CHAPTER – 1
INTRODUCTION
Private Banks are banks owned by either an individual or a general partner (s) with limited partner(s). Private Banks are not incorporated. In any such case the creditors can looks to both the “entirely of the bank’s assets” as well as the entirely of the sole proprietors general-partners assets.
Private Banks can also refers to non government owned banks in general, In contrast to government – owned (or nationalized) banks, which were prevalent in communist, socialist and some social democratic states in the 20th century.
A public bank is a bank a financial institution in which state or public actors are the owners. It is a company under state control. Higher spending on infrastructure, speedy implementation of projects and continuation of reforms will provide further impetus to growth. All these translates into a strong growth for banking sector too, as rapidly growing business turn to banks for their credit needs, thus helping them grow very fast. Also, with the advancements in technology, mobile and internet banking services have come to the fore. Banks are focusing more and more to provide better services to their clients and have also started upgrading their technology infrastructure, which can help improve customer experience as well as give banks a competitive edge. The operations of all the banks in India are controlled by the RBI. All the Indian banks are governed by the RBI. This governing body took over the reasonability of formally regulating the Indian banks in 1935. Banks in India are classified into 2 broad categories namely, Public sector banks and Private sector banks. Public sector banks are controlled and managed by the government of India. Public sector banks have been serving the nation for over centuries and well known for their affordable and quality services. The banking sector in India is mostly dominated by the public sector banks. The concept of private banking was introduced about twenty years ago. These are the banks that do not have any government stakes. Private Banks have gained quite a strong foothold in the Indian banking industry over the last few years especially because of optimum use of technology.
Scheduled commercial banks in India are categorized into five different groups according to their ownership and/or nature of operation. These bank groups are
state bank of India and its associates
other nationalized banks regional rural banks foreign banks andscheduled commercial banks are considered of 28 public sector banks (state bank of India and its seven associates nationalized banks and other public sector bank). 9 new private sector banks ,20 old private sector banks and 31 foreign banks 1.public sector bans are the ones in which the government has a major holding. They are divided into two groups i.e. nationalized banks of india and its associates.
Private sector banks came into existence to supplement the performance of public sector banks and serve the needs of the economy better. As the public sector banks where merely in the hands of the government, bank had no incentive to make profits and improve the financial health. Nationalization killed competition and stifled competition in banking. Banks operated in regulatory environment with administered rate of interest structure, quantitative restrictions on credit, high receive requirements and significant proportion of the bendable resources going to the priority and government sectors. This resulted in low levels of investment and growth, decline in productivity and erosion of profitability of banking sector. Thus, Narasimham committee (1991) which recommended the free entry of new banks in the financial market provided they confirm the minimum startup capital and other requirements by the permissions of reserve of India.
As on march 2016, the number schedule commercial banks india stood at 2182. As on june 2006 the number of banked centers served by scheduled commercial banks stood at 34, 513. Of these centers 29,039 were single office centers and 45 centers had 100 and more bank office. The top hundred center, out of 34,513 banked centers, arranged according to the size of deposit accounted for 67.7percent of the total deposit and the top hundred centers arranged according to the size of bank credit accounted 76.6 percent in June 2006 over June 2005, compared to 18.0 percent growth recorded a year 2006 over June, compared to 32.9 percent growth in June 2005.
Nationalized banks, as a group, accounted for 48.5 percent of the aggregate deposits, while state bank of India and its associates accounted for 22.9 percent. The shares of others scheduled commercial banks, foreign banks and regional rural banks in aggregate deposits were 20.0 percent 5.4 percent and 3.2 percent respectively. As regards gross bank credit. Nationalized banks held the maximum share of 47.6 percent in the total bank credit followed by state bank of India and its associates at 22.6 percent and other scheduled commercial banks at 20.3 percent forcing bank and regional rural banks had relatively lower shares in the bank credit at 6.9 percent and 2.6 percent respectively3.
With assets of around Rs. 4,93,000 crores, state bank of India (SBI) is the country’s largest bank, yet it ranks 84th in the world according to the Banker, the next biggest is ICICI bank, which is half
government- account for about 85 percent of banking assets. Thus there seems to be concentration as well as fragmentation in the Indian banking sector.
DEFINITION OF BANK
The Oxford dictionary defines the Bank as
, “An establishment for the custody of money, which it pays out, on a customer’s order.”According to Whitehead,
“ A Bank is defined as an institution which collects surplus funds from the public, safeguards them, and makes them available to the true owner when required and also lends sums be their true owners to those who are in need of funds and can provide security.”
Banking Company in India has been defined in the Banking Companies act 1949,
“One which transacts the business of banking which means the accepting, for the purpose of lending or investment of the deposits of money from the public, repayable on demand, or otherwise and withdraw able be cheque, draft, order or otherwise.”
The banking system is an integral subsystem of the financial system. It represents an important channel of collecting small savings from the households and lending it to the corporate sector.
The Indian banking system has Reserve Bank of India (RBI) as the apex body for all matters relating to the banking system. It is the central Bank of India. It is also known as the Banker To All Other Banks.
EVOLUTION OF INDIAN BANKING
Ancient banking system of India constituted of indigenous bankers. They have been carrying on their age-old banking operations in different parts of the country under different names. The modern age of banking constitutes the fundamental basis of economic growth. The term Bank is being used since long time but there is no clear conception regarding its beginning. According to the viewpoint, in good old days. Italian money leaders were known as “Banchi” because they kept a special type of table to transact their business.
IMPORTANCE OF BANKS
Today banks have become a part and parcel of Kotak Bank's life. There was a time when dwellers of the city alone could enjoy their services. Now banks offer access to even a common man and their activities extend to areas hitherto untouched. Banks cater to the needs of agriculturalists, industrialists, traders and to all the other sections of the society. In modern age, the banking constitutes the fundamental basis of economic growth. Thus, they accelerate the economic growth of a country and steer the wheels of the economy towards its goals of “self reliance in all fields”. It naturally arouses Kotak Bank's interest in knowing more about the ‘Bank’ and the various men and the activities connected with it.
Indian Banking System
Banking in India has its origin as early as the Vedic period. It was believed that transition from money lending to banking must have occurred even before Manu, The great Hindu Jurist, who has devoted a section of his work to deposit advance and laid down rules relating to rates of interest. During the Mogul period, the indigenous Bankers played a very important role in lending money financing foreign trade and commerce. During the days of East India Company, it was turn over the agency houses to carry on the business. “The General Bank of India” was the first to join sector in the year 1786.The others that followed were the Bank of Hindustan and the Bengal bank. The bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime.
In the first half of the 19th century the East India Company established three banks:
1 Bank of Bengal (1809) 2 Bank of Bombay (1840) 3 Bank of Madras (1843)
These three banks are also known as Presidency Banks were independent units and functioned well. These three banks were amalgamated in 1920 and Imperial Bank of India was established on 27th
january1921, which started as private shareholders banks, mostly Europeans shareholders, with the passing of time Imperial bank was taken over by the newly constituted State bank of India act in1955.In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. On July, 1969, 14 major Research and development in the banking sector. Banks of India were nationalized and on 15th April, 1980 six more commercial private banks were also taken over
PUBLIC SECTOR BANKS
Definition of Public Sector Bank
Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by a government. The shares of these banks are listed on stock exchanges. There are a total of 21 PSBs in India.
Emergence of Public Sector Banks
The Central Government entered the banking business with the nationalization of the Imperial Bank of India in 1955. A 60% stake was taken by the Reserve Bank of India and the new bank was named as the State Bank of India. The seven other state banks became the subsidiaries of the new bank when nationalized on 19 July 1960.The next major nationalization of banks took place in 1969 when the government of India, under prime minister India Gandhi, nationalized an additional 14 major banks. The total deposits in the banks nationalized in 1969 amounted to 50 crores. This move increased the presence of nationalized banks in India, with 84% of the total branches coming under government control
The next round of nationalization took place in April 1980. The government nationalized six banks. The total deposits of these banks amounted to around 200 crores. This move led to a further increase in the number of branches in the market, increasing to 91% of the total branch network of the country. The objectives behind nationalization where:
o To break the ownership and control of banks by a few business families, o To prevent the concentration of wealth and economic power,
o To mobilize savings from masses from all parts of the country, o To cater to the needs of the priority sectors...
o
State Bank of Bikaner & Jaipuro
State Bank of Hyderabado
State Bank of Indoreo
State Bank of Mysoreo
State Bank of Saurastrao
State Bank of TravancoreOther Nationalised banks are:
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharastra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab & Sind Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya BankPRIVATE SECTOR BANKS
The private-sector banks in India represent part of the Indian banking sector that is made up of both private and public sector banks. The "private-sector banks" are banks where greater parts of stake or equity are held by the private shareholders and not by government.
Banking in India has been dominated by public sector banks since the 1969 when all major banks were nationalized by the Indian government. However since liberalization in government banking policy in 1990s, old and new private sector banks have re-emerged. They have grown faster and
bigger over the two decades since liberalization using the latest technology, providing contemporary innovations and monetary tools and techniques
The private sector banks are split into two groups by financial regulators in India, old and new. The old private sector banks existed prior to the nationalization in 1969 and kept their independence because they were either too small or specialist to be included in nationalization. The new private sector banks are those that have gained their banking license since the liberalization in the 1990s.
List of Private Sector Bank
Bank of Punjab
Bank of Rajasthan
Catholic Syrian Bank
Centurion Bank
City Union Bank
Dhanalakshmi Bank
Development Credit Bank
Federal Bank
HDFC Bank
ICICI Bank
IDBI Bank
IndusInd Bank
ING Vysya Bank
Karnataka Bank
Karur Vysya Bank
Laxmi Vilas Bank
South Indian Bank
United Western Bank
UTI Bank
COMPARISON BETWEEN SBI BANK AND ICICI BANK
The State Bank of India traces its roots to the first decade of 19th century, when the
Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806.
The government amalgamated Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras on 27 January 1921, and named the reorganized banking entity the Imperial Bank of India. All these Presidency banks had been incorporated as joint stock companies, and were the result of the royal charters. The Imperial Bank of India continued as a joint stock company. Until the establishment of a central bank in India the Imperial Bank and its early predecessors served as India's central bank, at least in terms of issuing the currency. The State Bank of India Act 1955, enacted by the Parliament of India, authorized the Reserve Bank of India, which is the
central banking organization of India, to acquire a controlling interest in the Imperial Bank of India, which was renamed the State Bank of India on 30 April1955.
June 2, 1806: The Bank of Calcutta established.
January 2, 1809: This became the Bank of Bengal.
April 15, 1840: Bank of Bombay established.
July 1, 1843: Bank of Madras established.
1861: Paper Currency Act passed.
January 27, 1921: all three banks amalgamated to form Imperial Bank of India.
July 1, 1955: State Bank of India formed; becomes the first
Indian bank to be nationalized.
1959: State Bank of India (Subsidiary Banks) Act passed,
enabling the State Bank of India to take over eight former
1980s When Bank of Cochin in Kerala faced a financial crisis,
the government merged it with State Bank of India.
June 29, 2007: The Government of India today acquired the entire Reserve Bank of
India (RBI) shareholding in State Bank of India (SBI), consisting of
over 314 million equity shares at a total amount of over 355 billion rupees.
SBI PROFILE
COMPANY
OVERVIEW:-State Bank of India (SBI) is a multinational banking and financial services company based in India. It is
a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2013, it had assets of US$388 billion and 17,000 branches, including 190 foreign offices, making it the largest banking and financial services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with ICICI Bank, Punjab National Bank and Bank of Baroda.
The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of
Madras merged into the other two presidencies banks—Bank of Calcutta and Bank of Bombay—to form the Imperial Bank of India, which in turn became the State Bank of India. Government of India owned the Imperial Bank of India in 1955, with Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India.
The eight banking subsidiaries are:
1-State Bank of Bikaner and Jaipur (SBBJ) 2-State Bank of Hyderabad (SBH)
3-State Bank of India (SBI) 4-State Bank of Indore (SBIR) 5-State Bank of Mysore (SBM) 6-State Bank of Patiala (SBP) 7-State Bank of Saurashtra (SBS) 8-State Bank of Travancore (SBT)
INTRODUCTION OF SBI (state bank of india)
The State Bank of India, the country’s oldest Bank and a premier in terms of balance sheet size, number of branches, market capitalization and profits is today going through a momentous phase of Change and Transformation – the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an ability to give the Private and Foreign Banks a run for their money. The origin of the state bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on2 June 1806.
The bank is operating into many businesses with strategic tie ups – Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc – each one of these initiatives having a huge potential for growth.
It is also focusing at the top end of the market, on whole sale banking capabilities to provide India’s growing mid / large Corporate with a complete array of products and services. It is consolidating its global treasury operations and entering into structured products and derivative instruments. Today, the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list.
SBI have about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks, today it offers the largest banking network to the Indian customer. The Bank is also in the process of providing complete payment solution to its clientele with it’s over 8500 ATMs.
SBI Capital Markets- SBICAP Securities, SBI DFHI, SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS), SBI Funds Management Pvt Ltd (SBI FUNDS) and SBI Cards & Payments Services Pvt. Ltd. SBICPSL) - forming a formidable group in the Indian Banking scenario. It is in the process of raising capital for its growth and also consolidating its various holdings.
HISTORY OF ICICI BANK
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the
Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses.
In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYS
After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for
ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide
transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.
ICICI BANK PROFILE
ICICI Bank is India’s second-largest bank with total assets of 3,997.95 billion (US$ 100 billion) at March 31, 2008and profit after tax of Rs. 41.58 billion for the year ended March 31, 2008. ICICI Bank is the most valuable bank in India in terms of market capitalization and is ranked second amongst all the companies
listed on the Indian stock exchanges .In terms of free float market capitalization*.The Bank has a
network of about 130 branchesand3,950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customer through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Center and representative offices in the United States, United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. UK subsidiary has established a branch in Belgium. ICICI Bank's equity shares are listed in
India on Bombay Stock Exchange( B S E ) a n d t h e N a t i o n a l S t o c k E x c h a n g e ( N S E ) o f I n d i a L i m i t e d a n d i t s American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
INTRODUCTION TO ICICI BANK
ICICI Bank is India's second-largest bank with total assets of about Rs.1,67,659 crore at March 31, 2005 and profit after tax of Rs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 560 branches and extension counters and over 1,900 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management
ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom and Canada, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa.
ICICI Bank's equity shares are listed in India on the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
As required by the stock exchanges, ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees.
At April 4, 2005, ICICI Bank, with free float market capitalization of about Rs. 308.00 billion (US$ 7.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges.
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the
Government of India and representatives of Indian industry.
The principal objective was to create a development financial institution for providing medium-term and long-medium-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy.
The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services.
The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank.
The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.
SBI v/s ICICI
SBI stands for State Bank of India. It is a public sector institution (government owned), with a huge customer base all over India. It has seven associate banks operating under its SBI name. It has over thirteen thousand branches across India and in some selected international countries and a 56,000 ATM network across India. The
Standard Bank of India „ inherited the Bank of Calcutta, which was founded in 1806, and has ‟ been in existence for over two hundred years.
On the other hand, the ICICI is a private sector bank (privately owned), with a relatively smaller clientele base. It is one of the major banks in India (precisely the second largest), but much smaller than the SBI. It has 950 branches, with 3,500 branches across India. The bank has deposits of Rs 1.65 lakh crore compared to SBI s Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net ‟ worth of Rs 22,000 against Rs 27,000 for the State Bank of India. This represents Rs 9 crore business generated by each ICICI employee per year, compared to Rs 3 crore worth of business per employee of the ICICI.
While the State Bank pays 4.7 percent on deposits, and earns less on advances, the ICICI pays 0.7 less (4 percent), while earning more on advances, and thus earns
0.4 percent more on assets than the SBI. This is no surprise, as there’s seemingly limitless access to funds from the government for the state owned SBI.
On money transfers from overseas accounts, with the SBI, once a transfer transaction is
completed, you will be able to know the exchange rate used, and there are no restrictions on the amounts you can transfer a day. However, the ICICI transfer is somewhat different. After completion of a money transfer transaction, the exchange rate can only be known after five days, and there is a daily limit of $5000 that can be transferred a day.
Although the SBI has generally performed well in the past, in recent years, the ICICI has seen very good performance, almost edging out the SBI in every aspect, especially financially. The financial years between 2001-2002 and 2005, and 2006, saw very strong gains for the ICICI bank. Its deposits
grew by 200 percent, five times more than the SBI s, and while SBI s revenue grew by 30 percent and ‟ ‟ the ICICI banks revenue grew by seven times that percentage. This trend means that ICICI s growth ‟ will eventually overtake SBI s in the future, in terms of deposits. ‟
• The SBI is a government owned bank (public sector), while ICICI is a privately owned bank (private sector).
• The SBI is much older (more than 200 years old) and more established than the ICICI, which is less than 25 years old.
• The SBI does not limit daily international transfer amounts, while the ICICI limits daily transfers to $5000 a day.
• The SBI bank pays a higher percentage on deposits than the ICICI bank.
MISSION AND VISION OF SBI BANK
MISSION STATEMENT
:To retain the Bank’s position as premiere Indian Financial Service Group, with world class standards and significant global committed to excellence in customer, shareholder and employee satisfaction and to play a leading role in expanding and diversifying financial service sectors while containing emphasis on its development banking rule.
VISION STATEMENT
: Premier Indian Financial Service Group with prospective world-class Standards of efficiency and professionalism and institutional values.
Retain its position in the country as pioneers in Development banking.
Maximize the shareholders value through high-sustained earnings per Share.
An institution with cultural mutual care and commitment, satisfying and Good work environment and continues learning opportunities.
MISSION AND VISION OF ICICI BANK
MISSION
We will leverage our people, technology, speed and financial capital to:
Be the banker of first choice for our customers by delivering high quality, world-class products and services.
Expand the frontiers of our business globally.
Play a proactive role in the full realisation of India’s potential.
Maintain a healthy financial profile and diversify our earnings across businesses and geographies.
Maintain high standards of governance and ethics.
Contribute positively to the various countries and markets in which we operate.
create value for our stakeholders
Provide the social facilities to the society
IN order to build some brand equity by doing social service, ICICI Bank has decided to undertake a MISSION for reducing low birth weight incidence at the village level.
VISION
To be the leading provider of financial services in India and a major global bank.
To be the preferred brand for total financial and banking solutions for both corporates and individuals
To be the dominant Life, Health and Pensions player built on trust by world-class people and service.
This we hope to achieve by:
Understanding the needs of customers and offering them superior products and service
Leveraging technology to service customers quickly, efficiently and conveniently
Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders
Providing an enabling environment to foster growth and learning for our employees
And above all, building transparency in all our dealings
The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work.
We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.
PRODUCTS AND SERVICES OF SBI
Terms deposit scheme
Recurring deposits scheme
E- Pays
Atm service
Safe deposit locker
Working capital finance
Project finance
Deferred payment guarantees
Corporate term loan
Equipment leasing
Loan syndication
Fund transfer
Loans
I. Car loan II. Home loan III. Business loan IV. Personal loan
V.
Loan against property1. Term deposit
· Provide security, trust and competitive rate of interest. · Flexibility in period of term deposit from 15 days to 10 years · Affordable Low Minimum Deposit Amount:
.One can open a term deposit with SBI for a nominal amount of Rs.1000/- only.
· Flexibility in choosing the amount one wish to invest and the maturity period.
2. Recurring deposit
Recurring deposit refers to a little investment by an investor to meet his financial goals of future (Children’s education or marriage, buy a car etc.) Recurring deposit provides the element of compulsion to save at high rates of interest, wide choice in period of deposit.
Features:- · Flexibility in period of deposit with maturity ranging from 12 months to 120 months. · Low minimum monthly deposit amount.
3. E- pays
Bill Payment at Online SBI (e-Pay) will let you to pay your Telephone, Mobile, Electricity, Insurance and Credit Card bills electronically over our Online SBI website
Book your Railways Ticket Online.
The facility has been launched wef Ist September 2003 in association with IRCTC. The scheme facilitates Booking of Railways Ticket Online
4.
Atm services
State Bank offers you the convenience of over 8000 ATMs in India, the largest network in the country and continuing to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the Associate Banks – namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, and State Bank of Travancore) and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card.
5. Safe deposit locker
For the safety of your valuables we offer our customers safe deposit vault or locker facilities at a large number of our branches. There is a nominal annual charge, which depends on the size of the locker and the centre in which the branch is located.
6. Working Capital Finance
SBI offers working capital finance to meet the entire range of short-term fund requirements that arise within a corporate day-to-day operational cycle. The SBI working capital loans can help your company in financing inventories, managing internal cash flows, supporting supply chains, funding production and marketing operations, providing cash support to business expansion and carrying current assets.
7. Project Finance
The SBI has formed a dedicated Project Finance Strategic Business Unit to assess credit proposals from and extend term loans for large industrial and infrastructure projects. Apart from this, project term loans for medium sized projects and smaller clients are delivered through the CAG and the NBG.
8. Deffered Payment Guarantees
SBI can extend deferred payment guarantees to industrial projects for obtaining imported equipment. The DPG is a standby credit guaranteeing deferred payments, usually for payments for capital goods, turnkey contracts etc.
9. Corporate Term Loan
The SBI corporate term loans can support your company in funding ongoing business expansion, repaying high cost debt, technology upgradation, R&D expenditure, leveraging specific cash streams that accrue into your company, implementing early retirement schemes and supplementing working capital.
10. Equipment Leasing
The SBI's has deployed a dedicated Strategic Business Unit for lease financing that is richly experienced in arranging lease contracts for procuring expensive equipment for your project or plant. At SBI, we arrange lease agreements as stand alone contracts or as part of a structured package.
11. Loan Syndication
The SBI leverages its vast network of relationships to arrange syndicated credit products for corporate clients and industrial projects.
With its rich experience and strong reputation, SBI's syndication desk can assemble large loan packages involving a ring of reputed financial entities, domestic and international, that match the large credit requirements of infrastructure projects.
12. Funds Transfer
You can now avail a bouquet of funds transfer services through Internet banking
Transfer funds within your own accounts
Transfer funds to third party account held in the same bank
Make an Inter bank funds transfer to any account held in any bank including State Bank Group
Pay any VISA credit card bill
Record standing instructions to transfer a fixed amount at a scheduled frequency for a period not exceeding one year
Transfer funds to NRE PIS accounts to facilitate online trading
13. Loans I. Car loan
Move ahead in life with SBI Car Loans with more than 6000 Branches offering Car Loans. If you have been putting off purchasing that Car, SBI invites you to an attractive Car Loan Scheme with low interest rates, free accidental insurance, easy repayment options, optional SBI life cover, total transparency. Loan finance will include vehicle registration charges, insurance, one-time road tax and accessories worth Rs.25000/-.
II. Home loan
"The Most Preferred Home Loan Provider" voted in Awaaz Consumer Awards along with the Most Preferred Bank Award in a survey conducted by TV 18 in association with AC Nielsen-ORG Marg in 21 cities across India. SBI HOME LOANS now offers Interest Rates concessions on GREEN HOMES in accordance with SBI's commitment to Environment protection. SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of India.
III. Business loan
Traders Easy Loan scheme is launched by SBI to provide hassle free loan to Traders. Any businessman/ entrepreneur/ professional and self employed person can avail this loan. Loan under the scheme can be availed to meet normal business requirements and is sanctioned against equitable mortgage of property.
IV. Personal loan
SBI Saral - Personal Loan makes funds readily available to you whenever you desire or need. Access this facility from over 3000 branches across the country and confidently face the challenge of meeting any kind of personal expenses
V. Loan against property
A dream come true! An all purpose loan for anything that life throws up at you!! Do you need funds for a marriage ceremony, want to take your family to a well-deserved holiday or for a sudden medical emergency? you have some property, but would rather not sell it? Then why not
avail of this all purpose loan from SBI? SBI now makes it very much possible for you to not only keep your property but also have liquid funds.
Types of loans
Interest rates
Car loan 10.75% per annum
Home loan 9.25%-9.30%
Business loan 12.50%-13%
Personal loan 12.55%-17.65%
Loan against property 15.25%-15.50%
PRODUCTS AND SERVICES OF ICICI BANK
Special saving account
Life plus senior citizens account
Fixed deposit
Recurring account
Salary account
Child education planning
Tax saver fixed deposit
Cards
I. Credit cards II. Debit cards III. Pre-paid cards IV. Business cards
E-instructions
Consolidation demat account
NRI banking
Investments
Property solutions
Insurance
Corporate banking
Trade services
Foreign exchange services
Loans
I. Car loan II. Home loan III. Business loan IV. Personal loan
V. Loan against property
ICICI Bank’s Special Savings Account provides comprehensive banking services to non profit motive organizations like Trusts, Associations, Societies, Clubs, NGOs, Hospitals, Educational and Research Institutes and section 25 companies and entities eligible for a Savings Account as per RBI Guidelines.
2. Life plus Senior Citizens Account
Carry out your day-to-day banking transactions independently with ICICI Bank’s ‘Life Plus’ Senior Citizens Savings Account, a saving account designed for our customers above 60 years of age.
We have special Senior Citizen desks at all our branches, where you can carry out all your banking transactions, without having to wait in queues.
3. Fixed deposit
A sum of money given to a bank, financial institution or company whereby the receiving entity pays interest at a specified percentage for the time duration of the deposit. At the end of the time period of the deposit the amount that is originally given is returned to the investor. Fixed deposits are also known as term deposits. Fixed deposits are operated by ideal money. the interest is charge 9 to10% per annum. the facilities are provided by fixed deposit receipt.
4. Recurring Deposit
Recurring deposit are a good investment option for small investors if they do not have a
lump sum amount to invest at one go, but wish to save a smaller sum of money on a
regular basis. As one of the leading private sector banks in India, ICICI Bank offers its
customers highly flexible RD options at competitive interest rates.
5. Salary Account
ICICI Bank Salary Account is a benefit-rich payroll account for Employers and Employees.As an organization, you can opt for our Salary Accounts to enable easy disbursements of salaries and enjoy numerous other benefits. Additionally, ICICI Bank offers a host of advantages for your employees like instant credit of salaries, offers on bill payments, Phone Banking, Free Internet Banking and much more. To know more about the ICICI Bank Salary Accoun
6. Child Education Planning
Planning for your child’s special education needs isn’t an easy task, but it’s not insurmountable either. While support services vary from state to state, all states are required to assist your child in receiving the same education they provide every other child in school. The resources in this section can help you develop a plan to address your child’s education needs
7
.Tax saver fixed deposit Tax saver fixed deposit is a type of fixed deposit by investing in which you can get tax deduction under section 80C of the Indian Income Tax Act, 1961. Normally, tax saver deposits are of two types - “Single holder Type Deposits" and “Joint holder Type Deposits”. Such deposits are offered for a lock-in period of 5 years. Any investor can claim a deduction of maximum Rs.1, 50,000 by investing in tax saver fixed deposit.8. Cards
I. Credit cards
ICICI Bank Credit Cards give the customers the facility of cash, convenience and a range of benefits, anywhere in the world. These benefits range from life time free cards, Insurance benefits, global emergency assistance service, discounts, utility payments, travel discounts and much more.
II. Pre-paid cards
ICICI Bank brings to the customers a complete bouquet of pre-paid cards providing payment solutions at their fingertips. ICICI Bank pre-paid cards are a safe & convenient way for associate payments, disbursements, gifting & small ticket transactions. Pre-paid cards are available on a VISA platform thus providing accessibility to over 3.5 Lakh merchant establishments & cash withdrawal from all VISA ATMs in India.
III. Debit cards
The ICICI Bank Debit Card is a revolutionary form of cash that allows customers to access their bank account around the clock, around the world. The ICICI Bank Debit Card can be used for shopping at more than 3.5 Lakh merchants in India and 24 million.
IV.
Business cardsThe ICICI Bank Business Card is aimed at SMEs as an enabler for their business. The Business card is a smart alternative to cheques, cash, and personal credit cards. With its purchasing convenience, cost savings, available credit, and detailed reporting facilities, the ICICI Bank Business Credit offers what their business needs to stay on top.
9. E-instructions
Through this anyone can transfer securities 24 hours a day and 7 days a week through internet at a lower cost. It can also be done through customer care officer.
10. Consolidation demat account
Through this anyone can dematerialize their physical shares in various holding patterns and consolidate all such scattered holdings into their primary demat accounts at reduced costs.
11. NRI banking
Under NRI Banking ICICI Bank provides a variety of services Money Transfer Bank Accounts Investments Property Solutions Insurance Loans
12. Investments
Under investments it provides various services. Some of they are as follows- International deposit
Mutual fund
Online share trading Structured deposit Private equity
Commercial real state
13. Property solutions
Under property solutions it provides some services to the customers. Like it provides home loan to the customers. It also provides help to the customers in searching houses.
14. Insurance
Under insurance ICICI Bank provides both general as well as life insurance services to its customers.
15.Corporate banking
ICICI BANK gives a number of facilities under corporate banking services. Corporate Net Banking
Cash Management Trade Services Tradeway
Forex Online Sme Services Online Taxes
16. Trade services
ICICI Bank offers a wide range of Trade Services designed to assist you in building on your
strengths, so that your company can size business opportunities across the world. ICICI Bank has in place a Centralized Trade-Services Unit, which adheres to six sigma standards. As a result, ICICI Bank customers experience fewer delays in receiving payment, require less effort in locating collection information, gain increased control over foreign receivables and experience improved cash flows.
17. Foreign Exchange Services
Competitive rates
Free Replacement Card along with ICICI Bank Travel Card on purchase
Online purchase of Foreign Exchange and delivery at doorstep in select cities.
24x7 international toll free numbers for ICICI Bank Travel Card holders in select countries
Wide network of 1600+ Foreign Exchange serving branches in India .Located your nearest branch
18. LOANS
I Car loanTurn your dream into reality. Own that new car you have always desired, with a little help from ICICI.
The bank offer cars loans up to 90% of the ex-showroom price of the car. Its interest rates would Pleasantly. surprise you. What's more, you can take up to 5 years to repay the loan. ICICI Bank offers new car loans with fixed rate option only.
II . Home loan
We, at ICICI Bank Home Loans, offer unbeatable benefits to ensure that you get the best deal without any hassles. As one of the leading home loan provider, ICICI Bank understands how special building a new home is for you and our Home Loan help you lay the foundation for your dream home. ICICI offers you the most convenient home loan plans to suit your needs. With so many attractive features in every type of home loan we offer, creating the home you always wanted is no longer a distant dream.
ICICI Bank's Dealer Financing schemes offer short-term unsecured finance at reasonable cost to selected dealers of large corporates, extended for procurement of goods from corporates. These are commonly available on a non-recourse basis, with corporate recourse available by way of First Loss Deficiency Guarantee in some cases.
IV Personal loan
ICICI Personal Loans is provided only to an existing ICICI Bank customer. It is possible to secure a loan even without having to visit your bank branch. If you have been an ICICI Bank customer for the past 9 months, you might have a pre-approved loan offer waiting for you.
V Loan against property
Loan Against Property is the perfect way to unlock the hidden value of your property. With this loan,You can fully benefit from life’s little surprises you may have earlier passed over due to lack of funds. Live your dreams with a Loan Against Property! This multi-purpose loan puts funds at your disposal to use as you wish. What’s more, this loan is available at a reasonable rate and can be repaid comfortably over as many as 10 years.The ICICI Bank’s Loan Against Property can be used for any purpose.
Types of loans
Interest rates
Car loan 11.5%-16.5%
Home loan 9.40%-9.45%
Business loan 15.00%-19.00%
Personal loan 11.49%-17.50%
Loan against property 12% per annum
ANALYSIS AND INTERPRETATION OF SERVICES
ICICI
We can see here that SBI advertises sale of mutual fund units in their Gold Fund scheme during the festival of Akshaya Tritiya. Investors who have knowledge about the market will know very well that gold as a commodity yields an average 20% Yon and has since never saw a negative rate of return. SBI also had a scheme that offered 1% discount on all denominations of Gold coins except those above 100gms during their campaign. The drawback of advertising like this is, many do not know the benefits of investing in „paper gold. Which means, gold mutual funds or gold exchange traded funds; this form of investment has superior advantages than investing in gold as a physical commodity. ICICI however had decorated all its branches during the festival and even offered a larger discount, 8% on gold coins being purchased online. Many Indians today still choose gold as a physical commodity and it is possible that ICICI had better sales than SBI in comparison to gold coins.
SBI could simply mention the rate of return on its gold mutual funds or offer the advantages of „paper gold over physical gold in its advertisements during Akshaya Tritiya. The advantages of investing in paper gold are not even mentioned on their mutual funds website by means of a flash advertisement.
Case 2-ATM Services
SBI
ICICI
Cash Withdrawal Cash Withdrawal
Fund Transfers Fund Transfers
Mobile Recharge Mobile Recharge
Mini Statement Mini Statement
Balance Enquiry Balance Enquiry Pay SBI Credit Card Bills Pay ICICI credit card bills Pay Utility Bills (MTNL and Besom only) Pay Utility Bills (All) Donate to relief funds Request cheque book
Pay SBI Life Insurance premium Pay ICICI Prudential Insurance premium Donate to temple trusts
83 17
Banks
ICICI SBI
SBI ATMs do have more services than what ICICI ATMs offer. But there is a small glitch in their service delivery and marketing. SBI offers the basic services (highlighted purple) in all the ATMs. However, the rest are available only in a select few. The data for which is unavailable.
Only on their website in a link that shows up when you type “ATM” in the search bar. Poor advertising of its ATM functionality has resulted in lack of awareness among consumers regarding the services available. In fact, the SBI website also does not advise any details on what services their ATMs offer.
The irony is, SBI keeps advertising on the number of ATMs and cash withdrawals made by consumers over the years in these ATMs. This advertising is irrelevant. As a customer of SBI, it makes no difference on the number of ATMs added over the years since the data is irrelevant. ICICI however offers all the services in all of its ATMs. And the advertising of its services has been clearly seen on all its branches. There is even a flash demo on the banks website that provides details on the services available at its ATMs. Their current marketing campaign, suggests “Our
ATM is almost a bank branch” indicating customers the improvised convenience offered to them.
Figure 6.1. Innovative Banking Services
1 On being asked about the innovative nature of banking services, 83.2 % of the customers of ICICI bank said that the banking schemes offered by ICICI bank are very much innovative.
2 The SBI customer were asked about the innovative nature of SBI services, around 77.5 % customers out of 100 said that the schemes are very much innovative.
51.5 48.5
Banks
ICICI SBI 56.4 43.6Banks
ICICI SBIFigure 6.2. Innovative Banking Services
3 As far as the comparisons of innovative scheme of both the banks are concerned; it is found that ICICI bank offers more innovative schemes than SBI.
4 About the dynamic nature of banking services offered by ICICI bank only 51.5% of the customers out of 100 said that the services are very much dynamic in nature whereas 33.3% SBI customers fell that the services provided by SBI are dynamic. In comparison with SBI about dynamic services, ICICI bank stands first.
83
17
Banks
ICICI SBI
Figure 6.3 Dynamic Services
5 In terms of competitiveness of banking schemes ICICI bank has only 56.4% customer saying its services are very much competitive.
6 SBI customers are negative about the competitiveness of banking schemes of SBI. Around 37.3% customers feel that the services are very much competitive whereas majority of customers i.e. 50% have the opinion that the schemes offered by SBI are very less competitive.
7 The customers of ICICI bank are satisfied with the services offered by ICICI bank. Since 83.2 % of the, customers responded „yes to the question whether they are satisfied with the services of‟ ICICI bank.
Figure 6.5. Service Satisfaction
8.SBI customers are also satisfied with the banking services offered by SBI. The customers who are satisfied with ICICI bank services stand at 76.5%.
76.5 23.5
Banks
SBI ICICI 83 17Banks
ICICI SBIFigure 6.6. Banking Services
9.It was obvious that ICICI bank customers are more satisfied with 83.2% out of total 100 respondents when compared with SBI bank in terms of satisfaction.
Figure 6.7 Customer Satisfaction
10.Private sector banks give more importance to customer satisfaction. For private sector banks, not only the product and services are important, but also the way they communicate about their new services, opening of new branches, changes in interest rates etc. to their customers. It shows that 80.2 % out of total respondents are satisfied with the communication from ICICI bank.
80 20
Banks
ICICI SBI 85.3 14.7Banks
SBI ICICIFigure 6.8 Product Satisfaction
11. SBI customers are more satisfied at 85.3 % about communication from SBI about new services, changes in interest rates opening of new branches, etc.
12 When ICICI bank and SBI are compared on satisfaction with the communication from banks it is found that SBI is more prompt and efficient in communication with the customers.
13 It is found that 34.6 % customers of ICICI bank are always satisfied with the way ICICI bank markets it banking services. And 61.4% of the ICICI bank customers are sometimes satisfied with marketing of ICICI bank services.
14 it is found that 50% customers of SBI are sometimes satisfied with the SBI markets its products, 47.1% customers of SBI are always satisfied with the way bank markets its services.
15 ICICI bank has 11.9% customers who are not satisfied with the service of ICICI bank. The study also attempts to find out the reasons for dissatisfaction of services of ICICI bank, it is found that;
8.9% customers are not satisfied because of services
• 1.0% customers are not satisfied because of schemes offered by ICICI bank. • 7.9% customers are not satisfied with the staff of ICICI bank.
• 7.0% customers of ICICI bank are not satisfied because of banking charges.
19.8 14.8 166 13.2 12 7 767.2
Banks
ICICI ICICI ICICI ICICI ICICI ICICI SBI. Figure 6.10 Staff and Scheme Satisfaction of ICICI Bank
16. SBI has 7.9% out of the total respondents who are not satisfied with the services of SBI. The Study also attempts to find out the reasons for dissatisfaction of services of SBI It is found that:
• 6.9% of the customers of SBI are not satisfied because of services. • 3.9% customers of SBI are not satisfied with the schemes offered by SBI • 13.7% of the customers are not satisfied with the staff SBI
10.8% Customers of SBI are not satisfied with service charges charged by SBI
13.2 11.5 6.5 22.8 18 6.5 922.5
Banks
SBI SBI SBI SBI SBI SBI ICICIFigure 6.11 Staff and Scheme satisfaction of SBI
17 It is found out from the above study that the major reason for dissatisfaction of ICICI bank customers is banking staff and charges by ICICI bank.
18 It is found out from the above study that the major reason for dissatisfaction of SBI customers is banking staff with 13.7% and service charges with 10.8%.
19 When Customers of ICICI bank asked to rate ICICI bank on the basis of customer services the customer of ICICI bank have rated ICICI bank as follows:
32.7% of the total respondents said ICICI bank is excellent in terms of customer services.
28.7% of the total respondents said ICICI bank is very good in terms of customer service.
30.7% of the total respondents said ICICI bank is good in terms of customer service.
Figure 6.12 ICICI Customer Service 32.7 28.7 30.7 7.9 3
Banks
ICICI ICICI ICICI ICICI SBI20 When customers of SBI asked to rate SBI on the basis of customer services the customers of SBI have rated SBI as follows:
25.5% of the total respondents said SBI is excellent in terms of customer services.
34.4% of the total respondents said SBI is very good in terms of customer services.
37.3% of the total respondents said SBI is good in terms of customer services.
4.9% of the total respondents said SBI is poor in terms of customer services. 21.
When asked about the Redresses of complaints most of the marketing staff of ICICI bank replied in negative terms. Around 32% said it is satisfactory, 26% said it is poor. And 6% said the Redresses of complaints at ICICI bank is excellent, 10% said it is very good and 26% said it is
32 26 6 10 26 4
Banks
ICICI ICICI ICICI ICICI ICICI SBI Figure 6.15 12 6 45 16 21 4Banks
SBI SBI SBI SBI SBI ICICIFigure 6.14 Complaint Redresses
22 The question regarding customer complaints when asked to marketing staff of SBI they replied in following way: reply to customer complaints at SBI is excellent 12%, very good 6%, good 45% and 16% satisfactory around 21% said it is poor.
43 Customer complaints
8 12 55 20 5 4
Banks
SBI SBI SBI SBI SBI ICICI23 IT is found that the marketing problems faced by marketing staff of SBI is related to banking products 8%, marketing strategies 12%, service charges 55% banking staff 20% and other 5%.
Figure 6.16 Marketing Staff
In case of ICICI bank it is found that the marketing problems faced by marketing staff is related to banking products 9% marketing strategies 10% service charges 63% banking staff 10 and other 8%.
It is found that most of the time ICICI bank marketing staff faces problems in convincing the customers because of reasons such as service charges, banking staff, etc. at 79% where SBI staff faces problems at 51%.
The major question remains whether all these problems affect the marketing staff in convincing the customer about other products. Only 2% of ICICI bank marketing staff feels that they have problem in convincing the customers all the times because of all these problems stated above, 9% have problems most of the time. 79% have problems some times, and 10% never have problems because of all these reason to convince the customers.
SWOT ANALYSIS OF SBI
Strength:
SBI is the largest bank in India in terms of market share, revenue and assets.
SBI has the first mover advantage in commercial banking service.
Weakness:
Lack of proper technology driven services when compared to private banks The banks spends a huge amount on its rented buildings
SBI has the largest number of employees in banking sector, hence the bank spends a considerable amount of its income in employee’s salary compensation
In spite of modernization, the bank still carries the perception of traditional bank to new age customers
Opportunities:
Merger of associate banks with SBI ,as it will expand the market share and increase4 the revenues Opening up of new branches And ATM’s.
Pool in talent to replace the going top management to serve the next generation
Threats:
Customer prefer to switch to private banks and financial service providers for loans and mortgages, as SBI involves stringent verification procedures and take long time for processing. More private banks are venturing into rural areas.
SBI is currently operating at lowest CAR. Insufficient capital may restrict the growth prospects of the
Banks going forward.
Delay in technology upgradation could result in loss of market shares.
SWOT ANALYSIS OF ICICI BANK
Strength:
Online Services: ICICI Bank provides online services of all it’s banking facilities. It also
provides D Mart account facilitates on-line, so a person can access his account from anywhere he is.
Advanced infrastructure: Branches of ICICI Bank are well equipped with advanced technology to provide the customers with taster banking services. All the computerized machines are located in suitable manner & are very useful to the customers & staff of the bank.
Friendly Staff: The staff of ICICI Bank in all branches is very friendly & help the customers in all cases They provide faster services along with bonding & personal relationship with the customers
24 hrs. Banking services: Compared to other bank ICICI bank provides long hours of services i.e. 8-8 services to the customers. This service is one of its kinds & is very helpful for the customers who are in urgent need of money.
Weakness:
High bank service charges: ICICI bank charges highly to customers for the services provided by them when compared to other bank & that are why it is only in the reach of higher class of society.
Less Credit Period: ICICI bank provides credit facilities but only up to limited period. Even when the credit period is not over it sends reminder letters to the customers which may annoy them.
Opportunities:
Bank Insurance services: The bank should also provide insurance services. That means the bank can have a tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies.
Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also up to large extent help the bank cam profits & popularity
Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & so are knowledge about various tax policies. The bank can recruit these students through tie-ups with colleges. Such students will surely prove as an asset to the bank.
Associate with social cause: The bank can also associate itself with social cases like providing relief aid patients funding towards natural calamities. But this falls in the 4” quadrant so the bank should neglect it.
Threats:
Competition: lClCl Bank is facing tight competition locally as well as internationally. Bank like CITI Bank. HSBC, ABM, Standard Chartered. HDFC so provide equivalent facilities like ICICI do.
Net Services: ICICI Bank provides all kind of services on-line. There can be easy access to the e-mail ids of the customers through wrong people. The confidential information of the customers can be leaked easily through the e-mail ids.
No Proper Facilities To Uneducated customers: ICICI Bank provides l services through electronic computerized machines. This creates problems to the less educated people. But this threat falls in the 4’ quadrant so its negligible. The company can avoid this threat.
ADVANTAGES OF ICICI OVER SBI:
ICICI is growing at a very fast rate with a totalasset of Rs. 3,744.10 billion.In the area of human relations, the two are takingdivergent paths. SBI, which had over 1 lacksemployees, has reduced headcount through avoluntary retirement scheme and is cautious aboutadding headcount.ICICI Bank, on the other hand, is setting upregional hubs where its workforce would be
concentrated and plans to add 20,000 to itsheadcount every year. The group plans to addbetween 75,000 and 1, 00,000 employees in thenext few years. ICICI Bank is also set to outdo SBI is in itsinternational book- An area where it has been very aggressive.
ADVANTAGES OF SBI OVER ICICI:
SBI is the largest and oldest bank of India. Itsmajor stocks are held by government of India. Sothis bank enjoys the trust of its Customers a lot.
SBI offers flexible tenures of loan repayment.
State bank of India has vast experience in thefield of SME(Small and Medium Enterprises) Financing. As it is the oldest name so it enjoys public trust alot.SBI have four national level Apex
TrainingColleges and 54Learning Centers spread all over the countrythe Bank isContinuously engaged