Annexure-I

RESEARCH PROJECT REPORT

On

MICRO & MACRO AND CAMEL ANALYSIS

OF ICICI BANK

Submitted to
Asian Business School, Noida
In partial fulfillment for the award of Full time

Post Graduate Diploma in Management (PGDM)

(Approved by AICTE, Ministry of HRD, Govt. of India)

Submitted to: Submitted by:

Mrs. Bushra Mohit Jain
(Faculty Guide) ABS/PGDM/JULY18/073
Asian Business School Batch: 2018-2020

Asian Business School (ABS) A2, Sector – 125, Noida

Website: www.abs.edu.in
Annexure-II
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 CERTIFICATE

This is to certify that the project report titled MICRO & MACRO AND CAMEL

ANALYSIS OF ICICI BANK is submitted to Asian Business School, in partial fulfillment

of the requirements for the award of the Post Graduate Diploma in Management, and is an

original work by Mohit Jain (ABS/PGDM/JULY18/073). The project has been done under

my supervision & guidance and the project has not formed the basis for the award of any

degree / diploma or other similar title to any candidate.

SIGNATURE SIGNATURE
Internal Examiner External Examiner

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Annexure-III

DECLARATION

I hereby declare that the project report titled MICRO & MACRO AND CAMEL ANALYSIS

OF ICICI BANK is original piece of research work carried out by me under the guidance and

supervision of Mrs. Bushra. The information has been collected from genuine & authentic

sources. The work has been submitted in partial fulfillment of Post Graduate Diploma in

Management of Asian Business School.

Mohit Jain

Date:

Place: Asian Business School, Noida

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 ACKNOWLEDGEMENT

First of all, I wish to express my gratitude to the almighty for giving me the strength to

present the Research Project Report on MICRO & MACRO AND CAMEL ANALYSIS OF

ICICI BANK and complete the report within the stipulated time. Many lives & destinies are

destroyed due to the lack of proper guidance, directions & opportunities. It is in this respect I

feel that I am in much better condition today due to continuous process of motivation & focus

provided by my parents & teachers in general. The process of completion of this project was

a tedious job & requires care & support at all stages. I would like to highlight the role played

by individuals towards this.

I am deeply indebted to my Faculty Advisor Mrs. Bushra, Assistant Professor, Asian

Business School for her whole-hearted supervision, valuable guidance and encouragement at

every step of preparing this report.

I would also like to thank my lecturers, faculty members and all those persons who have

directly or indirectly helped me in providing the books and amenities which have helped in

development of this report, without such help this report would not have been possible. I am

thankful to my parents, friends and all well-wishers for blessing me for my success.

MOHIT JAIN
Batch: 2018-2020

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 EXECUTIVE SUMMARY

Banking system occupies an important place in nation's economy. A banking institution is

indispensable in a modern society. It plays a pivotal role in the economic development of a

country. Thus, economic development of a country depends upon success of banking industry

and success of banking Industry is determined to a large extent by now well then needs of its

customers have been understood and satisfied.

Shortage of employable talent is a challenge faced by the Indian IT industry. There is a rising

demand for capable IT professionals but, a scarcity of this talent pool. While the number of

engineers graduating each year has grown substantially, as per a NASSCOM Report, only

about 20% of them are employable. The need of the hour is to improve supply of productive

fresh professionals. To address this growing need, Nucleus School of Banking Technology

(NSBT) was launched in the year 2010-11, with a goal to provide World Class training.

NSBT offerings are targeted at developing professionals in the area of Banking Technology

NSBT education is about laying the foundation to build long and successful career which is

achieved through experiential learning and specifically created opportunities. As a corporate

trainer, NSBT focuses on role based development programs to Banking Technology

Professionals. It covers the below mentioned topics:

 Lending Business

 Borrowing business

Making use of analysis for effective execution using secondary data from different journals,

websites, and surveys to get to objectives, results, and limitations.

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 TABLES OF CONTENTS

S. No. Title Page No.

1 Chapter-1 Introduction

2 Chapter-2 Literature Review

3 Chapter-3 Research Methodology

4 Chapter-4 Data Analysis and Presentation

5 Chapter-5 Findings and Learning Outcomes

6 Bibliography

7 Appendices

List of Figures and Tables

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S. No. Title Page No.
1

10

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 Chapter- 1
INTRODUCTION

1.1 INTRODUCTION

The history of banking begins with the first prototype banks of merchants of the ancient

world, which made grain loans to farmers and traders who carried goods between cities. This
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began around 2000 BC in Assyria and Babylonia. Later, in ancient Greece and during

the Roman Empire, lenders based in temples made loans and added two important

innovations: they accepted deposits and changed. Archaeology from this period in ancient

China and India also shows evidence of money lending activity. Banking, in the modern

sense of the word, can be traced to medieval and early Renaissance Italy, to the rich cities in

the north such as Florence, Venice and Genoa.

The development of banking spread from northern Italy throughout the Holy Roman Empire,

and in the 15th and 16th century to northern Europe. This was followed by a number of

important innovations that took place in Amsterdam during the Dutch Republic in the 17th

century, and in London in the 18th century. During the 20th century, developments in

telecommunications and computing caused major changes to banks' operations and let banks

dramatically increase in size and geographic spread. The financial crisis of 2007–2008 caused

many bank failures, including some of the world's largest banks, and provoked much debate

about bank regulation.

1.2 HISTORY OF INDIAN BANKING

The English traders that came to India in the 17th century could not make much use of the

indigenous bankers, owing to their ignorance of the language as well the inexperience

indigenous people of the European trade. Therefore, the English Agency 

Houses in Calcutta and Bombay began to conduct banking business, besides their

commercial business, based on unlimited liability. The Europeans with aptitude of

commercial pursuit, who resigned from civil and military, organized these agency houses.

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A type of business organization recognizable as managing agency took form in a

period from 1834 to 1847.The primary concern of these agency houses was trade, but

they branched out into banking as aside line to facilitate the operations of their main business.

The English agency houses, that began to serve as bankers to the East India Company had no

capital of their own, and depended on deposits for their funds. They Financed movements

of crops, issued paper money and established joint stock banks. Earliest of these was

HINDUSTAN BANK established by one of the agency houses in Calcutta in 1770.Banking

in India originated in the last decades of the 18th century. The first bank in India, though

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conservative, was established in 1786 in Calcutta by the name of bank of Bengal. Indian

banking system, over the years has gone through various phases.

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

though conservative, was established in 1786 in Calcutta by the name of bank of Bengal.

Indian banking system, over the years has gone through various phases. For ease of study

and understanding it can be broken into four phases-

1. EARLY PHASE (1786 to 1935)

2. PRE NATIONALISATION (1935 to 1969)

3. POST NATIONAISATION (1969 to 1990)

4. MODERN PHASE (1990 till date )

Early Phase (1786 to 1935)

Banking in India originated in the last decades of the 18thcentury. The first banks were The

General Bank of India, which started in 1786, and the Bank of Hindustan, both of which are

now defunct. The oldest bank in existence in India is the State Bank of India, which

originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank

of Bengal. This was one of the three presidency banks, the other two being the Bank of

Bombay and the Bank of Madras, all three of which were established under charters from the

British East India Company for many years the Presidency banks acted as quasi-central

banks, as did their successors. The East India Company established Bank of Bengal, Bank of

Bombay and Bank of Madras as independent units and called it Presidency Banks. The three

banks merged in 1925 to form the Imperial Bank of India, which, upon India's independence,

became the State Bank of India. Foreign banks too started to arrive, particularly in Calcutta,

in the 1860s.

NAME OF BANK YEAR OF START

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 Bank of Bengal 1809
Bank of Bombay 1840
Bank  of  Madras 1863
Allahabad Bank 1865
Punjab National Bank Ltd. 1894
Canara Bank 1906
Indian Bank 1907
Bank of Baroda 1908
Central Bank of India 1911
Bank of Mysore 1913
Union Bank of India 1922

Pre Nationalization Phase (1935 to 1969)

Organized banking in India is more than two centuries old. Until 1935 all, the banks were in

private sector and were set up by individuals and/or industrial houses, which collected

deposits from individuals and used them for their own purposes. In the absence of any

regulatory framework, these private owners of banks were at liberty to use the funds in any

manner, they deemed appropriate and resultantly, the bank failures were frequent. For many

years the Presidency banks acted as quasi-central banks as did their successors. Bank of

Bengal, Bank of Bombay and Bank of Madras merged in 1925 to form the Imperial Bank of

India, which, upon India’s independence, became the state Bank of India. Even though

consolidation in banking was building trust among the investors but a central regulatory,

authority was much needed. British Government in India passed many trade and commerce

laws but acted little on regulating the banking industry.

Reserve Bank of India

The Reserve Bank of India was set up on the recommendations Royal Commission on Indian

Currency and Finance also known as the Hilton-Young Commission. The commission

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submitted its report in the year 1926, though the bank was not set up for nine years. Reserve

Bank of India (RBI) was created with the central task of maintaining monetary stability in

India. The Government on December 20, 1934 issued a notification and on January 14, 1935,

the RBI came into existence, though it was formally inaugurated only on April 1, 1935.

Main functions of RBI were 

1. Regulate the issue of banknotes.

2. Maintain reserves with a view to securing monetary stability and

3. To operate the credit and currency system of the country to its advantage

The Bank began its operations by taking over from the Government the functions so far being

performed by the Controller of Currency and from the Imperial Bank of India. Offices of the

Banking Department were established in Calcutta, Bombay, Madras, Delhi and Rangoon.

Burma (Myanmar) seceded from the Indian Union in 1937 but the Reserve Bank continued to

act as the Central Bank for Burma until Japanese Occupation of Burma and later unto April

1947. After the partition of India, the Reserve Bank served as the central bank of Pakistan up

to June 1948 when the State Bank of Pakistan commenced operations.

Post Nationalization Phase (1969 to 1990)

Nationalization of banks in India was an important phenomenon. On july19, 1969 - the

erstwhile government of India nationalized 14 major private banks. Nationalization of bank

in India was not new or happening first time. From 1955 to 1960, State Bank of India and

other seven subsidiaries were nationalized under the SBI Act of 1955.

List of Nationalized Banks in 1969

1.Central Bank of India 8.Indian Overseas Bank
2.Bank of Maharashtra 9.Bank of Baroda

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3.Dena Bank 10.Union Bank
4.Punjab National Bank 11.Allahabad Bank
5.Syndicate Bank 12.United Bank of India
6.Canara Bank 13.UCO Bank 
7.Indian Bank 14.Bank of India

It was not a step taken at random or because of the whims of the leadership of the time, but

reflected process of struggle and political change which had made this an important demand

of the people. Nationalization took place in two phases, with a first round in 1969 covering

14 banks followed by another in 1980 covering seven banks. Currently there are 27

nationalized commercial banks.

Reasons for Nationalization

1. The need for the nationalization was felt mainly because private commercial banks were

not fulfilling the social and developmental goals of banking, which are so essential for

any industrializing country. Despite the enactment of the Banking Regulation Act in 1949

and the nationalization of the largest bank, the State Bank of India, in 1955, the expansion

of commercial banking had largely excluded rural areas and small-scale borrowers.

2. The stated purpose of bank nationalization was to ensure that credit allocation occur in

accordance with plan priorities.

3. Reduce the hold of moneylenders and make more funds available for agricultural

development. Nationalization of bank was to actively involve in poverty alleviation and

employment generation programs.

Modern Phase from 1991 till date

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This is the phase of “New Generation” tech-savvy banks. This phase can be called as “The

Reforms Phase”. Starting of the modern and current phase of Indian Banking is marked by

two important events.

Narasimhan Committee

The Committee on Banking Sector Reforms Committee headed by Mr. M. Narasimhan, it is

also known as Narasimhan Committee. The Committee, headed by former Reserve Bank of

India governor M Narasimhan, was appointed by the United Front government to review the

progress in banking sector reforms. The committee submitted its recommendations to union

Finance Minister Yashwant Sinha in November of 1991.The Committee was required to

review the progress in the reforms in the banking sector over the past six years with and to

chart a programme on Financial Sector Reforms necessary to strengthen the India’s financial

system and make it internationally competitive taking into account the vast changes in the

international and financial markets, technical advances. Some of the recommendations

offered by the committee are:

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1. A reduction, phased over five years in the Statutory Liquidity Ratio (SLR) to 25 percent,

synchronized with the planned contraction in Fiscal Deficit.

2. A progressive reduction in the Cash Reserve Ratio (CRR).

3. Gradual deregulation of interest rates.

4. All banks to attain Capital Adequacy 8% in a phased manner.

5. Banks to make substantial provisions for bad and doubtful debts.

6. Profitable and reputed banks are permitted to raise capital from the public.

7. Instituting an Assets Reconstruction Fund to which the bad and doubtful debts of banks

and Financial Institutions could be transferred at a discount.

8. Facilitating the establishment of new private banks, subject to RBI norms.

1.3 TERMS AND FINANCIAL STATEMENTS OF BANK

Assets

Current Assets / Liquid Assets

 Cash and cash due from Central Bank; cash on deposit in postal banking accounts;

Due from Banks; Interest-bearing deposits in other banks

 Cash held in trust: may be on the behalf of a third party or the result of a

merger/acquisition and may have restrictions encumbering its usage.

 Fed Funds Sold: Federal funds, or fed funds, are unsecured loans of reserve balances

at Federal Reserve Banks that depository institutions make to one another. Banks

keep reserve balances at the Federal Reserve Banks to meet their reserve requirements

and to clear financial transactions. Transactions in the fed funds market enable

depository institutions with reserve balances in excess of reserve requirements to lend

them, or sell? As it is called by market participants, to institutions with reserve

deficiencies. Fed Funds are sold daily to various financial institutions (commercial
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 banks, thrift institutions, agencies and branches of foreign banks in the United States,

federal agencies, and government securities dealers) throughout the United States.

The most common duration or term for fed funds transaction is overnight, though

longer-term deals are arranged. The rate at which these transactions occur is called the

fed funds rate.

Most overnight loans are booked without a contract. The borrowing and lending

institutions exchange verbal agreements based on various considerations, particularly

their experience in doing business together, and limit the size of transactions to

established credit lines in order to minimize the lender's exposure to default risk. 

Overnight fed funds transactions under a continuing contract are renewed

automatically until termination by either the lender or the borrower. This type of

agreement is used most frequently by correspondent banks that borrow overnight fed

funds from a respondent bank.

 Due From Banks: demand and time deposits with other banks (does not include

loans to banks that may be termed time deposits due from banks) and although there

is a slight element of risk involved, it is still considered cash.

 Negotiable Certificates of Deposit, which should be stated at the lower of cost or net

realizable value.

 Marketable Securities: U.S. Treasury and other U.S. government agencies, States

and political subdivisions, exchange listed (publicly traded) securities such as

corporate bonds equities, Asset-backed securities Mortgage-backed securities. This

account is also sometimes known as Securities Available-for-Sale (amortized; price

movements in these securities are dependent upon the movement in market interest

rate).

Loans less than one year

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  Advances to customers

 Accounts receivable – trade

 Securities held under Reverse Repurchase Agreements: the financial institution

"lent" out cash and took securities at a discounted value as security, which are

recorded as receivables.

Loans or Receivables (of various maturities in excess of one year) will represent one of the

main business activities of the bank and may account for the largest percentage of total assets.

A loan is an extension of credit resulting from direct negotiations between a lender and a

borrower. Loans may be held until maturity, may be sold in whole or a portion to third

parties, and may also be obtained through purchase in whole or in portion from third parties.

 What is in the portfolio? Corporate / commercial loans (secured / unsecured, fixed-

term / revolving)? Construction loans (this is one of the riskiest types of loan),

Commercial lease financing, Mortgages (residential or commercial), secured loans,

loans to public authorities, consumer loans such as credit card, home equity and

personal loans; consumer lease financing?

 Collateralized loans mean that the grantor has in its possession (or a fiduciary,

administrator, trustee) readily marketable or highly liquid instruments (cash, CDs,

stocks and bonds). Sufficient margin on collateralized credits should also be provided

(due to interest rate and market sensitivity).

 Secured loans are secured by assets that are not readily marketable and/or under the

control of the recipient of the loan (UCC filings on receivables, pledges of inventory,

equipment, assignment of real estate mortgages or rents, contracts). Pledge of

inventory and real estate should be adequately insured and in the name the Grantor.

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  Loans secured by real estate are loans predicated upon a security interest in real

property. A loan predicated upon a security interest in real property is a loan secured

wholly or substantially by a lien on real property for which the lien is central to the

extension of the credit

 Shown net of Allowance of Losses (the reserve set aside that represents an amount

considered by management to be adequate to cover estimated losses in the loan

portfolio).

 Derivative Contracts for managing (positioning or hedging) exposure to market risk

(including interest rate risk and foreign exchange risk), cash flow risk, and other risks

in operations and for trading. The accounting and reporting standards for derivative

instruments, including certain derivative instruments embedded in other contracts, and

for hedging activities are set forth in FASB Statement No. 133, "Accounting for

Derivative Instruments and Hedging Activities," as amended. Statement No. 133

requires all derivatives to be recognized at their fair value.

 Mortgage Servicing Rights (MSRs): Many banks that originate primary residential

mortgages and then sell them into the secondary market retain the servicing rights of

the mortgage. This means that for a fee the bank collects the monthly payment from

the mortgagee and passes on the principal and interest components of the payment to

the trust that owns the mortgage and then also makes the insurance and real estate tax

payments from the escrow account that is maintained.

Fixed Assets

 Leasehold and freehold land and buildings (at historical cost or at revised market

value at time of statements, less depreciation and amortization).

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  Tangible fixed assets: fixtures, equipment, motor vehicles (depreciated or

amortized).Investments

 Brady bonds (should not be carried at a value not exceeding their secondary market

value).

 Investments in subsidiaries.

Other Assets

 Bank-Owned Life Insurance

Other real estate owned ("OREO")

 Foreclosed property held by the bank.

 Deferred Taxes

Liabilities

Current Liabilities

 Due to customers (on sight or time deposits) / Deposits: Savings accounts, regular

checking accounts, NOW accounts, money market deposit accounts, CDs.

 Core Deposits consist of all interest-bearing and noninterest-bearing deposits, except

certificates of deposit over $100,000. They include checking interest deposits, money

market deposit accounts, time and other savings, plus demand deposits.

 Brokered Deposits represent funds which the bank obtains, directly or indirectly, by

or through any deposit broker for deposit into one or more deposit accounts. Thus,

brokered deposits include both those in which the entire beneficial interest in a given

bank deposit account or instrument is held by a single depositor and those in which

the deposit broker sells participations in a given bank deposit account or instrument to

one or more investors. Fully insured brokered deposits are brokered deposits that are

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 issued in denominations of $100,000 or less or that are issued in denominations

greater than $100,000 and participated out by the deposit broker in shares of $100,000

or less.

 Commercial Paper consists of short-term negotiable promissory notes issued in the

United States, which rollover every 30 to 270 days and are usually not collateralized.

 Short-term borrowings are usually from banks, securities dealers, the Federal Home

Loan Bank, unsecured federal funds borrowings, which generally mature daily.

 Fed Funds Purchased are short-term, unsecured borrowings.

 Advances from a Federal Home Loan Bank are fully collateralized by loans on the

bank's asset-side of the balance sheet.

 Dividend payable (preferred stock dividend in arrears)

 Derivative Contracts for managing (positioning or hedging) exposure to market risk

(including interest rate risk and foreign exchange risk), cash flow risk, and other risks

in operations and for trading. The accounting and reporting standards for derivative

instruments, including certain derivative instruments embedded in other contracts, and

for hedging activities are set forth in FASB Statement No. 133, "Accounting for

Derivative Instruments and Hedging Activities," as amended. Statement No. 133

requires all derivatives to be recognized at their fair value.

Long-Term Liabilities

 Mortgages payable, which may have been incurred for commercial property where

either the headquarters, offices or branches of the bank are located.

 Covered Bonds, which is bank debt backed by a pool of pledged, secured, qualifying

collateral, usually bank loans. However, principal amortization and interest is usually

satisfied by the cash flow of the bank, not the cash flow of the assets in the cover

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 pool. The cover pool is usually structured to allow a revolving schedule of similar

quality loans to be added to / withdrawn from the pool. The purchaser of the bond

usually also has full recourse to the financial institution if the collateral assets in the

pool are insufficient to redeem the principal and full interest of the bond (however,

any claim will rank pari passu with all other senior unsecured creditors). The covered

bond remains an on-balance sheet obligation of the financial institution. 

 Contingent Core Tier 1 Capital / CoCos is debt that will automatically convert into

equity shares of the bank if the bank's core capital ratio declines below a specific

level.

 Accrued/deferred taxes

Stockholder's Equity / Share Capital

 Common shares (authorized and outstanding). Is there a tier system of voting shares

and common shares?

Why is it a poor decision for banks to buy back shares on the open market in order to increase

the market price of the common equity? Because corporate stock purchases actually reduce

capital (instead of increasing retained earnings). Why is it an even worse decision of taking

on debt to buy back shares on the open market? Because the bank is actually increasing

leverage while it is simultaneously reducing capital.

 Preferred shares (restrictions?). Preferred stock is a form of ownership interest in a

bank or other company which entitles its holders to some preference or priority over

the owners of common stock, usually with respect to dividends or asset distributions

in a liquidation.

 Some trust related preferred securities may have equity characteristics and are treated

favourably under Tier 1 guidelines; and may have lower interest costs. The
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 instruments are deeply subordinated (just ahead of common stock) and have long

maturities although they may have call provisions. Dividend payments may have

some favourable tax treatment for the issuers. However, these securities generally

have debt-like characteristics. The bank is unlikely to defer dividend payments due to

the message it may send to other sources of funding.

 Retained Earnings: equity will increase if retained earnings are increasing.

 Subordinated, perpetual notes

 Trust Preferred Securities / TruPS. TruPS were approved by the Federal Reserve in

1996 as Tier 1 capital (maximum 25.0% of tier 1 capital). The Trust issuer is usually a

wholly-owned subsidiary of a bank holding company, or a direct subsidiary of the

bank. The Trust sells securities to investors and then uses the proceeds from the sale

to purchase subordinated debentures of the parent holding company or bank.

Clarifying the value of Stockholder's Equity. Equity invested into any type of financial

institution is an accounting entry. It is not a situation where there is a separate account where

segregated cash and assets are held independently for an emergency of what is indicated on

the balance. Rather, equity is utilized to purchase / invest in assets from which the financial

institution can generate revenue. Thus, the value of Equity is only as good as the quality of

the Assets that have been purchased.

Income Statement

Income

 Interest income (gross or net?): is adversely affected by falling long and short-term

interest rates.

Interest expenses

 Subtracted from Interest Income Only

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  The cost of funds the company borrows on a short- and long-term basis, buys in the

money markets, or takes in from depositors. Competition for customer funding will

increase interest expense, placing pressure on margins. Some banks and financial

services companies will also break out the average annual interest rate paid on the

various sources of funds.

Non-interest Income

 It is important that banks develop/increase revenues derived from non-interest sources

(bank services, fees such service charges on deposits, trust income, mortgage

servicing fees, securities processing and brokerage services, results of trading

operations) that have more stable growth rates and are not tied to loan growth cycles,

and can provide an offset if loan growth slows.

 Other Income

 Dividend income: from third party investment or subsidiary/affiliate?

 Net/gain loss from securities trading: volatility from year to year.

 Foreign exchange: based on customer activity and volatility in the market. Sale of

investments: is it exceptional?

 Net commission/fee income; based on transactions such as insurance brokering,

stock-broking

 Related party transaction(s)

Operating income

 After expenses but before provisions and taxes and extraordinary items.

Extraordinary / Non-recurring Items

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  Material events and transactions that are unusual and infrequent.

 Profit (gains) or loss on sale of fixed assets.

Provision (for loan losses)

 Changing market conditions where the bank operates may result in a deterioration of

loan and lease assets, which may result in actual and anticipated losses (write-down or

write-off of the asset's value). The accumulated loss may exceed the existing Loan

Reserve thus earnings may have to add to the Loan Reserve account to either increase

or replenish the amount to meet an actual or anticipated loss.

Taxation

 Current taxation (tax payable on recognized income for the fiscal year, which was

paid to federal, state and local, and foreign revenue authorities).

 Deferred taxation

1.4 NUCLEUS SOFTWARE EXPORTS LIMITED

It is an Indian global IT product and solutions company serving The Banking and Financial

Services sector for the past 27 years. It offers wide range of IT solutions and consultancy

services serving a variety of sectors of the banking industry. It is listed on The Bombay Stock

Exchange and the National Stock Exchange of India. The company has its Headquarters

in Noida, Uttar Pradesh, India and it operates in more than 50 countries Nucleus Software

started its operations in 1986 in a small office at Thyagraj Nagar, New Delhi. In 1994, the

Company went global with its entry into Singapore. In 1995, it became a public company,

when it Issued 201,000 equity shares of Rs 10 each. In 2005–06, Nucleus Software expanded

its operations In Europe with wholly owned subsidiary in Amsterdam. The Company was

awarded with Gold shield For Excellence in Financial Reporting 2010 by Institute of

Chartered Accountants of India (ICAI). Nucleus Software Exports Ltd., is a Mid Cap

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company (having a market cap of Rs 875.01 Cr.) operating in Information Technology sector.

Nucleus Software Exports Ltd. key Products/Revenue Segments include Software

Development (Overseas) which contributed Rs 223.16 Cr to Sales Value (79.97% of Total

Sales), Software Development (Domestic) which contributed Rs 55.88 Cr to Sales Value

(20.02% of Total Sales), for the year ending 31-Mar-2015.For the quarter ended 31-Mar-

2015, the company has reported Standalone sales of Rs. 83.18 Cr., up 22.61% from last

quarter Sales of Rs. 67.84 Cr. and up 37.47% from last year same quarter Sales of Rs. 60.51

Cr. Company has reported net profit after tax of Rs. 20.82 Cr. in latest quarter. The

company’s management includes Mr. Vishnu R Dusad, Mrs.Elaine Mathias, Ms.Poonam

Bhasin, Ms.Poonam Bhasin, Prof.Trilochan Sastry, Mr.Ashish Nanda, Mr.Janki Ballabh, Mr.

Subramaniam, Mr.Prithvi Haldea, and Mr. P Singh. Company has Deloitte Haskins & Sells as

its auditors. As on 31-Mar-2015, the company has a total of 32,383,724 shares outstanding

Nucleus Software Exports Limited operates in more than 50 countries. And has its

headquarters in Noida, Uttar Pradesh, India As of 31 March 2014, and Nucleus Software had

14 offices across 10 countries and seven wholly owned subsidiaries.

Products of Nucleus software:

FinnOne Neo is an end to end loan lifecycle management solution for the global banking and

financial services industry. It is a powerhouse of seamlessly integrated applications, designed

to provide risk management operational and decision making support in lending lifecycle to

banks and financial services companies.

FinnAxia is an integrated global transaction banking solution built on latest java technology

over Service Oriented Architecture platform. With FinnAxia banks can breakdown traditional

product silos, launch personalized products/services over multiple channels and achieve

operational excellence.

26
FinnAxia offers the capability to swiftly address corporate customer’s liquidity management

to financial supply chain management, with enhanced customer satisfaction. The solution

empowers financial institution establish and maintain a market leading presence through the

flexible, speedy and efficient execution of transaction banking processes.

FinnOne Neo Loan Management System (LMS) is an advanced and comprehensive bank

loan management system that aims to improve the quality, turnaround time and service for

end customers, it enables banks to improve the agility, transparency and efficiency of their

lending solutions. As a loan management solution, it enables financial institution to automate

the processes for achieving cost savings and enhanced customer experiences.

FinnOne Neo collections is a customer centric, web based and workflow driven solution that

allows financial institutions manage, monitor and control the delinquent loan accounts while

automating the loan collections management framework. The workflow manager governs the

entire business processes and the rule engine defines the supporting rules in line with their

policies.

MTB is Nucleus Software's mobile Transaction Banking suite for Additive (existing bank

customers) and Transformational (new bank customers) transaction banking services. This

mobile banking solutions offers a wide range of mobile banking services with out of the box

features across Payments, Receivables, Liquidity Management and Account services,

encompassing multi entity, multi-currency transactional solution.

MTB provides the advantage of ready integration with the FinnAxia transaction system. It is

compatible with Android mobile platform. It is available as a downloadable application with

quick installation process and an instant start up.

FinnAxia Business Internet Banking is a delivery channel for bank’s customers, offering

convenience to bank anytime and anywhere. It allows banks to provide easy access to

information from multiple back-end systems as relevant data into a single customer view. It is
27
an easy to use, robust solution that provides direct access to a comprehensive suite of

transaction banking products developed for bank’s corporate customers.BIB is a secure

solution with 2-factor authentication using a security token, encrypted password storage,

shields against hacking as per international standards, secure communication over the Internet

using SSL (Secure Sockets Layer). Customers can personalize their user interface, dashboard

widget as per their personal preferences.

The shift to digital is well underway. Operating in real-time is now a fundamental

requirement rather than nice-to-have. Financial services organizations across the globe are

embracing predictive analytics at an increasing rate in order to get insights that will help them

explore new opportunities, fine-tune existing programs, minimize risk and improve

efficiencies. At Nucleus, we have more than 3000 person years’ experience in providing

thought leadership, building high performance applications and supporting infrastructure

components for our clients. We enable financial institutions to experience how predictive

analytics can help them in developing insights that would shape their lending business

decisions and give them a competitive advantage.

Nucleus analyzes the historical data of the financial institution. Predictive models and

scorecards are then created and validated following which strategy maps and validated

reports are shared. The insights help the institutions take more informed decisions across the

lending lifecycle from customer acquisition to delinquency management.

Realize the power of Nucleus Software Products quickly, cost-effectively, transparently and

virtually risk free with our unique implementation strategy. Continuous business

improvement and transformation are critical to keep pace with the rapidly changing

competitive landscape and dynamic economic environment. To facilitate this we have taken

the knowledge and experience gained from working with the world’s leading organizations

and embedded it into our project methodology – Finn Edge. Finn Edge is designed to turn our
28
customers’ visions into reality, on time and to budget. Finn Edge is a comprehensive

implementation methodology which maximizes our customers’ business value by

incorporating industry best practices quickly, reducing the total cost of deployment and

supporting all their needs, virtually risk-free. It transforms Project Management into Solution

and Value Management, accelerating value delivery in four steps: Evaluate; define; generate;

empower.

1.5 OBJECTIVES OF STUDY

1) Micro & Macro Analysis of ICICI BANK.

2) CAMEL rating Analysis of ICICI BANK.

3) To study the different types of lending practices of the ICICI BANK.

1.6 SCOPE OF PROJECT

I. The research would highlight the comparative position of a sample commercial bank

with respect to ICICI Bank - the first Indian Universal Bank, which would help the

concerned banks to know where it stands with respect to Universal Bank.

II. The research would enumerate the financial health and risk exposure of sample

commercial banks in terms of the CAMEL Model. This would be helpful to

understand the relative strength and risk exposure of Indian commercial banks.

III. The research can be used as a base for Post-doctoral research work

29
 Chapter- 2
LITERATURE REVIEW

30
2.1 INTRODUCTION

“Banking is a heaven for the Researchers and hell for the Practitioners” is a popular saying on

Banking. Number of research studies has been carried out in different Universities. These

studies can be grouped under classifications like PhD, studies carried by Institution like RBI,

NIBM etc. and individual scholars. The following literature have been reviewed for this study

to highlight the research work already done on the subject in India and Abroad, which proved

beneficial to delineate the various issues and methodologies adopted

Al-Tamini et al (2006) have attempted to compare service quality and performance of Bank.

Comparison has been made between National and Foreign Banks in the UAE. Mann Whitney

non-parametric test has been used for comparing the financial performance.

Agarwal Pankaj K et al (2011) have compared the performance of PSBs with their Private

sector counterparts on globally accepted CAMEL model. The study discovered that PSBs

have lower Capital Adequacy than Private Sector Banks, while the Asset Quality of PSBs is

superior to Private Sector Banks which reflected in their Gross NPAs and there is no

significant difference in the Net NPA performance of these Banks.

31
Ahluwalia Montek S (01) (2002) conducted a study on “Economic Reforms in India since

1991: Has Gradualism worked?” This study deals with the impact of gradualist economic

reforms in India on the policy environment from 1991 to 2001. The researcher has gone into

depth about the process of economic reforms in India forced. By severe BOP crisis, post-

reforms performance, need to reduce fiscal deficit and subsidies etc.

Arora et al (2005) studied the performance evaluation of PSBs in the post reforms period on

the basis of four parameters i.e. financial parameters, Operational parameters, Profitability

parameters and Productivity parameters and found the performance of PSBs quite satisfactory

during the study period.

Bisht et al (2002) studied the impact of Liberalisation on the Indian Banking Sector. They

established the fact that the present Banking structure is the outcome of a process of

Expansion , Re – organization and Consolidation which have been going on for many years

and passed through three important phases - Pre – nationalisation, Post nationalization and

Post Liberalization. With the advent of internet, one can distinctly perceive the arrival of

fourth phase which led to mass structural changes in Banking by replacing brick and mortar

branches with the electronic delivery channels to provide more options to the customers.

Traditional Banking has become a thing of the past; and technology has changed the rule of

the game.

Das M R(2001) made a study on performance of the PBs for the year 1999-00 vis-a- vis the

preceding year. For this purpose, data was mainly collected from the RBI Report on Trend

and Progress of Banking in India, 1999-2000. The analysis revealed that overall performance

of Private Banks during 1999-2000 looked up compared to that in the previous year. New

32
Private Bank which were equipped with latest technology was ahead of most of the old

Private Banks.

Das Uday (2002) made a study which was the critical evaluation of the Lead Bank Scheme in

the light of Banking Sector reforms. Das observed that high level of NPAs, large number of

loss making branches; lower productivity, excess manpower and old fashioned operations

have adversely affected the profitability of PSBs.

Frierson, Robert DeV (2007) has made an attempt to study „Orders Issued under Section 4

of the Bank Holding Company Act‟. This study finds out that National City Corporation has

submitted an application to the U.S. Federal Reserve Board to acquire Harbor Federal

Savings Company and Appraisal Analysis Inc. and merge with Harbor Florida Bancshares

Company in Cleveland, Ohio. The Board has considered the comments and all the factors of

the proposal after the filing and publication of notice of the proposal. The application was

approved because the Companies comply with the Bank Holding Company Act.

Joshi PN (2002) have analysed the impact of Financial Sector reforms on the weaker sections

of society and observed that reforms have helped the Banks in introducing innovative

measures to improve their business prospects profitably, thus, maximizing wealth for the

shareholders.

Kaveri (2001) has made an attempt to study strategies suggested by the RBI to avoid

accretion of fresh NPAs by strictly monitoring the post sanction follow up like periodical

inspection of unit and inventory, scrutiny of books and transactions, verification of various

statements and returns, periodical interaction with borrowers etc. Such close follow up with

the borrowers would help in identifying early signals of sickness/default.

33
Ketkar Kusum W et al (2008) have investigated the Efficiency of Indian Banks since

systemic reforms began in 1990s using DEA technique and Bank– specific data from 1997 –

2004. The study revealed that Foreign Banks are more efficient followed by New PBs and the

efficiency/ performance of PSBs has adversely affected due to priority sector advances.

Kohli (1999) made an attempt to evaluate the effectiveness of Bank branch licensing in the

backdrop of Financial Sector Reforms. In view of changes in banking perspective in India,

performance evaluation parameters have also changed. Earlier Performance Indicators like

Deposits, Priority Sector lending and Branch expansion, have yielded to new ones like

Efficiency and Profitability.

Kumar Sunil et al (2009) have made an attempt to study the Efficiency, Effectiveness and

Performance of 27 PSBs and concluded that in the case of PSBs, higher effectiveness is not

on account of higher efficiency but there lies a strong co- relation between effectiveness and

performance measures.

Kunjukunju, Dr. Benson (2006) conducted a study on „Reforms in Banking Sector and

their Impact in Banking Services‟. This study emphasized that strategies followed by the

Indian Banks are still far from adequate and have not obtained the expected results. The

systematic planning and introduction of customer oriented and customized products and

services by the Indian Banks will help them to compete and succeed in the contemporary

competitive Banking environment. In a competitive business environment in order to retain

and widen the customer base, the Banks should initiate steps to better personal contacts with

34
their customers. The Banks must concentrate on enhancing quality of its personnel and try to

develop it further.

Manjula Kumara Wanniarachchige et al (2011) have focused on the study of Commercial

Banks across all the Banking groups, by using DEA technique. The findings revealed that

Foreign Banks outperformed other Banking Groups in terms of cost and revenue efficiencies,

though they could not generally extend their Banking services beyond metro cities.

Milind Satya (2005) carried out a study analysing the Bank ownership, particularly

Privatization, on the efficiency and performance of Banks for the period 1998-2002. The

findings categorically state that the financial performance and efficiency of partially

privatized Banks were better than wholly owned PSBs and also continue to perform better.

Nagarajan (2002) analyzed „Other Income of the Banks‟ for the period 1993-1994. He

emphasized that other income of the Banks has been receiving focused attention due to two

reasons. Firstly, Banks are being urged to increase this source of income. Secondly, there was

a spurt in Other Income of Banks during 2001-2002.

Pal Ved et al (2009) discussed on Productivity Analysis of Commercial Banks in India. They

focused on productivity growth of the Indian Banking Sector using panel data of 63

Commercial Banks from 1996-2005 through Data Envelopment Analysis. The study reveals

that overall productivity growth is the result of technical progress accompanied by stagnating

and negative growth rate in the other components of total factor productivity.

Prasuna (2004) has investigated the performance of 65 Commercial Banks for the period

2003 – 04 by using CAMEL model. The researcher has observed that the Bank customers

35
have tremendously benefitted from the competition among the Banks and have enjoyed

improved service quality and innovative products and services at lower cost.

Ramachandra Reddy et al (2001) focused their attention on the seriousness of NPAs in

PSBs. They are of the opinion that introduction of IRAC norms in the Indian Banking System

have emerged as one of the major challenges facing the PSBs. They further felt that total

elimination of NPAs is not possible in banking business due to several externalities, but their

incidences can be minimised.

Saha et al (2000) have made an attempt to rank 25 PSBs using DEA for the period 1991-92

to 1994-95 and observed that PSBs have improved, in general, their efficiency over the

period of study.

Sainesh G et al (2003) carried out a linkage between Service Quality and Service Climate in

the Retail Commercial Banks operating in India. Survey data was collected from the front

line employees as well as customers of 48 branches belonging to eight Public Sectors, Private

and Foreign Banks through a self-administered Questionnaire. The Researchers in the study

found that the employees‟ perception of service quality of Private and Foreign Banks is

similar. The Public Sector Banks score low on all dimensions of service quality. They further

found that employees‟ perception of service climate is related to customer’s perception of

service quality. Finally, they came to a conclusion that the existence of a linkage between

employees‟ perception of service climate and customers‟ perception of service quality does

signify the contribution of the service climate of a Bank for delivering quality service to its

customers.

36
Samal (2002) in his study has observed that NPAs cannot be totally eliminated from the

Banking System but could be minimized if appropriate pre-sanction scrutiny and post-

sanction follow up are made. It is further observed that there is a lack of political will and

need for further legal reforms for speedier recovery of NPAs.

Samson E Edo (2000) examined the interaction between Liquidity and Profitability in the

Banking Sector of Nigeria. An equation model is specified to explain the relationship. The

estimated results reveal that the two variables have direct and significant impact on one

another. A causality test conducted, indicated that liquidity has a stronger impact in the

relationship. He recommends that liquidity of Banks could be improved.

Sanjeev et al (2006) examined whether there exists any co-relation between efficiency and

size of the Banks in India. The researchers have conducted the study on PSBs for the period

1997-2001 by using DEA and observed that no conclusive relationship can be established

among the said two variables.

Satish et al (2005) have carried out an assessment of performance of 55 Commercial Banks

for the year 2004-05 using CAMEL Model. The findings state that leveraging technology will

help the Indian Banks for sustainable growth with solid foundation.

Shankaraiah (1999) made an attempt to study the awareness and preferences of customers

towards the Banking services. In order to give representation to all the people in all walks of

life a sample of about 140 customers is selected on stratified random sampling method and

structured questionnaire is administered on them. The study covers only the respondents

residing in Hyderabad during the study period of 1997-1998. Researcher in this study found

that Banks are offering various deposit, credit, ancillary, diversified services to the customers

37
to meet their variety of needs. But many of these schemes are not much known to the

customers. Further, he observed that a scheme, that offers high security, return, growth,

flexibility, promptness, care, attention, simplicity, convenience, less price would attract the

customers to make use of them. In this study, he suggested that a continuous effort is required

to analyse the preferences and awareness of customers, to serve the customer better and

improve upon further through innovations.

Sheeba Kapil et al (2003) paper’s objective was to review and analyse the Current Financial

Health of the Indian Public Sector Banks in the light of banking reforms and predict the

future and scope of the same. The viability of the 27 PSBs has been analysed on the basis of

off-site supervisory model CAMEL.

Shrivastava Urvashi et al (2011) have studied the soundness and financial strength of Axis

Bank in terms of capital adequacy and effectiveness by using financial ratios and applying

correlation and t – test. The study reveals that the said Bank has resorted to raising of non-

equity capital as a matter of its growth strategy to meet the capital adequacy requirements.

The findings further reveal that the Bank not only could meet the minimum capital

requirement but also made provision for business growth by adequately mapping credit,

operational and market risk to projected business growth.

Siraj K K et al (2011) have examined the impact of global financial crisis of 2007-09 on

performance of SCBs by relying upon the relevant data for the period 1999 – 00 to 2010 – 11.

It is observed by the researcher that PSBs were comparatively more stable, While PBs and

Foreign Banks were susceptible to the financial crisis, whereas, SCBs as a whole have shown

vulnerability to global financial crisis.

Sooden et al (2004) have studied the performance of PSBs from profitability angle during the

pre and post reform periods by using correlation and regression analysis. The findings

38
suggest that the PSBs have gradually lost social profitability with the decline in priority

sector lending, though however overall profitability of PSBs have improved.

Veni (2004) studied the Capital Adequacy requirements of the Banks and the measures

adopted by them to strengthen their capital ratios. The author highlighted that the Rating

Agencies give prominence to Capital Adequacy Ratios of Banks while rating the bank’s

Certificate of Deposits, Bonds etc. They normally adopt CAMEL Model for rating Banks.

Capital Adequacy is considered the key element of Bank rating.

2.2 CONCLUSION

Researchers have employed different methods to analyse the performance of Commercial

Banks. Studies conducted to analyse the performance are based on the Data Envelopment

Analysis (DEA) approach as referred to by Ozkan, Tektas, Arzu (2006), a tool to detect and

improve the sources of inefficiency by Bank Management and Supervisory Agents, which

shows that risk management issues as well as explicit considerations of Government rules

and directives drive an edge between the functioning of Public Sector and Private Sector

Banks. The analysis further revealed that there is no definite relationship between Efficiency

and Size of Banks. Technically, more efficient Banks are those which have on an average less

NPAs.

DEA method of analysis is not free from discrepancies, like results are sensitive to the

selection of inputs and outputs. So, their relative importance needs to be analysed prior to the

calculations. However, there is no way to test their appropriateness. When there is no

relationship between explanatory factors (within inputs and/or within outputs), DEA views

each company as unique and fully efficient and efficient scores are very close to 1, which

results in a loss of discriminatory power of the method.

39
Another method most commonly used is “CAMELS model”. The acronym CAMELS refers

to the Bank’s five components that are evaluated: Capital adequacy, Asset quality,

Managerial adequacy, Earnings, Liquidity and Bank’s Sensitivity to market risk (added in

1997). An overall rating of 1 is best, while a rating of 5 implies a Bank being laden with

existing or potential problems.

The CAMELS approach also suffers from indeterminacy, subjectivity and even

inconsistency. There are instances when an examination of accounting records failed to

decide, whether to give an „average‟ or „below average‟ score. The good and Bad indicators

are easily available but not so the „in-betweens‟ due to the indeterminacy.

Finally, in case of Commercial Banks, DEA and CAMELS models are employed to assess

the effectiveness of performance of Banking Sector which is not secluded from discrepancies.

Therefore, it was necessary to analyse the comparative performance of the Banking Sector,

especially the Public Sector and the Private Sector Banks in India by following method other

than DEA and CAMELS and hence this study.

40
 Chapter- 3
RESEARCH
METHODOLOGY

41
 RESEARCH METHODOLOGY

3.1 Data Collection:

The empirical data can be gathered in two ways, from primary sources and secondary

sources. Primary sources are information gathered primarily for research, primary sources

could be: interviews, surveys, case studies, focus groups.

There are both advantages and disadvantages with the two different data sources. What is

favorable with the primary sources is that they are updated and gathered for the study’s

specific purpose, which makes it provide the information the study intends to investigate.

Although, it can be problematic with primary sources because it is time-consuming and

expensive to conduct. The advantage of secondary sources is that they are time and cost-

efficient. Secondary sources are used in this study. The secondary sources enabled the author

to collect relevant information to answer the purpose of the study.

Research is based on secondary data. Secondary data was made available by official

websites of respective banks, Balance sheets of respective Banks, Magazine like Business

Today

Secondary Data:-

Secondary data is the data that have been already collected by and readily available from

other sources. Such data are cheaper and more quickly obtainable than the primary data and

also may be available when primary data cannot be obtained at all. It is used for analysis

purpose and collected through secondary sources which are extracted from annual reports,

websites, and journal of companies under study.

42
The secondary data constitutes profiles of commercial banks. Slabs of rate of interest on

house loan & fixed deposit are covered to make the comparison between the interest rates

which bank charges & lend to its lenders & borrowers.

Data Collection Sources

 Balance Sheet of particular Bank

 Loan Interest Rate Slab of particular Bank

 Deposit Interest Rate Slab of particular Bank

 Banking and Financial Journals.

 Through website

3.2 Research Design and Methodology

A descriptive research purpose is clearly stated and to the point. The descriptive research is

structured, the data gathering involves a structured process and follows a clear set of rules in

the execution of the research. Descriptive research could involve more than one variable, but

the researcher is usually interested in deep knowledge in a phenomenon. A descriptive

research can be used in both quantitative and qualitative studies. A research design provides

guidelines for conducting the study and the design should be chosen based on the fact that it

can provide relevant information to meet the study’s purpose.

43
 Chapter- 4
DATA ANALYSIS
AND PRESENTATION

44
4.1 Global Banking Outlook 2018

Ten years after the global financial crisis, the banking industry has regained its health and the

mood of bankers is more buoyant. They should enjoy it while it lasts. With 85% of banks

citing implementation of a digital transformation program as a business priority for 2020,

investment in technology to drive efficiency, manage evolving risks and benefit from growth

opportunities will be critical for sustainable success.

Our Global banking outlook survey of 221 financial institutions across 29 markets reveals

that bankers are positive about their ability to improve their financial performance in 2018

and beyond.

The industry is turning to growth

 Now the global banking sector considerably healthier in comparison of previous 10

years ago.

 The largest banks in the world have significantly improved their capital position in the

years since the crisis.

 The vast majority of banks expect revenues and profitability to improve over the next

12 months to 3 years, despite rising costs.

45
Cost and competitive challenges remain

 Analysis of 200 banks shows that their aggregate costs have fallen by a little more than 10%

in the last five years but they are still more than 25% over their 2008 cost base.

 According to the survey most banks reveals that most bankers anticipate that cost will

continue to increase over the next three years because of as the moderate savings in regulatory

change programs are reallocated to growth initiatives and cyber security spending.

 On average, bankers expect a 2.1% cost increase over the next three years.

46
47
ICICI Bank is India's largest private sector bank with total consolidated assets of Rs.

11,242.81 billion (US$ 172.5 billion) at March 31, 2018 and profit after tax of Rs. 67.77

billion (US$ 1.0 billion) for the year ended March 31, 2018. ICICI Bank currently has a

network of 4,867 Branches and 14,367 ATMs across India.

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 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.

48
Chanda Kochhar

Managing Director& CEO

Lending Products

Home Loan: ICICI bank provides home loan to the customers at the rate of 8.45% P.A. For

the purpose of purchase flat, Home, etc. they also provide the loan for the construction

purpose at the same rate.

Car Loan: ICICI bank provides car loan to the customers at the rate of 9.75% P.A. for the

purpose of purchasing of new as well as old car with 100% ex-showroom price of the car for

new purchase.

Education Loan: Bank provide education loan to the students at the rate of 15% P.A. for India

as well as for foreign studies they also provide full coverage of fees as well as

accommodations.

Personal Loan: Bank provide personal loan to the customers on the salary basis or mortgage

basis at the rate of 10.99% P.A.

Other lending products are:

Gold Loan, loan against securities, Commercial Business loans, Pradhan mantra mudra

yojana.

4.2 Camel Analysis

Introduction
49
In the 1980s, CAMEL rating system was first introduced by U.S. supervisory authorities as a

system of rating for on-site examinations of banking institutions. Under this system, each

banking institution subject to onsite examination is evaluated on the basis of five critical

dimensions relating to its operations and performance, which are referred to as the component

factors. These are Capital, Asset Quality, Management, Earnings and Liquidity used to reflect

the financial performance, financial condition, operating soundness and regulatory

compliance of the banking institution.

The CAMEL rating system is based upon an evaluation of five critical elements of credit

union’s operations: Capital Adequacy, Asset Quality, Management, Earnings and

Asset/Liability Management. This rating system is designed to take into account and reflect

all significant financial and operational factors examiners assess in their evaluation of credit

union’s performance. Credit unions are rated using combination of financial ratios and

examiner judgment.

Since the composite CAMEL rating is an indicator of the viability of a credit union, it is

important that examiners rate credit unions based on their performance in absolute terms

rather than against peer averages or predetermined benchmarks. The examiner must use

professional judgment and consider both qualitative and quantitative factors when analyzing

a credit union’s performance. Since numbers are often lagging indicators of a credit union’s

condition, the examiner must also conduct qualitative analysis of current and projected

operations when assigning CAMEL ratings.

Although the CAMEL composite rating should normally bear a close relationship to the

component ratings, the examiner should not derive the composite rating solely by computing

and arithmetic average of the component ratings. Following are general definitions and

calculations of the ratios.

4.2.1 Capital Adequacy Ratio

50
The capital adequacy ratio (CAR) is a measure of a bank's capital. It is expressed as a

percentage of a bank's risk weighted credit exposures. Also known as capital-to-risk weighted

assets ratio (CRAR), it is used to protect depositors and promote the stability and efficiency

of financial systems around the world. Two types of capital are measured: tier one capital,

which can absorb losses without a bank being required to cease trading, and tier two capital,

which can absorb losses in the event of a winding-up and so provides a lesser degree of

protection to depositors. Tier 1 Capital consists of shareholders’ equity and retained earnings.

Tier 1 Capital is intended to measure a bank’s financial health and is used when a bank must

absorb losses without ceasing business operations. Tier 2 Capital includes revaluation

reserves, hybrid capital instruments and subordinated term debt, general loan loss reserves,

and undisclosed reserves. Tier 2 Capital is supplementary capital because it is less reliable

than Tier 1 Capital. Two types of capital are measured - tier one capital which can absorb

losses without a bank being required to cease trading, e.g. ordinary share capital, and tier two

capital which can absorb losses in the event of a winding-up and so provides a lesser degree

of protection to depositors, e.g. subordinated debt. As per the latest RBI norms, banks in

India should have a CAR of 9%. The purpose of having minimum capital adequacy ratios is

to ensure that banks can absorb a reasonable level of losses before becoming insolvent, and

before depositors funds are lost.

Particulars ICICI Indusind HDFC Bank

       
Capital Adequacy Ratio 16.64% 15.31% 14.60%

51
 Capital Adequacy Rati o
16.64%

15.31%

14.60%

ICICI HDFC Indusind

ADVANCES TO ASSETS
This is a ratio of the Total Advances to Total Assets. This ratio indicates a bank’s
aggressiveness in lending which ultimately results in better profitability. Total advances also
include receivables.

Particulars ICICI bank HDFC Bank Indusind Bank

Advances 4642320842 4872904174 1130805076

Assets 7717914460 7622123264 1786484138

Ratio 60.1% 63.9% 63.2%

Advances to Assets rati o

63.90%
63.20%

60.10%

ICICI HDFC Indusind

Interpretation: In comparison of the banks HDFC bank is more aggressive to given the

loans against their assets, Indusind bank is following the HDFC, ICICI is better in this with

the ratio of 60.10%

52
GOVERNMENT SECURITIES TO TOTAL INVESTMENTS:

Government securities to total investment ratio depicts the percentage share of government

securities investment of the bank out of their total investments. This ratio shows the risk

involved in a bank’s investment. Government Securities, are generally, considered as the

most safe debt instrument, which, as a result, carries the lowest return. Since government

securities are risk-free, the higher the Government Securities to investment ratio, the lower

the risk involved in a bank’s investment.

Particulars ICICI Bank HDFC Bank Indusind Bank

Govt. Securities 1125135393 1576610655 314523418

Total Investment 1615065454 1936338475 367021382

Ratio 69.6% 81.4% 85.6%

Government Securiti es to Total Investments

85.60%
81.40%

69.60%

ICICI HDFC Indusind

Interpretation: In this Indusind bank is investing more in govt. securities which means

risk taking capacity is less whether HDFC is following Indusind with 81.40% in comparison

with these banks ICICI taking more risk in investments. Higher the risk higher the return.

53
4.2.2 ASSETS QUALITY:

Asset Quality determines the robustness of financial institutions against loss of value in the

assets. The deteriorating value of assets, being prime source of banking problems, directly

pour into other areas, as losses are eventually written-off against capital, which ultimately

jeopardizes the earning capacity of the institution.

The solvency of financial institutions typically is at risk when their assets become impaired,

so it is important to monitor indicators of the quality of their assets in terms of over-exposure

to specific risks, trends in non-performing loans, and the health and profitability of bank

borrowers – especially the corporate sector.

NPA: Non-Performing Assets – Advances are classified into performing and non-performing

advances (NPAs) as per RBI guidelines. NPAs are further classified into sub-standard,

doubtful and loss assets based on the criteria stipulated by RBI. An asset, including a leased

asset, becomes Non-performing when it ceases to generate income for the bank.

An NPA is a loan or an advance where:

 Interest and/or installment of principal remains overdue for a period of more than 90

days in respect of a term loan.

 The account remains “out-of-order” in respect of an overdraft or cash credit.

 The bills remains overdue for a period of more than 90 days in case of bills purchased

and discounted.

 A loan granted for a short duration crops will be treated as an NPA if the installments

of principal or interest thereon remain overdue for two crop seasons.

 A loan granted for long duration crops will be treated as an NPA in the installments of

principal or interest thereon remain overdue for one crop season.

54
The bank classifies an account as an NPA only if the interest imposed during any quarter is

not fully repaid within 90 days from the end of the relevant quarter. This is a key to the

stability of the banking sector. There should be no hesitation in stating that Indian banks have

done a remarkable job in containment of non-performing loans (NPL) considering the

overhang issues and overall difficult environment.

Asset Quality is rated in relation to:

 The quality of loan under-writing, policies, procedures and practices

 The level, distribution and severity of classified assets

 The level and composition of non-accrual and restructured assets

 The ability of management to properly administer its assets, including the timely

identification and collection of problem assets

 The existence of significant growth trends indicating erosion or improvement in asset

quality

 The existence of high loan concentrations that present undue risk to the credit union

 The appropriateness of investment policies and practices

 The investment risk factors when compared to capital and earnings structure; and the

effect of fair value of investments v/s book value of investments

GROSS NPA TO Net ADVANCES

Gross NPA to Net Advances ratio explains the amount of bad loans that bank won’t be

receiving back from their debtors out of the total gross advances. This ratio is used to check

whether the bank’s gross NPAs are increasing quarter on quarter or year on year. If it is,

indicating that the bank is adding fresh stock of bad loans. It would mean the bank is either

not exercising enough caution when offerings loans or is too lax in terms of following up

with borrowers on timely repayments. It is a measure of the quality of assets in a situation,

55
where the management has not provided for loss on NPAs. The Gross NPAs are measured as

a percentage of Gross Advances. The lower the ratio, the better is the quality of advances.

Particulars ICICI Bank HDFC Bank Indusind bank

Gross NPA 425520000 439283000 105487000
Net Advance 4642320842 4635255540 1130805076
Ratio 9.16% 9.4% 9.32%

Gross NPAs to Net Advance

9.40%

9.32%

9.16%

ICICI HDFC Indusind

Interpretation: Gross NPA of all the given banks are nearly same. Less the ratio good for
the bank.

NET NPA TO NET ADVANCES

Net NPA to Net Advances ratio explains the amount of bad loans that bank won’t be

receiving back from their debtors out of the total Net advances. Net NPAs reflect the

performance of banks. A high level of NPAs suggests high probability of a large number of

credit defaults that affect the profitability and net-worth of banks and also wear down the

value of the asset. Loans and advances usually represent the largest asset of most of the

banks. It monitors the quality of the bank loan portfolio. The higher the ratio, the higher the

credits risk. It is a measure of the quality of assets in a situation where the management has

not provided for loss on NPAs. Net NPAs are Gross NPAs net of provisions on NPAs and
56
interest in suspense account. In this ratio, Net NPAs are measured as a percentage of net

advances.

Particulars ICICI Bank HDFC Bank Indusind Bank

Net NPA 254510000 132037000 438910000

Net Advance 4642320842 4635255540 1130805076

Ratio 5.48% 2.84% 3.88%

Net NPA to Net Advances

5.48%

3.88%

2.84%

ICICI HDFC Indusind

Interpretation: Net NPA of the ICICI bank is more in comparison with HDFC and

Indusind which means asset quality of the ICICI bank is not up to the mark because it is the

most standard measure of asset quality of the banks.

57
TOTAL INVESTMENTS TO TOTAL ASSETS
Total investments to total assets indicate the extent of deployment of assets in investment as

against advances. This ratio is used as a tool to measure the percentage of total assets locked

up in investments, which, by conventional definition, does not form part of the core income

of a bank. It is arrived at by dividing total investments by total assets. A higher ratio means

that the bank has conservatively kept a high cushion of investments to guard against NPAs.

Particulars ICICI Bank HDFC Bank Indusind Bank

Total Investment 1615065454 1936338475 367021382

Total Assets 7717914460 7622123264 17864841380

Ratio 20% 25.4% 21%

Total Investments to Total Assets Rati o

25.40%

20.00% 21.00%

ICICI HDFC Indusind

Interpretation: This ratio basically measures the extent of deployment of assets in

investment as against advances. HDFC is investing more to cushion their NPA’s while

Indusind and ICICI is investing less in comparison with HDFC.

58
Net NPAs to Total Assets
It is a measure of the quality of assets in a situation where the management has not provided

for loss on NPAs. Here, the Net NPAs are measured as a percentage of Total Assets.

Net NPAs to Total Assets

 Particulars ICICI Indusind HDFC
Net NPAs 254510000 43891000 132037000
Total Assets 7717914460 1786484138 7622123264
Ratio 3.29% 2.4% 1.73%

Net NPAs to Total Assets

3.29%

2.40%

1.73%

ICICI HDFC Indusind

Interpretation: Net NPA of the ICICI bank is higher against the total assets in comparison

with HDFC and Indusind. In these banks HDFC is performing well.

4.2.3 MANAGEMENT EFFICIENCY:

Management of financial institutions is generally evaluated in terms of capital adequacy,

asset quality, earnings and profitability, liquidity and risk sensitivity ratings. In addition,

performance evaluation includes compliance with set norms, ability to plan and react to

changing circumstances, technical competence, leadership and administrative ability. In

effect, management rating is just an amalgam of performance in the above-mentioned areas.

59
Sound management is one of the most important factors behind financial institutions’

performance. Indicators of quality of management, however, are primarily applicable to

individual institutions, and cannot be easily aggregated across the sector. Furthermore, given

the qualitative nature of management, it is difficult to judge its soundness just by looking at

financial accounts of the bank.

Total advances to Total Deposits

The ratio measures the efficiency of management in converting the deposits available with

the bank (excluding other funds like equity capital, etc.) into high earning advances. Total

deposits include demand deposits, savings deposits, term deposits and deposits of other

banks. Total advances also include the receivables.

Particulars ICICI BANK Indusind HDFC Bank

TOTAL ADVANCES 4642320842 1130805076 4872904174

TOTAL DEPOSITS 4900390648 1265722228 5458732889

RATIO 0.94 0.89 0.89

Total advances to Total Deposits

0.94

0.89 0.89

ICICI HDFC Indusind

60
Interpretation: ICICI is converting their deposits in to the higher earning advances in

comparison with HDFC and Indusind both banks have the same ratio 0.89 while ICICI have

0.94.

BUSINESS PER EMPLOYEE:

This tool measures the efficiency of all the employees of a bank in generating business for the

bank. It is arrived at by dividing the total business by total number of employees. By

business, we mean the sum of total deposits and total advances in a particular year.

Business per employee refers to the business that the bank is generating on each employee

being employed in it. It is a measure of how efficiently a particular bank is utilizing its

employees. Ideally, a bank wants the highest business per employee possible, as it denotes

higher productivity. In general, rising revenue per employee is a positive sign that suggests

the bank is finding ways to squeeze more sales/revenues out of each of its employee.

Particulars ICICI Bank HDFC Bank Indusind Bank

Total Business 9542711490000 10331637063000 2396527304

Total Employee 82841 84041 25314

Ratio 115193098.70 122935675.00 94672011.69

Business per Employee

122935.67
115193.09
94672.01

ICICI HDFC Indusind

61
Interpretation: HDFC bank have the highest business per employee ratio in comparison

with the ICICI and Indusind. ICICI bank is following HDFC with 82841 employees where

HDFC have more employee 84041.

PROFIT PER EMPLOYEE:

This ratio measures the efficiency of employees at the branch level. It also gives valuable

inputs to assess the real strength of a bank’s branch network. It is arrived at by dividing the

Profit after Tax (PAT) earned by the bank by the total number of employees. The higher the

ratio, higher is the efficiency of the management. The profit per employee explains the profit

that the bank is earning per employee. This ratio shows that surplus earned per employee.

The higher the ratio shows good efficiency of the management.

Particulars ICICI Bank HDFC Bank Indusind Bank

PAT 213961477000 323521958000 28678927000

No. of Employee 82841 84041 25314

Ratio 2582796.88 3849572.92 1132927.51

Profi t per Employee

3849.57

2582.79

1132.93

ICICI HDFC Indusind

Interpretation: HDFC bank is earning more profit per employee whether ICICI bank and

indusind bank earning less. It is good for the HDFC.

62
4.2.4 EARNING QUALITY:

Earnings and profitability, the prime source of increase in capital base, is examined with

regards to interest rate policies and adequacy of provisioning. In addition, it also helps to

support present and future operation of the institutions. The single best indicator used to

gauge earning is the return on assets (ROA), which is net income after taxes to total asset

ratio.

Strong earnings and profitability profile of banks reflects the ability to support present and

future operations. More specifically, this determines the capacity to absorb losses, finance its

expansion, and pay dividends to its shareholders, and build up to and adequate level of

capital.

INTEREST INCOME TO TOTAL INCOME:

Interest income is a basic source of revenue for banks. The interest income to total income

indicates the ability of the bank in generating income from its lending. This ratio measures

the income from lending operations as a percentage of the total income generated by the bank

in a year. Interest income includes income on advances, interest on deposits with the RBI,

and dividend income. Interest income to total income describes the interest earned by the

bank out of the total income. It compares the interest income with the total income of the

bank. Interest income is a basic source of revenue for banks. The interest income total income

indicates the ability of the bank in generating income from its lending. In other words, this

ratio measures the income from lending operations as a percentage of the total income

generated by the bank in a year.

Particulars ICICI Bank HDFC Bank Indusind

Interest Income 541562793 481113435 144066703

63
 Total Income 736607624 743732155 185771625

Ratio 73.5% 64.6% 77.5%

Interest Income to Total Income

77.50%
73.50%

64.60%

ICICI HDFC Indusind

Interpretation: Indusind bank is earning more income from their lending operations

followed by ICICI bank, HDFC is earning less in comparison with ICICI and Indusind.

NON-INTEREST INCOME TO TOTAL INCOME

This measures the income from operations other than lending as a percentage of the total

income. A fee-based income account for a major portion of a bank’s other incomes. The bank

generates higher fee income through innovative products and adapting the technology for

sustained service levels. Non-interest income is the income earned by the banks excluding

income on advances and deposits with the RBI.

This generates higher fee income through innovative products and adapting the technology

for sustained service levels. The higher ratio indicates increasing proportion fee-based

income. The ratio is also influenced by gains on government securities, which fluctuates

depending on interest rate movement in the economy.

Particulars ICICI bank HDFC Bank Indusind Bank

Non-Interest 195044831 262618720 41704922

64
 Income
Total Income 736607624 743732155 185771625

Ratio 26.4% 35.3% 22.8%

Non- interest Income to Total Income

35.30%

26.40%
22.80%

ICICI HDFC Indusind

Interpretation: Non interest income is the part of fee based income HDFC banks is

earning more by providing services to their customer in comparison with the Indusind and

ICICI Bank.

Spread or Net Interest Margin (NIM) to Total Assets

NIM, being the difference between the interest income and the interest expended as a

percentage of total assets. It is an important measure of a bank’s core income (income from

lending operations). A higher spread indicates the better earnings given the total assets.

Interest income includes dividend income and interest expended included interest paid on

deposits, loan from the RBI, and other short-term and long term loans.

Net Interest Margin to Total Assets Ratio

 Particulars ICICI Indusind HDFC
Net Interest Margin 217373208 60626042 290919866
Total Assets 7717914460 1786484138 7622123264
Ratio 2.8% 3% 3%
65
 Spread or Net Interest Margin (NIM) to Total Assets

0.03 0.03

0.03

ICICI HDFC Indusind

Interpretation: It is the difference between interest income and interest expanded the ratio

of the banks are nearly the same it shows that these banks are retaining only 2.8 to 3%

earning from the interest.

Net Profit to Average Assets / Return on Average Capital Employed

This ratio measures return on assets employed or the efficiency in utilization of assets. It is

arrived at by dividing the net profit by average assets, which is the average of total assets in

the current year and previous year. Thus, this ratio measures the return on assets employed.

Net Profit To Average Assets

 Particulars ICICI Indusind HDFC
Net Profit 269332790 28678927 128173250
Average Assets 7462432754 1273421825 12498516245
Ratio 3.6% 2.2% 1%

66
 Net Profi t to Avg. Assets
0.04

0.02

0.01

ICICI HDFC Indusind

Interpretation: ICICI bank is managing their assets in better form to earn the profit while

HDFC is not able to manage their assets in better form.

4.2.5 LIQUIDITY:

An adequate liquidity position refers to a situation, where institution can obtain sufficient

funds, either by increasing liabilities or by converting its assets quickly at a reasonable cost.

It is, therefore, generally assessed in terms of overall assets and liabilities management, as

mismatching gives rise to liquidity risk. Efficient fund management refers to a situation

where a spread between rate sensitive assets (RSA) and rate sensitive liabilities (RSL) is

maintained.

LIQUID ASSETS TO TOTAL ASSETS

Liquid Assets include cash in hand, balance with the RBI, balance with other banks (both in

India and abroad), and money at call and short notice. This ratio is arrived by dividing liquid

assets by total assets. The proportion of liquid assets to total assets indicates the overall

liquidity position of the bank.

Particulars ICICI bank HDFC Bank Indusind bank

Liquid assets 757130614 390688815 186282542
67
Total Assets 7717914460 7622123264 1786484138

Ratio 9.8% 5.12% 10.4%

Liquid Assets to Total Assets

9.80% 10.40%

5.12%

ICICI HDFC Indusind

GOVERNMENT SECURITIES TO TOTAL ASSETS

Government securities are the most liquid and safe investment. This ratio measures the

proportion of risk-free liquid assets invested in government securities as a percentage of the

assets held by the bank and is arrived by dividing investment in government securities by the

total assets. This ratio measures the risk involved in the assets held by a bank.

Particulars ICICI BANK INDUSIND BANK HDFC Bank

Govt. SECURITY 1125135393 314523418 1576610655

TOTAL ASSETS 7717914460 1786484138 7622123264

RATIO 14.5% 17.6% 20.6%

Government Securiti es to Total Assets

20.60%
17.60%
14.50%

ICICI HDFC Indusind

68
Interpretation: Basically banks invest in the govt. securities for meet the SLR activities,

govt. securities are safe securities for investing HDFC investing more and meet SLR in

comparison to ICICI and indusind. ICICI investing less in Govt. securities.

Liquid Assets to Total Deposits

This ratio measures the liquidity available to the depositors of a bank. Liquid assets include

cash in hand, balance with the RBI, and balance with other banks (both in India and abroad),

and money at call and short notice. Total deposits include demand deposits, savings deposits,

term deposits and deposits of other financial institutions.

Particulars ICICI BANK INDUSIND BANK HDFC Bank

LIQUID ASSETS 757130614 186282542 390688815

TOTAL DEPOSITS 4900390648 1265722228 5458732889

RATIO 15.4% 14.7% 7.15%

Liquid Assets to Total Deposits

15.40%
14.70%

7.15%

ICICI HDFC Indusind

Interpretation: ICICI bank is maintaining good liquidity in comparison to HDFC and

Indusind HDFC is maintaining low liquidity with 7.15%.

69
Approved Securities to Total Assets

This is arrived at by dividing the total amount invested in approved securities by total assets.

Approved securities are investments made in the state-associated bodies like electricity

boards, housing boards, corporation bonds, share of regional rural banks.

Particulars INDUSIND BANK ICICII BANK HDFC Bank

APPROVED 0 0 0

SECURITIES
TOTAL ASSETS 1786484138 9860426640 2761875587

RATIO 0 0 0
RANK - - -

4.3 CONCLUSION

On the whole year was a successful year for the ICICI bank which reported net profit of

₹2, 13,96,14,77,000. But the NPA of the ICICI is more in comparison of the other banks.

According to the camel analysis ICICI bank is performing well in the banking sector and

maintained its rating.

4.4 ANALYST REVIEW

According to the analysis the business per employee and profit per employee is less in

comparison with the HDFC bank. Liquidity is maintained well, the bank has strong profits

which is showing an increasing trend.

4.5 RECOMMENDATIONS

 The bank must try to decrease its NPA.

 The investment in the govt. securities must increase for the safety purpose.

70
  Business per employee and profit per employee try to increase both of these to

increase the profits.

That is all that is recommended because the bank is stable and has a well-positioned in the

market.

Chapter- 5
FINDINGS AND
LEARNING OUTCOMES
71
5.1 LEARNINGS OUTCOMES

1) UNDERSTANDING ABOUT THE BANKING SYSTEM

2) UNDERSTANDING ABOUT THE HISTORY OF BANKING

3) UNDERSTANDING ABOUT THE GLOBAL BANKING SCENARIO

4) UNDERSTANDING OF CAMELS APPROACH

5) UNDERSTANDING TIME VALUE OF MONEY

5.2 FINDING AND RECOMMENDATIONS

1) Bank should give to attention to Rural Banking as banks seeks to increase their

customer base, the relatively untapped rural population in India is likely to offer

attractive opportunities.

2) Bank should give advances more to home loan because it gives more interest but

the bank must measure the credit worthiness of customer. Home loan takes more

time to be covered.so there would be chances of defaulting the loan.

72
 3) NPA is the big problem. The bank should give more secured loan to reduce NPA

auto loan and home loan would be favorable for bank because when the borrower

make any default the bank can cover the loan by the house and auto.

4) In case of education loan till 400000 it is unsecured so the bank should be more

careful for the loan. But for loan more than 400000 the loan would be secured

because the customer has to give collateral.

5) For personal loan it gives less interest than other but tenure is less too therefore

this kind of loan should be given that customer who has less creditworthiness.

Loan in arrear is more favorable it gives more interest for same duration.

5.3 CONCLUSION

Banking is no longer a business restricted to borrowing and lending of funds. Recent years

have seen Indian commercial banks – both in the public sector and private sector diversify

into new areas to widen their business horizons. As banks started offering diversified services

ranging from insurance to mutual funds, from stock-broking to housing finance, from

merchant banking to portfolio management under one ‘umbrella-brand’, they gradually

metamorphosed from being business organizations having prime focus on money transactions

to a business related to information on financial transactions. Thus, with this transition, banks

gradually moved towards becoming ‘Universal banks’.

73
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Books:
1) C.R. Kothari, Research Methodology: Methods and Techniques, second

revised edition, Published by New Age International (P) Ltd. (2004, 1990,

1985),Page 7,104

2) Hair, Joseph F, Arthur H. Money, Phillip Samouel, and Mike Page. Research

Methods for Business, 2007

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1) https://www.investopedia.com/terms

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2017/$FILE/EY-global-banking-outlook-2017.pdf

3) https://www.theguardian.com/sustainable-business/rethinking-global-economic-

system-sustainable-capitalism

4) https://www2.deloitte.com/global/en/pages/financial-services/articles/gx-banking-

industry-outlook.html
74
 5) https://www.icicibank.com/managed-assets/docs/investor/annual-

reports/2016/icici-subsidiaries-ar-2015-16.pdf

6) https://www.icicibank.com/managed-assets/docs/investor/annual-

reports/2017/annual-report-fy2017.pdf

7) https://www.icicibank.com/aboutus/about-us.page?

8) http://www.kvb.co.in/global/bank_profile.html

9) http://www.investopedia.com/terms/c/camelrating.asp

10) http://www.accountingedu.org/accounting-ratios.htmlhttp://profit.ndtv.com/

11) http://business.mapsofindia.com/

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13) https://en.wikipedia.org

Journal Articles:

1) Al-Tamimi, Hussein. (2006). Factors Influencing Individual Investor Behavior: An

Empirical study of the UAE Financial Markets, The Business Review, Cambridge,

Vol.5,No. 2,225-232, 2006.. The Business Review, Cambridge,. 5. 225-232.

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43 – 51.

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Worked? Journal of Economic Perspectives. 16. 67-88.

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 5) Uday Kumar Lal Das (2002). Banking Reforms and Lead Bank Scheme. ISBN
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6) Joshi PN (2002). Management of Non-performing Advances. Vol. XXVI, No.2, pp.

143-57.

7) Patel, K.V, and Kaveri, V.S, “Non-Performing Advances in Priority Sector - A

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reform period”, The International Journal of Finance, Vol 20, No 3, pp 4910 – 4929.

Appendices:

ICICI Bank Balance sheet 2018-2019

    2019 2018
CAPITAL AND LIABILITIES      
       
Capital 1 11,651,071 11,631,656
Employees stock options outstanding   62,562 67,019
Reserves and surplus 2 987,797,070 885,657,157
Deposits 3 4,900,390,648 4,214,257,086
Borrowings 4 1,475,561,521 1,748,073,779
Other liabilities and provisions 5 342,451,588 347,264,350
       
Total Capital and Liabilities   7,717,914,460 7,206,951,047
       
ASSETS      
       
Cash and balances with Reserve Bank of India 6 317,024,051 271,060,888
Balances with banks and money at call and short notice 7 440,106,563 327,626,531
Investments 8 1,615,065,454 1,604,117,966
Advances 9 4,642,320,842 4,352,639,419
1
Fixed assets 0 78,052,072 75,769,200
76
 1
Other assets 1 625,345,478 575,737,043
       
Total Assets   7,717,914,460 7,206,951,047
       
1
Contingent liabilities 2 10,309,937,127 9,007,987,789
Bills for collection   226,231,852 216,547,286

P&L A/c of ICICI Bank 2018-19

I. INCOME   2019 2018
       
Interest earned 13 541,562,793 527,394,348
Other income 14 195,044,831 153,230,516
Total Income   736,607,624 680,624,864
       
II. EXPENDITURE      
       
Interest expended 15 324,189,585 315,153,949
Operating expenses 16 147,550,576 126,835,582
Provisions and contingencies (refer note 18.41)   166,856,557 141,372,460
Total Expenditure   638,596,718 583,361,991
       
III. PROFIT/(LOSS)      
       
Net profit for the year   98,010,906 97,262,873
Profit brought forward   171,321,884 172,614,164
Total Profit/(Loss)   269,332,790 269,877,037
       
IV. APPROPRIATIONS/TRANSFERS      
       
Transfer to Statutory Reserve   24,503,000 24,316,000
Transfer to Reserve Fund   9,824 9,340
Transfer to Capital Reserve   52,933,000 23,822,375
Transfer to/(from) Investment Reserve Account   - -
Transfer to Revenue and other reserves   - 5,000,000
77
 Transfer to Special Reserve   4,500,000 13,500,000
Dividend (including corporate dividend tax) for the previous year
paid during the year   -62,410 38,513
Proposed equity share dividend (refer note 18.45)   – 29,075,153
Proposed preference share dividend (refer note 18.45)   – 35
Corporate dividend tax   – 2,793,737
Balance carried over to balance sheet   187,449,376 171,321,884
       
Total   269,332,790 269,877,037
       
Earnings per share (refer note 18.1)      
Basic (`)   16.84 16.75
Diluted (`)   16.77 16.65
Face value per share (`)   2 2

CASH FLOW STATEMENT for the year 2018-19

    31/03/2019 31/03/2018
Cash flow from/(used in) operating activities      
Profit before taxes   126574260 135574704
Adjustments for:      
Depreciation and amortization   10444420 9567289
Net (appreciation)/depreciation on investments1   -57426431 -34641416
Provision in respect of non-performing and other assets   157937006 88308555
General provision for standard assets   -3733753 3175576
Provision for contingencies & others   2257433 28584825
(Profit)/loss on sale of fixed assets   14230 -264335
Employees stock options grants   180903 142309
(i)   236248068 230447507
Adjustments for:      
(Increase)/decrease in investments   -67356023 -40179999
(Increase)/decrease in advances   -411803233 -648486064
Increase/(decrease) in deposits   615098725 651221453
(Increase)/decrease in other assets   -70639536 -24030865
Increase/(decrease) in other liabilities and provisions   283839854 132466667
(ii)   349139787 70991192
Refund/(payment) of direct taxes (iii) -59032520 -64985465
Net cash flow from/(used in) operating activities (i)+(ii)+(iii) (A) 526355335 236453234
Cash flow from/(used in) investing activities      
Purchase of fixed assets   -13167144 -8483857
Proceeds from sale of fixed assets   156340 703145
(Purchase)/sale of held to maturity securities   -3046583 -110411892
Net cash flow from/(used in) investing activities (B) -16057387 -118192604
Cash flow from/(used in) financing activities      
Proceeds from issue of share capital (including ESOPs)   1772579 2824200
78
Proceeds from long-term borrowings   403761367 455604563
Repayment of long-term borrowings   -508077502 -319709230
Net proceeds/(repayment) of short-term borrowings   -217920893 -46055502
Dividend and dividend tax paid   -34230910 -34524887
Net cash flow from/(used in) financing activities (C) -354695359 58139144
Effect of exchange fluctuation on translation reserve (D) -1053605 -2411769

Net increase/(decrease) in cash and cash equivalents (A)+(B)+(C)+(D)   154548984 173988005

Cash and cash equivalents at beginning of the year   650359702 476371697
Cash and cash equivalents at end of the year   804908686 650359702

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