BRANCHES
METRO
URBAN
SEMI URBAN
RURAL

169
132
85
46

INTRODUCTION OF THE STUDY

This project is all about studying IDBI BANK. Their comprehensive banking solution
and their strengths.

SERVICES PROVIDED BY IDBI

RETAIL BANKING

CORPORATE BANKING

DEPOSITS
LOANS
PAYMENT
INVESTMENT
INSURANCE
CARDS
24 HOURS BANKING
INSTITUTIONAL BANKING

PROJECT FINANCE
NON PROJECT FINANCE
INFRASTRUCTURE FINANCE
CORPORATE LOANS
FILM FINANCE
TREASURY PRODUCTS
DIRECT DISCOUNTING OF BILL
FINANCE FOR OVERSEAS

OTHER PRODUCTS
PREFERRED BANKING

ACQUISTION
REDISCOUNTING

10

RETAIL BANKING

RETAIL BANKING "is typical mass-market banking where individual

customers use local branches of larger commercial banks. Services offered
include: savings and checking accounts, mortgages, personal loans, debit cards,
credit cards, and so forth."

Banking services for individual customers.

1. DEPOSIT

SAVING ACCOUNT

CURRENT ACCOUNT

FIXED DEPOSIT

SUVIDHA PLUS FIXED DEPOSIT

PENSION ACCOUNT

SABKA ACCOUNT

a) SAVING ACCOUNT
Experience Complete Banking Convenience
The Super Savings Account is a complete financial package that provides customer with
easy access to their money and complete banking convenience too.
It offers a customer whole range of options for optimal management of money.
So apart from the basic benefits of a savings account, IDBI offer options for faster
transfer of funds, options to pay your bills or tax online and options to grow money at

11

attractive interest rates in the savings account. All these features are offered for a
minimum balance of Rs 5,000.

Instant Banking

International Debit Card

Family Account

Quick Money Transfer

Easy Payments

Bank on the Move

Profit from your Account

Value Added Services

Travel and Gift Solutions

b) CURRENT ACCOUNT
IDBI Current Accounts not only gives the flexibility of banking anytime, anywhere, but
also allows to save more money while doing business across the country.
Roaming Current Account from IDBI comes packed with a host of services and facilities
that makes banking convenient and hassle-free. With services such as multi-city and
multi-branch banking, electronic funds transfers, national clearing in 15 cities, 24x7 cash
withdrawals from ATMs, Internet Banking, Phone Banking and SMS Banking, customer
are assured of faster remittances and collection of funds at competitive rates. Whats
more, extended IDBI Banking hours and Sunday Banking, all this to simplify banking for
you.

12

FEATURES

Make payments to your vendors in different cities without any costs

Receive payments form your customers without any charge deducted from the
amount

Do all your banking right from where you are or wherever you travel

Most importantly, maintain better relations with your vendors and customers.

All this, only with the IDBI Roaming Current Account.

Customer can open a Current Account (Basic Roaming Current Account) with only Rs
10,000.
Cash withdrawal limit per day in ATMs is Rs 20,000.
c) FIXED DEPOSITS
IDBI Suvidha Fixed Deposits have always stood for safety, credibility and attractive rates
of interest. Whats more, interest rates are among the highest in the industry so you get
the benefit of high rates of return on your savings. These deposits have been further
packed with the following features:

Anytime access to your deposits

Deposits across tenures of 15 days to 9 years

13

Various Options to suit customer needs

Monthly Quarterly Income Plans

For those who seek regular incomes
A great option for people who require interest income at regular intervals. The interest
income will be credited automatically into savings account at the interval
(Monthly/Quarterly) specified by customer.
Quarterly Compounding Fixed Deposit
Ideal for those how want a higher rate of return combined with a low risk Fixed
Deposit
This option re-invests the interest earned on customer deposit, every quarter resulting in a
higher rate of return.
For example, the interest rate for a 2 years + 1 day deposit is 5.80% p.a. but the effective
yield is higher at 6.11% p.a. on account of re-investment of the interest earned. Also,
there is automatic renewal of FDs on maturity hence customer dont lose interest for a
single day.
Recurring Deposit
Ideal for those who want to save a fixed sum every month
In this Customer can start saving any amount from Rs. 500 to Rs. 1 lakh every month.

14

The amount as decided by Customer will be deducted every month from your savings
account. Further, there is no Tax deducted at source on these deposits and also no charges
for executing your standing instructions.
Overdraft against Fixed Deposit
Tide over your urgent cash requirements without breaking your Fixed Deposit
This option allows Customer to continue earning the higher rate of interest on an FD and
at the same time, Customer meet their monetary requirements.
An overdraft of upto 90% of the FD/Multiple FDs held with the bank, will be setup in
your zero balance savings account.
The overdraft can be availed against an FD amount of Rs. 50,000 or higher at very
competitive rates. Moreover, the overdraft is first given on the FD earning least interest
so that your interest payout is minimized.
Senior Citizens Fixed Deposits
Earn higher rates
In senior citizen case, customer can have the advantage of earning higher interest on their
regular income plans and reinvestment plans.
IDBI interest rates for senior citizens are higher by 0.50% pa. You can choose from
tenure ranging from 46 days to 9 years for minimum deposits starting from Rs 10,000

15

C) SUVIDHA PLUS FIXED DEPOSIT

Suvidha Plus Fixed Deposit; a fixed deposit scheme that gives customer the advantage of
earning much higher return on your investments with interest rates at 9.5%*, 9%* and
8.5%*p.a. for regular deposits and 10%*, 9.5%* and 9%*p.a. for Senior Citizens.

List of benefits:

Higher Interest Rate:

o

9.5%* p.a. for 800 days, 9%* p.a. for 360 days and 8.5%* p.a. for 300
days - Regular Deposits

10%* p.a. for 800 days, 9.5%* p.a. for 360 days and 9%* p.a. for 300
days - Senior Citizens Deposits

Minimum Investment Amount: To invest in Suvidha Plus Fixed Deposit a

minimum investment of Rs. 10,000 is required. Deposits should be made in
multiples of Rs. 1000.

Tenure: 800, 360 and 300 days

Overdraft / Loan against Fixed Deposit facility.

Zero balance Savings Account*

International ATM-cum-Debit card

Cheque book

16

Internet Banking facility

d) PENSION ACCOUNT

IDBI's Pension Account gives the joy of receiving pension without any tension. The
Pension account comes along a host of additional features that will bring banking at ease
for customer.
e) SABKA ACCOUNT

IDBI introduces Sabka Account - a savings account thats literally meant for everyone;
absolutely elementary in its approach and with an average quarterly balance requirement
of just Rs 250.
SALIENT FEATURES OF SABKA ACCOUNT

17

Low average quarterly balance

Modern banking facilities with IDBIs Sabka Account with just Rs 250.

Debit cum ATM Card and Cheque Book

Get an ATM cum Debit Card and cheque book on request at nominal charges*. The card
allows transacting at IDBI ATMs and shopping at retail outlets. The cheque book
however, will help to carry out other banking transactions

Free ATM and branch transaction*

customer can avail of 4 free transactions (2 financial and 2 non- financial) at IDBI ATMs
and 2 free transactions at your IDBI branch in a month.

Multiple ways to access your account

now no need to visit the bank time and again. IDBI unique services like Phone Banking,
SMS Banking and Internet Banking will allow customer to access your account from
anywhere, anytime

Quarterly Account Statements

Keep track of r Sabka Savings Account through free quarterly account statements.
If customers have registered for Internet Banking, they can also avail of the quarterly
account statements via email.

18

Recurring Deposits
This account offers a recurring fixed deposits service wherein customer can earn a higher
rate of interest just by investing a small amount (as low as Rs 500) every month.

Relaxation in Documentation for opening Sabka account

In case a person wants to open a Sabka account, but is not able to furnish all the
documents as required by the bank, an account can be opened with

Introduction from another account holder who has been subjected to full KYC
procedure as required by the bank. (The introducer's account with the bank should
be at least six month old and should show satisfactory transactions. Photograph of
the customer who proposes to open the account and also his address needs to be
certified by the introducer)
Or

Any other evidence as to the Identity and Address of the customer as required by
the bank

2.) LOANS

HOME LOAN

LOAN AGAINST HOME

EDUCATION LOAN

PERSONAL LOAN

IPO FINANCE

LOAN AGAINST CURRENCY

19

a)HOME LOANS
Customer can avail of the Home Loans for constructing a home, purchasing a ready built
house/flat, residential plot and even for re-financing existing loans you may have availed
from other banks or housing finance company.
Advantages of IDBI Home Loans

Flexibility of choosing between Floating or Fixed interest rate

EMI on monthly reducing balance

Personalized doorstep service

Simple documentation

Legal and technical assistance

Reassessment and adjustment of applicant's loan eligibility in case of change of income

and residence status.
b)LOAN AGIANST HOME

20

IDBI realize how important it is to raise money in the face of exigencies. IDBI help
through these difficult situations through customer friendly Loans against Home product.
Loans could be used for:

Education

Business

Marriage

Purchase or improvement of property

Medical treatment or any other personal need.

Maximum amount possible is Rs 2, 00,000 subject to repayment capacity and value of

property (residential only).
The IDBI Advantage

Interest rate on monthly reducing balance

Fixed and floating interest rate options

Services at doorstep

Simple documentations

Personalized services

Free legal and technical assistance

c) EDUCATION LOANS
Education loans from IDBI aim at providing financial support to deserving/ meritorious
students for pursuing higher education in India and abroad. With an array of courses to

21

choose from and easy repayment options, IDBI makes sure customers get complete
financial backing.

d) PERSONAL LOAN
Personal Loans from IDBI comes with an insurance cover. This means when times are
tough, customer will have an insurance cover to take care of the EMI's.

In case of death or disability due to an accident, the principle outstandings will be

paid by the insurance company.

In case of loss of job, the insurance company will pay the EMIs for up to 3
months

E) IPO FINANCE
IDBI provides financing to individuals for applying to an initial public offering (IPO) of
select companies. The entire application amount will be offered as a loan against some
margin money collected from the individual. The contracted interest rate for loan would
be charged on the application money net of the margin money.
f) LOAN AGAINST SECURITIES
The Loan against Securities is an overdraft facility against individual securities. It
helps individual to meet the exigency of life through an overdraft facility giving easy and
flexible access to short-term funds without the need to sell your securities.
It includes:

22

Loan against KVPs

Loan against shares

Loan against GoI bonds

Loan against mutual fund units

3.) PAYMENTS

a) Tax Payment
Individuals can pay their taxes thorough any of the following ways:

Pay Direct Taxes Online

Pay Central Excise Duty and Service Tax Online

b) Easyfill - instant mobile refill

Now, prepaid users can get mobile phone refills without any hassles. Just get registered
with IDBI's Easy Fill Instant Mobile Refill and refill your mobile phone account.

23

.Technology has always been at IDBI forefront and time and again, IDBI have been using
it to redefine service. With Easy Fill, individual can refill airtime in any denomination
between Rs 200 to Rs 5,000, depending on your requirement and your budget.
c) Electronic bill payment
No more queues at phone and power company offices. No more headaches due to late
payment fees. No more worries of having phone or electricity line cut-off because. The
Electronic Bill Payment facility from IDBI cuts out the hassles.
This bill payment service gives individual the flexibility of viewing and paying their bills
online. All the need is to do enter the billing details in IDBI Internet Banking, and then,
start paying utility bills, insurance premiums, etc, month on month, absolutely hasslefree.
d) Card to card money transfer
Sending money within India has never been this simple, convenient, fast and safe! IDBIs
Card to Card Money Transfer facility; a first-of-its-kind money transfer service in India is
the absolute way to send money anywhere, anytime to any Visa Debit or Credit
cardholder in India. Banks customers can now transfer money from their Bank account
or Visa card to any other Visa debit or credit card across the country through this service.
FEATURES
Card To Card Money Transfer comes packed with a host of features such as:

Funds can be transferred to any debit or credit card in India

Sender needs to know only the card number of the beneficiary

24

Benefits

Cheaper, faster and more convenient than Demand Drafts, telegraphic transfers
and Payable-At-Par cheques

No geographical limitation within India

Beneficiary location need not be known

Funds will be transferred within 2-3 working days

Payment of credit card bills

e) Shopping

www.esevaonline.com

www.indiatimes.com

www.vizagcityonline.com

www.ebay.in

www.rediff.com

www.fabmall.com

www.mid-day.com

www.visakhapatnammunicipalcorporation.com

25

4.) INVESTMENT
DEMAT ACCOUNT
INVESTMENT SERVICES
a) Demat account
Paper securities are passe. Enter the world of dematerialized shares, bonds and other
securities. Convert your securities to dematerialized form with IDBI Demat Account. It's
as simple as opening a Savings Account.

Why Demits with IDBI

Lowest fees

Statement by emails

Demat access through Internet, cell and phone

Portfolio valuation on the account statements

Online execution of transactions at branches

Special rates for stock market intermediaries and sub brokers

B)Investment services

When is the right time to invest? This is the eternal question that is always on our mind. IDBI,
understand this customer requirement and are therefore presented Investment Advisory
Service.
IDBI believe that all investors share a common goal, regardless of their objectives:

26

Superior and sustained returns with a tight control over risk. Meeting long-term investment
goal is dependent on a number of factors: individual investment capital, expected rate of return,
inflation, taxes and investment time horizon. To meet such requirements, IDBI offer investment
options based on risk tolerance and return expectations
5.) INSURANCE
FAMILY CARE
LIFE INSURANCE
a) FAMILY INSURANCE
The Family Care Policy is a complete health insurance plan that covers individual, his/
her spouse and two dependant children up to the age of 25 years. It enables to access the
best medical treatment in case of a sudden illness, accidents or an emergency surgery,
without any hassles.
The Family Care policy covers the hospitalisation expenses as a result of any illness and
accident*. Unlike any other regular policy, wherein a family has to take individual
policies for each member, this unique family floater policy gives you the flexibility of
taking one policy that covers the entire family under a single sum insured.

b) LIFE INSURANCE

27

IDBI brings Birla Sun Life Insurance, one of the leading providers of life insurance
products.
To invest in an insurance policy, just walk into any of IDBI branches and meet Certified
Insurance Officer. After studying individual profile, short-term and long-term needs and
plans for the future, he will recommend a policy thats best.
6) PREFERRED BANKING

IDBI Preferred program is designed to offer special services to a select group of

discerning and deserving individuals.

With special features to help save customer time and efforts, and tools to
help to build wealth through efficient deployment of assets, Preferred Banking promises
to make banking experience a fulfilling one.
Relationship Banking
To extend the benefits further, IDBI offer relationship pricing on all banking transactions

28

to help save while you relax in the luxury of Exclusive Preferred banking zones at
designated branches.
To ensure the same high standards of service, every time, a priority back office cell will
strive to respond to all your queries and requirements.
Asset Products
IDBI offers a range of specially designed loan products with the convenience of door-step
service.
Customer can enjoy hassle free priority processing right from application to
disbursement. Special relationship pricing will ensure that save time & money while
customer needs are met.
Investment Advisory
IDBI understand that no two investors have same requirements. Thats why; IDBI Banks
Investment Advisory cell provides customized investment solutions.
With a wide variety of investment products, to choose from, IDBI help to build a
portfolio that is in tune with customer financial needs and aspirations.
Preferred Banking offers a one stop solution with products ranging from fixed deposits to
Govt. of India Bonds and Mutual Funds to Unit Linked Insurance Plans.
Anytime Access

Individual can use any of the modes to ask for Relationship manager or to keep in touch
with your finance while on the move.
- 24-hour dedicated Toll-Free Phone Banking Assistance
29

- Exclusive Preferred banking mail id

- Internet Banking
- Mobile Banking & SMS alerts
7.) NRI SERVICES
IDBI offer basic NRI banking products like Non Resident Rupee Checking Account, Non
Resident Rupee Term Deposits and Foreign Currency Non Resident Deposit. IDBI also
provide seasoned banking professionals to handle queries and offer value added services.
The value-added services we provide range from answers to online tax and foreign
exchange related queries and needs with special emphasis on FEMA guidelines issued by
The Reserve Bank of India from time to time.
IDBI International Debit Card is designed to offer the convenience of accessing funds s
from any ATM and also pay for your purchases from any merchant establishments across
the world.
Individual can avail of IDBI advanced funds transfer facility to transfer funds from your
account to that of your family members' account held with any IDBI branch across India.

30

8.) INSTITUTIONAL BANKING

INSTITUTIONAL SAVING
CORPORATE PAYROLL ACCOUNT

CITIZENIDBIBANK

INSTITUTIONAL SAVING
The Institutional Savings Account isn't just a product; it's an Endeavour to address very
unique needs. It's a complete banking and financial advisory service to the following
types of organizations:

Trusts - Religious, Social, Charitable Association

Societies

Clubs

Educational Institutions - Schools and Colleges

Hospitals, Clinics

Non - Government Organizations

Government Organizations

Retirement Solutions - Provident Fund, Superannuation

and Gratuity.

Any Branch Banking

31

Access your account from any IDBI branch across the country and transfer funds freely
between accounts.
Document Pick-up and Delivery*
IDBI representative will deliver and pick up documents from our drop box placed in
customer premises, so that they can enjoy the best of doorstep banking. IDBI also arrange
to pick up and deliver cash from customer doorstep.

Salary Account for your Staff

When corporate open a Salary Account with IDBI, they can disburse salaries without
issuing numerous cheques.

Single Window Solution

There is no need to run from one desk to another. dedicated Relationship Manager will
look after all your banking needs.
Additional benefits of banking
Loans against Fixed Deposits
Customer can get a loan against your IDBI Bank Fixed Deposit.

Internet Banking
Customer can access their account as well as get detailed account information online.
Absolutely free.

32

CORPORATE PAYROLL ACCOUNT

Bring ease to salary disbursement
Welcome to world-class banking at IDBI.
Growing sales and scale of operations, controlling costs, managing employee turnover
are some of the issues you and your company are seized with everyday.
At IDBI, we have the right solution to your payroll management problems - IDBI's
Corporate Payroll Account. This hassle-free salary account offers you all the benefits of a
Savings Account combined with a host of additional features to give you and your
organisation complete banking convenience.
9.) 24 HOURS BANKING

PHONE BANKING

INTERNET BANKING

ACCOUNT ALERTS

SMS BANKING

10.) CARDS

GOLD DEBIT CARD

WORLD CURRENCY CARD

33

GIFT CARD

INTERNATIONAL DEBIT CUM ATM CARD

GOLD DEBIT CARD

IDBI present yet another revolutionary card product - The Gold Debit Card. Not only can
you withdraw cash and make purchases through the card, but also avail of a host of
services and facilities that make your banking simple and enjoyable.
Features

ATM and POS usage- The card can be used to transact at IDBI ATMs and
13,000 VISA/Plus ATMs in India and for making purchases at 1.2 lac Visa
locations

International validity- The Gold Debit Card can also be used abroad to make
purchases at 13 million merchant locations and withdraw local currency at 8.5 lac
Visa/Plus ATMs

WORLD CURRENCY CARD

The World Currency Card is a prepaid multi currency card that provides individual the
convenience of making purchases and withdrawing cash while travelling almost
anywhere abroad.
The Card

does away with the inconvenience of carrying travellers cheques,

is much more safer than carrying foreign currency and

34

is more economical than credit cards.

Powerful Features :
Packed with features and special privileges, the Card offers great deals on
1. air tickets,
2. holiday packages,
3. also offers a comprehensive insurance package to take care of all your travel
needs.
The IDBI World Currency Card allows individual to make purchases and withdraw cash
in the local currency all over the world.
IDBI GIFTCARD
IDBI GiftCard allows individual loved one to purchases goods and services at over 1.8
lac merchant establishments in India that accept Visa cards. No heartaches of being
bound to specific stores with gift vouchers.
Features
The IDBI GiftCard comes packed with a host of features:

No hassles of opening an account with us

Instant card, sold over the counter

Accepted at over 1.8 lac shops that accept Visa cards across India

Usable more than once, till the value on the card is exhausted

35

Pre-wrapped and ready for gifting

2.) CORPORATE BANKING

A.)PROJECT FINANCE SCHEME

Project finance involves providing credit and other facilities to a borrower with a credit
rating normally of 'A' or 'BBB' (provided adequate mitigants are in place), for setting up
new projects, expansion, diversification and modernisation of existing industrial units.
While considering the project for assistance, IDBI evaluates technical feasibility,
commercial and economic viability and financial soundness of the project. The interest
rate and other fees for credit and other facilities would be based on creditworthiness of
borrower, rating, risk perception, tenure of loan / facilities and other relevant factors. The
repayment of the loans and facilities is normally fixed on case to case basis depending on
projected cash flow of the borrower.

B.)FINANCING OF FEATURE FILMS

IDBI provides finance for production of feature films as defined under the
Cinematograph (Certification) Rules, 1983. Advertisement films, short films,
documentaries etc. are not eligible for financing. A corporate entity, promoted by reputed
producers, backed by established directors & other technicians and possessing
satisfactory track record are eligible to avail assistance under the scheme.
In case the entity is recently corporatised, track record of the main promoter(s) is

36

considered. Assistance would be not less than Rs.2 cr .

C.)CORPORATE LOAN SCHEME

Under the Corporate Loan Scheme, IDBI provides rupee and/or foreign currency loans to
corporates with minimum 5 years of operations, continuous profits for the last 2 years
with credit rating normally 'A' or 'BBB' (provided adequate mitigants are in place) and
satisfactory track & credit record with lenders for normal capital expenditure, working
capital margin, shortfall in working capital and general corporate purposes, including
expenses on Voluntary Retirement Scheme and business acquisition where no tangible
asset creation is envisaged. The interest rate would be based on creditworthiness of
borrower, rating, risk perception, tenure of loan and other relevant factors. The repayment
period for the loans would normally not exceed 5 1/2 years.
D.) DIRECT DISCOUNTING OF BILL
For financially sound machinery / equipment manufacturer, who wish to promote sales,
IDBI provides deferred credit facility for sale / purchase of indigenous machinery /
equipment under its easy to operate direct discounting scheme. Assistance would be
100% of the total value (including insurance, taxes & freight).
Interest rate / discount rate would be as prevalent at the time of discounting of bills,
depending on monthly / quarterly / half-yearly/ yearly payments and according to
temporal profile of bills.

37

E.) TECHNOLOGY UPGRADATION FUND SCHEME

The Government of India introduced the Technology Upgradation Fund Scheme (TUFS)
for Textile and Jute Industries, which is valid upto March 31, 2007. The Scheme is
intended to facilitate induction of state-of-the-art or near state-of-the-art technology in
Textiles Industry. Existing units with or without expansion and new units are eligible
under TUFS.
IDBI is a Nodal Agency for textile industry (Non-SSI Sector). Normally the project
would be evaluated as per project finance norms. The rate of interest is normal applicable
rates prevailing at the time of sanction / execution of loan documents. However,
Government of India (GoI), Ministry of Textiles (MoT), gives interest reimbursement of
5% p.a. to eligible projects sanctioned assistance under TUFS. As regards FC Loan, GoI,
MoT provides a cover for actual adverse exchange fluctuations not exceeding 5% from
the base rate (the base rate being the weighted average rate covering all disbursements of
the loan) or cost of forward cover premium limited to 5% p.a. on the base rate of
exchange, as an option, to be exercised only once in each Financial Year.

F.) SCHEME FOR LENDING TO REAL ESTATE SECTOR

IDBI provides finance in the form of project funding and securitisation of lease rentals, to
a borrower (promoter group in case of SPV), with continuous profit for the last 3 years,
internal rating of 'A' and above, for productive construction activity in real estate.
Assistance would be in the form of term loans and total term loans including IDBI loan
should not exceed 30% of the project cost. For projects exclusively for lease out, the

38

ceiling on total loans will be 60% of project cost. Interest rate would be based on
creditworthiness of borrower, rating, risk perception, tenure of loan and other relevant
factors. The assistance would be short to medium term in nature not exceeding 5 years.
As regards securitisation of lease rentals, the strength of the lessee and lessor would be
assessed on the basis of financials, reputations, track record and cash flows. The exposure
would be on the basis of present value of lease rentals of maximum 7 years excluding
expenses (like TDS, maintenance, property tax and adjustment of advance payment) or
60% of the property value less advanced payment received from the lessor, whichever is
lower.

E.) REHABILITATION FINANCE

A specialized department viz. Recovery Department, (RD) [originated from erstwhile
Rehabilitation Finance Department] has been created in IDBI with a focus on
aggressively resolving the Non Performing Assets (NPAs) /Fully Written Off (FWO)
cases.
RD is aggressively working for settlement of NPAs/FWO cases by way of One Time
Settlement (OTS), Negotiated Settlement (NS) and resolution under SARFAESI Act.
In case of potentially viable units, possibilities of revival of the units are explored either
by effecting change of management and/or grant of restructuring their liabilities either
through IDBI's internal mechanism and/or through BIFR/CDR route.

RD is in possession of a database relating to NPAs/FWO cases for possible

buyers/investors, Banks/ FIs/ NBFCs/ Agencies etc. Industrywise, location-wise

39

information on sick units is also available. IDBI is open to interact with prospective
buyers/investors in order to achieve resolution of the NPAs/FWO cases. There will also
be regular interaction with industry associations for this purpose.

F.) TREASURY PRODUCT FACILITY

Under the Treasury Product Facility, IDBI provides rupee and/or foreign currency loans
to well performing corporates with credit rating of minimum 'AA minus', 5 years of
operations and satisfactory track & credit record, for providing finance for general
corporate purposes with fund requirement of short term nature. Assistance under the
scheme would be minimum Rs.10 cr. The interest rate would be based on
creditworthiness of borrower, rating, risk perception, tenure of loan and other relevant
factors. The repayment period would not exceed 18 months.

40

G.) IDBI VENTURE CAPITAL

Venture capital is equity or equity related investment in growth oriented small/ medium
business to enable investees to accomplish corporate objectives, in return for minority
shareholding in the business or the irrevocable right to acquire it.
Venture capital is a way in which investors support entrepreneurial talent with finance
business skills to exploit market opportunities and, thus to obtain long term capital gains.
This was set up in 1986 and is a divisional activity of IDBI, and is operated by
technology Development department.

Objectives
The scheme is designed to provide venture capital assistance to new or existing industrial
concern for encouraging commercial application of indigenously developed technology
and adopting imported technology to wider domestic application.

Target entrepreneurs
Assistance under the scheme is available to all industrial concern existing as well as new
units. In case of existing units, good record of performance and sound financial position
are pre-requisites for assistance.
Nature of projects
Assistance is provided to projects in fields like chemicals, software, electronics, biotechnology, food products and medical equipment. The minimum and maximum project
cost ranges between Rs. 5 lakh to Rs. 250 lakh.

41

Stage of financing
Assistance under the scheme is available for financing cost of fixed assets as well as
operating expenditure (including cost of raw materials, salaries and wages, utilities and
market development expenses) during the development period.

Method of financing
The minimum contribution of promoters is 10 percent for ventures costing Rs 50 lakh and
less and 15 percent for ventures costing more than Rs 50 lakh. The actual contribution
takes into account the resource capability of promoters and, in the case of an existing
company, the availability of cash surplus.
The assistance is provided mainly in the form of unsecured loans carrying a concessional
interest rate of 6 per cent per annum during the initial development period. This is
enhanced to 14 per cent per annum once the process/ product is developed by market.
IDBI also charges royalty at a mutually agreed rate on the sales of product arising from
the venture.
The period of repayment of loan is fixed depending upon the cash generation of the
venture.

Technique of project appraisal

Certain conditions have to be fulfilled by the promoters of the project before they become
eligible for assistance under the scheme. These relate to the composition of the board of
directors, management set up, and R & d team, government approval and sanctions,

42

payment of dividends, sale and purchase of assets, sale of technology, so on. The IDBI
venture capital fund (VCF) expects a preliminary profile of the proposal giving details of
the following:

Brief details of the performance of industrial concern, if it exists.

Nature and advantage of proposed process/ product.

Development content in the process.

Approximate cost of the project.

After examining the proposal the detailed application form is sent by the IDBI which is
required to be filled in and submitted to the technological department for appraisal. After
the project has been appraised, it is submitted to the screening committee for its
recommendation. If necessary the IDBI may also refer the proposal to the group of
experts. A complete application form may take two or three months for appraisal.

Managerial Support and Monitoring

Three different management support and monitoring mechanism are employed by the
evaluation committee of IDBI-VCF. These are:

A Monthly progress report

Periodic visit to the unit

Discussion with the promoter

The periodic reports are scrutinized to assess the degree of progress in the
implementation of project, while visit and discussion are undertaken to evaluate the
physical progress achieved, to provide the requisite guidance to entrepreneurs as well as
to fix the cut off date for enhancing the interest payable to VCF by venture. Time and
43

cost overruns are closely monitored. With a view to promoting closer interaction with
promoter closer interaction with promoters of the venture at local level, a few technical
consultancy organization (TCOs) have been identified and follow up work a few units
assisted in their respective states has been entrusted to them.

Marketing efforts
For promoting its scheme, the IDBI has been in constant touch with 500 industrial
undertakings having R&D set ups. It also conducts seminar and industrial meets to
educate the entrepreneurs about their scheme, exporting, technology and so on.

Disinvestment mechanism
Tough the IDBI has not had the occasion to disinvest its holding as yet, the preferred
routes are promoters buy back and the OTCEI.

44

OBJECTIVE OF STUDY
To study the various policies and schemes of IDBI
IDBIs venture capital facility.
IDBI comparison with other banks.

45

RESEARCH METHODOLOGY

RESEARCH METHOODOLOGY refers to all those techniques that are used in

performing research operations. Without research every study is incomplete. It includes:

PROBLEM RECOGNITION
It is first and foremost step consisting of defining and identification of problem.
Study the various policies of IDBI
IDBI strengths and its comparison with other banks
REVIEW THE LITERATURE
Site of IDBI
Various journals on IDBI

RESEARCH DESIGN
The research design in this case is DESCPRITIVE. The research design is Descriptive
because deep study has been done.

SAMPLE DESIGN
The sample design in this case is JUDGEMENT SAMPLING.

COLLECTION OF DATA
The data in research is
46

 Secondary data was collected through website of IDBI.

ANALYSIS AND INTERPRETATION

IDBI Bank is the leader in the pack, having late last year decided to double its exposure
limit to Rs 2 billion. It has sanctioned Rs 1.8 billion while disbursals stand at Rs 850-900
million towards movie projects.
IDBI is the the only bank that provide the REDISCOUNTING facility.
IDBI promotes Venture Capital.

47

ANALYSIS AND INTERPRETATION

1. IDBI, size of the loan can't be less than Rs 40 million and anything above Rs
200 million will have to be backed by a completion guaranteeIDBI Bank is the
leader in the pack, having late last year decided to double its exposure limit to
Rs 2 billion. IDBI, for instance, funds only corporate who have a track record of
three years and insist on a 1:1 debt equity ratio. "We don't deviate from these
lending norms.
Other banks like UTI have entered the fray, but the lending is still extended to
select production houses and the norms are strictly observed.
2. BANK OF INDIA which has financed just Rs 250 million for five movies over
a four year period. Because of its risky nature, bank have an upper ceiling of Rs
50 million per movie,"
3. An early lender into the film business, BANK OF BARODA is extremely
cautious about providing debt to the film sector.
4.) EXPORT-IMPORT BANK OF INDIA (EXIM) has recently agreed to lend $7
million to Crest Animation Studios.

48

BANK

AMOUNT SANCTIONED

COMMENTS

IDBI

Upper limit is 2 billion and loan cant be

less than 40 million.
Amount sanctioned: 1.8 billion

Leader in all Banks in

Film Financing

EXIM
BANK

Sanctioned Rs. 580 million

BANK OF
INDIA

Upper ceiling is Rs. 50 million per movie

Amount sanctioned: Rs. 250 million on 5
movies.

Still have cautious

approach

UTI

Has just entered the fray,

but the lending is still
extended to select
production houses and
the norms are strictly
observed.

BANK OF
BARODA

BANK OF BARODA is
extremely cautious about
providing debt to the film
sector

2.) REDISCOUNTING
IDBI is the only bank that provides rediscounting facility to various commercial banks.
3.) IDBI PROMOTES VENTURE CAPITAL

49

ADVANTAGES OF IDBI

1. Rediscounting facilities to bank is only provided by IDBI

2. Advantages of IDBI Home Loan

Flexibility of choosing between Floating or Fixed interest rate

EMI on monthly reducing balance

Personalized doorstep service

Simple documentation

Legal and technical assistance

Balance transfer facility

3. Currently, the OBC and others Gift card is available only in Delhi and Mumbai
while the IDBI Gift Card is available at all IDBI branches. .
4. IDBI also promotes venture capital.
5. IDBI has an upper hand in film Financing and the size of the loan can't be less than
Rs 40 million and anything above Rs 200 million will have to be backed by a
completion guarantee. It has doubled its exposure to 2 billion.
6. Citizenidbibank Org is a joint initiative between IDBI bank and India sponsor
Foundation, works towards the accelerated development of the deprived strata in
Indian society.

50

LIMITATIONS OF IDBI

1. In case of loss of World Currency Card Holder insurance covers are not
provided by IDBI.
2. The IDBI Gift card is available in denominations starting from Rs 1,000 to Rs
20,000 and is valid for one year while OBC Gift card is valid for two years and is
available in denominations of Rs 1,000 to Rs 50,000.
3. IDBI Bank has tied up with Visa and the card can be used at 51,000 merchant
establishments across the country while OBC has tied up with MasterCard and the
pre-paid card can be used at more than 60,000 merchant establishments.
4. IDBI provides loan only to production not for distribution.
5. IDBI does not extend loan below Rs 4 crore & does not fund entire project cost.

51

SUGGESTIONS

The denomination of IDBI Gift Card should be increased.

IDBI Film Financing should extend to distribution side also along with production
side.

IDBI should also provide the insurance cover with World Currency Card.

52

CONCLUSION/ FINDINGS

Only IDBI provide Rediscounting facility to banks

IDBI also promotes venture capital.

IDBI has an upper hand in film Financing and It has doubled its exposure to 2
billion.

Special schemes like Mahila Udyan Nidhi is operated by SIDBI through

exclusively for Women to set up SSI units and to start service activities i.e. it
promotes women entrepreneur.

53

BIBLIOGRAPHY
www.idbi.com
www.google.com
www.outlook.com
www.yahoo.com
RESEARCH METHODOLY BY C R KOTHARI

54