gaurav choudhari project report

COMPARATIVE STUDY OF CURRENT ACCOUNT SCHEMES OF IDBI BANK AND ICICI BANK NAGPUR BRANCH

INTRODUCTION

Banking is the backbone of a modern economy. Health of banking industry is one of

the most important pre-conditions for sustained economic progress of any country. The world

of banking has assumed a new dimension at the dawn of the 21st century with the advent of

tech banking, thereby lending the industry a stamp of universality. In general, banking may be

classified as retail and corporate banking. Retail banking, which is designed to meet the

requirements of individual customers and encourage their savings, includes payment of utility

bills, consumer loans, credit cards, checking account balances, ATMs, transferring funds

between accounts and the like. Corporate banking, on the other hand, caters to the needs of

corporate customers like bills discounting, opening letters of credit and managing cash.

The Indian banking scene has changed drastically with the private sector making inroads in an

area hitherto dominated by large public sector banks. Growing disinvestment is likely to

impact the banking industry as well. There is every possibility of privatization of public sector

banks, leading to greater operational autonomy. The development of the Indian banking sector

has been accompanied by the introduction of new norms such as Income Recognition and

Capital Adequacy, by the government. The latter implies that banks can lend on the basis of

their respective capital base. These norms have caused banks to construct equity on their own,

before going in for debt. Disintermediation is a real threat for banks. Of late, banks are

adopting the EVA (Economic Value Added) concept wherein revenues are viewed in the

context of the risk associated with them. The New World order has ensured "Survival of the

Fittest". New services are the order of the day, in order to stay ahead in the rat race. Banks are

now foraying into net banking, securities, consumer finance, housing finance, treasury market,

merchant banking and insurance.

1 DEPARTMENT OF MANAGEMENT STUDIES & RESEARCH

Civil Lines Sadar, Nagpur-440001


PRODUCTS OF A BANK

In their search for higher returns, many customers of banks and credit unions are look-ing

beyond traditional savings accounts to investment products such as mutual funds and

annuities. Mutual funds and annuities have their advantages, but it’s important to understand

how they work and what risks are involved.

Any money you have in savings and checking accounts or in certificates of deposit (CDs) is

known as a deposit. Your financial institution is committed to returning all of your deposits

(plus interest) whenever you ask. You can even take money out of a CD before it matures,

however, you will have to pay a penalty for early withdrawal.

Your institution is also required to carry government insurance on your deposits up to

$100,000. The insurer is usually the Federal Deposit Insurance Corporation (FDIC). Contact

your financial institution if you have specific questions about your insured deposits.

Buying through Institution

Not all banks and credit unions sell investment products, but many do. Some simply rent

lobby space to outside companies. Other institutions sell what are called proprietary funds,

which are sponsored by an outside company but receive investment advice from the institution

itself. Private label funds, meanwhile, are sponsored and managed through an outside

company but are only sold through one bank or credit union.

Some mutual funds and annuities have names that sound very much like names of financial

institutions. But no mutual funds or annuities are insured by either your institution or the U.S.

government. As an investor, you should be aware that these funds have different degrees of

risk and could possibly lead to a loss of some or your entire principal.




LPG PRIVATE BANKS

The Consumers Legal Protection Forum (CLPF) has demanded immediate steps to repay the

amount taken by the LPG dealers from the consumers against home delivery, in all those

cases where consumers are made to collect their cylinders from the dealers godowns etc. The

CLPF said in a statement here that it been receiving complaints from LPG consumers located

in various parts of the State that they are made to collect their cooking gas cylinders from the

dealers godowns etc places at their own cost. However the dealers are not remitting them back

the amount of Rs 8 taken from them against home delivery of each of the cylinders.

The dealers are refusing home delivery of the cooking gas cylinders on various pleas. But they

continue to charge the consumers the amount of Rs 8 against home delivery of such cylinders.

The failure of the dealers to make home delivery of the cooking gas cylinders has also resulted

in the growth of large black market of LPG cylinders throughout the State. The matter was

taken up by the CLPF with the Indian Oil Corporation Ltd (IOCL) Authorities and the

Director of Food and Civil Supplies on occasions. But so far none of these authorities has

taken any step to redress the grievances of the consumers, alleged the CLPF. It needs mention

here that the State has at present 253 LPG distributing firms. Of them, 228 are connected with

the IOCL, 16 are connected with the Bharat Petroleum and nine are connected with the

Hindustan Petroleum. There are around 20,37,000 LPG consumers in the State and of them

19,37,120 are linked with the IOCL, 70,000 are linked with the Bharat Petroleum and 30,000

are linked with Hindustan Petroleum.

MEANING OF CURRENT ACCOUNT

Current refers to regularity of transactions in the account within banking hours in all

working days. The banker’s liability in this regard is to honor all the demands of the

customers to the extent to which his account shows a credit balance. It is because of this

obligation, Current Account deposit known as bankers demand liability and in order to fulfill

this liability he keeps sufficient cash ready every moment. A current is a running and active




account which may be operated upon any number of times during a working day. There is no

restriction on the number and amount of withdrawals from a current account. As the banker is

under an obligation to repay their deposits on demand, they are called demand liabilities of a

banker. To meet such liability the banker keeps sufficient cash reserve against such deposits

vis-à-vis the savings and the fixed deposit.

A current account carries certain privileges which are not given to a saving banking holder.

a) Third party cheques and cheques with endorsement may be deposited in the current account

for collection and credit.

b) Overdraft facilities are given in case of current accounts only.

c) The loans and advances granted by the bank to their customers are not given in the form of

cash but through the current accounts they earn interest on all type of advances granted by the

banker.

Current is opened and deposited by big businessmen, companies, institution, public service

bodies, corporation, industrialist etc. who:

a) Have huge working capital in their hands.

b) Are interested in keeping their money safe.

c) Transact with their bankers daily.

d) Utilies the agency services of the banker frequently.

e) Receive and make payment usually through cheques.

f) Take full advantage of other ancillary services rendered by the banker and

g) Are engaged in large scale business activity, social and government activity.




Special Features of Current Account:-

In general some of the special features of current Account:-

1) The account meant for those who want make themselves free from the burden of keeping

their working capital safe and at the same time transact the receiving and making the payment

with ease and efficiency without directly involving themselves.

2) The current holder is free from all the collections – cash, bank draft, postal order, dividends,

bills, cheques etc. and also discharges liabilities on due date bill payable, insurance premium

etc.

3) Usually no interest is allowed on deposits (and credit balance) in the current account.

4) If interest is allowed by any bank insist on maintaining a certain amount in the credit of the

credit of the amount in the credit of the account. If the balance falls below this agreed limit,

bank charges commission at specified rate.




FACILITIES TO THE CURRENT ACCOUNT HOLDERS:-

The important facility which a bank generally offers to its current account holder is:

1. Properly endorsed cheques, bills, etc drawn in favour of third party may be collected for the

depositor and credited.

2. The bank may follow the facility of overdraft on prior arrangements in this respect.

3. Loans and advances may be sectioned current holder \s with ease. Without any cash

transaction lending process is completed by depositing the sectioned amount in the current,

thus facilitating the credit expansion process.

Thus, it is clear that the current account doesn’t earn but it serves the cause of industry, trade

and commerce thereby helping smooth and advantageous running of the whole show with

ease and without much of irritation and tension. Bank thus, renders both economic as well as

social service in the cause of national economic and social development.




OPENING OF CURRENT ACCOUNT

By opening an account with the banker, a customer enters into relationship with the

banker. The special features of this relationship impose several obligations on the banker. He

should, therefore, be very careful in opening an account in the name of the customer. Though

any person can apply for opening an account in his name but the banker reserve the right to do

so on being satisfied about the customer. The procedure is as follows:-

1. APPLICATION IN THE PRESCRIBED FORM : - The request for opening a

current account is made on the prescribed form on the bank concerned. Banks provide

separate application forms for opening current account for individuals, partnership firms and

companies. The application is requires to mention his name, occupation, full address,

specimen, signature and the name and signature of the referee. He also undertakes to comply

with the banks rules in forces from time to time for the conduct of the account. It means rules

prevailing at the time of opening an account may be changed or modified by the baker and

such modified rules should be acceptable to the customer.

2. INTRODUCTION OF THE APPLICATION : - Before opening a current account

in the name of an intending customer, the banker must get true identity of the former in order

to ensure that he is a credit worthy persons. The banker, thus, reserves the right not to open an

account in the name of a person whose true has not been established or who is considered to

be an undesirable person, e.g. A thief, robber etc….




PROFILE OF THE BANK

INTRODUCTION OF ICICI BANK




INTRODUCTION OF ICICI BANK

ICICI Bank is India's second-largest bank with total assets of about Rs. 1 trillion and a

network of about 540 branches and offices and over 1,000 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-Banking , venture capital, asset management and

information technology. ICICI Bank's equity shares are listed in India on stock exchanges at

Chennai, Muzaffarnagar, Kolkata and Vadodara, 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).

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 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 finances 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.

At present, ICICI Bank is India's second largest bank with total assets of Rs. 3849.70 billion

as on Sept 30th, 2008. The bank has a wide network of 1416 branches and over 4644 ATMs

in India, with a global presence in around 18 countries. ICICI Bank offers various services in

personal, NRI and business banking areas. In Personal banking segment it offers Loans,

Credit Card, Investment, Insurance, Demat, Property and Wealth Management services. The

bank is the largest issuer of credit cards in India. While Business Banking services include

Corporate Net Banking, Cash Management Trade Services, FX Online, SME Services,

Online Taxes and Custodial Services. The equity shares of the bank are listed in India on the

Bombay Stock Exchange and National Stock Exchange of India ltd and its ADRs are listed

on the New York Stock Exchange.




Banking in India originated in the last decades of the 18th century. The oldest bank in

existence in India is the, a government-owned bank that traces its origins back to June 1806

and that is the largest commercial bank in the country. Central banking is the responsibility

of the Reserve Bank of India, which in 1935 formally took over these responsibilities from

the then Imperial Bank of India, relegating it to commercial banking functions. After India's

independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969

the government nationalized the 14 largest commercial banks; the government nationalized

the six next largest in 1980.

ICICI Bank is India's second-largest bank with total assets of Rs. 3,849.70 billion (US$ 82

billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half year ended

September 30, 2008. The Bank has a network of about 1,400 branches and 4,530 ATMs in

India and presence in 18 countries. 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

nonlife insurance, venture capital and asset management. The Bank currently has subsidiaries

in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain,

Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative

offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and

Indonesia. Our UK subsidiary has established branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the

National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are

listed on the New York Stock Exchange (NYSE).

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 NYSE.

ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of India)

is India's largest private sector bank in market capitalization and second largest overall in

terms of assets. Bank has total assets of about USD 100 billion (at the end of March 2008), a

network of over 1,399 branches, 22 regional offices and 49 regional processing centres,

about 4,485 ATMs (at the end of September 2008), and 24 million customers (at the end of

July 2007). ICICI Bank offers a wide range of banking products and financial services to

corporate and retail customers through a variety of delivery channels and specialised

subsidiaries and affiliates in the areas of investment banking, life and non-life insurance,

venture capital and asset management. (These data are dynamic.) ICICI Bank is also the

largest issuer of credit cards in India. ICICI Bank has got its equity shares listed on the stock

exchanges at Kolkata and Vadodara, Mumbai and the National Stock Exchange of India

Limited, and its ADRs on the New York Stock Exchange (NYSE).




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

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

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

providing medium-term and long-term project financing to Indian businesses.

Mr.A.Ramaswami Mudaliar is elected as the first Chairman of ICICI Limited. ICICI

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

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

companies to raise funds from international markets.

1956: ICICI declared its first dividend, of 3.5%.

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

1960: ICICI building at 163, Backbay Reclamation, inaugurated.

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

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

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

1972: ICICI becomes the second entity in India to set up merchant banking services. Mr. H.

T. Parekh appointed the third Chairman of ICICI.

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

manages its first equity public issue.

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




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

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

commences leasing business.

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

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

1986: ICICI became the first Indian institution to receive ADB Loans.

ICICI, along with UTI, set up Credit Rating Information Services of India Limited, India's

first professional credit rating agency. ICICI promotes Shipping Credit and Investment

Company of India Limited. The Corporation made a public issue of Swiss Franc 75 million

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

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

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

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

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

up. ICICI Asset Management Company set up.

1994: ICICI Bank set up.

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

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

of ICICI Ltd




1997: ICICI Ltd was the first intermediary to move away from a single prime rate structure

to a three-tier prime rates structure and introduced yield-curve-based pricing. The name

"The Industrial Credit and Investment Corporation of India Ltd" changed to "ICICI Ltd."

ICICI Ltd. announced the takeover of ITC Classic Finance.

1998: A new logo symbolizing the common corporate identity for the ICICI Group was

introduced. ICICI announced takeover of Anagram Finance.

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

durables. ICICI becomes the first Indian company to get listed on the NYSE through an

issue of American Depositary Shares.

2000: ICICI Bank became the first commercial bank from India to get its stock listed on the

NYSE. ICICI Bank announces merger with Bank of Madura.

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

ICICI Bank.

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

of assets. ICICI assigned higher than "Sovereign" rating by Moody’s. ICICI Bank launched

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

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

centre and a first of its kind in India, is inaugurated in Pune. ICICI Bank launched Private

Banking. A 1,100-seat Call Centre for Customer Care by phone and e-mail was set up in

Hyderabad. ICICI Bank Home Shoppe, the first-ever permanent aggregation and display of

housing projects in the county, launched in Pune. ATM-on-Wheels, India’s first mobile

ATM, launched in Mumbai.




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

ICICI Bank announced the setting up of its first-ever offshore branch in Singapore. The first

offshore banking unit (OBU) at SEEPZ Special Economic Zone, Mumbai, was launched.

ICICI Bank’s representative office inaugurated in Dubai. Representative office set up in

China. ICICI Bank’s UK subsidiary launched. India’s first ever "Visa Mini Credit Card", a

credit card 43% smaller in dimensions was launched. A subsidiary of ICICI Bank was set up

in Canada. Temasek Holdings acquired 5.2% stake in ICICI Bank. ICICI Bank became the

market leader in retail credit in India.

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

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

association with Reliance Info comm. India’s first multi-branded credit card with HPCL and

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

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

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

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

branch in India. ICICI Bank introduced partnership model wherein ICICI Bank would forge

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

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

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

introduced 8 to 8 banking wherein all the branches of the Bank would remain open from

8a.m. to 8 p.m. from Monday to Saturday. ICICI Bank introduced the concept of floating

rate for home loans in India.

2005: First rural branch and ATM launched in Uttar Pradesh at Delpandarwa, Hardoi. "Free

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

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

mobile phone. Private Banking Masters 2005, a nationwide Golf tournament for high net

worth clients of the Private Banking division launched. This event is the largest domestic




invitation amateur golf event conducted in India. Becomes the first Indian company to make

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

Acquired IvestitsionnoKreditny Bank of Russia. ICICI Bank became the largest bank in

India in terms of its market capitalization. ICICI Bank became the first private entity in

India to offer a discount to retail investors for its follow-up offer.

2006: ICICI Bank became the first Indian bank to issue hybrid Tier-1 perpetual debt in the

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

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

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

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

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

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

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

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

Andhra Pradesh

2007: ICICI Bank makes a USD 2 billion three-tranche international bond offering, which

becomes the largest bond offering by an Indian bank. Sangli Bank was amalgamated with

ICICI Bank. ICICI Bank raised Rs 20,000 crore (approx $5 billion) from domestic and

international markets through a follow-on public offer.

ICICI Bank’s GBP 350 million international bond offering marked the inaugural deal in the

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

Asia. Launched India’s first ever jewellery card in association with jewellery major Gitanjali

Group. ICICI Bank became the first bank in India to launch a premium credit card -- The

Visa Signature Credit Card. The foundation stone for a regional hub in Gandhinagar,

Gujarat was laid. ICICI Bank introduced SME Toolkit, an online resource centre, to help




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

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

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

loans, commercial vehicles loans, construction equipment loans and professional equipment

loans. In a first-of-its-kind, nationwide initiative to attract bright graduate students to pursue

a careers in banking, ICICI Bank launched the "Probationary Officer Programme".

Launched Bank@Home services for all savings and current account customers residing in

India ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg, Russia. 2008:

ICICI Bank enters USA, launches its first branch in New York ICICI Bank enters Germany,

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

in banking where practically all Internet banking transactions can now be done easily on the

mobile phone. ICICI Bank concluded India's largest ever securitization transaction of a pool

of retail loan assets aggregating to Rs. 48.96 billion (equivalent of USD 1.21 billion) in a

multitranche issue backed by four different asset categories. It is also the largest deal in Asia

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

since the beginning of 2007. ICICI Bank launches ICICI ACTIVE-Banking Interactive

Service - along with DISH TV, which will allow viewers to see information about the

Bank's products and services and contact details on their DISH TV screens. ICICI Bank and

British Airways launch a co-branded credit card, designed to earn cardholders accelerated

reward points with every British Airways flight or by spending on everyday purchases




Personal Banking:

Deposits Loans Cards Investments Insurance Demat services Wealth management

NRI Banking:

Money Transfer Bank accounts Investments Property Solutions Insurance Loans

Business Banking:

Corporate net banking Cash Management Trade services FX online SME services Online taxes Custodial services




INTRODUCTION OF IDBI BANK




INTRODUCTION OF IDBI BANK

The Industrial Development Bank of India Limited (IDBI) (BSE: 500116) is one of India's

leading public sector banks and 4th largest Bank in overall ratings. RBI categorized IDBI as

an "other public sector bank". It was established in 1964 by an Act of Parliament to provide

credit and other facilities for the development of the fledgling Indian industry. It is currently

10th largest development bank in the world in terms of reach with 1300 ATMs, 758 branches

and 513 centers. Some of the institutions built by IDBI are the National Stock Exchange of

India(NSE), the National Securities Depository Services Ltd (NSDL), the Stock Holding

Corporation of India (SHCIL), the Credit Analysis & Research Ltd, the Export-Import Bank

of India (Exim Bank), the Small Industries Development bank of India(SIDBI),

the Entrepreneurship Development Institute of India, and IDBI BANK, which today is owned

by the Indian Government, though for a brief period it was a private scheduled bank.

To meet emerging challenges and to keep up with reforms in financial sector, IDBI has taken

steps to reshape its role from a development finance institution to a commercial institution.

With the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003, IDBI

attained the status of a limited company viz. "Industrial Development Bank of India Limited"

(IDBIL). Subsequently, the Reserve Bank of India (RBI) issued the requisite notification on

30 September 2004 incorporating IDBI as a 'scheduled bank' under the RBI Act, 1934.

Consequently, IDBI formally entered the portals of banking business as IDBIL from 1

October 2004.

The commercial banking arm, IDBI BANK, was merged into IDBI. In March 2008, IDBI

Bank entered into a joint venture with Federal Bank and Fortis Insurance International to

form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The company ended

the year with over 300 Cr in premiums as on 31 March 2009.



http://en.wikipedia.org/wiki/Entrepreneurship_Development_Institute_of_India

http://en.wikipedia.org/w/index.php?title=Small_Industries_Development_bank_of_India&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Export-Import_Bank_of_India&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Export-Import_Bank_of_India&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Credit_Analysis_%26_Research_Ltd&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Stock_Holding_Corporation_of_India&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Stock_Holding_Corporation_of_India&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=National_Securities_Depository_Services_Ltd&action=edit&redlink=1

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India

http://en.wikipedia.org/wiki/Act_of_Parliament

http://en.wikipedia.org/wiki/India

http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500116%E2%80%8E

http://en.wikipedia.org/wiki/Bombay_Stock_Exchange


Overview of development banking in India

The concept of development banking rose only after Second World War, after the Great

Depression in 1930s. The demand for reconstruction funds for the affected nations compelled

in setting up a worldwide institution for reconstruction. As a result the IBRD was set up in

1945 as a worldwide institution for development and reconstruction. This concept has been

widened all over the world and resulted in setting up of large number of banks around the

world which coordinating the developmental activities of different nations with different

objectives among the world. The Narashimam committee had recommended to give up its

direct financing functions and to perform only the promotional and refinancing role. However,

the S.H.Khan committee, appointed by the RBI, recommended its transformation into a

universal bank.

The course of development of financial institutions and markets during the post-Independence

period was largely guided by the process of planned development pursued in India with

emphasis on mobilization of savings and channeling investment to meet Plan priorities. At the

time of Independence in 1947, India had a fairly well-developed banking system. The

adoption of bank dominated financial development strategy was aimed at meeting the sectoral

credit needs, particularly of agriculture and industry. Towards this end, the Reserve Bank

concentrated on regulating and developing mechanisms for institution building. The

commercial banking network was expanded to cater to the requirements of general banking

and for meeting the short-term working capital requirements of industry and agriculture.

Specialized development financial institutions (DFIs) such as the IDBI, NABARD, NHB and

SIDBI, etc., with majority ownership of the Reserve Bank were set up to meet the long-term

financing requirements of industry and agriculture. To facilitate the growth of these

institutions, a mechanism to provide concessional finance to these institutions was also put in

place by the Reserve Bank.

The first development bank In India incorporated immediately after independence in 1948

under the Industrial Finance Corporation Act as a statutory corporation to pioneer institutional

credit to medium and large-scale. Then after in regular intervals the government started new



http://en.wikipedia.org/wiki/Reserve_Bank_of_India

http://en.wikipedia.org/wiki/Great_Depression

http://en.wikipedia.org/wiki/Great_Depression

http://en.wikipedia.org/wiki/Second_World_War


and different development financial institutions to attain the different objectives and helpful to

five-year plans.

The early history of Indian banking and finance was marked by strong governmental

regulation and control. The roots of the national system were in the State Bank of India Act of

1955, which nationalized the former Imperial Bank of India and its seven associate banks. In

the early days, this national system operated alongside of a large private banking system.

Banks were limited in their operational flexibility by the government’s desire to maintain

employment in the banking system and were often drawn into troublesome loans in order to

further the government’s social goals.

The financial institutions in India were set up under the strong control of both central and state

Governments, and the Government utilized these institutions for the achievements in planning

and development of the nation as a whole. Thus all India financial institutions can be

classified under five heads according to their economic importance that are:

All-India Development Banks

Specialized Financial Institutions

Investment Institutions

State-level institutions

Other institutions...




INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI)The Industrial Development Bank of India (IDBI) was established on 1 July 1964 under an

Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16 February

1976, the ownership of IDBI was transferred to the Government of India and it was made the

principal financial institution for coordinating the activities of institutions engaged in

financing, promoting and developing industry in the country. Although Government

shareholding in the Bank came down below 100% following IDBI’s public issue in July 1995,

the former continues to be the major shareholder (current shareholding: 52.3%). During the

four decades of its existence, IDBI has been instrumental not only in establishing a well-

developed, diversified and efficient industrial and institutional structure but also adding a

qualitative dimension to the process of industrial development in the country. IDBI has played

a pioneering role in fulfilling its mission of promoting industrial growth through financing of

medium and long-term projects, in consonance with national plans and priorities. Over the

years, IDBI has enlarged its basket of products and services, covering almost the entire

spectrum of industrial activities, including manufacturing and services. IDBI provides

financial assistance, both in rupee and foreign currencies, for green-field projects as also for

expansion, modernization and diversification purposes. In the wake of financial sector reforms

unveiled by the government since 1992, IDBI evolved an array of fund and fee-based services

with a view to providing an integrated solution to meet the entire demand of financial and

corporate advisory requirements of its clients. IDBI also provides indirect financial assistance

by way of refinancing of loans extended by State-level financial institutions and banks and by

way of rediscounting of bills of exchange arising out of sale of indigenous machinery on

deferred payment terms.

IDBI has played a pioneering role, particularly in the pre-reform era (1964–91),in catalyzing

broad based industrial development in the country in keeping with its Government-ordained

‘development banking’ charter. In pursuance of this mandate, IDBI’s activities transcended

the confines of pure long-term lending to industry and encompassed, among others, balanced

industrial growth through development of backward areas, modernization of specific




industries, employment generation, entrepreneurship development along with support services

for creating a deep and vibrant domestic capital market, including development of apposite

institutional framework.

Narashimam committee recommends that IDBI should give up its direct financing functions

and concentrate only in promotional and refinancing role. But this recommendation was

rejected by the government. Later RBI constituted a committee under the chairmanship of

S.H.Khan to examine the concept of development financing in the changed global challenges.

This committee is the first to recommend the concept of universal banking. The committee

wanted the development financial institution to diversify its activity. It recommended to

harmonies the role of development financing and banking activities by getting away from the

conventional distinction between commercial banking and developmental banking.

In September 2003, IDBI diversified its business domain further by acquiring the entire

shareholding of Tata Finance Limited in Tata Home finance Ltd., signaling IDBI’s foray into

the retail finance sector. The fully-owned housing finance subsidiary has since been renamed

‘IDBI Home finance Limited’. In view of the signal changes in the operating environment,

following initiation of reforms since the early nineties, Government of India has decided to

transform IDBI into a commercial bank without eschewing its secular development finance

obligations. The migration to the new business model of commercial banking, with its

gateway to low-cost current, savings bank deposits, would help overcome most of the

limitations of the current business model of development finance while simultaneously

enabling it to diversify its client/ asset base. Towards this end, the IDB (Transfer of

Undertaking and Repeal) Act 2003 was passed by Parliament in December 2003. The Act

provides for repeal of IDBI Act, corporatization of IDBI (with majority Government holding;

current share: 58.47%) and transformation into a commercial bank. The provisions of the Act

have come into force from 2 July 2004 in terms of a Government Notification to this effect.

The Notification facilitated formation, incorporation and registration of Industrial

Development Bank of India Ltd. as a company under the Companies Act, 1956 and a deemed

Banking Company under the Banking Regulation Act 1949 and helped in obtaining requisite



http://en.wikipedia.org/w/index.php?title=Narasimam_committee&action=edit&redlink=1


regulatory and statutory clearances, including those from RBI. IDBI would commence

banking business in accordance with the provisions of the new Act in addition to the business

being transacted under IDBI Act, 1964 from 1 October 2004, the ‘Appointed Date’ notified by

the Central Government. IDBI has firmed up the infrastructure, technology platform and

reorientation of its human capital to achieve a smooth transition.

IDBI Bank, with which the parent IDBI was merged, was a vibrant new generation Bank. The

Pvt Bank was the fastest growing banking company in India. The bank was pioneer in

adapting to policy of first mover in tier 2 cities. The Bank also had the least NPA and the

highest productivity per employee in the banking industry.

On 29 July 2004, the Board of Directors of IDBI and IDBI Bank accorded in principle

approval to the merger of IDBI Bank with the Industrial Development Bank of India Ltd. to

be formed incorporated under the Companies Act, 1956 pursuant to the IDB (Transfer of

Undertaking and Repeal) Act, 2003 (53 of 2003), subject to the approval of shareholders and

other regulatory and statutory approvals. A mutually gainful proposition with positive

implications for all stakeholders and clients, the merger process is expected to be completed

during the current financial year ending 31 March 2005.

The immediate fall out of the merger of IDBI and idbi bank was the exit of employees of idbi

bank. The cultures in the two organizations have taken its toll. The IDBI BANK now is in a

growing fold. With its retail banking arm expanding further after the merger of United

western Bank.

IDBI would continue to provide the extant products and services as part of its development

finance role even after its conversion into a banking company. In addition, the new entity

would also provide an array of wholesale and retail banking products, designed to suit the

specific needs cash flow requirements of corporates and individuals. In particular, IDBI would

leverage the strong corporate relationships built up over the years to offer customised and

total financial solutions for all corporate business needs, single-window appraisal for term

loans and working capital finance, strategic advisory and “hand-holding” support at the

implementation phase of projects, among others.




IDBI’s transformation into a commercial bank would provide a gateway to low-cost deposits

like Current and Savings Bank Deposits. This would have a positive impact on the Bank’s

overall cost of funds and facilitate lending at more competitive rates to its clients. The new

entity would offer various retail products, leveraging upon its existing relationship with retail

investors under its existing Suvidha Flexi-bond schemes. In the emerging scenario, the new

IDBI hopes to realize its mission of positioning itself as a one stop super-shop and most

preferred brand for providing total financial and banking solutions to corporates and

individuals, capitalizing on its intimate knowledge of the Indian industry and client

requirements and large retail base on the liability side.

IDBI upholds the highest standards of corporate governance in its operations. The

responsibility for maintaining these high standards of governance lies with its Board of

Directors. Two Committees of the Board viz. the Executive Committee and the Audit

Committee are adequately empowered to monitor implementation of good corporate

governance practices and making necessary disclosures within the framework of legal

provisions and banking conventions.

The industrial investment bank of India is one of oldest banks in India. The Industrial

Reconstruction Corporation of India Ltd., set up in 1971 for rehabilitation of sick industrial

companies, was reconstituted as Industrial Reconstruction Bank of India in 1985 under

the IRBI Act, 1984. With a view to converting the institution into a full-fledged development

financial institution, IRBI was incorporated under the Companies Act, 1956, as Industrial

Investment Bank of India Ltd. (IIBI) in March 1997. IIBI offers a wide range of products and

services, including term loan assistance for project finance, short duration non-project asset-

backed financing, working capital/ other short-term loans to companies, equity subscription,

asset credit, equipment finance as also investments in capital market and money market

instruments.




In view of certain structural and financial problems adversely impacting its long-term

viability, IIBI submitted a financial restructuring proposal to the Government of India on 25

July 2003. IIBI has since received certain directives from the Government of India, which,

inter alias, include restricting fresh lending to existing clients approved cases rated corporates,

restrictions on fresh borrowings, an action plan to reduce the overhead expenditure, disposal

of fixed assets and a time-bound plan for asset recovery/reconstruction. The Government of

India had also given its approval for the merger of IIBI with IDBI and the latter had already

started the due diligence process. But on 17 December 2005 the IDBI rejected any such

merger.

ACQUISITION OF UNITED WESTERN BANK

In 2006, IDBI Bank acquired United Western Bank in a rescue. Annasaheb Chirmule, who

worked for the cause of Swadeshi movement, founded Satara Swadeshi Commercial Bank in

1907, and some three decades later founded United Western Bank. The bank was incorporated

in 1936, and commenced operations the next year, with its head office in Satara,

in Maharashtra State. It became a Scheduled Bank in 1951. In 1956 it merged with Union

Bank of Kolhapur, and in 1961 with Satara Swadeshi Commercial Bank. At the time of the

merger with IDBI, United Western had some 230 branches spread over 47 districts in 9 states,

controlled by five Zonal Office at Mumbai,Pune, Kolhapur, Jalgaon and Nagpur.




THE PRODUCTS AVAILABLE AT IDBI BANK IN BRIEF ARE AS

FOLLOWS:-

1) SAVING ACCOUNT:- The saving account from IDBI BANK comes packed with

benefits that make compete convenient for people. At IDBI bank saving account is opened

with just Rs. 5000 and holder enjoys a host free facilities.

2) SWEEP IN SAVINGS ACCOUNT:- Very often, people wish to place money in a

fixed deposit yet want the flexibility of withdrawing from that deposits and when a need arises

that’s precisely where the sweep in saving account of IDBI makes things convenient. You just

need to make deposit of Rs. 25,000/- to get this free, zero balance saving account.

3) FIXED DEPOSIT: - Fixed deposits of IDBI have been customized to meet individual

needs. Like monthly or quarterly interest, cumulative fixed and recurring deposits. There are

also certain special benefits such as automatic renewal and specific interest rates for senior

citizens.

4) CORPORATE PAYROLL SAVING ACCOUNT: - As an employer are sized

with many import issue, one of them being regular disbursements of employee’s salaries.

Presenting corporate payroll account, a saving account for employee of corporate house. It is

power packed with benefits for the employer and employees. It ensures trouble free

disbursement of salaries electronically to employees.




5) BUSINESS SPECIAL CURRENT ACCOUNT: - The minimum balance to be

maintained in this account is Rs. 50,000/- as the average quarterly balance (Rs. 25,000 in

selected centers). The holder of current account enjoy slew of services which come free to

them.

These Facilities are:-

DD’s up to 5 lac per day.

Cheque collection up to 5 lac per month.

Electronic transfer of up to 5 lac per day

Monthly Account Statement

Commission free pay orders

Multi city, Multi Branch Banking

An ATM card (for individual, sole proprietors)

Phone Banking, Mobile Phone Banking, Internet Banking

Extended Banking Hours and Sunday banking at selected branches




They also personalized at par cheque book payable at 17 cities. They also offer a zero balance

sweep in current account with just Rs. 1 lac in Fixed where they offer the same services free.

PERSONAL LOAN: - Homes, cars and education are planned expenses, and IDBI bank

has well structure Loan products to help people with these acquisitions. They also provide

personal loans for those entire situations that are not planned for. To taken an impulsive

holiday, to buy a new TV, to get a Computer for your kids, to pay off your credit card dues

IDBI bank provides loans up to Rs. 20,000/- without need for any collateral, for periods

ranging between 12 and 36 months at very attractive interest rates. Prepayment facility is

available and IDBI bank salary account holders can avail of preferential interest rates.




OBJECTIVES OF THE STUDY

1) To know various current account schemes

2) To know the performance of existing policies. Owing to consumer oriented policy of both

ICICI and IDBI banks, they have captured large share of market in Nagpur region and they

have also broaden their networking to cater the financial needs of the Central India region.

3) To identifying the problem areas of the existing schemes: The researcher has made great to

identify the problem areas of the existing current account schemes of both ICICI and IDBI

bank.




SCOPE

1. GEOGRAPHICAL SCOPE :- Geographical scope relevant to boundary delimitation or

undelimited zone issues

This scope tells about the location wise area covered in the making of this project.

The scope of project is that the data is collected from the selected area of NAGPUR.

2. FUNCTIONAL SCOPE : - Functional scope refers to the services your system offers

and that will eventually be captured by the use cases.

To study free services offered by ICICI and IDBI banks.

To study Multi city & multi branch banking facilities, Electronic funds transfer,

National clearing, ATM card, Monthly statement of account by courier, Mobile

Banking, Phone Banking, internet Banking, D-emat account offered both the Banks by

ICICI Bank and IDBI Bank.




LIMITATION: -

A limited time within or during which something is to be done.

A certain precinct within which friars were allowed to beg, or exercise their functions;

also, the time during which they were permitted to exercise their functions in such a

district.

I. The project Is time bound

II. The study depends upon the accuracy of the records.

III. While analysis of data, some human errors could have been possible.

IV. This study is limited to the survey to be conducted in Nagpur city

V. Due to time and resource constraints only a small a sample of ten people was taken into

consideration.

VI. Some of the respondents might have been biased in their responses as such the analysis could

vary to some extent.




HYPOTHESIS: -

Hypothesis is a proposition, or set of propositions, set forth as an explanation for the

occurrence of some specified group of phenomena, either asserted merely as a provisional

conjecture to guide investigation (working hypothesis) or accepted as highly probable in the

light of established facts. It is also a mere assumption or guess.

i. Most of the current account is operated by sole proprietor in the given area.

ii. The customers prefer national Bank for operating current account.




RESEARCH METHODOLOGY

“All progress is borne of inquiry & inquiry leads to invention”

This is a famous Hudson maxim in the context of which the significance of research can well

be understood. Research is an academic activity. Any kind of research is a search for

knowledge.

To be more precise it is a scientific & systematic way which defines & redefines problems,

formulating hypothesis or suggested solutions, collecting, organizing & evaluating data,

making deduction & reaching to conclusions.

Every research activity involves research method & research methodology. Research methods

are those that are used for conducting a research i.e. methods used for collection of data,

statistical techniques which are used for establishing relationships between the data & the

unknown, & other methods used to evaluate the accuracy of the results obtained.

Research methodology is a way to solve the research problem systematically. Researchers not

only need to know how to develop technique but also need to know which of the methods are

relevant & which are not.

This means that they have to design their methodology for their specific problem, as

methodology may differ from problem to problem.




Collection of data:

Collection of data refers to as unique purposive gathering of information relevant to subject

matter.

Methods by which a research data can be collected through documents which get from

banking organizations i.e. ICICI BANK & IDBI BANK.

Data collection through primary source such as –

1. Direct personal investigation.

2. Information received through local agents.

3. Drafting a questionnaire.

Primary data are the original observation collected by the researchers or his agents for the 1st

time and used by them in their investigations. Once the primary data has been used, it ceases

to be primary data and becomes secondary data.

1. Direct personal investigation:-

This implies the situation where the researcher goes into the field of study in person for the

collection of the required data. Also, the investigation of this nature is normally confined to a

single locality and the information gathered is original in nature.

I gave a personal visit to ICICI BANK located near Vishnu Vaibhav, 222, Palm Road, Civil

Lines, Nagpur. - 440001 and collected broachers and other pamphlets that are relevant to my

project in order to gain information, facts and figures. And also visit to IDBI located near

Junior Bonsla Palace, Tulsi Bagh Road, Mahal Nagpur, Nagpur, Maharashtra 440002 and

collected circular and broachers to gain more information.




2. Information received through local Agents:

Having direct personal investigation for the collection of required data, information also being

gathered from local agents other than get from organization. i.e. ICICI BANK, IDBI BANK.

3. Questionnaire:-

The another method of data collection is a survey done by me which consists of asking

questions intended to cover a cross-section of a population. A questionnaire is generally

mailed or handed to the respondent & filled by him without the help of interviewer. I did

survey for my project by forming questionnaire.

Secondary data are those which have already been collected by others. When it is not

possible to collect the data in primary form the researcher may take the help of secondary

data. They are those which have already been collected with some other view in mind. They

are collected for serving the objectives other than the researcher might have in his mind.

The sources of secondary data include:-

1. Web sites:-

In today’s generation one can use the web sites to get the required information which is

economical both in terms of money, time and labour. The web sites which were used by me to

collect the data of ICICI BANK and IDBI BANK were as,

www.icici.com.




www.idbi.com.

DATA INTREPRETAION AND ANALYSIS

Processing & Analysis the collected data: - Once the field survey is over and questionnaire

have been received, the next task is to aggregate the data in a meaningful manner. A number

of tables are preparing to bring out the main characteristics of the data. The researcher should

have a well thought out framework for processing and analyzing data, and this should be done

prior to the collection. It includes the following activities—

(i) Editing: The first task in data processing is the editing. Editing is the process of examining

errors and omissions in the collected data and making necessary corrections in the same.

(ii) Coding: coding is the procedure of classifying the answer to a question into meaningful

categories. Coding is necessary to carry out the subsequent operations of tabulating and

analyzing data. If coding is not done, it will not be possible to reduce a large number of

heterogeneous responses into meaningful categories with the result that the analysis of data

would be weak and ineffective, and without proper focus.

(iii) Tabulation: tabulation comprises sorting of the data into different categories and

counting the number of cases that belong to each category. The simplest way to tabulate is to

count the number of responses to one question. This is also called universal tabulation. The

analysis based on just one variable is obviously meager. Where two or more variables are

involved in tabulation; it is called bivariate or multivariate tabulation.

(iv) Analysis: After the all three above steps, the most important step is analysis the data

under this step; they can use the various tools of the analysis such as Central Tendency,

dispersion, Correlation coefficient, Regression Analysis, Test of Hypothesis etc.



http://www.idbi.com/


Following graph is showing how many people are having a current account:-

YES NO

C/A Holders 0.700000000000001 0.3

5%

15%

25%

35%

45%

55%

65%

Interpretation: - The above following graph shows that 70% of people are having a current account, whereas 30% of the people have other types of account.




Following graph is showing In which bank do they have a current account:-

ICICIIDBI

Other

0%5%

10%15%20%25%30%35%40%45%

ICICI

IDBIOther

C/A Holders

Interpretation:- The above following graph shows that 44% of people are having their current account in ICICI Bank, 25% people are having their current account in IDBI and rest 31% of people are having their current account in other banks.




Following graph is showing how many people are satisfied with their banks.

YES NO

Satisfied 0.320000000000001 0.68

5%

15%

25%

35%

45%

55%

65%

Interpretation: - The above following graph shows that 32% people are satisfied with their banks, whereas 68% people are dissatisfied with their banks.




CURRENT ACCOUNT SCHEMES OF ICICI BANK




CURRENT ACCOUNT SCHEMES OF ICICI BANKS

New Pension Scheme (NPS) is a defined contribution based pension system launched by

Government of India with effect from 1 January, 2004. Unlike most other developing

countries, India does not have a universal social security system to protect the elderly against

economic deprivation. As a first step towards instituting pension reforms, Government of

India moved from a defined benefit pension to a defined contribution based pension system.

Apart from offering wide gamut of investment options to employees, this scheme would help

government of India to reduce its pension liabilities. Unlike existing pension fund of

Government of India that offered assured benefits, NPS has defined contribution and

individuals can decide where to invest their money. The scheme is structured into two tiers:

Tier-I account: This NPS account doesn’t allow premature withdrawal and is available from

1 May, 2009

Tier-II account: The tier-II NPS account permits withdrawal and is operational from 1

December, 2009.

Since 1 April, 2008, the pension contributions of Central Government employees covered by

the New Pension System (NPS) are being invested by professional Pension Fund Managers in

line with investment guidelines of Government applicable to non-Government Provident

Funds. A majority of State Governments have also shifted to the defined contribution based

new pension system from varying dates. 22 State/UT Governments have notified the NPS for

their new employees. Of these, 6 states have already signed agreements with the

intermediaries of the NPS architecture appointed by PFRDA for carrying forward the

implementation of the New Pension System. The other States are in the process of finalization

of documentation.





REGULATOR

Pension Fund Regulatory and Development Authority (PFRDA) is the prudential regulator for

the NPS. PFRDA was established by the Government of India on 23 August 2003 to promote

old age income security by establishing, developing and regulating pension funds. PFRDA

has set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the PFMs. The

NPS Trust is composed of members representing diverse fields and brings wide range of

talent to the regulatory framework.

COVERAGE AND ELIGIBILITY

NPS will be available to all citizens of India on voluntary basis and mandatory for

employees of central government (except armed forces) appointed on or after 1 January 2004.

All Indian citizens between the age of 18 and 55 can join the NPS.

Tier-I is mandatory for all Govt. servants joining Govt. service on or after 1.1.2004. In Tier I,

Govt. servants will have to make a contribution of 10% of his Basic Pay, DP and DA which

will be deducted from his salary bill every month. The Govt. will make an equal matching

contribution. Since 1 April, 2008, the pension contributions of Central Government

employees covered by the NPS are being invested by professional Pension Fund Managers in

line with investment guidelines of Government. However, there will be no contribution from

the Government in respect of individuals who are not Government employees. The

contributions and returns thereon would be deposited in a non-withdrawable pension

account. In addition to the above pension account, each individual can have a voluntary tier-II

withdrawable account at his option. Government will make no contribution into this account.

These assets would be managed in the same manner as the pension. The accumulations in this

account can be withdrawn anytime without assigning any reason. It’s estimated that 8 crore

citizens of India are eligible to join the NPS.




OPERATIONAL STRUCTURE

NPS is designed to leverage existing network of bank branches and post offices to collect

contributions and ensure that there is seamless transfer of accumulations in case of change of

employment and/or location of the subscriber. It offers a basket of investment choices and

Fund managers. The key terms to understand the working of NPS are as follows:

Central Record Keeping Agency (CRA): It would maintain records of all

contributions and transaction details of subscribers. It will also have the mandate to effect

client instructions regarding switching from one fund to another or from one scheme to

another of the same fund. Besides, facilitating implementation of individual choice, the CRA

is also expected to help in big way in reducing fees and costs because every fund manager will

not be required to set up an elaborate fund collection, transfer, record keeping and marketing

infrastructure.

Permanent Retirement Account Number (PRAN): A unique 16 digit Permanent

Retirement Account Number would be allocated to each new subscriber for the Permanent

Retirement Account (PRA). Subscribers can retain their PRAs when they change jobs or

residence, and even change their fund managers and the allocation of investments among the

different asset classes. Pension Fund Managers (PFM): PFRDA has appointed PFMs to

manage the savings corpus under NPS. Presently subscribers can choose from amongst six

PFMs.

There will be one or more CRA, several PFMs to choose from which will offer different

categories of schemes. The participating entities (PFMs, CRA etc.) would give out easily

understood information about past performance & regular NAVs, so that the individual would

able to make informed choices about which scheme to choose. PFMs would share this

common CRA infrastructure. The PFMs would invest the savings people put into their PRAs,

investing them in three asset classes, equity (E), government securities (G) and debt

instruments that entail credit risk (C), including corporate bonds and fixed deposits.

Presently there are 22 entities that have 330 authorized Points of presence (POPs) for opening




Permanent Retirement Account (PRA) with Central record Keeping Agency (CRA). Few of

the major banks part of POP network are: SBI and its associates, ICICI, Axis, Kotak

Mahindra, Allahabad Bank, Citibank, IDBI, Oriental Bank of Commerce, South Indian Bank,

Union Bank of India. Additionally four financial entities which part of POP entities

are: LIC, IL&FS, UTI Asset Management and Reliance Capital.

CONTRIBUTION GUIDELINES

The following contribution guidelines have been set by the PFRDA:

Minimum amount per contribution: Rs. 500 per month

Minimum number of contributions: 4 in a year (at least 1 in each quarter)

Minimum annual contribution: Rs 6,000 in each subscriber account.

If the subscriber is unable to contribute the minimum annual contribution, a default penalty of

Rs.100 per year of default would be levied and the account would become dormant. In order

to re-activate the account, subscriber will have to pay the minimum contributions, along with

penalty due. A dormant account will be closed when the account value falls to zero.

Investment Options all under the investment guidelines finalized for the NPS, pension fund

managers will manage three separate schemes, each investing in a different asset class. The

three asset classes are equity, government securities and credit risk-bearing fixed income

instruments. The subscriber will have the option to actively decide as to how the NPS pension

wealth is to be invested in three asset classes:

1. E Class: Investment would primarily in Equity market instruments. It would invest in Index

funds that replicate the portfolio of either BSE Sensitive index or NSE Nifty 50 index.



http://en.wikipedia.org/wiki/IL%26FS

http://en.wikipedia.org/wiki/LIC


2. G Class: Investment would be in Government securities like GOI bonds and State Govt.

bonds.

3. C Class: Investment would be in fixed income securities other than Government Securities

* Liquid Funds of AMCs regulated by SEBI with filters suggested by the Expert Group

* Fixed Deposits of scheduled commercial banks with filters

* Debt securities with maturity of not less than three years tenure issued by bodies corporate

including scheduled commercial banks and public financial institutions

Credit Rated Public Financial Institutions/PSU Bonds

Credit Rated Municipal Bonds/Infrastructure Bonds

In case the subscriber does not exercise any choice as regards asset allocation, the contribution

will be invested in accordance with the ‘Auto choice’ option. In this option the investment

will be determined by a predefined portfolio. At the lowest age of entry (18 years) the auto

choice will entail investment of 50 % of pension wealth in “E” Class, 30% in “C” Class and

20% in “G” Class. These ratios of investment will remain fixed for all contributions until the

participant reaches the age of 36. From age 36 onwards, the weight in “E” and “C” asset class

will decrease annually and the weight in “G” class will increase annually till it reaches 10% in

“ E”, 10% in “C” and 80 % in “ G” class at age 55.




CURRENT ACCOUNT SCHEMES OF

IDBI BANK




CURRENT ACCOUNT SCHEMES OF IDBI BANK

New Pension Scheme (NPS) is a defined contribution based pension system launched by

Government of India with effect from 1 January, 2004. Unlike most other developing

countries, India does not have a universal social security system to protect the elderly against

economic deprivation. As a first step towards instituting pension reforms, Government of

India moved from a defined benefit pension to a defined contribution based pension system.

Apart from offering wide gamut of investment options to employees, this scheme would help

government of India to reduce its pension liabilities. Unlike existing pension fund of

Government of India that offered assured benefits, NPS has defined contribution and

individuals can decide where to invest their money. The scheme is structured into two tiers

Tier-I account: This NPS account doesn’t allow premature withdrawal and is available from

1 May, 2009

Tier-II account: The tier-II NPS account permits withdrawal and is operational from 1

December, 2009. Since 1 April, 2008, the pension contributions of Central Government

employees covered by the New Pension System (NPS) are being invested by professional

Pension Fund Managers in line with investment guidelines of Government applicable to non-

Government Provident Funds. A majority of State Governments have also shifted to the

defined contribution based new pension system from varying dates. 22 State/UT Governments

have notified the NPS for their new employees. Of these, 6 states have already signed

agreements with the intermediaries of the NPS architecture appointed by PFRDA for carrying

forward the implementation of the New Pension System. The other States are in the process of

finalization of documentation.





REGULATOR

Pension Fund Regulatory and Development Authority (PFRDA) is the prudential regulator for

the NPS. PFRDA was established by the Government of India on 23 August 2003 to promote

old age income security by establishing, developing and regulating pension funds. PFRDA

has set up a Trust under the Indian Trusts Act, 1882 to oversee the functions of the PFMs. The

NPS Trust is composed of members representing diverse fields and brings wide range of

talent to the regulatory framework.

COVERAGE AND ELIGIBILITY

NPS will be available to all citizens of India on voluntary basis and mandatory for employees

of central government (except armed forces) appointed on or after 1 January 2004. All Indian

citizens between the age of 18 and 55 can join the NPS. Tier-I is mandatory for all Govt.

servants joining Govt. service on or after 1.1.2004. In Tier I, Govt. servants will have to make

a contribution of 10% of his Basic Pay, DP and DA which will be deducted from his salary

bill every month. The Govt. will make an equal matching contribution. Since 1 April, 2008,

the pension contributions of Central Government employees covered by the NPS are being

invested by professional Pension Fund Managers in line with investment guidelines of

Government. However, there will be no contribution from the Government in respect of

individuals who are not Government employees. The contributions and returns thereon would

be deposited in a non-withdrawable pension account. In addition to the above pension

account, each individual can have a voluntary tier-II withdraw able account at his option.

Government will make no contribution into this account. These assets would be managed in

the same manner as the pension. The accumulations in this account can be withdrawn anytime

without assigning any reason. It’s estimated that 8 crore citizens of India are eligible to join

the NPS.




CONTRIBUTION GUIDELINES

The following contribution guidelines have been set by the PFRDA: Minimum amount per

contribution: Rs. 500 per month

Minimum number of contributions: 4 in a year (at least 1 in each quarter) Minimum annual

contribution: Rs 6,000 in each subscriber account.

If the subscriber is unable to contribute the minimum annual contribution, a default penalty of

Rs.100 per year of default would be levied and the account would become dormant. In order

to re-activate the account, subscriber will have to pay the minimum contributions, along with

penalty due. A dormant account will be closed when the account value falls to zero.

== Investment Options == all Under the investment guidelines finalized for the NPS, pension

fund managers will manage three separate schemes, each investing in a different asset class.

The three asset classes are equity, government securities and credit risk-bearing fixed income

instruments. The subscriber will have the option to actively decide as to how the NPS pension

wealth is to be invested in three asset classes:

1. E Class: Investment would primarily in Equity market instruments. It would invest in

Index funds that replicate the portfolio of either BSE Sensitive index or NSE Nifty 50 index.

2. G Class: Investment would be in Government securities like GOI bonds and State Govt.

bonds.

3. C Class: Investment would be in fixed income securities other than Government

Securities.

* Liquid Funds of AMCs regulated by SEBI with filters suggested by the Expert Group

* Fixed Deposits of scheduled commercial banks with filters

* Debt securities with maturity of not less than three years tenure issued by bodies corporate

including scheduled commercial banks and public financial institutions

Credit Rated Public Financial Institutions/PSU Bonds

Credit Rated Municipal Bonds/Infrastructure Bonds




In case the subscriber does not exercise any choice as regards asset allocation, the contribution

will be invested in accordance with the ‘Auto choice’ option. In this option the investment

will be determined by a predefined portfolio. At the lowest age of entry (18 years) the auto

choice will entail investment of 50 % of pension wealth in “E” Class, 30% in “C” Class and

20% in “G” Class. These ratios of investment will remain fixed for all contributions until the

participant reaches the age of 36. From age 36 onwards, the weight in “E” and “C” asset class

will decrease annually and the weight in “G” class will increase annually till it reaches 10% in

“ E”, 10% in “C” and 80 % in “ G” class at age 55.




FINDINGS

Out of 100 respondents, there are 23% persons who are in government sector, 39% persons

are from private sector, 24% persons have their own business and 14% belongs to others

category.

Among 100 respondents, the salary of 29% persons are below Rs.10,000,salary of 38%

persons lies between Rs.10,000-Rs.20,000,salary of 25% persons lies between Rs.20,000-

Rs30,000,and salary of 8% persons is more than Rs.30,000.

Out of 100 respondents, there are 70% people who were having saving account in any banks.

Among 100 respondents, 37% persons prefer HDFC Bank to open saving account, 29%

persons prefer ICICI Bank and 34% persons prefer other banks to open saving account.

Among 100 respondents, 27% says that HDFC bank provide good treatment, 39% says that

ICICI bank provide good treatment, 34% says that other banks provides good treatment.

Among 100 respondents, 35% persons say that HDFC bank enjoys good reputation, 32%

persons says that ICICI bank enjoys good reputation and 33% persons says that other banks

enjoys good reputation.

Among 100 respondents, 42% says that HDFC bank charges lower maintenance fees, 38%

persons says that it is low in case of ICICI bank and 20% says that other banks charges lower

maintenance fees. Banasthali vidhyapith

Among 100 respondents, 10% says that HDFC saving account products are average, 14% says

that it is good, 44% says that it is very good and 32% says that HDFC saving account products

are excellent.




RECOMMANDATIONS

ICICI Bank and IDBI bank has to improve its brand image, i.e. it has to position itself in the

minds of prospects in a better way in comparisons to others.

People who deal with customers should have complete knowledge about the different

products and their features.

It should more emphasize in advertising, as it is the most powerful tool to position ant brand

in the mindsets of customers.

It should provide online training and for those who are in jobs and want to become advisors

IDBI should provide evening training classes, so that they can join the training after doing

their jobs.

It should open more number of branches in different cities.




CONCLUSION

After doing a lot of research and studying the materials available on internet, newspapers,

magazines and journals. I want to conclude that people prefers ICICI Bank more than IDBI

Bank for saving accounts in private sector. As private banks are coming daily in our country

still, Mostly people prefers government banks for saving accounts, especially older persons

are more dependent on government banks. It is true that younger population preference is

changing and they prefer more private banks because of services and facilities provided by

private banks. The appearance of banks also becomes very important for the present

generation and private banks put their complete efforts on this, which is lacking in

government banks. At last I can only say that IDBI Bank enjoys leading position in personal

saving account sector.




BIBLIOGRAPHY

BOOKS :-

Banking Laws & Practices – Varshany

Business Organisation & Management—Y.K. Bhushan

WEBSITES:-

www.icicibank.com

www.idbi.com



http://www.idbi.com/

http://www.icicibank.com/


ANNEXURES

QUESTIONNAIRE

PERSONAL DETAILS:

Name Mr./Mrs./Miss:- ……………………………………..

Address:-…………………………………………………….

……………………………………………………..

Contact no. :-………………………………………………..

Email Address:-.....................................................................

1) Occupation:-

a. Own Business [ ]

b. Service [ ]

2) {If service} your monthly household income

a) Less than 15000 b) 15001-25000

c) 25001 and above

Please give some references of people who you know are

Trading/investing in stocks:




1) ……………………………………………….

2) ……………………………………………….

Q1. In which bank do you have an account?

i. ICICI ii. IDBI iii. Other

Q2. What is the nature of your account?

i. Savings a/c ii. Current a/c iii. Other

Q3. Are you satisfied with your banking services?

i. Yes ii. No

Q4. Your decision to open an account is influenced by

i. Oneself ii. Broker

iii. Market Research iv. Friends/Relatives

v. Any other

Q5. What are the factors which you considered before opening account in a

particular bank?

i. Financial Position ii. Current Market Position

iii. Goodwill iv. Future Prospects

v. Any others.

ii. Audi Nagpur ii. Mercedes-Benz iii. BMW



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