Icici bank final report

2009

ICICI Group

Gagan Pareek
Sainatth Wagh
Parvez Rangwalla
Sandeep kumar A
Sriaditya Kasula
Harish Nath

© 2009 Water Perspective Group

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ICICI Bank is a leading Indian private sector commercial bank
offering a variety of products and services. It was incorporated
in India in 1994. In 2002, ICICI, a non-bank financial institution,
and two of its subsidiaries, ICICI Personal Financial Services
and ICICI Capital Services, were amalgamated with ICICI Bank.
It is the India's second-largest bank with total assets of Rs.
3,674.19 billion (US$ 77 billion) at June 30, 2009 and profit after
tax Rs. 8.78 billion for the quarter ended June 30, 2009. The
Bank has a network of 1,532 branches and about 4,816 ATMs
in India and presence in 18 countries.

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 finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital


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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.

As of March 31, 2009, ICICI Bank had 17 subsidiaries as mentioned below:

Domestic Subsidiaries International Subsidiaries
ICICI Prudential Life Insurance Company Limited ICICI Bank UK PLC
ICICI Lombard General Insurance Company Limited ICICI Bank Canada
ICICI Prudential Asset Management Company Limited ICICI Wealth Management Inc.1
ICICI Prudential Trust Limited ICICI Securities Holdings Inc
ICICI Securities Limited ICICI Securities Inc.3
ICICI Securities Primary Dealership Limited ICICI Securities Holdings Inc.2
ICICI Venture Funds Management ICICI International Limited
ICICI Home Finance Company Limited
ICICI Investment Management
Company Limited
ICICI Trusteeship Services Limited

ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED:

Uniquely positioned to take the Indian entrepreneur further is ICICI Venture Funds, the Wholly
owned subsidiary of ICICI, with its keen understanding of the IndianFinancial Markets,
entrepreneurial ethos, access to global capital and a network through influential global
alliances. Strong parentage and affiliates provide ICICI Venture with access to a broad
spectrum of financial and analytical resources. An affiliation with (Trust Company of the West)
provides a platform for networking Indian Companies to global markets and technology. ICICI
Venture Funds currently manages / advises 11 Funds aggregating US$ 400 million, making it
the most significant private equity investor in the country. The investment experience of ICICI
Venture’s professionals is the foundation its strengths and success in several areas of
investing. ICICI Venture seeks to invest in opportunities where its network through ICICI and
TCW can create value for all involved. ICICI Venture’s primary investment objective is capital
investment through investments by way of equity or equity-related securities in unlisted
companies with significant growth potential. ICICI Venture’s investments span a broad
spectrum of industries and stages of development, the investment focus being on
· Information Technology
· Biotechnology and Life Sciences
· Media and entertainment
· Retail Services


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ICICI SECURITIES AND FINANCE COMPANY LIMITED:
Formed in 1993 when ICICI’s Merchant Banking Division was spun off into a new
company, I-SEC today are India’s leading Investment Bank and one of the most significant
players in the Indian capital markets. Its client list includes some of the best known, most
respected names in Indian business and industry, and I-SEC offers them what are probably
the widest, most in-depth range of services in the market, with the highest standards of
professionalism. Backed by a strong distribution network, I-SEC is acknowledged to be at the
forefront of all new developments in the Indian debt market. I-SEC Research Reports,
Compendia,Updates, I-BEX and sovereign Bond Index, have become industry
standards,sought after by finance, business and reputed publications alike. The Project
Finance Group has helped take strategic projects from the drawing board to financial closure,
leveraging the expertise of parent organization. I-SEC has also executed several assignments
in M & A, including business valuations, spin-offs and mergers, for both domestic and
overseas clients. The range of products offered by i-SEC includes:
· Corporate Finance – Mergers and Acquisitions, Equity, Bidding (especially
for Telecom Projects)
· Fixed Income – Primary Dealership, Debt Research
· Equities – Lend managemen
t, Underwriting, Syndication, Private Equity placement, Sales, Trading, Broking, Sectoral and
Company Research I - SEC Continues to sustain a steady rate of growth by offering the most
extensive range of services combined with unrivalled standards of professionalism.
I
ICICI BROKERAGE SERVICES LIMITED

Set up in March 1995, ICICI Brokerage Services is a 100% subsidiary of I-SEC. It
commenced its securities brokerage activities in February 1996 and is registered with the
National Stock Exchange of India Limited and The Stock Exchange, Mumbai. We are a joint
venture between ICICI and the leading financial services provider in India, and prudential plc
of U.K., one of the finest Life insurance companies in the world. Together we provide you with
an extensive range of insurance products to suit your various needs at various life stages. We


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aim to keep you covered, at every step in life. Their policies are need-specific and address
particular age groups. This means that no matter where in life you are, we offer specific
products to suit your needs for savings, protection and retirement. Our products can be
categorized into the following:
· Saving plans
· Protection plans
· Retirement plans

ICICI PERSONAL FINANCIAL SERVICES LIMITED:
ICICI Personal Financial Services Limited (ICICI PFS),
formerly ICICI-Credit, was one of the first four companies to
obtain registration as a Non-Banking Financial Company (NBFC)
from the Reserve Bank of India (RBI) on September 10, 1997
under the new section 45IA of the Reserve Bank of India Act,
1934. It is now a focal point for marketing and distribution of all
rental asset products for ICICI, including auto loans, consumer
durable finance and other financial products. The Company has
thus become part of ICICI’s retail strategy aimed at offering a
comprehensive range of products and services to retail
customers. In view of this reorientation of the business, the name
of the Company was changed from ICICI Credit Corporation to
ICICI Personal Financial Services Limited (ICICI PFS) effective
March 22, 1999.

ICICI CAPITAL SERVICES LIMITED:
ICICI Capital Services Ltd. was incorporated in the name
of SCICI Securities Ltd. on September 24, 1994 as a wholly
owned subsidiary of erstwhile SCICI Ltd. With the objective of
providing stock broking services to the institutional clients and
undertaking activities such as underwriting, primary market
placements & distribution industry & company research etc. After
the amalgamation of SCICI with ICICI effective from April 1,
1996, resulting in the change of the name. The company is
mandated, under review by ICICI, to carry out on its behalf the
retail resource raising activities and to provide front office
services related to all retail and semi retail liability products of
ICICI. The company also operates the network of ICICI Centers
being set up by ICICI. As on date the company has set up 91
centers across the country.

ICICI INFOTECH:
ICICI InfoTech is a leading provider of end-to-end IT
solutions. We have an in-depth experience of having worked on
varied technologies with leading corporations worldwide. Our
service portfolio includes the following:
IS & IT Consulting


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Software Design and Development
Enterprise Application Integration
Value Chain Management Solutions (SCM, CRM etc.)
Application Re-engineering and Management
Knowledge Management Solutions
Embedded System Applications
Technology Incubation, IT-enabled Services & IT Outsourcing

ICICI Capital Ltd:
Its products are RBI Bonds, E-invest (ICICI Direct.com),Fixed Deposits, Mutual Funds Bonds,
Demat, Equity IPO

Top 3 Brands of ICICI Bank:

Segment Wise Result FY: 2007-08


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Segment Wise Result FY: 2008-09

After analysing the segment wise break-up of ICICI bank in FY 2007-08 & FY 2008-09, it can
be observed that the major revenue generators for ICICI were ICICI Home finance company
Ltd, ICICI Prudential life insurance (Life insurance) and ICICI Lombard insurance (general
insurance).

1. ICICI Home Finance Company Limited:

ICICI Home Finance Company Limited was incorporated on May 28, 1999 as 100%
subsidiary of ICICI Personal Financial Services Limited (ICICI PFS). ICICI Home Finance
Company Limited, was set up with the objective of providing long term housing loans to
individuals and corporate. The Company was registered on March 30, 2000 with National
Housing Bank (NHB) under National Housing Bank Act, 1987 in terms of Housing Finance
Companies (NHB) Directions, 1989. With effect from May 3, 2002, ICICI Home Finance has
become a 100% subsidiary of ICICI Bank Limited.

ICICI Home Loans are at present available to customers in 150 cities/towns across the
country. Loans are offered for purchase of new homes, purchase of resale homes and home
improvement. Besides, the company also offers loans for commercial property and loans
against existing property. The loans are offered for tenors up to 30 years. The company has


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also introduced several customer friendly services such as 'door-step' service, 'know your
loan on phone' facility and 'ICICI Home Search' - free property brokerage services.

2. ICICI Prudential Life Insurance:

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of
India's foremost financial services companies-and Prudential plc - a leading international
financial services group headquartered in the United Kingdom. Total capital infusion stands at
Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.
ICICI Prudential began its operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). The nation-wide team comprises of
2074 branches (inclusive of 1,116 micro-offices), over 225,000 advisors; and 7
bancassurance partners.

3. ICICI Lombard Insurance:
ICICI Lombard General Insurance Company Limited is a 74:26 joint venture between ICICI
bank limited and the Canada based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank
is India's second largest bank; while Fairfax Financial Holdings is a diversified financial
corporate engaged in general insurance, reinsurance, insurance claims management and
investment management. Lombard Canada Ltd, a group company of Fairfax Financial
Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard
General Insurance Company received regulatory approvals to commence general insurance
business in August 2001.

Positioning of the Key Brands:

Positioning is the act of designing the company's offering and identity (that will create a
planned image) so that they occupy a meaningful and distinct competitive position in the
target customer's minds. Following are positioning parameters:


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Following are the position strategies adopted for the following key brands are:
ICICI Lombard: ICICI Lombard’s strategy of positioning and promoting their brand was very
simple. Since the company had conviction that rural consumers needed better value for their
money and were interested in tangible benefits compared to that of an urban consumer.
So in order to work on their strategy, ICICI Lombard had tied up with dairy companies such as
Hatsun Agro Products Ltd in Chennai and Raja Ram Babu Dairy in Maharashtra to piggyback
on their distribution channels to sell its cattle insurance policies. In addition to that, ICICI
Lombard also had several tie ups with the banks offering the loans for purchasing cattle. So
with the implementation of this strategy, ICICI Lombard was very successful. Now comparing
with positioning parameters, it is quite evident that they imbibed product class and product
user.

ICICI Prudential: Initially it launched a unique triple advantage product LifeStage
Assure that guaranteed a numerous advantages to the consumers on the premium
without any risk of downside. In addition to that it included the benefit of a lifecycle
based portfolio strategy that allocates the investors money across various asset
classes based on his life stage and risk appetite. Also few other features included the
option of cover continuance, which ensures continuance of life insurance cover, even in
a as of break in premium payment.
Speaking on launch, Mr. Bhargav Dasgupta, Executive Director, ICICI Prudential Life
Insurance, said, ''With the continuous volatility in the equity markets, the retail investor
is averse towards investing in the markets. However, to reap the benefit of the situation
they had assured the guaranteed returns on the first year premium.

Initially as part of the strategy, ICICI Pru focused on creating a strong brand identity and
awareness and designed the marketing communication strategy accordingly. Later on it
completely changed the communications strategy and began to promote specific products
from its product portfolio based on the consumer research study. One of the promotional
objectives designed was to create a feel good factor around retirement and change
customers’ perception of retirement as a mark of old age and loss of financial


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independence. Now comparing with positioning parameters, it is quite evident that they
imbibed attributes and benefits along with product user.

ICICI Home insurance: Following were the benefits provided by ICICI under home finance:
The new home loan rates also offer an opportunity of even higher savings for people holding
high cost loans that they may have taken over the last 4-5 years.
ICICI s Balance Transfer product allows a person with an existing loan to transfer to the ICICI
Home Loan in an extremely convenient way.
ICICI Home Finance finances both the prepayment charges on the old loan as well as the
processing fee for the new loan. In addition, the company has introduced several customer
friendly services such as door-step service; know your loan on phone facility, free personal
accident insurance
So based on the above benefits its quite clear that they used product class and price as the
positioning parameters before positioning their product.
The above three products can be mapped to the BCG matrix as shown below:

Boston Consultancy Group (BCG) Matrix:

Following are the features of the following characteristics:
1. Stars which imply high growth, high market share
2. Cash Cows which imply low growth, high market share
3. Dogs which imply low growth, low market share
4. Question Marks which imply high growth, low market share

Based on the above characteristics, ICICI brands can be categorized as following:
ICICI Prudential:

Since the company was established with the collaboration between ICICI Bank and Prudential
plc which helped to increase their profit. It can be stated that it follows under CASH FLOWS.
Also since the growth was at the rapid space along with the high market share it is also
categorized under STAR.
ICICI Lombard:
The company was established with the collaboration between ICICI bank and Fairfax
Financial holding, it can be stated it falls under the category of CASH FLOWS. Also since the


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growth was at the rapid space along with the high market share it is also categorized under
STAR.
ICICI Home Finance:
Since the company, had large amount of cash for inflow and outflow, in addition to the
balance sheet, it falls under category of STAR.

Competitors and the differentiation of each Brand based on positioning:

The approach to this segment of report is done the following way:

For Prudential an external approach of being different towards their customer and processes
have been highlighted which highlights how they were different and position themselves.

For Lombard the internal processes and people was covered so that it puts light on how they
created and built themselves into a brand to differentiate themselves from existing competitors

A generic approach for Home finance has been exhibited

1. ICICI Prudential:

Porter’s five competitive forces:
Threat of Intense Segment Rivalry: Because of immense potential in this sector, intense
competition exists in this sector. Major competitors are LIC, Bajaj Alliance, HDFC, Franklin
Templeton, Reliance, UTI etc.
Threat of new entrants: Entry barrier is high especially due to government regulations and
exist barrier is low due to which new firms can enter into the industry and poor-performing
firms can easily exit.
Threat of substitute Product: Threat exists from substitutes, specifically from well established
competitors like LIC.
Threat of Buyer’s growing Bargaining Power: The buyer’s switching cost is low in the financial
investment sector which offers them more bargaining power.
Threat of Suppliers Growing Powers: In this segment, the suppliers bargaining power is more,
because banks and CA are the easiest and the important channel to reach the client and for
that reason they have the strong bargaining power.


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ICICI Lombard:

At the turn of the century, the explosive growth of the BFSI segment compelled ICICI Lombard
to look into ways of fending off the increasing competition. Customers were demanding lower
rates and with an increase in demand, the industry had to respond with solutions that would
allow them to sustain margins without losing customers. To combat this challenge, ICICI
Lombard decided to adopt an e-procurement solution.

In addition to the increased competition, a complex network and vast geographical presence
made it difficult for ICICI Lombard to keep it’s spend under control. The organization attributed
nearly 80 percent of its spend to complex indirect expenses like IT, marketing, printing and
stationery and infrastructure and it needed a way to streamline purchasing practices across
varied categories, as well as manage suppliers more efficiently.

The Solutions ICICI Lombard began to evaluate options to regulate spend and build efficiency
within the organization. The organization chose Ariba to implement it’s spend management
solution, as the team had heard of Ariba’s success with others in their industry and
determined that the company’s industry knowledge would be beneficial.
Ariba’s use of reverse auction negotiation, backed with a robust sourcing methodology that
could help sustain initiatives across an organization and numerous spend categories, was
another reason ICICI Lombard chose to begin their spend management journey with Ariba.
The other key differentiator was the user-friendly interface, which allowed ICICI Lombard to
seamlessly transition from a paper to online organization to a great extent.


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ICICI Lombard began its partnership with Ariba in June of 2005, and implemented the solution
in two phases. Ariba Sourcing Execution Services were initially deployed to address two large
spend areas, print and infrastructure. The objective was to target high savings and establish a
proven sourcing process within ICICI Lombard. Ariba Sourcing™ - Basic was then deployed
across all departments—including multiple vendors across different locations—to help them to
leverage a larger supplier base, reduce overheads and increase its bottom line.

“The deployment of Ariba Sourcing – across branches helped ICICI Lombard make e-sourcing
a way of life,” To ensure that e-sourcing would be adhered to, ICICI Lombard provided
extensive training to its purchasing personnel and suppliers.

The Benefits- Ariba solution enabled ICICI Lombard to automate its key spend processes in a
single integrated manner. The team now has the transparency, visibility and operational
compliance required to successfully manage and leverage it’s spend. ICICI Lombard began
it’s spend management journey by gaining significant success through Ariba’s category
expertise before gradually focusing on spend penetration. The company has achieved
average savings of 15 percent on projects associated with categories such as interiors, IT and
services. The second year of the engagement with Ariba was focused on addressing complex
categories of services and marketing promotion.

Significant amounts of time are now saved when dealing with negotiations with multiple
vendors. Within just nine months of implementation, ICICI Lombard achieved the targeted
return on its investment.

The results have been very impressive thus far, and ICICI Lombard is now considering using
e-sourcing for all possible spend areas to achieve spend penetration. The team first plans to
roll it out to more locations and to train additional buyers. Currently the de-facto tool for all
sourcing done by its administrative, HR and marketing

2. ICICI Home Finance Ltd.

With the home financing how is ICICI home finance is holding its hand out in the crowd to
ensure visibility.

Their main focus apart from distribution channels is to position itself in the minds of the
customer, so that whenever one is vouching out to buy a house, he /she first thinks about
ICICI home finance.

The products of all the competition has been almost the same but they have focused on the
following Distinctiveness, Relevance, Memorability, Extendibility, Depth of meaning. With a
depth of brand audits and understanding the present brand knowledge the consumer has,
they have able to reach the customer and customer to them whenever a prospect arrived.
With the economy showing its trends off late and in the near future they have been spending
quiet a lot in R&D in understanding their customers, what they want? Why they want? How
they want? And thus building a competitive advantage by differentiating themselves than the


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other by tuning their processes and by being quick in reaching and catering the customer A-Z.
By implementing the best processes in their sister concerns they have been nimble footed in
getting the right things done for them as well for the customer.

They have been focusing on capturing the mind of the customer by offering him solutions
wherever a customer might think can face a problem. As per their research a typical customer
though aware of things is not aware of lot many things in getting his work done, the biggest is
the paper work and then the agreements and legal procedures involved, and this takes a lot of
time in for the other competitors to woo them away, now they approached this issue by being
a solution provider by being with the customer and getting his formalities done and to convert
them as one of their clients and this process has to be quick. Though others also have a
similar approach, but the way one does differentiates himself, and the trick of the trade is
transparency and quickness.

Key Marketing communication & its evolution:

ICICI Bank was the first bank in India to choose main line advertising medium to reach out to
the masses, as it wanted to position itself as a retail banking behemoth. Besides choosing
both print and electronic medium for marketing communication it undertook various direct and
outdoor selling initiatives.

In electronic medium it carried out various advertisements few of them featuring Bollywood
stars such as Amitabh Bachchan and Shahrukh Khan. It is very active in print medium as well;
it carries marketing campaign on a regular basis promoting its products and offers.

Advertisement featuring Amitabh Bachchan

A study conducted showed that none than 90% of the respondents could recall having seen
the ICICI ad. No other bank ads received a mention over 10%. This is particularly interesting
in view of other banks also having continued their ad campaigns during the period.


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More than 85% of those sampled could recall Amitabh Bachchan as the ‘brand ambassador’
for ICICI. Further, most of the respondents were positively inclined to the use of Mr. Bachchan
as they felt his personality and popularity was boon to the image of ICICI. He was perceived
to be effective, competent and trustworthy in communicating to the consumer about loan
facilities being offered by ICICI Bank.

The success of the celebrity endorsement is further boosted by the claim of more than one-
fourth of the respondents that in future they would approach ICICI Bank first for such loan
facilities like car loan, house loan or other personal loans.

HUM HAI NA ..
Year 2005, this advertisement sung Hum Hai Na in a backdrop of a soft and catchy tune, it
featured Shahrukh Khan, and he brought energy to the brand. It is perhaps the most effective
marketing campaigns ICICI ever did. This advertisement created a further strong brand value.
Hum hai na even today is banks favorite slogan among all.

Surviving Rumors
In the year 2008 ICICI Bank was surrounded with rumors of going bust due to its exposure in
subprime crisis. Depositors lined up across India at ICICI’s ATM to withdraw their deposits.
Their share value had taken a hit at the stock market, losing 14% on a single day. Their image
was tarnished. Customer confidence was at the lowest.

Therefore in order to uplift its image it designed a marketing campaign (Print). It was a great
success in winning back its lost position. Large hoarding were put up across the country which
read”Vishwas Jagata hai sab kuch”.

Co-Branding
One of its co-branding exercises includes.

IRCTC in conjunction with ICICI bank announced the launch of mobile payments and ticketing
system, offering IRCTC customers to book railway tickets via sms and make payments
through their bank accounts.

Outdoor Marketing
One of its outdoor marketing activities includes.


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Tie-up with multinationals for salary accounts for their employees. The process will give ICICI
bank with data base. This database is suspects which it converts into prospects for any of
their products.

Rural Marketing
None of the earlier advertisements considered rural customers as a target. However with the
success of its “Kamdhenu Cattle Loan Campaign” and “Talkies on the Move Campaign” which
won them two awards at the WOW event and Experiential marketing awards 2009. ICICI bank
now is diverting its focus to the Indian Rural segment.

Road Ahead For ICICI Bank in the next five years
This is, perhaps, one of the most difficult times for the banks, and ICICI is no exception. On
May 1 2009, Chanda Kochhar took over as the MD and CEO of the ICICI Bank. She is a Cost
Accountant who also holds a degree from Jamnalal Bajaj Institute of Management Studies.
This has helped the ICICI bank to a certain extent. Strangely enough, she takes over at a time
when the going is not all that great for ICICI Bank. The global liquidity situation has been tight
and the bank is facing a challenging environment. The Road Ahead for ICICI in such a
scenario is not going to be easy. At a point of time, the finance ministry and the management
of ICICI Bank had to reassure people that all was well with the bank.

The Challenges:

1. The growth in the balance sheet has come to a complete halt compared to a 40%
average annual growth it posted in the period from 2005-08. The size of bank’s balance
sheet declined by 5.1% in FY 2009. In the days of the economic boom, the bank’s
growth was fuelled by an unprecedented growth in retail loans. In fact, even at the end
of FY 2009, retail loans constituted 49% of its total loan book – the highest for any bank
in India. As the slowdown started making its presence felt in the Indian economy, the
retail loan segment became rather risky. Interestingly, what had made the bank is
today causing it a great deal of concern.
2. The bank’s net NPA jumped from 1.55% of its net advances at the end of March 08 to
2.09% at the end of March 09. At current levels, it has the highest NPAs, in percentage
terms, across large banks in the country.

Immediate Concerns:
1. Tackle the Slowdown: - Reducing the operational cost and building trust is going to be
a key ingredient for any bank to sustain.
2. Improve Share of Current and Saving Account: - These deposits attract lower interest
rates reducing the cost of deposits.


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3. Keeping talent with them: - There is a dearth of talented and experienced people in
every industry. With number of banks growing day by day it is highly important for any
bank to be able to keep rare talent with them. Banks like Yes Bank have come up with
customised offers for talented people and ICICI will have to act immediately.

RECOMMENDATIONS

1. A Major revamp of its Customer care: A complete over hauling of its customer care
department is required so as to reduce complaints of customer in turn which may affect
its working.

2. Penetration into Rural Market with E – Commerce Facility:
Though it is one of the strategies of ICICI Bank to enter deeply into rural sector, but this
step has to be taken up seriously and as soon as possible so as to tap the market the
rural market easily and these services should be well equipped with E – Commerce
features mainly like Tele – banking and ATM’s etc.
3. Introduction of Smart Cards for New as well as Old Credit Card Holders:
ICICI Bank should come up with the concept of smart cards where the data regarding
all the accounts, debit cards and credit card of individual customer is placed in a single
card reducing the burden of carrying all credit cards & other necessary items required
for banking transaction.
4. Concentrate on Building Brand Image:
ICICI Bank is very well known institution for investing purposes and as well as for its
practices involving anti – social elements; thereby affecting name and Brand value of
its self and also of ICICI group as a whole. ICICI needs to improve on this front & make
a better positive image of itself by maintaining a good conduct.
5. Formulation of a Win - Win Situation to reduce Non Performing Assets:
It has become a necessity for ICICI Bank to reduce its NPA’s which have risen
tremendously after the merger with ICICI Limited.
6. Completely separation of other alike Businesses like Insurance, Mutual Funds etc: It is
usually seen that the ICICI Bank branches are overcrowded with staff though they don’t
belong to that branch or do not even belong to the ICICI Bank, they usually are the
agents of its other businesses like Insurance, Mutual funds etc – this annoys the
customer and creates a bad impression. This overcrowding of bank branches needs to
be avoided in order to better serve the customer.
7. Major re-look at working of their Agents:
The easiest way to reach to customers is through agents; and the agents of ICICI Bank
are highly skilled in this field but they do it at the cost of customer’s innocence. There
are many incidences where in the information provided by the agents is false. It’s time
for ICICI Bank to look into the matter and rework on its agents policies.
8. Reduction of Penalty Fees & Special Service Fees.:
The penalties & special service imposed by ICICI Bank is very high as compared to
public sector banks; this sometimes adds a negative perspective to ICICI Bank. ICICI
needs to reduce these penalties.


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How ICICI can differentiate from others:
1. One Stop Shop: Banks should develop themselves on the model of one stop shop like
Malls. All the financial needs of a customer should be addressed at one place in quick
time. Each floor or section should cater to a specific segment. This would reduce the
response time taken by banks and improve their service.
2. Place and time mobility: Banks should also look at occupying spaces in Malls and
opening up of kiosks at various functions. The time of operations should also be
flexible.
3. Widening Loan Portfolio: Providing loans for cosmetic surgeries and other beauty
enhancements can attract high end customers.
4. Reverse Mortgage: A concept that is yet to arrive in India. Banks should start looking at
this also.
5. Cyber Cafes and Coffee Shops: Opening up of Cyber Cafes and Coffee shops where
waiting time can be properly utilized can be a good idea and added source of business.

Sources:
CK Prahalad
www.icicidirect.com
www.icicibank.com
Financial Report of 2008-2009 ICICI Group


Icici bank final report

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