Importance of effective brand building and segmentation with respect of icici credit cards

1. PROJECT REPORT
ON
IMPORTANCE OF EFFECTIVE
BRAND BUILDING AND
SEGMENTATION WITH
RESPECT TO ICICI CREDIT
CARDS.
ICFAI NATIONAL COLLEGE
DEHRADUN
SUBMITED TO: SUBMITED BY:

2. A REPORT ON
IMPORTANCE OF EFFECTIVE
BRAND BUILDING AND
SEGMENTATION WITH
RESPECT TO ICICI CREDIT
CARDS.
A report submitted in partial fulfillment of the
requirement of M.B.A program (2006-08)
ICFAI NATIONAL COLLEGE
DEHRADUN

3. TABLE OF CONTENTS
1. CERTIFICATE 4
2. ACKNOWLEDGEMENT 5
3. ABBREVIATIONS 6
4. SUMMARY OF THE STUDY 7
5. OBJECTIVES AND LIMITATIONS 9
6. INTRODUCTION 10
7. REVIEW OF LITERATURE 13
8. COMPANY PROFILE 19
9. HISTORY OF CREDIT CARDS 29
10. CREDIT CARD FEATURES 36
11. SEGMENTATION OF CREDIT CARDS 43
12. DATA ANALYSIS 49
13. FINDINGS 54
14. CONCLUSIONS 55
15. BIBLIOGRAPHY 56

4. CERTIFICATE
This to certify that the management thesis-2 titled
“IMPORTANCE OF EFFECTIVE BRAND BUILDING AND
SEGMENTATION WITH RESPECT TO ICICI CREDIT
CARDS”.
Enrollment no. 6nb20852 during semester-IV of the MBA
program (class of 2008 embodies original work done by him.)
SIGNATURE OF THE
FACULTY
NAME
DESIGNATION
CENTRE

5. ACKNOWLEDGEMENT
The making of any project calls for contribution & co-operation from many others
besides the individual alone. It is the result of meticulous effort put in by one with
contribution of inputs by many that led to the formation of final report.
Firstly, I sincerely thank our institute for giving me an opportunity to do the project,
which helped me learn a lot about mutual fund industry. I take this opportunity to
extend my gratitude to all the employees of SBI bank for their encouraging advice that
really was the inspiration & the motivating force behind my endeavors.
Special thanks and gratitude to Mr. ISHVINDER SINGH, Faculty guide (ICFAI
National College) for giving me some practical inputs which were extremely valuable in
the making of this project.
Finally, my sincere thanks to all who directly and indirectly helped and encouraged me
in the making of this project.

6. ABBREVIATIONS
(POS) - POINT-OF-SALE
(ADRs) - AMERICAN DEPOSITARY RECEIPTS
(NYSE) - NEW YORK STOCK EXCHANGE
(ICICI) - INDUSTRIAL CREDIT AND INVESTMENT
CORPORATION OF INDIA.
(GDP) - GROSS DOMESTIC PRODUCT.
(AMC) - ASSET MANAGEMENT COMPANIES.

7. SUMMARY
Current marketing thinking on the tasks of market definition, market segmentation, and
brand building is in disarray. Segmentation, in particular, is often discussed in textbooks
and articles without defining the market that’s segments are to be identified. The
researcher is looking for segments among current customers, consumers that currently
are prospects in the product category, or individuals taken at random from some
unspecified frame. It matters how management defines its market. The definition should
correspond to the strategic task that management is facing, and authors should state
reasons for the definition they use. Some authors use the term “Segmentation” when
discussing how customers react to a current array of product offerings. Others consider
segments to be groups defined through demographic categories, such as blacks, seniors,
or newlyweds. Such groups are segments of the population, but on what basis can they
be regarded as market segments? It’s not clear exactly what market segmentation
currently means and how it provides a distinct orientation to analysis that’s different
from market definition and brand positioning.
Strategic analysis in marketing has not always been so muddled. In a 1956 article in the
Journal of Marketing (“Product Differentiation and Market Segmentation as Alternative
Marketing Strategies,”), Wendell Smith stated that market segmentation and brand
positioning are distinct forms of analysis. Market segmentation, according to Smith,
involved analyzing the demand side of the market to obtain a rich understanding of
where people are coming from and “the wants” they bring to the marketplace.
Identifying such wants was in line with marketing’s responsibility of guiding
management to “make what people want to buy” by providing insight into the conditions
individuals face in their everyday life and work. Smith clearly contrasted such an
approach with a form of brand positioning that creates positioning differences without

8. regard to what people want.
Segmentation has since become a general buzzword for any analysis that attempts to
identify groups of individuals who are similar in attitudes, response to marketplace
offerings, where they live, or how they are described—for just about any marketing-
related task. Such a state of affairs results from many factors, including the ready
availability of marketplace data and the hope that meaningful insights can emerge from
data analysis, however lacking in strategic direction. In fact, marketing authors often
seem to use “segmentation” where authors in other disciplines would speak simply of
“analysis,” seeking some form of order or pattern by creating and searching for
differences among subgroups.
Consider the case of an urban transportation agency that wants to develop an image
advertising campaign, perhaps prior to announcing a fare increase or floating a bond
issue
before voters. Such a case is not an instance of seeking to base product strategy and
accompanying communication on one motivational segment found within a relevant
universe, as described by Smith. Instead, management is bent on achieving an externally
imposed objective other than satisfying prospects’ wants as found. Analysis of current
customers may identify groups of heavy users—some with negative attitudes about
public transportation and others with more positive attitudes. While such analysis can
provide useful information for implementing a targeted advertising campaign, it doesn’t
provide the insight needed to guide management to “make what people want to buy.”
The analysis of customers, their attitudes to current offerings, and marketplace behavior
in general is ambiguous regarding the reasons that people find value in a brand. Simply
knowing that a brand or specific attribute is preferred doesn’t provide insight into the
conditions that people deal with, for which they would be glad of help and ready to part
with money to receive that help.
Knowing the conditions that prospects face is critically important for tasks including
brand (re)formulation and obtaining the attention of targets in mass media. Moreover,
these conditions need not be reflected in or be retrievable from attitudes toward the
offerings currently present in the marketplace— unmet demand (i.e., prospects’
conditions that no brand is addressing) almost certainly exists in all markets.

9. OBJECTIVES:-
1. To study effective brand building and segmentation with specific reference to
ICICI credit cards.
2. The research aims to study its concept of segmentation and brand building.
3. The application of above concepts by ICICI credit cards.
4. Evaluate the effectiveness of client concept through primary and secondary
research of customers at Dehradun.
LIMITATIONS:-
• Paucity of time.
• Limited availability of data.
• Data conferred to ICICI in Dehradun only.
• Reluctance in part of company to share too many details about credit cards.
RESEARCH DESIGN:-
• The research is limited to Dehradun ICICI Bank at Hathibarkla Road has been
chosen as the model center for conducting the research.
• Secondary data has been obtained from website, journals, company officials etc.
• Primary data has been obtained from company officials.
• Efforts have been made to identify various card users in Dehradun and willing to
be part of their research.
METHODOLOGY:-
• Importance of segmentation.
• Brand building and segmentation.
• Study of credit cards industry.
• Study of ICICI group with specific reference to credit cards.
• Study of secondary data.
• Data collection.
• Data analysis.
• Findings / Recommendations
• Conclusion.

10. INTRODUCTION:-
Organizations used to think if they targeted only a segment of a market, the economies
would not work. Therefore, ICICI earned huge profits and became the most popular
bank in private banking sector in India.
Dividing the market by grouping the customers with similar tastes and preferences into
one segment is called segmentation. It is becoming increasingly important for marketers.
Different products ranges target different customers. Segmentation helps marketers to
understand the needs of different customers better and serve them with better value
propositions. Companies need to develop and refine their products and services to meet
the needs and preferences of various segments.
ICICI was established in 1955 at the initiative of the World Bank ,the Government of
India and the representatives of Indian industry .The main objective of was to create a
development financial institution for providing medium-term and long-term project
financing to Indian businesses .
ICICI Bank was promoted in 1994 by ICICI Ltd. Its shares are listed in India on the
Bombay Stock Exchange and National Stock Exchange and its American Depositary
Receipts are listed on the New York Stock Exchange under the symbol “IBN” .In 1999
ICICI Bank became the first Indian company and the first bank from non-Japan Asia o
be listed on the NYSE.
Presently ICICI Bank has a wide network of more than 650 branches and over 2523
ATMs .It is the largest private sector bank in India and second largest bank after SBI.
ICICI Bank’s head office is situated in Mumbai.
Chairman of CICI Bank is Mr. N.Vaghul and MD and CEO is Mr.K.V.Kamath. The
authorized capital of ICICI Bank is Rs.1, 000 cr. The present paid-up capital of ICICI
Bank is 153.84 cr...

11. PRODUCTS OF ICICI BANK
(A) SAVING ACCOUNT:-
1. Regular saving account
2. saving plus account
3. Salary account
4. Retail trust account
(B) RECURRING ACCOUNT.
(C) FIXED DEPOSIT.
(D) LOANS:-
1. Personal loans
2. Home loans
3. Two wheeler loans
4. New car loans
5. Used car loans
6. Overdraft against car
7. Gold loans
8. Express loans
(E) INSURANCE:-
1. Life insurance
2. General insurance
3. Health insurance
4. Home insurance
(F) CARDS:-
1. Credit cards
2. Debit cards

12. (G) CURRENT ACCOUNT:-
1. Roaming current account
2. Trade current account
3. Made to order current account
INTRODUCTION

13. SEGMENTATION AND BRAND BUILDING
MARKET SEGMENTATION
Introduction
The purpose of market segmentation analysis is to understand where prospects are
coming from. People engage in observed behaviors for many different reasons. They go
swimming, walk the dog, take their car in for repair, and hire marketing research
consultants for reasons that range from solving immediate problems to relishing some
aspects of the activity itself. By developing their understanding of the Direct Customer
Connection’s (DCCs) that lead
to action, marketers guide product formulation and meaningfully participate in the tasks
and interests of prospects.
Some authors are on record as stating that market segmentation is a strategy of last resort
—it is what firms do when they have a weak brand. If the brand isn’t strong enough to
appeal to everyone, then perhaps it could appeal to someone. We disagree with this
orientation. No brand can legitimately claim to be responsive to all of the DCCs that lie
behind an observed action in any product category. No one winter coat can protect
all people from the elements they experience, no one oxidizing chemical works for all
household stains, and no one marketing research publication can be responsive to all the
conditions in which management allocates funds to conduct marketing research. If it
were true that market segmentation is a strategy of last resort, we wouldn’t see the
extensive variety of offerings available in all product categories. Most obviously, the
help that users can obtain from a product category ranges from strong (responsive to
urgent or extreme versions of the underlying conditions) to mild or gentle (tailored to
minimize the chance that the product’s effect could be harmful).

14. Other authors have stated that market segmentation is a necessary evil that will diminish
in importance as firms obtain more detailed records of household purchase transactions.
We again disagree. As noted, DCCs are not retrievable from purchase behavior, or even
from noting the objective consumption environment. We actually learn very little from
household purchase data beyond what people prefer and their sensitivity to variables
such as price. While such information is useful for devising price promotions for
existing offerings, it offers little guidance to any of the strategic questions.
Market segmentation analysis is the discipline’s classic research approach to providing
information relevant to devising, assessing, and possibly changing management’s
product
strategy and the accompanying communications message. It is firmly grounded in
management’s search for guidance on product strategy to make the best use of its
resources, with a view to obtaining a satisfactory return on investment (ROI).
Management’s resources are used to best advantage when they build on the way people
are bent on spending their resources.
For this reason, market segmentation research is directed to understanding motivational
influences as they already exist in the everyday lives of management’s prospects. It is a
matter of plain common sense that resources are better allocated when management
responds to pre-existing demand, rather than putting resources at risk by first trying to
change the way people are ready to use their resources.
Corresponding to each product category is a domain of activity (e.g., for packaged
vacations, there is taking a week’s vacation away from home; for dog food, there is
owning/caring for a dog). For each activity, prospects have a variety of orientations
across individuals and, sometimes, within individuals over time (i.e., from one occasion
of the activity to another).
A prime task of management is to investigate, describe, and roughly quantify the
specifics (i.e., personal and environmental elements) of each of these orientations in its
product category.
This is the basic function of market segmentation research. An implication of the present
orientation is that segments of demand are identified, not imposed. What is at issue is
identifying the naturally occurring kinds of demand—the conditions that preexist in the

15. prospect’s world, predisposing them to spend their resources in a particular way.
Management is identifying a diversity that already exists. Accordingly, imposing some
extraneously determined segmentation scheme is not at issue. Analytic groups derived
from patterns of response to management strategy don’t qualify as naturally occurring
segments of demand because (1) respondents are constrained to express demand in terms
of options that management has provided and (2) while the analysis of such imposed
groupings may be useful for pursuing tactical management objectives, they don’t address
the strategic objective of deciding “what to offer to whom.” In our orientation,
management defines its market and then selects from the natural diversity of demand
that it finds therein, rather than imposing groupings determined outside the system or
based on reactions to marketing efforts. The DCCs are considered fixed in the analysis
for several reasons.
First, they exist outside of the marketplace in the context of everyday life and work and
are therefore difficult to influence. Also, the marketing concept, “make what people
want to buy,” is built on the premise that it’s more profitable to tailor one offering to the
prospect than to try to tailor the prospect to fit the offering.
Understanding where people are coming from involves conceptualizing and quantifying
the DCCs relevant to an activity.
In our article, “No Brand Level Segmentation?” (Marketing Research, Spring 2002), we
discuss measuring DCCs as the motivational component of an occasion for action.
Motivating conditions are expressed as the concerns and interests that lead people to
action, and examples are provided for the act of brushing teeth. In research with Sha
Yang, we have found that the concerns and interests are predictive of relative brand
preference and offer a useful basis variable for market segmentation.
Moreover, in other research we find that they provide an opportunity to consider unmet
demand in a product category. Once the DCCs are identified and measured, market
segmentation analysis proceeds by assessing the state of want satisfaction for each kind
of concern or interest. Conventional criteria for assessing segments of demand include
characteristics such as “substantial” and “actionable.” While adjectives such as these

16. are difficult to disagree with, they provide little substantive guidance as to how a firm
should proceed. Target selection must consider the capability of the firm to meaningfully
respond to some subset of the DCCs given its capabilities, actual and perceived,
related to core competencies. Here, the analyst is organizing the information obtained in
market segmentation.
BRAND BUILDING
The strategic task of brand positioning refers to management’s selecting as its market
targets (1) a subset of conditions (DCCs) to address with a responsive offering and (2)
the individuals who experience such conditions. In contrast to studying where people are
coming from, which is the purpose of market segmentation analysis, the purpose of
brand positioning is to influence the brands prospects choose in the marketplace.
Broadly speaking, product strategy has to do with designing a brand so that it can claim
and deliver getting enough prospects to where they want to be to provide management
with a satisfactory ROI. More specifically, brand positioning analysis involves further
refining answers to the strategic questions in Exhibit 1 in light of the defined market,
the state of want satisfaction, competing offerings, and best use of management’s
resources.
As a strategic task, brand positioning is based on management’s conducting an iterative
evaluation of the inroads that an offering can achieve by designing it to respond to some
region of the diverse kinds of demand as found. For each segment of demand,
management reviews the current state of want satisfaction provided by existing
offerings, with a view to assessing its ability profitably to improve on what is currently
available. Such assessment takes account of the possible hegemony of the competitors in
a segment. Segments of demand served by strong competitors are viewed as less
attractive than those served by weak competitors. If a competing firm does not already
have the segment locked up, specific levels of attributes are identified in response to the
DCCs.

17. Such attributes can be physical (e.g., breath freshening) and psychological (e.g., shows
others one care about oneself).
Management assesses likely credibility and attractiveness of the selling proposition as
identified with the firm.
Now consider getting the brand’s message to its targets— those prospects with
conditions that the brand has been tailored for. From the initial selection of
communications
medium (e.g., nationwide TV, print, or billboards), management chooses specific media
vehicles within that broad range. Getting the message to the brand’s targets has to be
thought of in two stages—choosing media vehicles that expose the message
in the presence of prospects, and gaining the attention of targets among those prospects
by what is shown and said in the advertising execution.
In stage 1, the link between prospects and media vehicles can be made via
demographics. That is, sellers of media vehicles use demographic information to
describe their audiences, and management knows the demographic profile of its pros
marketing
pacts. Based on such a demographic matching, management seeks audiences that contain
prospects disproportionately. In stage 2 (i.e., engaging the attention of its targets in such
audiences), management must rely on how it constructs its advertising message to ensure
that the ad portrays the conditions for which the brand has been tailored, and conveys the
attributes that equip the brand to address those conditions.
Specific answers to the remaining variables of price and exchange venue are so
dependent on the particular situation— product category, status in the marketplace, and
options actually available—that it is generally not possible to prescribe a sequence of
steps to arrive at optimal answers to these final strategic questions. Management may
have access to a favorable exchange venue, or a specific magazine or other media
vehicle
may exist that efficiently provides access to prospects. Such factors affect determining
an optimal, profit maximizing price.
Brand positioning and, indeed, finding the best answers to all the strategic questions in
Exhibit 1, form a highly creative enterprise. By a process of successive approximation, it

18. involves management’s choosing the most advantageous position on each of the
variables where its actions have strategic implications. These are the classic domains of
strategic choice, where management seeks the best use of its resources in selecting (1)
whom to include in its market (prospects), (2) which DCCs found among prospects to
target
by building responsive features into its offering (product), (3) how best to get its brand’s
message to its targets (promotion), (4) consistent with ROI, a minimal price in money
terms (price), and (5) user-convenient arrangements for effecting exchange (place).
Taking an integrated approach to the tasks of market definition, market segmentation,
and brand positioning offers a number of advantages. First, the approach highlights the
strategic and tactical nature of variables such as prospects, product, price, place, and
promotion. Price, for example, plays a dual role in marketing. The general price band of
an offering is associated with market definition, and the specific value of price within the
band is used to optimize profits for a brand— given that it is a player in the market.
Initially, the product category determines which individuals in a given population
management regards as prospects. The type of communications medium, exchange
venue, and price band have strategic implications for which prospects and competition
the market comprises, while the specific media vehicle (e.g., specific magazine),
message (e.g., ad content and execution), exchange venue (e.g., specific department
store), and specific attribute levels (e.g., 6x zoom lens) influence whether or not the
offering is chosen sufficiently often to provide satisfactory ROI. Second, an integrated
approach provides a context for considering answers to each of the major strategic
questions that
give due recognition to the user-producer interface. On the producer side, management
starts with a geographic area in which it wants to do business and a product category of
interest and selects relevant individuals from the population in its geographic area.
Further defining its market, management puts in place the broad communications,
exchange venue, and price bands of the venture. Taking that market as defined, it is
then the role of market segmentation to study the conditions outside the marketplace that
lead prospects to engage in the focal activity. We thus avoid circular definitions of

19. consumer segments that are characterized in terms of their reaction to real or
hypothetical offerings. Such analysis brings together the user and producer worlds
prematurely. This leads to blurred understanding and a dilution of marketing’s ability to
represent the world of the consumer and give equal treatment to the systematic roles of
users and producers. Attempting to read consumer wants by studying what people
choose is limited by the offerings that happen to be present in the marketplace. When
market segmentation research is, as here, based on a description of prospects’ wants that
is independent of
marketplace offerings, it provides better guidance to firms to “make what people want to
buy.”
Finally, the present integrated approach leads to substantive analysis of users and
producers. The task of market definition sets up bounds on the range of users, producers,
and interface variables to be studied. Market segmentation analysis focuses primarily on
the user side of the market, and brand positioning explores producers’ product offerings
and further productive capability in light of users’ diverse wants.
ORGANIZATION OVERVIEW
HISTORY
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

20. 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 Ahmedabad 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 has formulated a Code of Business Conduct and Ethics for its directors and
employees.
ICICI BANK

21. ICICI Bank is India's second-largest bank with total assets of Rs. 3,446.58 billion (US$
79 billion) at March 31, 2007 and profit after tax of Rs. 31.10 billion for fiscal 2007.
ICICI Bank is the most valuable bank in India in terms of market capitalization and is
ranked third amongst all the companies listed on the Indian stock exchanges in terms of
free float market capitalization. The Bank has a network of about 950 branches and
3,300 ATMs in India and presence in 17 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 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 Centre and representative offices in the United States, United Arab Emirates,
China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary
has established a branch in Belgium.
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).
ECONOMIC OVERVIEW
The year 2001 witnessed a continuation of the global economic slowdown that had
begun
to set in at the end of the year 2000. This recessionary trend deepened in the aftermath
of the terrorist attacks in the United States in September 2001. This broad-based nature
of the global slowdown, the most marked in recent times, impacted the outlook for
emerging
market economies in terms of reduced capital inflows and restricted access to funds from
international capital markets. However, India remained relatively insulated from the
global
slowdown due to the lower significance of the external sector in its Gross Domestic
Product (GDP). Despite the external environment, India’s real GDP recorded one of the

22. highest growth rates among all the economies of the world. This also marked a recovery
over the low growth in fiscal 2001, though still below the average growth rate of the
previous five years.
The overall GDP growth was supported mainly by agriculture and allied sectors and
services. Services continued to fuel the economy, reflecting robust performance in
financial services and technology. While consumer finance saw major growth, industrial
growth witnessed a decline which may be attributed to various factors such as business
and investment cycles, inherent adjustment lags of corporate restructuring, absence of
investment demand, infrastructure constraints in power and transport and delays in
establishing a credible institutional and regulatory framework for private participation in
some key sectors. However, select infrastructure sectors, such as telecommunications
and roads, saw significant success.
The implementation of the National Highways Development Programme (NHDP)
“Golden Quadrilateral” project is expected to be completed on schedule. The port sector
has witnessed progress in private investments in new container terminals and minor
ports and in corporatization of port trusts. In the telecom sector, significant progress has
been made by Telecom Regulatory Authority of India (TRAI) in opening up all
segments of the sector to competition, reducing prices in both long distance and cellular
services. However, railways, power and urban infrastructure are key areas requiring
reforms. The Union Budget for fiscal 2003 takes these concerns into account as it
emphasizes rationalization of user charges and increased public expenditure on
infrastructure.
The average annual rate of inflation in terms of the Wholesale Price Index (WPI) has
declined significantly from 7.1% at the beginning of fiscal 2002 to 2.1% for the week
ended July 8, 2002. This is in line with the deflationary trends experienced globally in
commodity and manufactured product prices.
Interest rates declined significantly during the year. Yields on Government securities
declined, reflecting the ample liquidity in the system. The small savings rate was further
lowered by 50 basis points in Reserve Bank of India’s (RBI) Monetary and Credit Policy
announced in April 2002. This removed a key impediment for structurally lower interest

23. rates. Reserve Bank of India has stated its preference for maintaining the current interest
rate environment with a bias towards softer interest rate regime in the medium term, in
order to create an environment that facilitates credit growth and investment activity in
the economy.
Fiscal 2002 was a volatile year for the Indian equity capital markets. The markets
underwent major structural reforms including the introduction of compulsory rolling
settlement in a large number of stocks, margin trading, derivative instruments and the
first Exchange Traded Fund.
At the same time, the worldwide recession and decline in technology stock prices
impacted the markets. However, notwithstanding adverse developments, the year 2001
witnessed the highest FII investment in Indian equity.
In the foreign exchange markets, other than occasional fluctuations caused by normal
market forces, the exchange rate of the rupee in terms of the major currencies of the
world remained reasonably stable during the year, with close monitoring by RBI. The
exchange rate policy has by and large focused on managing volatility with no fixed rate
target. During the year, foreign exchange reserves (including gold and special drawing
rights) grew significantly, reaching a record level of nearly USD 58.00 billion as of July
5, 2002. An increase in inflow of invisibles and a lower trade deficit resulted in the
current account showing a surplus of USD 1.40 billion (0.3% of GDP) in fiscal 2002
compared to a deficit of USD 2.60 billion in fiscal 2001.
Foreign investments grew 15.2% aided by a sharp rise in Foreign Direct Investment
(FDI) inflows of 67%. Moreover, as a result of effective external debt management by
the
Government, India’s external debt situation improved significantly, as reflected in the
declining external debt-to-GDP and debt service ratios. It is particularly noteworthy that
for the first time, the World Bank has classified India as a less-indebted country.
BUSINESS OVERVIEW
The past year saw the process of financial sector reforms being carried forward with
particular focus on banks and financial institutions. Considerable attention was given to
asset classification and provisioning norms in banks. RBI announced guidelines on

24. universal banking to facilitate the transformation of financial institutions into banks. It
also granted licenses for two new private sector banks and reduced the cash reserve ratio
in October 2001 and April 2002, bringing it down to 5.0%. The Union Budget for fiscal
2003 provided for higher tax deduction on provisions for bad debts. It also proposed the
enactment of new legislation for banking sector reforms and foreclosure laws. The
Union Budget also permitted incorporation of subsidiaries by foreign banks.
The Securitization and Reconstruction of Financial Assets and Enforcement of Security
Interest Ordinance, 2002 has significantly strengthened the ability of lenders to resolve
non-performing assets by granting them greater rights as to enforcement of security and
recovery of dues. The setting up of a pilot asset reconstruction company is also expected
to facilitate faster resolution of non-performing assets in the financial system.
Fiscal 2002 saw measures designed to move towards a flexible interest rate regime.
Measures such as reduction in interest rates and withdrawal of tax incentives across
various small savings schemes, and benchmarking small savings rates to the average
annual yields on Government securities of equivalent maturities are designed to make all
interest rates market linked and give banks greater flexibility in reprising their deposits.
The introduction of floating rate deposits with reset at six-monthly intervals and the
option to depositors to convert current fixed rate deposits to variable deposits is also
designed to encourage better spread management for banks.
The liquidity scenario during the past year was comfortable. RBI has indicated that the
policy of active demand management of liquidity through open market operations and
liquidity adjustment facility would be continued. Credit growth and investment demand
would be supported by maintaining the bias towards soft interest rates. RBI has also
given a significant boost to housing finance by reducing the risk weightage on residential
housing loans and mortgage-backed securities pertaining to residential housing loans
from 100% to 50%.
MERGER OF ICICI WITH ICICI BANK
ICICI Bank and ICICI, along with other ICICI group companies, were operating as a
“virtual universal bank”, offering a wide range of financial products and services. The
merger of ICICI and two of its subsidiaries with ICICI Bank has combined two
organizations with complementary strengths and products and similar processes and
operating architecture.

25. The merger has combined the large capital base of ICICI with the strong deposit raising
capability of ICICI Bank, giving ICICI Bank improved ability to increase its market
share in banking fees and commissions, while lowering the overall cost of funding
through access to lower-cost retail deposits. ICICI Bank would now be able to fully
leverage the strong corporate relationships that ICICI has built, seamlessly providing the
whole range of financial products and services to corporate clients. The merger has also
resulted in the
integration of the retail finance operations of ICICI, and its two merging subsidiaries,
and ICICI Bank into one entity, creating an optimal structure for the retail business and
allowing the full range of asset and liability products to be offered to all retail customers.
The share exchange ratio approved for the merger was one fully paid-up equity share of
ICICI Bank for two fully paid-up equity shares of ICICI. This was determined on the
basis of a comprehensive valuation process incorporating international best practices,
carried out by two separate financial advisors and an independent accounting firm. The
equity shares of ICICI Bank held by ICICI have not been cancelled in the merger. In
accordance with the provisions of the Scheme of Amalgamation, these shares have been
transferred to a Trust to be divested by appropriate placement. The proceeds of such
divestment would accrue to the merged entity. With the merger taking effect, the paid-up
share capital of the Bank has increased to Rs. 6.13 billion, comprising 613 million shares
of Rs.10 each. The merger process was complex and posed significant challenges. The
merger of a financial institution with a commercial bank to create the country’s first
universal bank had significant implications for the entire financial system. It therefore
involved extensive dialogue with the Government and Reserve Bank of India. The
merger also posed the challenge of compliance with regulatory norms applicable to
banks in respect of ICICI’s assets and liabilities, particularly the reserve requirements.
This required resources of about Rs. 210.00 billion to be raised in less than six months
for investment in Government securities and cash reserves, in addition to normal
resource mobilization for ongoing business requirements. We leveraged our strong retail
franchise, including the distribution network acquired in the merger of the erstwhile
Bank of Madura Limited with ICICI Bank in fiscal 2001, to grow our retail deposit base.
We

26. also achieved significant success in securitizing loans and developing a market for
securitized debt in India. We also adopted proactive strategies to minimize the duration
of our Government securities portfolio, in order to mitigate the interest-rate risk arising
from the acquisition of a portfolio of about Rs. 180.00 billion in five months.
As both ICICI and ICICI Bank were listed in Indian and US markets, effective
communication to a wide range of investors was a critical part of the merger process. It
was equally important to communicate the rationale for the merger to international and
domestic institutional lenders and to rating agencies. The merger process was required to
satisfy legal and regulatory procedures in India as well as to comply with United States
Securities and Exchange Commission requirements under US securities laws.
The merger of India’s largest financial institution with its largest private sector bank also
involved significant accounting complexities. In accordance with best practices in
accounting, the merger has been accounted for under the purchase method of accounting
under Indian GAAP. Consequently, ICICI’s assets have been fair-valued for their
incorporation in the books of accounts. The fair value of ICICI’s loan portfolio was
determined by an independent values, while ICICI’s equity and related investment
portfolio was fair-valued by determining its mark to- market value. The total additional
provisions & write-offs required to reflect the fair values of ICICI’s assets determined at
Rs. 37.80 billion have de-risked the loan and investment portfolio and created a
significant cushion in the balance sheet, while maintaining healthy levels of capital
adequacy.
The merger was approved by the shareholders of both companies in January 2002, by the
High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of
Judicature at Mumbai and the Reserve Bank of India (RBI) in April 2002. The challenge
of mobilization of resources for compliance with statutory reserve requirements
applicable to banks, on ICICI’s outstanding liabilities on merger, was met successfully
within the target date of March 30, 2002. While the merger became effective on May 3,
2002, in accordance with the provisions of the Scheme of Amalgamation and the terms
of approval of RBI, the Appointed Date for the merger was March 30, 2002.
We believe that the structure of an organization needs to be dynamic, constantly
evolving

27. and responsive to changes both in the external and internal environments. Our
organizational structure is designed to support our business goals, and is flexible while at
the same time ensuring effective control and supervision and consistency in standards
across business groups. The organization structure is divided into five principal groups –
Retail Banking, Wholesale Banking, Project Finance & Special Assets Management,
International Business and Corporate Centre.
The Retail Banking Group comprises ICICI Bank’s retail assets business including
various retail credit products, retail liabilities (including our own deposit accounts as
well as distribution of third part liability products) and rural micro-banking.
The Wholesale Banking Group comprises ICICI Bank’s corporate banking business
including credit products and banking services, with separate dedicated groups for large
corporate, Government and public sector entities and emerging corporate. Treasury,
structured finance and credit portfolio management also form part of this group.
ICICI GROUP

28. ICICI Bank also has banking subsidiaries in UK, Canada and Russia
BOARD MEMBERS
Mr. N. Vaghul, Chairman
Mr. Sridhar Iyengar
Mr. Lakshmi N. Mittal
Mr. Narendra Murkumbi
Mr. Anupam Puri
Mr. Vinod Rai
Mr. M.K. Sharma
Mr. P.M. Sinha
Prof. Marti G. Subrahmanyam
Mr. T.S. Vijayan
Mr. V. Prem Watsa
Mr. K.V. Kamath, Managing Director & CEO
Ms. Chanda Kochhar, Joint Managing Director & Chief Financial Officer
Ms. Madhabi Puri-Buch, Executive Director
Mr. Sonjoy Chatterjee, Executive Director
Mr. V. Vaidyanathan, Executive Director
SERVICES OFFERED:-

29. SERVICES PROVIDED BY ICICI BANK
1. 8 TO 8 BANKING
2. ANYWHERE BANKING
3. MOBILE BANKING
4. PHONE BANKNG
5. INTERNET BANKING
6. DOORSTEP BANKING
7. THIRD PARTY TRANSACTION
8. CASH AND CREDIT TRANSACTION
9. ELECTRONIC FUND TRANSFER
HISTORY OF CREDIT CARDS
Section 0.1 A credit card is an automatic way of offering credit to
a consumer.
Credit is a method of selling goods or services without the buyer having cash in hand. A
credit card is only an automatic way of offering credit to a consumer. Today, every
credit card carries an identifying number that speeds shopping transactions. Imagine
what a credit purchase would be like without it, the sales person would have to record
one identity, billing address, and terms of repayment.
According to Encyclopedia Britannica, "the use of credit cards originated in the United
States during the 1920s, when individual firms, such as oil companies and hotel chains,
began issuing them to customers." However, references to credit cards have been made

30. as far back as 1890 in Europe. Early credit cards involved sales directly between the
merchant offering the credit and credit card, and that merchant's customer.
Around 1938, companies started to accept each other's cards. Today, credit cards allow
one to make purchases with countless third parties.
(a) THE SHAPE OF CREDIT CARDS
Credit cards were not always been made of plastic. There have been credit tokens made
from metal coins, metal plates, and celluloid, metal, fiber, paper, and now mostly plastic
cards.
(b)FIRST BANK CREDIT CARD
The inventor of the first bank issued credit card was John Biggins of the Flatbush
National Bank of Brooklyn in New York. In 1946, Biggins invented the "Charge-It"
program between bank customers and local merchants. Merchants could deposit sales
slips into the bank and the bank billed the customer who used the card.
(c) DINERS CLUB CREDIT CARD
In 1950, the Diners Club issued their credit card in the United States. The Diners Club
credit card was invented by Diners' Club founder Frank McNamara and it was intended
to pay restaurant bills. A customer could eat without cash at any restaurant that would
accept Diners' Club credit cards. Diners' Club would pay the restaurant and the credit
card holder would repay Diners' Club. The Diners Club card was at first technically a
charge card rather than a credit card since the customer had to repay the entire amount
when billed by Diners Club.
American Express issued their first credit card in 1958. Bank of America issued the
BankAmerica (now Visa) bank credit card later in 1958.

31. (d)THE POPULARITY OF CREDIT CARDS
Credit cards were first promoted to traveling salesmen (more common in that era) for
use on the road. By the early 1960s, more companies offered credit cards, advertising
them as a time-saving device rather than a form of credit. American Express and
MasterCard became huge successes overnight.
By the mid-'70s, the U.S. Congress begin regulating the credit card industry by banning
such practices as the mass mailing of active credit cards to those who had not requested
them. However, not all regulations have been as consumer friendly. In 1996, the U.S.
Supreme Court in Smiley vs. Citibank lifted restrictions on the amount of late penalty
fees a credit card company could charge. Deregulation has also allowed very high
interest rates to be charged.
GRACE PERIOD
A credit card's grace period is the time the customer has to pay the balance before
interest is charged to the balance. Grace periods vary, but usually range from 20 to 30
days depending on the type of credit card and the issuing bank. Some policies allow for
reinstatement after certain conditions are met. Usually, if a customer is late paying the
balance, finance charges will be calculated and the grace period does not apply. Finance
charge(s) incurred depends on the grace period and balance, with most credit cards there
is no grace period if there's any outstanding balance from the previous billing cycle or
statement (ie. interest is applied on both the previous balance and new transactions).
However, there are some credit cards that will only apply finance charge on the previous
or old balance, excluding new transactions.

32. THE MERCHANT'S SIDE
An example of street markets accepting credit cards. For merchants, a credit card
transaction is often more secure than other forms of payment, such as checks, because
the issuing bank commits to pay the merchant the moment the transaction is authorized,
regardless of whether the consumer defaults on their credit card payment (except for
legitimate disputes, which are discussed below, and can result in charge backs to the
merchant). In most cases, cards are even more secure than cash, because they discourage
theft by the merchant's employees.
For each purchase, the bank charges a commission (discount fee), to the merchant for
this service and there may be a certain delay before the agreed payment is received by
the merchant. The commission is often a percentage of the transaction amount, plus a
fixed fee. In addition, a merchant may be penalized or have their ability to receive
payment using that credit card restricted if there are too many cancellations or reversals
of charges as a result of disputes. Some small merchants require credit purchases to have
a minimum amount (usually between $5 and $10) to compensate for the transaction
costs, though this is not always allowed by the credit card consortium.
In some countries, like the Nordic countries, banks guarantee payment on stolen cards
only if an ID card is checked and the ID card number/civic registration number is written
down on the receipt together with the signature. In these countries merchants therefore
usually ask for ID. Non-Nordic citizens, who are unlikely to possess a Nordic ID card or
driving license, will instead have to show their passport, and the passport number will be
written down on the receipt, sometimes together with other information. Some shops use
the card's PIN code for identification, and in that case showing an ID card is not
necessary.
PARTIES INVOLVED
• Cardholder: The owner of the card used to make a purchase; the consumer.

33. • Card-issuing bank: The financial institution or other organization that issued the
credit card to the cardholder. This bank bills the consumer for repayment and
bears the risk that the card is used fraudulently. American Express and Discover
were previously the only card-issuing banks for their respective brands, but as of
2007, this is no longer the case.
• Merchant: The individual or business accepting credit card payments for
products or services sold to the cardholder
• Acquiring bank: The financial institution accepting payment for the products or
services on behalf of the merchant.
• Independent sales organization: Resellers (to merchants) of the services of the
acquiring bank.
• Merchant account: This could refer to the acquiring bank or the independent
sales organization, but in general is the organization that the merchant deals with.
• Credit Card association: An association of card-issuing banks such as Visa,
MasterCard, Discover, American Express, etc. that set transaction terms for
merchants, card-issuing banks, and acquiring banks.
• Transaction network: The system that implements the mechanics of the electronic
transactions. May be operated by an independent company, and one company
may operate multiple networks. Transaction processing networks include:
Cardnet, Nabanco, Omaha, Payment, NDC Atlanta, Nova, Vital, Concord
EFSnet, and VisaNet.
• Affinity partner: Some institutions lend their name to an issuer to attract
customers that have a strong relationship with that institution, and get paid a fee
or a percentage of the balance for each card issued using their name. Examples of
typical affinity partners are sports teams, universities and charities.
(e) TRANSACTION STEPS
• Authorization: In the event of a chargeback (when there's an error in processing
the transaction or the cardholder disputes the transaction), the issuer returns the
transaction to the acquirer for resolution. The acquirer then forwards the
chargeback to the merchant, who must either accept the chargeback or contest it.

34. (f) SECURED CREDIT CARDS
A secured credit card is a type of credit card secured by a deposit account owned by the
cardholder. Typically, the cardholder must deposit between 100% and 200% of the total
amount of credit desired. Thus if the cardholder puts down $1000, he or she will be
given credit in the range of $500–$1000. In some cases, credit card issuers will offer
incentives even on their secured card portfolios. In these cases, the deposit required may
be significantly less than the required credit limit, and can be as low as 10% of the
desired credit limit. This deposit is held in a special savings account. Credit card issuers
offer this as they have noticed that delinquencies were notably reduced when the
customer perceives he has something to lose if he doesn't repay his balance.
The cardholder of a secured credit card is still expected to make regular payments, as he
or she would with a regular credit card, but should he or she default on a payment, the
card issuer has the option of recovering the cost of the purchases paid to the merchants
out of the deposit. The advantage of the secured card for an individual with negative or
no credit history is that most companies report regularly to the major credit bureaus. This
allows for building of positive credit history.
Although the deposit is in the hands of the credit card issuer as security in the event of
default by the consumer, the deposit will not be debited simply for missing one or two
payments. Usually the deposit is only used as an offset when the account is closed, either
at the request of the customer or due to severe delinquency (150 to 180 days). This
means that an account which is less than 150 days delinquent will continue to accrue
interest and fees, and could result in a balance which is much higher than the actual
credit limit on the card. In these cases the total debt may far exceed the original deposit
and the cardholder not only forfeits their deposit but is left with an additional debt.
Most of these conditions are usually described in a cardholder agreement which the
cardholder signs when their account is opened.
Secured credit cards are an option to allow a person with a poor credit history or no
credit history to have a credit card which might not otherwise be available. They are
often offered as a means of rebuilding one's credit. Secured credit cards are available
with both Visa and MasterCard logos on them. Fees and service charges for secured

35. credit cards often exceed those charged for ordinary non-secured credit cards, however,
for people in certain situations, (for example, after charging off on other credit cards, or
people with a long history of delinquency on various forms of debt), secured cards can
often be less expensive in total cost than unsecured credit cards, even including the
security deposit.
Sometimes a credit card will be secured by the equity in the borrower's home. This is
called a home equity line of credit (HELOC).
(g) PREPAID CREDIT CARDS
A prepaid credit card is not really a credit card, as no credit is offered by the card
issuer: the card-holder spends money which has been "stored" via a prior deposit by the
card-holder or someone else, such as a parent or employer. However, it carries a credit-
card brand (Visa or MasterCard) and can be used in similar ways. As more consumers
require a suitable solution to rebuilding credit, recent changes have allowed some credit
card companies to offer pre-paid credit cards to help rebuild credit. They are hard to find
and have higher APR fees and higher interest costs.
After purchasing the card, the cardholder loads it with any amount of money and then
uses the card to spend the money. Prepaid cards can be issued to minors since there is no
credit line involved. The main advantage over secured credit cards is that one are not
required to come up with $500 or more to open an account. Also most secured credit
cards still charge one interest even though one is not actually "borrowing" any money.
With prepaid credit cards one are not charged any interest but one are often charged
monthly fees after an arbitrary time period. Many other fees also usually apply to a
prepaid card.
Prepaid credit cards are often marketed to teenagers for shopping online without having
their parents complete the transaction.
Because of the many fees that apply to obtaining and using credit-card-branded prepaid
cards, the Financial Consumer Agency of Canada describes them as "an expensive way
to spend one own money" The agency publishes a booklet, "Pre-paid cards, which
explains the advantages and disadvantages of this type of prepaid card.

36. ICICI BANK CREDIT CARDS: KEY FEATURES
Bandhan | Balance Transfer | Global Emergency Assistance Service | Wide Acceptance |
Statement by e-mail and mobile alerts | Earn while one spend - ICICI Bank Express
Rewards Programme | Photo-Card | Self Set Limit | Cash Advance Facility | Other Benefits
BANDHAN
One can freely present a maximum of two add-on Cards to one wife, sister, brother, parents or
children above 18 years of age. To apply for this add-on Card, referred to as "Bandhan", just call

37. the ICICI Bank and place one request with an executive. A form will be sent. Also if one has
linked Credit Card with one’s Internet banking User-id then one can also place one’s request for
an add-on Card online.
BALANCE TRANSFER FACILITY
Transfer the balances from one’s Other Bank Credit Card to one ICICI Bank Credit Card and
enjoy an interest rate as low as 0% on the transferred amount.
Various attractive schemes like the 0% Balance Transfer offer and the Life Time Balance
Transfer offer, along with the zero documentation and speedy draft delivery make ICICI Bank
Credit Card balance Transfer Programme the best in the market.
Just see how simple it is to transfer the balances:
• Call up the 24-hour Customer Care Centre number and dial.
• Give Other Bank Card details (no other documents required) to our phone banking
officer.
• On approval, one will receive the draft within 3 working days.
THERE ARE OTHER SIMPLE WAYS TO APPLY FOR A
BALANCE TRANSFER:
• SMS BT to 5676766 - and we will call one in a days time
• Fill up this small Balance Transfer form and mail it across to us
In both these cases we would give one a call within 1 working day.
GLOBAL EMERGENCY ASSISTANCE SERVICE
The next time one travel abroad please remember that one have the option of using the Global
Emergency Assistance Services provided by VisaMaster for our cardholders. These can be
availed for

38. 1. Reporting lost/stolen credit cards,
2. Requesting for an emergency card replacement
3. Emergency cash advance
4. Miscellaneous enquiries.
The toll free telephone numbers for accessing these emergency assistance Help lines are
available in local telephone directories/yellow pages and other local listings in each country. For
availing Visa Global Assistance Services, charges as applicable including telecom costs will be
charged to one’s Card Account like Lost/Stolen Card reporting, Emergency Card replacement,
Emergency Cash Disbursement and Miscellaneous Customer Service Enquiries.
WIDE ACCEPTANCE
ICICI Bank Blue Cards are welcomed at all Merchant Establishments displaying the VISA logo -
over 1,10,000 and MasterCard logo - over 77,000 establishments across India and Nepal and
the Silver and Gold Cards are accepted globally by over 22 million VISA Card and 22 million
MasterCard accepting establishments.
STATEMENT BY E-MAIL AND MOBILE ALERTS
Statement Online is a very simple, powerful and convenient way to view Credit Card statement
details instantly without any postal delays. Just sign up for Statement Online and get faster,
reliable access to Account Statement. A mobile alert from ICICI Bank provides one with
information on the ICICI Bank Credit Card even when we are on the move. One would now no
longer miss a payment or exhaust the credit limit without a warning. Currently customers having
Internet Banking user-ids can subscribe to the alerts.
EARN WHILE ONE SPEND - ICICI BANK XPRESS
REWARDS PROGRAMME
A special bonus plan that allows one to earn points every time one uses his Card, Every Rs. 200
that one spends earns to 1 point. The redemption of reward points can be done against the
products, services in the rewards catalogue or against bank’s renewal fees.

39. PHOTO-CARD
One has the option of having his photograph and signature digitally imprinted on the front of the
Card. This provides us extra security at any of the merchant establishments. In fact, it can be
used as a proof of identification. In the interest of our own security, we strongly recommend that
we opt for a photo-Card. If one had decided not to opt for a photo Card when applying, just call
the ICICI Bank 24-hour Customer Care Centre and place one request with the executive. A
form will be sent to one. One are then required to mail the completed form to us at: ICICI Bank
Credit Card Operations, P.O. Box 7931, Tulsiwadi, PO, and Mumbai - 400 034. A photo-Card will
be ones at no extra cost.
SELF SET LIMIT
The only Card that allows one to pre-define ones own credit limits. One can request for a limit
lower than what one is eligible for. One can even preset the monthly spending limits on the
"Bandhan" Card. Any transactions over the specified 'Spend Limit' will be declined.
This monthly spending limit can be reset every billing cycle by just calling the ICICI Bank 24-
hour Customer Care Centre and place ones request with the executive. One spend limit will be
changed on-line and come in to force from the next billing cycle.
CASH ADVANCE FACILITY
With an ICICI Bank Credit Card in one’s wallet, one will not be strapped for cash ever again. One
can withdraw cash on one Card, 24-hours a day from any VISA and MasterCard participating
member bank ATM. During banking hours one can also draw cash over-the-counter, from any
ICICI Bank branch in cities where the ICICI Bank Credit Card has been introduced.
OTHER BENEFITS
• Internet Banking
• Limited Lost Card Liability
• Dial-A-Draft
• Utility Payments
• Revolving Credit Facility
• Auto Debit Facility

40. • Temporary Credit Limit Enhancement
INTERNET BANKING
Bank understands the pressure on time. To access information when one need it, where one
need it, bank offers access to ICICI Bank Credit Card related information through the Internet.
One can do transactions like accessing account information - current and last statement, getting
one payment status, viewing one monthly statement by email, request for a duplicate PIN, record
a change of address, order a draft, give auto debit instructions, request for a replacement Card
or an add-on Card, access and redeem online from the Rewards catalogue, subscribe to
statement by e-mail and mobile alerts.
LIMITED LOST CARD LIABILITY
In case the Card is lost or stolen, call the ICICI Bank and report the loss of one Card. A new
Card will be sent to one within 72 hours of reporting this loss. One are protected from any
financial liability arising out of transactions done on one missing Card, from the time one report
the loss to us.
DIAL-A-DRAFT
To order a draft from the convenience of one home, simply call the ICICI Bank 24-hour
Customer Care Centre and ask for a draft, payable anywhere in India and favoring any
company or individual (one can order a draft up to the available cash limit on one account). The
draft will be delivered to one mailing address. For each draft request, a transaction fee of 2.5% of
the amount withdrawn, subject to a minimum of Rs. 300, will be levied. In addition to the
transaction fee, an interest charge will also be levied from the date of transaction to the date of
repayment. The amount of the draft will be billed in one monthly Credit Card statement.

41. UTILITY PAYMENTS
One now have the convenience of paying one utility bills - telephone and mobile phone bills
through one ICICI Bank Credit Card.
ICICI BANK 24-HOUR CUSTOMER CARE CENTRE
The ICICI Bank 24-hour Customer Care Centre is equipped with a state-of-the-art system that
ensures one queries being handled efficiently and promptly.
REVOLVING CREDIT FACILITY
When one receives one bill, one need not pay the entire bill amount. One has the flexibility of
selecting any of the following payment options:
• Pay the total amount due.
• Pay only the minimum amount due (5% of the bill amount subject to a minimum of Rs
100) and the balance can be carried forward to subsequent statements.
• Pay any amount ranging from the minimum amount due to the total amount due.
AUTO DEBIT FACILITY
If one have an account with any ICICI Bank branch, one have the option of making the payment
of one monthly credit statement (either the minimum amount due or the total amount due)
directly through one bank account.
TEMPORARY CREDIT LIMIT ENHANCEMENT
There will be times when one feel the need for an increase in one credit limit to enable one to
make increased purchases on one Card. To avail of the temporary credit limit enhancement, all
one need to do is to call our Customer Call Centre and make one request. The executive will be
able to increase the limit on-line. Please note that this facility is available only after 9 months of
membership and based on credit history.
UNDERSTANDING THE PROCESS

42. How card processing works: When a customer pays for products or services with a credit
card, the card information is recorded- either by manual entry, a card imprinter, point-of-
sale (POS) terminal, or virtual terminal - and then verified so that the merchant can
receive payment for the transaction. This process involves the following parties:
Cardholder: the owner of the card used to make a purchase.
Merchant: the business accepting credit card payments for products or services sold to
the cardholder.
Acquirer: the financial institution or other organization that provides card processing
services to the merchant.
Card association: a network such as VISA® or MasterCard® (and others) that acts as a
gateway between the acquirer and issuer for authorizing and funding transactions.
Issuer: the financial institution or other organization that issued the credit card to the
cardholder.
The flow of information and money between these parties-always through the card
associations-is known as the interchange, and it consists of a few steps:
Authorization: The cardholder pays for the purchase and the merchant submits the
transaction to the acquirer. The acquirer verifies with the issuer-almost instantly-that the
card number and transaction amount are both valid, and then processes the transaction.
Batching: After the transaction is authorized it is then stored in a batch, which the
merchant sends to the acquirer later to receive payment (usually at the end of the day).
Clearing and settlement: The acquirer sends the transactions in the batch through the
card association, which debits the issuers for payment and credits the acquirer. In effect,
the issuers pay the acquirer for the transactions.

43. Payment: Once the acquirer has been paid, the merchant receives payment. The amount
the merchant receives is equal to the transaction amount minus the discount rate, which
is the fee the merchant pays the acquirer for processing the transaction.
SEGMENTATION CARRIED OUT BY ICICI WITH
REGARD TO ICICI CREDIT CARDS
1. Market Research: - It is the primary step of segmentation which is carried out
by ICICI with regard to credit cards. In this step bank carried out a survey of the
potential market with internal as well as external research agencies for covering
the entire potential market.
2. Identifying target customers: - In this step the collected information is
processed and then the targeted customers were identified for the next level.
3. Profiling of the customers: - In this step the targeted customers were profiled on
the basic of income, profession, occupation, etc.
4. Identifying The Companies For Co- Branding: - For providing the various co-
related services to the customers ICICI gives great emphasis on co- branding.

44. NUMBER AND TYPES OF CREDIT CARDS
• PREMIUM CARDS
• CLASSIC CARDS
• VALUE FOR MONEY CARDS
• CO BRANDED CARDS
• AFFINITY CARDS
• EMI CARD
• PICTURE CARDS
• PREFERRED CARDS

45. SEGMENTATION BY INCOME
PREMIUM CARDS
These cards are at the top level of the ICICI credit card segment this segment of credit
cards is containing basically three types of cards these cards are basically targeted
towards the premium segment of high profile customers these cards and their features
are given below:
1. TITANIUM CARDS

46. 2. PLATINUM CARDS
3. GOLD CARDS
TITANIUM CARDS
The cards in this segment are meant only for the (HNI’s) those customers are basically
from the different professions like Doctors, C.A, and Entrepreneurs etc.
The minimum requirement and the eligibility for this card is the client must be having
the a/c balance of at least Rs.10,00,000 in ICICI Bank or the income of these clients
must be above 5 to 10 lakhs monthly. These were the basic requirements from the side of
the bank. This card is recently in the (New Product Development) segment.
PLATINUM CARDS
This card is basically meant for the clients from upper middle segment of the society, the
target clients of this segment are those person who have the minimum a/c balance of 3
lakhs in ICICI Bank or those who are getting the monthly salary of at least 1 lakh. These
are the basic requirements of the platinum card users.
GOLD CARDS
This segment of ICICI Bank credit cards is segmented towards the middle income
segment group of people. The holders of this particular card are basically those people
having the monthly income of Rs.10, 000 and above. To penetrate in this income
segment ICICI has adopted a very unique strategy to provide this gold card to every
person who is having his income in this given slab, that’s why they have penetrated in
this segment so well and got the maximum number of clients in this segment.
SEGMENTATION BY INDUSTRY ASSOCIATION

47. CO BRANDED CARDS
The co branded cards are those cards which are basically associated with the other
companies from the different sectors like (retail, fmcg, oil & gas, hospitality etc) to
provide the clients a unique facility on verge of their service of credit cards. This
segment of ICICI credit cards is basically meant for various segments. On account of
these services go on smoothly ICICI Bank is having the corporate tie-up’s with different
company’s. They are given below:
• Big Bazaar
• Decan Airways
• Jet Airways
• HP
• India Times
These are the companies having tie-up’s with ICICI Bank in respect to credit cards, now
those customers for whom the cards are meant, these client list is given below:
• Those customers who are the regular byres from big bazaar are offered this co
branded cards for making their purchase more convenient in regard to the paying
facilities.
• If we take the aviation industry ICICI Bank is having the tie-up with two
companies (jet and decan) here ICICI has done the segmentation on the basic of

48. the travelers of the two different categories in these two airways. These are the
middle and upper middle segment people those who are using these services
frequently.
• If we take the example of the petroleum industry ICICI Bank is having the tie-up
with Hindustan Petroleum to fulfill the needs of that segment which is generally
doing their business in the transportation industry for their convenience by using
their petro- cards.
• This particular segmentation is for the youth brigade those who are using the
services of India Times frequently and doing their payments on line.
SECTORAL SEGMENTATION
EMI CARD: FOR AGRICULTURAL SECTOR
This is the totally different segment where ICICI Bank penetrated; because 65 % to 70%
population of our country is indulge in the agricultural business to attract these
customers ICICI took the initiative to attract the people from this segment. The number
of purchases the card holder makes he has to make the payments in the installments for

49. ex: 5000, 10000 and up to 25000 as per the credit worthiness of the client. For this
service the clients have to pay a minimal interest on emi of 2.95% monthly and service
tax of 12.36%.
These were the different cards of ICICI Bank with their features and
requirements. This shows how well ICICI Bank segmented its market with the different
set of Credit Card services.
• CLASSIC CARDS
• VALUE FOR MONEY CARDS
• AFFINITY CARDS
• PICTURE CARDS
• PREFERRED CARDS
These following cards are discontinued by ICICI Bank in the past.
DATA ANYLISIS
INTRODUCTION
This chapter includes the analysis of data collected from the officials of ICICI Bank and
the secondary data is also there in these facts and figures.
By 2004, ICICI had achieved remarkable growth figures. Nationwide ICICI had
achieved cards sales worth US $ 3.3 billion. There was a rise of 13% in the volume of

50. total card sales over 2004. The biggest challenge before ICICI was to maintain its brand
leadership in feature in the face of threats from established brands like HSBC, CITI
Bank and SBI. Industry observers believed that HSBC cards posed a grater threat to
ICICI Credit cards.
Now the facts and figures shown below will show that how ICICI credit cards
established themselves in the marketplace in a very sophisticated manner.
Exhibit1: Retail Sales Volume 2006 of ICICI Credit Cards
(in US $ million)
Delhi 300
Mumbai 730
Kolkatta 120
Gujarat 890

51. Punjab 565
Chennai 465
Delhi Mumbai Kolkatta Gujrat Punjab Channai
0
100
200
300
400
500
600
700
800
900
(in us $ million)
Retail sales volume - 2006
Exhibit2: Retail Sales Volume Growth of ICICI Credit Cards
(year over year percentage growth)
Delhi 24%
Mumbai 45%
Kolkatta 12%
Gujarat 67%

52. Punjab 35%
Chennai 29%
Delhi Mumbai Kolkatta Gujrat Punjab Channai
0%
10%
20%
30%
40%
50%
60%
70%
(year over year
percentage gain)
Retail Sales Volume Growth
Exhibit3: Number Of Credit Cards Of ICICI Bank in Major
Cities of India
In
Thousands
78 143 45 257 132 120
Delhi 23%
Mumbai 45%
Kolkotta 14%

53. Gujarat 67%
Punjab 39%
Chennai 31%
0%
10%
20%
30%
40%
50%
60%
70%
78 143 45 257 132 120in thousands
Number of cards -2006
Delhi
Mumbai
Kolkotta
Gujrat
Punjab
Channai
Exhibit4: Growth Rate Of ICICI Credit Cards in India From
2004 - 2006
Year over Year Growth From 2004 - 2006
2004 11%
2005 13%
2006 17%

54. 0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
11% 13% 17%
year over year growth
Growth Rate 2004-2006
2004
2005
2006
FINDINGS

55. 1. ICICI Bank has witnessed a many fold growth in all the
business activities. The credit card business of bank has also
progressed by leaps and bounds.
2. Effective segmentation through market research has been the
key feature in launching of various credit cards by the bank.
3. Focused attention on target market through segmentation,
has insured a top of the mind recall of ICICI brand in credit
cards.
4. The target group has been well defined and a focused
approach with benefits specific to the target market have
been launched which have been a success.
RECOMMENDATION AND
CONCLUSION

56.  The bank is still needs to target the mass population by
launching innovative offer directed at huge untapped market.
 The sales volume and total number of credit cards has grown
by 17% in 2006.
 The bank has also put in immense efforts for effective brand
building by utilizing various promotions and marketing
vehicles to increase and enhance penetration.
 The risk associated with rapid expansion also needs to be
kept in mind.
 There is a need to revise the interest rates to make the cards
more affordable for the common man.
 The bank needs to increase its efforts in brand building to
insure more vulnerability and recall value amongst
customers.
BIBLIOGRAPHY

57. • Efficient capital market (a review of theory and empirical
work)
• Financial analysts Journal
• www.bseindia.com
• www.nseindia.com
• www.religareonline.com
• www.economicstimes.com
• www.google.com
• business today, business world
• ICFAI journals and books