Team 3

Presenters Omdutt Hamnaaz Rajashree Sacchidanad Priya Dhirendra SHUBRA

Industry analysis

 Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and BANK OF HINDUSTAN, which started in 1770; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal.

Conti
This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors.
The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955.

NATIONALISED BANKS ARE

Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation." The meeting received the paper with enthusiasm.

NATIONALISED

Banks Nationalisation in India: Newspaper Clipping, Times of India, July 20, 1969

LIBERALIZATION:

In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.

SWOT Analysis
STRENGTHS
Favourably on growth. Policy makers have help strengthen the sector. Extensive reach. Foreign banks advantage

Cont.
WEAKNESS
Fundamental Problems. Structural Weakness. Refusal to dilute stake in PSU Banks.

Cont.

OPPORTUNITY
Expected Growing Indian Economy. Innovative Business Models by New Private Banks

Advantages of Service Sector. RBI has revealed new opportunities.

Cont.

THREATS
Threat of stability of the system Rise in inflation Increase in the number of foreign players

Introduction to ICICI
2nd largest bank with total assets of 1,67,659 crore. Founded-1955 Headquarters-Mumbai, Maharashtra Equity shares are listed in BSE and NSE and the ADR are listed in NYSE. Ranked 3rd amongst listed companies of Indian stock exchanges

PRODUCTS & SERVICES OF ICICI

1) 2) 3) 4) 5) 6) 7) PRODUCTS Savings Account Home loans Car loans Lockers Family wealth Account Foreign Ex services Demat Accounts

SERVICES
1) Wide variety of deposite products such as internet and mobile banking. 2) Credit and debit cards. 3) Travel cards with US dollar, Euro pounds etc. 4) Customer care. 5) Nomination facility.

Driving Forces
Internet Banking

Bill payment Funds transfer Money manager Quick payments

 Globalization

ICICI to set up its branches in countries like US, Hong-Kong, Sri Lanka, etc. Serves NRIs. Subsidiaries overseas.

Growth
Net income & profitability Deposits grew from 13% to 16%. Credit growth from 17% to 22%.

Innovation
24X7 electronic banking Tab banking Bank-on-the-Move E-Locker

Michael porter's five forces mode

Intensity of Existing Rivalry

Low storage costs (ICICI Bank)

Government limits competition (ICICI Bank)

Large industry size (ICICI Bank)

Bargaining Power of Suppliers

Inputs have little impact on costs (ICICI Bank)

Bargaining Power of Customers

Large number of customers (ICICI Bank)

Threat of Substitutes

New Aspirants in Banking sector like AV Birla, Tata Group, IFCI etc.

Threat of New Competitors

Strong distribution network required (ICICI Bank) High capital requirements (ICICI Bank)

High sunk costs limit competition (ICICI Bank)

 Industry requires economies of scale (ICICI Bank) Geographic factors limit competition (ICICI Bank) High learning curve (ICICI Bank)

Key success factors

Channel Strength

Access to Costumer Base

Experience of sponsors

Access to capital

Strong Brand Name

Swot analysis

Strengths of ICICI Bank

ICICI is the second largest bank in terms of total assets and market share ICICI bank has first mover advantage in many of the banking and financial services.

Weaknesses of ICICI Bank

The ICICI bank has the most stringent policies in terms of recovering the debts and loans, and credit payments. The bank service charges are comparatively higher

Opportunities of ICICI Bank

Banking sector is expected to grow at a rate of 17% in the next three years The concept of saving in banks and investing in financial products is increasing in rural areas as more than 62% percentage of Indias population is still in rural areas. Within next four years ICICI bank is planning to open 1500 new branches

Threats of ICICI Bank

RBI allowed foreign banks to invest up to 74% in Indian banking HDFC is the major competitor for ICICI, and other upcoming banks like AXIS, HSBC impose a major threat In rural areas the micro financing groups hold a major share