A PROJECT REPORT ON INDUSTRIAL EXPOSURE

(ICICI BANK) In partial fulfillment of the requirement for the award of degree of Bachelors in Business Administration (B.B.A.)

2009-2012

Submitted By:
ANKIT DHOOT GROVER

Under the Guidance of:

MISS. HIMANI

BHARATI VIDYAPEETHs
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INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI

ACKNOWLEDGEMENT

I am very thankful to everyone who all supported me, for I have completed my project effectively and more over on time. I am equally grateful to my teacher Miss Himani Grover. She gave me moral support and guided me in different matters regarding the topic. She had been very kind and patient while suggesting me the outlines of this project and correcting my doubts. I thank her for her overall supports. I am also very indebt to Mrs Taruna Gulati, my guide in ICICI BANK. Who helped me a lot in gathering different information and guiding me from time to time in making this project .Despite of his busy schedules, he gave me different ideas in making this project unique. Last but not least I would like to thank my colleagues to lay their helpful hands whenever required.

CONTENTS
Chapter 1: Introduction to Company

1. Overview of industry 2. Profile of the organization 3. Problems of the organization 4. Competitors information 5. SWOT Analysis Chapter 2: Research Methodology 1. Objective 2. Scope of study 3. Managerial usefulness of study
4. Methodology

5. Limitations Chapter 3: Conceptual Discussions 1. PEST Analysis 2. Customers Review

3. Performance Analysis

4. Growth Potential 5. 5 Forces Model Chapter 4: Data Analysis 1. Profitablity Highlights 2. Other Highlights 3. Balance sheet assests 4. Equity inv. in subsidiaries
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5. Balance sheet liabilities 6. Comparison of borrowing 7. ICICI home finance Chapter 5: Conclusion and suggestions

Chapter 6: Appendices Chapter 7: Bibilography

Chapter 1: Introduction to company

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1. Overview of industry 2. Profile of the organization 3. Problems of the organization 4. Competitors information 5. SWOT Analysis

1) Overview of industry
ICICI (INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA) Bank Ltd.(NSE: ICICIBANK, BSE: 532174, NYSE: IBN) is an Indian diversified financial services company headquartered in Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank has a network of 2,630 branches and 8,003 ATM's in India, and has a presence in 19 countries, including India. The bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in Belgium and Germany. ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab National Bank and HDFC Bank. ICICI Bank was established in 1996 by the Industrial Credit and Investment Corporation of India, an Indian financial institution, as a wholly owned subsidiary. The parent company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks and public-sector insurance companies to provide project financing to Indian industry. The bank was initially known as the Industrial Credit and Investment Corporation of India Bank, before it changed its name to the abbreviated ICICI Bank. The parent company was later merged into ICICI Bank.
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ICICI Bank launched internet banking operations in 1998. ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering of shares in India in 1998, followed by an equity offering in the form ofAmerican Depositary Receipts on the NYSE in 2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock deal in 2001, and sold additional stakes to institutional investors during 2001-02. 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 nonJapan Asia to be listed on the NYSE. In 2000, ICICI Bank became the first Indian bank to list on the New York Stock Exchange with its five million American depository shares issue generating a demand book 13 times the offer size. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. In 2008, following the 2008 financial crisis, customers rushed to ATM's and branches in some locations due to rumors of adverse financial position of ICICI Bank. The Reserve Bank of India issued a clarification on the financial strength of ICICI Bank to dispel the rumors.

2.Profile of the organization

ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011. The Bank has a network of 2,752 branches and about 8,003 ATMs in India, and has a presence in 19 countries, including India.
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ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

VICE CHAIRMAN

CEO / M.D.
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VP

VP

VP

VP

SENIOR MANAGER

SENIOR MANAGER

SENIOR MANAGER

SENIOR MANAGER

SENIOR MANAGER

SENIOR MANAGER

ASSISTANT MANAGERS JUNIOR EXECUTIVES

Fig:1.1 She began her career with ICICI as a Management Trainee in 1984 and has there on successfully risen through the ranks by handling multidimensional assignments and heading all the major functions in the Bank at various points in time. In 1993 when ICICI decided to enter commercial banking, she was deputed to ICICI Bank as a part of the core team to set up the bank. When ICICI set up the Infrastructure Industry Group in 1996 to
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Ms. Chanda Kochhar is the Managing Director and Chief Executive Officer of ICICI Bank

create dedicated industry expertise in the areas of Power, Telecom and Transportation sector, she was handpicked and made incharge of the Infrastructure Industry Group. In July 2000, she was chosen to head the Retail Finance division of ICICI and has been instrumental in scaling up the business. In April 2001, she was promoted as an Executive Director, heading the retail business in the Bank. In April 2006, she was appointed as the Deputy Managing Director with responsibility for both Corporate and Retail banking business of ICICI Bank and from October 2006 to October 2007 she handled the International and Corporate businesses of ICICI. In October 2007, she was appointed as the Joint Managing Director & CFO. She was heading the Corporate Centre, was the Chief Financial Officer (CFO) and was also the official spokesperson for ICICI Bank.

3) Problems of the organization

The story of ICICI Bank indeed is quite exciting as we look into how the company has internationalized its business vis-a-vis the other banks from India. With the least number of international bank branches as compared to many of the other Indian banks, it stands tall in terms of its share of international business, especially in the foreign remittance business. In a short period of time, it has grown to be the largest bank in the private sector with a global foot print. Its share of international remittance business among the banks in India has risen from 4% in 2003-04 to about 30% today while retaining over 75% of the total online international remittance business in India. How did it grow so fast? Did it face any challenges at home or outside to achieve these successes? What have been its strategies in the internationalization process of its business? In other words, what have been the secrets of its success? Several pertinent questions come to mind when we look at the
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pace of growth of this company in a highly turbulent and competitive world of internationalbanking that has been guarded for years by the well established, highly networked, international banks and remittance business houses. Let us explore some of the following issues to understand the companys approach towards internationalization and how it broke through the old guards of international banks and remittance business houses.

4) Competitors information
State Bank of India (SBI) SBI is the oldest bank of India and also India's largest commercial bank.State Bank of India (SBI) began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809.On 1st July 1955 State Bank of India was constituted under the State Bank of India Act 1955, for the purpose of taking over the undertaking and business of the Imperial Bank of India .The State Bank Group, with over 16,000 branches has the largest banking branch network in India.The bank has 131 overseas offices spread over 32 countries as on 31st Dec 2009. It has about 8500 ATMs across the nation. HDFC Bank Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd, was established in the year 1994, as a part of the liberalization of the Indian Banking Industry by Reserve Bank of India (RBI). HDFC Bank has 1,725 branches and over 4,232 ATMs, in 779 cities in India, and all branches of the bank are linked on an online real-time basis.The year 2008 has been very prosperous for HDFC as it won a host of awards for being the best retail bank and also the best among other Indian banks to adopt Information Technology. Punjab National Bank(PNB) Punjab National Bank (PNB) is a state-owned financial services company located in New Delhi, India. It was registered on May 19, 1894 under the Indian Companies Act with its office in Anarkali Bazaar Lahore.Today, the Bank is the second largest government-owned commercial bank in India with about 5000 branches across 764 cities. It serves over 37 million customers.
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UTI Bank (AXIS Bank) Axis Bank, formerly UTI Bank, is a financial services firm that had begun operations in 1994, after the Government of India allowed new private banks to be established. The bank changed its name to Axis Bank in April 2007 to avoid confusion with other unrelated entities with similar name.The Bank has 28 branches in urban and semi urban areas as on 31st July 1998. All the branches are fully computerised and networked through VSAT. ATM services are available in 27 branches.At the end of October 2009, The Bank has a very wide network of more than 1000 branches and Extension Counters.The Bank has a network of over 4055 ATMs (as on 31 March 2010).

5) SWOT Analysis Strengths High Growth Rate High Operational Efficiency Highly Competent Staff Wide Area Coverage
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Weaknesses Low Market Share Low Promotion Low Bank Awareness Low Bank Resonance

Opportunities High Industry Growth Rate Improved Global Scenario Increased FDI in the sector

Threats Entry of New Players in the market Threat from existing players in the market

Fig:1.2 STRENGTH
1) Online Services: ICICI Bank provides online services of all itsbanking facilities. It

also provides D-Mart account facilities on-line, soa person can access his account from anywhere he is.[D-Mart is a dematerialized account opened by a salaried personfor purchase & sale of shares of different companies.

2) Advanced Infrastructure: Branches of ICICI Bank are wellequipped with advanced

technology to provide the customers withtaster banking services. All the computerized machines are located insuitable manner & are very useful to the customers & staff of thebank.

3) Friendly Staff: The staff of ICICI Bank in all branches is veryfriendly & help the

customers in all cases. They provide faster services along with bonding & personal relationship with thecustomers.
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4)

12 hrs. Banking services: Compared to other bank ICICI bankprovides long hrs. of services i.e. 8-8 services to the customers. Thisservice is one of its kind & is very helpful for the customers who arein urgent need of money.

WEAKNESS
1) High Bank Service Charges: ICICI bank charges highly to

customers for the services provided by them when compared toother bank & that is why it is only in the reach of higher class of society

2) Less Credit Period: ICICI bank provides credit facilities but

onlyupto limited period. Even when the credit period is not over itsends reminder letters to the customers which may annoy them

OPPORTUNITIES
1) Rural financing and loans to small enterprises could increase the

market shareability and profitability of icici bank

2) Growth in general insurance industry will help increasing the market

share of icici
3) Lombard general insurance company

THREATS 1) Competition: ICICI Bank is facing tight competition locally as

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Well as internationally. Bank like CITI Bank, HSBC, ABM, Standered Chartered, HDFC also provide equivalent facilities like ICICI do not have consistency in its international operation Standered Chartered, HDFC also provide equivalent facilities like ICICI do and also 2) Net Services: ICICI Bank provides all kind of services online.There can be easy access to the e-mail ids of the customers through wrong people. The confidential information of the customers can beleaked easily through the e-mail ids. 3) Decentralized Management: Each branch manager is given the authority of taking decisions in their respective branches. The decisions made by different managers are diverse and any one wrong decision can laid to heavy losses to the bank. 4) No Proper Facilities To Uneducated customers: ICICI Bankprovides all services through electronic computerized machines. Thiscreates problems to the less educated people. But this threat falls inthe 4thquadrant so its negligible. The company can avoid this threat.

Chapter 2: Research Methodology

1. Objective 2. Scope of study
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3. Managerial usefulness 4. Methodology 5. Limitations

1) Objective
1. To promote and develop in India sound and progressive banking principles, practices and conventions and to contribute to the developments of creative banking. 2. To render assistance and to provide various common services to Members and to the banking industry.

To develop and implement new ideas and innovations in banking services, operations and procedures. To organize co-ordination and co-operation on procedural, legal, technical, administrative or professional problems and practices of banks and the banking industry. 3. To initiate advance planning for introduction of new systems or services in the banking

industry. 4. To collect, classify and circulate statistical and other information on the structure and

working of the banking system. 5. To act as a clearing house for dissemination and exchange of statistical data, information, views and opinions on the systems, procedures and practices, and organization and methods of banks and on the structure, working and operations of the banking system. 6. industry. 7. To pool together talents and resources available with members and to organize exchange To explore, plan, co-ordinate and organize detailed surveys on banking, business,

resources, personnel and management development programmes of banks and the banking

of expertise and experiences of members for simplifying forms and procedures, for reducing cost
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of operations, for increasing efficiency and productivity and for such other common purposes as may be necessary or relevant to banks and the banking industry. 8. To organize exchange of credit information and opinions, export information or

information and views on any other aspects of interest to banks or the banking industry. 9. 10. To promote education and knowledge of the law and practice of banking. To issue periodical newsletters, bulletins or magazines and publish books, pamphlets or

other literature on matters of interest to members and to the banking industry. 11. relations. 12. To promote harmonious personnel relations in banking industry and to devise ways and To project a good public image of banking as a service industry and develop good public

means for involving banking personnel in the endeavours of banks for growth and development of banking and the economy of the country.

To organize, promote and afford facilities for indoor and outdoor games, any form of sports, recreation, sports competitions, events, cultural activities, social activities, fine arts, social meetings, entertainments and to organize meetings for the above purposes and to provide for purposes by purchasing, acquiring, taking on lease, own, hire or otherwise playing fields, grounds, buildings, pavilions and other facilities.

To give financial assistance to individuals or bodies, from out of its own funds, or by collection from its members, or from any other source, and for the purpose of such collection, to accept grants, donations, etc. in cash or kind from Government, its members, other organizations, members of the public, etc. and to collect subscriptions, membership and other fees and to levy fees or charges for the use of the facilities and to raise funds in any manner to strengthen the financial position of the Association, from time to time, for the purpose of providing education, training and facilities for imparting basic, advance knowledge and techniques in games, sports, cultural activities, social activities, fine arts, etc. and to give donations, technical and other assistance, sports equipments, sports
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facilities and expert guidance to organizers for this purpose whether its members or not and to conduct, organize, participate or to associate itself in State-Level, Nation, International Tournaments and competitions pertaining to sports, cultural activities, social activities, fine arts, etc., held in or outside India.

To found, establish, develop and finance a separate body for the promotion of objects contained in Clauses n, nn, nnn, and generally, and to register it as a Society and/or Public Trust, or a Company under the provisions or relevant Acts, as the case may be.

13. To maintain continuous communications with the representatives of bank employees, to conduct talks, discussions, and negotiations with them and to arrive at Settlements. 14. To provide assistance and guidance to members in interpretation and implementation of Awards, Settlements, etc. 15. To assist, advise and guide all members and the smaller members in particular on all their needs, difficulties and problems of growth, development and working.

To act as an agent or a representative of a member or members in respect of matters connected with any of their operations working or administration.

16. To maintain close co-ordination and liaison with Reserve Bank of India, All Financial Institutions, Chambers of Commerce, Organisations of Banking Industry, Management or Educational Institutes, Universities and such other Organisations for realizing the subject and purposes of the Association. 17. Generally to do all and any other thing that may be necessary or relevant for the realization of the objects and purposes of the Association directly or indirectly. 18. To carry on publicity for the purpose of educating public opinion with regard to the scope, importance and activities of the banking industry, for creative growth and development. 19. To do all and such other things as are incidental or conductive to the attainment of any or all of the above objects.
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20. To assist in the creation, expansion and modernisation of private concerns;

21. To encourage the participation of internal and external capital in the private concerns; 22. To encourage private ownership of industrial investment. 2) Scope of study Shares in the ICICI Bank FPO are being offered in a price band of Rs 885 to Rs 950 price. For retail investors, the bank is offering its share at a discount of Rs 50 on the final price of the issue.Therefore, even if the final allotment takes place at a higher price band of Rs 950, retail investors will be allotted shares at Rs 900.Based on the Wednesday's closing price of ICICI Bank's July futures of Rs 947, the price difference between the FPO price and July futures stood at Rs 47 for retail investors.As the lot size of the ICICI Bank's futures is 350 shares, retail investors, who apply in four different names of their family, can get the advantage of the huge arbitrage opportunity, provided the bank's FPO gets subscribed only one time in the retail category.Data available on the NSE website on Wednesday showed that the bank's FPO for the retail category was subscribed by 0.0064 times."Looking at the subscription data, retail investors are expected to get a fair allotment of the bank's shares under the FPO, which offer good arbitrage opportunity for retail investors, who do not want to take undue risk," VK Sharma, head-research, Anagram Securities, said. The RNCOS report - "Opportunities in Indian Banking Sector" - provides extensive research and rational analysis on the Indian banking industry. This report has been made to help clients to evaluate the opportunities, challenges and driving forces critical to the growth of banking industryinIndia. The forecast given in this report is not based on a complex economic model but is intended as a rough guide to the direction in which the market is likely to move. The future projection is done on the basis of the current market scenario, past trends, and rules and regulations laid by the regulator and supervisor of the financial system, Reserve Bank of India (RBI). The report provides detailed overview of the Indian banking industry by contemplating and
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analyzing various parameters like assets size, and income level. It helps clients to understand various products available in the Indian banking industry and their future scope. The future forecast discusses the future prospects of different arms of banking industry including rural banking, bancassurance, financial cards, mobile banking, role of technology in rural banking, pension funds, and the future course of action and strategies for pension fund industy to betaken at macro level. Key Findings of the Report - Pension fund industry in India grew at a CAGR of 122.44% from 1999-00 to 2006-07. - Rural and semi-urban India is expected to account for 58.33% of the insurance sector by 2010. - In terms of ownership, debit cards are more in number than credit cards but in terms of transactions, credit cards are used more than debit cards. - The ATM outlets in India increased at a CAGR of 28.09% from March 2006 to March 2007. - Rural and semi-urban centers account for 66% of total bank branches. - Indian Mutual Fund industry witnessed a growth of 49.88% from May 2006 to May 2007, and higher growth is recorded in closed ended schemes at 215.61%. - Increasing number of millionaires in India is increasing the scope of Wealth Management Services. - Bankable households in India are anticipated to grow at a CAGR of 28.10% during 2007-2011. - Investment by banking sector in Information Technology is expected to increase at 18% in 2007 from last year. Key Issues & Facts Analyzed in the Report - Market analysis of different product segments in the banking industry. - Evaluation of current market trends. - Basel II Accord and capital requirement by Indian Banking Industry. - Role of technology in banking industry. - Pension fund industry in India.
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- Urban Vs rural banking in terms of deposit, branches, and credit and future outlook of rural banking. - Drivers and constraints for credit and debit cards industry in India. - Analysis of various challenges and opportunities for the industry. KeyPlayersAnalyzed This section covers the key facts about the major players (including Public, Private, and Foreign sector) in the Indian banking industry, including Bank of Baroda, State Bank of India, Canara Bank, Punjab National Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Citibank, Standard Chartered Bank, HSBC Bank, ABN AMRO Bank, American Express, etc.

InformationSources Information has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to more than 3000 paid databases. AnalysisMethod The analysis methods include ratio analysis, historical trend analysis, linear regression analysis using software tools, judgmental forecasting, and cause and effect analysis.

3) Managerial usefulness
a)This study can assist the management in decision making process. b)This study gives information about the competitors in the industry to the management c)This study can help management to innovate new ideas regardind products and services which can fulfill the needs of the existing as well as the potential customers d)This study provides the comparative analysis of major players in banking sector
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e)This study gives the SWOT analysis of the organization to the management Managerial decision areas include:

assessment of investible funds selecting business area choice of product determining optimum output determining price of product determining input-combination and technology sales promotion. Costs of production are effected by internal factors over which management has a large degree of control. An important job of executive management is to help the members of various management levels understand that all of them are part of the management team. Standard costs and their variances are an aid to keeping management informed of the effectiveness of production effort as well as that of the supervisory personnel. supervisors who often handle two thirds of three fourth of the dollar cost of the product are made directly responsible for the variance which, show up as materials variances (price, quantity, mix, and yield) or as direct labor variances (rate and efficiency). Materials and labor variances can be computed for each materials item, for each labor operation, and for each worker. Factory overhead variances (spending, controllable, idle capacity, volume, and efficiency) indicate the failure or success of the controlof variable and fixed overhead expenses in each department. Variances are not ends in themselves but springboards for further analysis, investigation, and action. Variances also permit the supervisory personnel to defend themselves and their employees against failures that were not their fault. A variance provides the yardstick to measure the fairness of the standard, allowing management to redirect its effort and to make reasonable adjustments. Action to eliminate the causes of undesirable variances and to encourage and reward desired performance lies in the field of management, but

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supervisory and operating personnel rely on the accounting information system for facts which facilitate intelligent action toward the control of costs.

Managerial implications for different market types towards homogenisation.

Market types Market Element Co-operation projects Ideal markets Heterogeneous supply Homogeneous and demand Competitive supply Horizontal management Homogeneous competition Heterogeneous supply Homogeneous

supply and demand supply Heterogeneous CBSE in use, software on the basis of

Own Needs Keep own needs flexible, monitor actively the offerings of the suppliers; take them into account as software architecture development. Use evaluated suppliers. Industry demand

demand demand Adopt CBSE; adapt More flexible own software system definition of own needs, usefulness of industry standards as basis for needs questionable as compatible supply non-existent. interfaces to the

architectures planned architecture and standards, own needs supply. accordingly. Well defined processes for needs identification Actively enhance and monitor the standardisation heterogeneity of demand may be increasing.

early as possible in the also planned

and acquisitions. Monitor other buyers, Participation and initiate co-operative efforts in order to homogenise demand. adaptation to industry standardisation efforts.

Participation in standardisation efforts, usefulness standards as basis for needs questionable as compatible supply non-existent Ability to buy

efforts in the market; of industry

Object of

Define in co-operation Software component Suppliers offer

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Market types Market Element

Co-operation projects Ideal markets Heterogeneous supply Homogeneous and demand

Competitive supply Horizontal management Homogeneous competition Heterogeneous supply Homogeneous demand standards-based, but suppliers possibly offering complete solution type package. Cost savings may be possible if supplier is able to abstract pieces of the

supply and demand supply Heterogeneous and services for value and cost analysis for both elements needed. demand abstracted services, requirements and criteria need to be prepared accordingly. Value and cost analysis important for both.

exchange

with the supplier,

complete solution type. abstracted, methods component and

Exchange

Close and cocontracts not very commitments.

Possible use of component brokers leading to

offering. More transactional, There may be a suppliers more likely need to develop pursuing long-term corelationship with the chosen supplier competition. transactional. If own operative the homogeneous use competitive strategy towards

mechanism operative, formal

detailed, more informal transactional relationships with suppliers to be managed in a more transaction based detailed contracts addressing precisely guarantees, Exchange Supplier relationship

relationships. Direct needs applicable to

supply, possibility to due to horizontal

manner, emphasis on suppliers.

responsibilities, etc. Interacting with the Contractual clauses Important to

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Market types Market Element

Co-operation projects Ideal markets Heterogeneous supply Homogeneous and demand

Competitive supply Horizontal management Homogeneous competition Heterogeneous supply Homogeneous demand develop ways to particular suppliers future roadmaps for Monitoring and adapting to the development of supply. the component. Participation in the industry standardisation efforts in order to use the homogeneity of demand to create homogeneity of supply.

supply and demand supply Heterogeneous supplier carefully demand important factor in

counter-part management, coand commitment emphasised. Industry supply Monitoring the development of the supply

operation, mutual trust planned and cocontracts. Participation in the industry standardisation efforts.

the supplier interface influence the

ordinated, defined in management

4) Methodology
The managerial methodology represents a domain of great interest for the efficiency of Romanian banks. It regards the promoting and the using of modern management systems, methods and techniques that represent a condition for their managerial, economic and commercial success. The efficiency and the effectiveness, the performances obtained in the managed domain are the natural consequences of a performant management and, firstly, of managerial methodology, that gives order disciplines and accuracy to managers and employees. It is considered that there cannot be obtained pluses in efficiency and effectiveness in the absence of a management that can ensure performance. It is well-known that as far as the banking system is concerned, this type of
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management refers, almost exclusively, to the financial and economic results achieved not to the general or specific performances in management. It is not possible to speak about profit, efficient placements and other efficiency indicators if the performance in the field of management, decisionmaking, information and organization have not reached a certain standard.

Considered by the majority of the specialists to be the most complex modality of managerial change, reengineering means fundamentally rethinking and radically redesigning business processes in order to achieve a spectacular improvement of the indicators considered today as critical in assessing performances, such as the cost, the quality, the service and the speed. Reengineering implies approaching, process by process its organization and its management, taking into account the fact that, within it there are included two categories of working processes that of management and of execution (Nicolescu, 2000). Even if in Romania there operate traditional bank as well as other banking institutions founded after 1990, reengineering is equally necessary to the banks facing economic difficulty, to those which function well, but for which the management anticipates future problems, and for those which are successful and expected to be successful also in the future, but which have an ambitious and aggressive management that aspires towards supremacy in the detriment of their competitors. Also, attention should be given to banks with a less efficient management as a result of: the lack of realistic policies and strategies; a passive attitude or, rarely, reactive towards the challenges of the national and international environment; the presence of the stupidity factor, namely a general or partial moral obsolescence of the organization in point of stages and structure, caused by lack of correlation between stage components and the objectives assumed, the coexistence of parallelisms in exercising certain tasks and responsibilities, the lack of certain positions and divisions indispensable for certain work processes, the incompatibility between certain positions and the people holding them, disregarding professional and managerial competence in promoting managers etc. Other factors that may contribute to a poor management in the banking sector are:
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 insufficient transparency in decision-making, at the top of the bank management; deficiency in communication between the managers and their subordinates generated by the prevailing authoritative managerial styles, that are to be found at all levels; deficiency in the organizational culture, mainly in what is called behaviour; culture deficiency in the field of management, economy and information in the case of most of the managers and subordinated; insufficient correlation between material compensation and individual and group performances, inspite of the high salaries paid in the banking system in comparison with other economic sectors; reduced management participation, namely modest implication of the employees in establishing and achieving the objectives, and reduced participation in training sessions, especially in the case of the department managers, a sector where the real economic substance is elaborated .

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fig:2.1

5) Limitations
During the early years it was not very easy for an Indian bank to open overseas branches, though the Reserve Bank of India was vested with the powers to allow them to open overseasbranches. Policymakers took into account a number of factors and not all of which are purely commercial. Three major elements influenced the Reserve Banks policy towards Indian banks opening offices abroad till the early 1970s. First, there was the question of foreign exchange for meeting the capital requirements and other expenses connected with the setting up of an overseas offices. Given the scarcity of foreign exchange reserves, RBI and the government were concerned about the foreign costs.

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Second, there was the issue of business potential. This was related to the number of persons of Indian origin residing in the country in question. The perception was that the branch or office abroad would grow in size if it was supported by a large number of ethnic Indians. Third, there was the principle of reciprocity

Following are the main disadvantages and limitations of branch banking system: 1. Problem of Management: Under the branch banking system a number of difficulties as regards management, supervision and control arise: (a) since the management of the bank gets concentrated at the head office, the managers can afford to be lax and indulgent in their duties and are often involved in serious irregularities while using the funds. (b) Since the branch manager has to seek permission from the head office on each and every matter, this results in unnecessary delay and red- tapism in the banking business. 2. Lack of Initiative: Branch managers generally lack initiative on all-important matters; they cannot take independent decisions and have to wait for. The clearance signal from the head office. 3. Monopolistic Tendencies: Branch banking encourages monopolistic tendencies in the banking system. A few big banks dominate and control the whole banking system of the country through their branches. This can lead to the concentration of resources into a few hands. 4. Regional Imbalances:
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Under branch banking system, the financial resources collected in the smaller and backward regions are transferred to the bigger industrial centres. This encourages regional imbalances in the country. 5. Adverse Linkage Effect: Under branch banking system, the losses and weaknesses of some branches also have their effect on other branches of the bank. 6. Inefficient Branches: In this system, the weak and unprofitable branches continue to operate under the protection cover of the large and more profitable branches. 7. Other Defects: Other defects of branch banking system arc as follows: (a) Preferential treatment is given to the branches near the head office, (b) Higher interest rates are charged in the developed area to compensate for the lower rates charged in the backward areas, (c) There is concentration and unhealthy competition among the branches of different banks in big cities, (d) Many difficulties are faced when a bank opens branches. In foreign countries.

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Chapter 3:Conceptual Discussions

1) PEST Analysis

Fig:3.1 PEST Analysis is an acronym used for Political,Economic,Social and Technological factors. PEST Analysis is a simple but important and widely-used tool that helps you understand the big picture of the Political,Economic, Socio-Cultural andTechnological environment you are operating in. PEST is used by business leaders worldwide to build their vision of the future. It is important for these reasons:

By making effective use of PEST Analysis, you ensure that what you are doing is

aligned positively with the forces of change that are affecting our world. By taking
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advantage of change, you are much more likely to be successful than if your activities oppose it.

Good use of PEST Analysis helps you avoid taking action that is condemned to failure PEST is useful when you start operating in a new country or region. Use of PEST

for reasons beyond your control.

Analysis helps you break free of unconscious assumptions, and helps you quickly adapt to the realities of the new environment.

2) Customer Review
The Banking and Finance Review (BFR) is a bi-annual, peer-reviewed international research journal that provides a publication outlet for theoretical as well as empirical issues in the fields of banking and finance. The Banking and Finance Review seeks to promote research that enhances the professions understanding of banking and finance. The scope of the Banking and Finance Review is broad. It includes studies in the following areas:Banking, Financial Institutions, Corporate Finance, International Finance, Capital Markets, Commodities Market, Derivatives, Risk Management, Insurance , Fixed Income Securities, Alternative Investments, Portfolio & Security Analysis, Investments, Real Estate Finance and other areas of finance that may be of interest to academicians and financial professionals. The Banking and Finance Review board of editors and ad hoc referees guarantee the high quality standard of the journal. Every effort is made to ensure a quick turnaround time; usually the reviewing time does not exceed 60 days. There are 3 steps to the review process:
1. Mid-Year Review Initial assessment of how youve done. 2. (Optional) End of Year Review How youve done after 1 year. 3. Round-Table Discussion Where your bonus number is decided.

The last step is already addressed in this article on how analysts (and associates) get ranked for bonuses and end-of-year reviews are irrelevant aside from your bonus number, so were going to focus on step 1 here.
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If youre a new analyst or associate, mid-year review means December or January, so youre judged on a few months of performance. Sometimes the process is both upward and downward: more senior bankers offer their comments on you, and comment on them. Other times, its only a downward process and you do not comment on VPs or MDs.

It is somewhat axiomatic to observe that the banking industry locally and globally is undergoing a period of great change. The expectation for SA banks is a continued period of low returns with a focus on cost reduction and meeting the ongoing requirements for new and ever more rigorous regulatory change.We believe that the current business climate in South Africa, though still tough, is also showing signs of recovery. So whilst we should not expect miracles and growth for local banks this year might not be at the levels seen prior to the economic crisis, Deloitte is of the view that 2011 is a year for banks to regain balance. They certainly cannot go into hibernation until the difficult times are over, nor can they afford to allow the current environment to force them into an overly internal focus. For example, it would be short-sighted to focus attention only on cost cutting without gearing up to be able to take advantage of opportunities when the markets shift. Banks need to use this time to reassess and change the way in which they manage their data in order to truly understand all their stakeholders and to use their data to build a competitive advantage. Attention should also be focused on balancing their efforts between cost optimisation, complying with regulation and identifying future growth opportunities in 2011. All this in an effort to bridge the gap between their response to the current environment and where they need to be by 2012. In the following pages, Deloitte SA has identified several key areas of focus that banks may wish to consider in 2011. I should like to thank my colleagues who have contributed to this publication and whose names and contact details are listed on the last page.

3) Performance Analysis The financial crisis of 2007-2008 was triggered by an insolvent United States banking system (catalysts of which were sub-prime lending, over leveraging and poor regulation) resulting in the
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collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. The destabilization of the banking sector in the U.S. had a domino effect on the global financial industry, with effects felt in Europe, the Middle East and the Asia Pacific. 24 months later, the global financial industry still hasnt regained its lost glory, and even countries with deep pockets such as the U.A.E. and Singapore have exhibited limited sectoral growth. The Indian financial industry underwent rapid transformation post liberalization in the early 90s, resulting in greater inflow of investments from FII's into the capital market. Despite the foray of foreign banks in the country, nationalized banks continue to be the biggest lenders in the country, primarily due to their size and penetration of networks. In fact, Industry estimates indicate that over 80% of commercial banks in India are in the public sector and of the 50-odd private banks, less than half are foreign banks. The Reserve Bank of India is the Indian equivalent of the Fed. The opportunities in this industry remain extremely promising due to its relatively low penetration of both basic as well as advanced financial products. Though the Indian finance and banking industry did suffer significantly during the past 2 years, it was relatively sheltered from the triggers of the global melt-down, suffering instead due to monies from FIIs drying up, falling interest rates, rapidly rising inflation and poor investor confidence. Annual reports suggest that most of the larger Banks have begun to pick up from where they left off, albeit with more caution, and most industry pundits are optimistic about the current fiscal year.

4) Growth Potential
There are a range of retail jobs to suit most skill sets, including banking officer, probationary officer, loan agent, assessor, mortgage loan underwriter, loan processing officer, accountant, product marketing and sales executive, and customer service executive among others. However, job security is not very high in retail banking as many players suffer from shrinking margins and poor customer retention due to increasing competition and limited market differentiation, leading to lay-offs. Meanwhile, there are also more skilled jobs available such as actuarist, equity researcher, forex trader, securities linked products developer and portfolio manager for those with the relevant knowledge and ambition. The biggest opportunity in this sector remains in improving
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information flow to customers. Hence, there is a growing emphasis on in-house research and market intelligence.

5)

Five forces model

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Fig:3.2

Chapter 4:Data Analysis

36

Fig:4.1

37

Fig:4.2

38

fig:4.3

39

Fig:4.4

40

Fig:4.5

41

Fig:4.6

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CHAPTER : 5Conclusions and suggestions

Keeping pace with changing times and an ever-growing need for specialized Services, ICICI BANK has begun offering its marketing expertise and distributaries facilities to other producers in banking and related areas. However a precondition of all such agreement is control supervision to be carried out by an ICICI BANK expert under the issues of RBI. Each of the regional Marketing offices has a customer services cell that is managed by qualified experts. These, in addition to handling after-sales servicing, function as advisory bodies that can help customers, make the right choice of cement for a specific area of application. ICICI BANK can provide expert advice on getting the best value For loan and offer assistance on related issues in loan projects. Besides this, technical books/booklets on bank and its related sectors are regularly must be available for the benefit of the customers. In addition to this, ICICI BANK also publish free booklet, which profiles the Latest information on concrete research, design, construction and maintenance. Thus to conclude it can be said that acc cement has its branches spread all over India . Limited company product are the profitable not only in India but also in the Whole world. The most fundamental role of a leader is to define the organizational goal, formulate plans and organize people to achieve the goals through the execution of plans. The figure5.1 illustrates the 3-Dimensions of leadership tasks
1. Vision - It defines the purpose, or simply What

to do? A vision includes determining the next product or feature, finding new markets for the product, adoption of new technology etc.
2. Strategy - It articulates the plans, How to

achieve the vision? Plans or strategies demonstrate the job knowledge or the skills of a leader. It includes restructuring organization, product management, strategic management etc.

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3. People - Who should carry out the Strategy? How to make people accomplish the

strategy and hence the goal, The people skills include providing inspiration & motivation, establishing relationship, intelligently using power and position of leadership etc. The most important skill that bridges the three job functions is making decisions. Any leader has to deal with array of options in his every day chore; a good leadership depends on how effectively he chooses those alternatives. Hence effective decision making is an essential skill for any leader, fortunately a lot of research and academics have focused on this area and there are substantial materials and tools for it.

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CHAPTER 6:APPENDICES
1. What is a Repo Rate? Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks have any shortage of funds they can borrow it from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive. 2. What is Reverse Repo Rate? This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. 3. What is CRR Rate? Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks. 4. What is SLR Rate? SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently.

5. What is Bank Rate?

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Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the money supply. 6. What is Inflation? Inflation is as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are fewer Goods and more buyers; this will result in increase in the price of Goods, since there is more demand and less supply of the goods. 7. What is Deflation? Deflation is the continuous decrease in prices of goods and services. Deflation occurs when the inflation rate becomes negative (below zero) and stays there for a longer period. 8. What is PLR? The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers). The rate is almost always the same amongst major banks. Adjustments to the prime rate are made by banks at the same time; although, the prime rate does not adjust on any regular basis. The Prime Rate is usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate. The rates reported below are based upon the prime rates on the first day of each respective month. Some banks use the name "Reference Rate" or "Base Lending Rate" to refer to their Prime Lending Rate. 9. What is Deposit Rate? Interest Rates paid by a depository institution on the cash on deposit. Policy Rates: Bank Rate: 6.00% Repo Rate: 5.25% Reverse Repo Rate: 3.75% Reserve Ratios: CRR: 6.00% SLR: 25.0% Lending/Deposit Rates: PLR: 11.00%-12.00%.
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 Deposit Rate: 6.00%-7.50%. . Savings Bank rate: 3.5%. Note: Rates as on 14-05-10. 10. What is FII? FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks. FII's generally buy in large volumes which has an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc. 11. What is FDI? FDI (Foreign Direct Investment) occurs with the purchase of the physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control (Or) A foreign company having a stake in a Indian Company. 12. What is IPO? IPO is Initial Public Offering. This is the first offering of shares to the general public from a company wishes to list on the stock exchanges. 13. What is Disinvestment? The Selling of the government stake in public sector undertakings. 14. What is Fiscal Deficit? It is the difference between the governments total receipts (excluding borrowings) and total expenditure. Fiscal deficit in 2009-10 is proposed at 6.8% of GDP. 15. What is Revenue deficit? It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government. Revenue deficit in 2009-10 is proposed at 4.8% of GDP. 16. What is GDP? The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period; classically a year. GDP during 2008-09 is 6.7%. 17. What is GNP?

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Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market. 18. What is National Income? National Income is the money value of all goods and services produced in a country during the year. 19. What is Per Capita Income? The national income of a country, or region, divided by its population. Per capita income is often used to measure a country's standard of living.Per capita income during 2008-09 estimated by CSO: Rs.25, 494. 20. What is Vote on Account? A vote-on account is basically a statement ,where the government presents an estimate of a sum required to meet the expenditure that it incurs during the first three to four months of an election financial year until a new government is in place, to keep the machinery running. 21. Difference between Vote on Account and Interim Budget? Vote-on-account deals only with the expenditure side of the government's budget, an interim Budget is a complete set of accounts, including both expenditure and receipts. 22. What is SDR? The SDR (Special Drawing Rights) is an artificial currency created by the IMF in 1969. SDRs are allocated to member countries and can be fully converted into international currencies so they serve as a supplement to the official foreign reserves of member countries. Its value is based on a basket of key international currencies (U.S. dollar, euro, yen and pound sterling). 23. What is SEZ? SEZ means Special Economic Zone is the one of the part of governments policies in India. A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. The basic motto behind this is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people.

Weve put together a brief glossary of the most common banking, financial and investing terms that a financial analyst may come across in the course of building a financial model:

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Accrued interest: Interest due from issue date or from the last coupon payment date to the settlement date. Accrued interest on bonds must be added to their purchase price.

Arbitrage: Buying a financial instrument in one market in order to sell the same instrument at a higher price in another market. Ask Price: The lowest price at which a dealer is willing to sell a given security. Asset-Backed Securities (ABS): A type of security that is backed by a pool of bank loans, leases, and other assets. Most ABS are backed by auto loans and credit cards these issues are very similar to mortgage-backed securities. At-the-money: The exercise price of a derivative that is closest to the market price of the underlying instrument.

Basis Point: One hundredth of 1%. A measure normally used in the statement of interest rate e.g., a change from 5.75% to 5.81% is a change of 6 basis points. Bear Markets: Unfavorable markets associated with falling prices and investor pessimism. Bid-ask Spread: The difference between a dealers bid and ask price. Bid Price: The highest price offered by a dealer to purchase a given security. Blue Chips: Blue chips are unsurpassed in quality and have a long and stable record of earnings and dividends. They are issued by large and well-established firms that have impeccable financial credentials. Bond: Publicly traded long-term debt securities, issued by corporations and governments, whereby the issuer agrees to pay a fixed amount of interest over a specified period of time and to repay a fixed amount of principal at maturity.

Book Value: The amount of stockholders equity in a firm equals the amount of the firms assets minus the firms liabilities and preferred stock. /p> Broker: Individuals licensed by stock exchanges to enable investors to buy and sell securities.

Brokerage Fee: The commission charged by a broker. Bull Markets: Favorable markets associated with rising prices and investor optimism. Call Option: The right to buy the underlying securities at a specified exercise price on or before a specified expiration date.
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Callable Bonds: Bonds that give the issuer the right to redeem the bonds before their stated maturity.

Capital Gain: The amount by which the proceeds from the sale of a capital asset exceed its original purchase price. Capital Markets: The market in which long-term securities such as stocks and bonds are bought and sold.

Certificate of Deposits (CDs): Savings instrument in which funds must remain on deposit for a specified period, and premature withdrawals incur interest penalties. Closed-end (Mutual) Fund: A fund with a fixed number of shares issued, and all trading is done between investors in the open market. The share prices are determined by market prices instead of their net asset value.

Collateral: A specific asset pledged against possible default on a bond. Mortgage bonds are backed by claims on property. Collateral trusts bonds are backed by claims on other securities. Equipment obligation bonds are backed by claims on equipment. Commercial Paper: Short-term and unsecured promissory notes issued by corporations with very high credit standings.

Common Stock: Equity investment representing ownership in a corporation; each share represents a fractional ownership interest in the firm. Compound Interest: Interest paid not only on the initial deposit but also on any interest accumulated from one period to the next.

Contract Note: A note which must accompany every security transaction which contains information such as the dealers name (whether he is acting as principal or agent) and the date of contract. Controlling Shareholder: Any person who is, or group of persons who together are, entitled to exercise or control the exercise of a certain amount of shares in a company at a level (which differs by jurisdiction) that triggers a mandatory general offer, or more of the voting power at general meetings of the issuer, or who is or are in a position to control the composition of a majority of the board of directors of the issuer.

Convertible Bond: A bond with an option, allowing the bondholder to exchange the bond for a specified number of shares of common stock in the firm. A conversion price is the
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specified value of the shares for which the bond may be exchanged. The conversion premium is the excess of the bonds value over the conversion price.

Corporate Bond: Long-term debt issued by private corporations. Coupon: The feature on a bond that defines the amount of annual interest income. Coupon Frequency: The number of coupon payments per year. Coupon Rate: The annual rate of interest on the bonds face value that a bonds issuer promises to pay the bondholder. It is the bonds interest payment per dollar of par value.

Covered Warrants: Derivative call warrants on shares which have been separately deposited by the issuer so that they are available for delivery upon exercise. Credit Rating: An assessment of the likelihood of an individual or business being able to meet its financial obligations. Credit ratings are provided by credit agencies or rating agencies to verify the financial strength of the issuer for investors.

Currency Board: A monetary system in which the monetary base is fully backed by foreign reserves. Any changes in the size of the monetary base has to be fully matched by corresponding changes in the foreign reserves. Current Yield: A return measure that indicates the amount of current income a bond provides relative to its market price. It is shown as: Coupon Rate divided by Price multiplied by 100%.

Custody of Securities: Registration of securities in the name of the person to whom a bank is accountable, or in the name of the banks nominee; plus deposition of securities in a designated account with the banks bankers or with any other institution providing custodial services. Default Risk: The possibility that a bond issuer will default ie, fail to repay principal and interest in a timely manner.

Derivative Call (Put) Warrants: Warrants issued by a third party which grant the holder the right to buy (sell) the shares of a listed company at a specified price. Derivative Instrument: Financial instrument whose value depends on the value of another asset.

Discount Bond: A bond selling below par, as interest in-lieu to the bondholders.
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Diversification: The inclusion of a number of different investment vehicles in a portfolio in order to increase returns or be exposed to less risk.

Duration: A measure of bond price volatility, it captures both price and reinvestment risks to indicate how a bond will react to different interest rate environments. Earnings: The total profits of a company after taxation and interest. Earnings per Share (EPS): The amount of annual earnings available to common stockholders as stated on a per share basis. Earnings Yield: The ratio of earnings to price (E/P). The reciprocal is price earnings ratio (P/E).

Equity: Ownership of the company in the form of shares of common stock. Equity Call Warrants: Warrants issued by a company which give the holder the right to acquire new shares in that company at a specified price and for a specified period of time.

Ex-dividend (XD): A security which no longer carries the right to the most recently declared dividend or the period of time between the announcement of the dividend and the payment (usually two days before the record date). For transactions during the ex-dividend period, the seller will receive the dividend, not the buyer. Ex-dividend status is usually indicated in newspapers with an (x) next to the stocks or unit trusts name. Face Value/ Nominal Value: The value of a financial instrument as stated on the instrument. Interest is calculated on face/nominal value.

Fixed-income Securities: Investment vehicles that offer a fixed periodic return. Fixed Rate Bonds: Bonds bearing fixed interest payments until maturity date. Floating Rate Bonds: Bonds bearing interest payments that are tied to current interest rates. Fundamental Analysis: Research to predict stock value that focuses on such determinants as earnings and dividends prospects, expectations for future interest rates and risk evaluation of the firm.

Future Value: The amount to which a current deposit will grow over a period of time when it is placed in an account paying compound interest.

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Future Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will grow over a period of time when it is placed in an account paying compound interest.

Futures Contract: A commitment to deliver a certain amount of some specified item at some specified date in the future. Hedge: A combination of two or more securities into a single investment position for the purpose of reducing or eliminating risk.

Income: The amount of money an individual receives in a particular time period. Index Fund: A mutual fund that holds shares in proportion to their representation in a market index, such as the S&P 500.

Initial Public Offering (IPO): An event where a company sells its shares to the public for the first time. The company can be referred to as an IPO for a period of time after the event. Inside Information: Non-public knowledge about a company possessed by its officers, major owners, or other individuals with privileged access to information.

Insider Trading: The illegal use of non-public information about a company to make profitable securities transactions Intrinsic Value: The difference of the exercise price over the market price of the underlying asset.

Investment: A vehicle for funds expected to increase its value and/or generate positive returns. Investment Adviser: A person who carries on a business which provides investment advice with respect to securities and is registered with the relevant regulator as an investment adviser.

IPO price: The price of share set before being traded on the stock exchange. Once the company has gone Initial Public Offering, the stock price is determined by supply and demand. Junk Bond: High-risk securities that have received low ratings (i.e. Standard & Poors BBB rating or below; or Moodys BBB rating or below) and as such, produce high yields, so long as they do not go into default.

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Leverage Ratio: Financial ratios that measure the amount of debt being used to support operations and the ability of the firm to service its debt.

Libor: The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). The LIBOR rate is published daily by the British Bankers Association and will be slightly higher than the London Interbank Bid Rate (LIBID), the rate at which banks are prepared to accept deposits. Limit Order: An order to buy (sell) securities which specifies the highest (lowest) price at which the order is to be transacted.

Limited Company: The passive investors in a partnership, who supply most of the capital and have liability limited to the amount of their capital contributions. Liquidity: The ability to convert an investment into cash quickly and with little or no loss in value.

Listing: Quotation of the Initial Public Offering companys shares on the stock exchange for public trading. Listing Date: The date on which Initial Public Offering stocks are first traded on the stock exchange by the public

Margin Call: A notice to a client that it must provide money to satisfy a minimum margin requirement set by an Exchange or by a bank / broking firm. Market Capitalization: The product of the number of the companys outstanding ordinary shares and the market price of each share.

Market Maker: A dealer who maintains an inventory in one or more stocks and undertakes to make continuous two-sided quotes. Market Order: An order to buy or an order to sell securities which is to be executed at the prevailing market price.

Money Market: Market in which short-term securities are bought and sold. Mutual Fund: A company that invests in and professionally manages a diversified portfolio of securities and sells shares of the portfolio to investors.

Net Asset Value: The underlying value of a share of stock in a particular mutual fund; also used with preferred stock.
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Offer for Sale: An offer to the public by, or on behalf of, the holders of securities already in issue.

Offer for Subscription: The offer of new securities to the public by the issuer or by someone on behalf of the issuer. Open-end (Mutual) Fund: There is no limit to the number of shares the fund can issue. The fund issues new shares of stock and fills the purchase order with those new shares. Investors buy their shares from, and sell them back to, the mutual fund itself. The share prices are determined by their net asset value.

Open Offer: An offer to current holders of securities to subscribe for securities whether or not in proportion to their existing holdings. Option: A security that gives the holder the right to buy or sell a certain amount of an underlying financial asset at a specified price for a specified period of time.

Oversubscribed: When an Initial Public Offering has more applications than actual shares available. Investors will often apply for more shares than required in anticipation of only receiving a fraction of the requested number. Investors and underwriters will often look to see if an IPO is oversubscribed as an indication of the publics perception of the business potential of the IPO company. Par Bond: A bond selling at par (i.e. at its face value). Par Value: The face value of a security. Perpetual Bonds: Bonds which have no maturity date. Placing: Obtaining subscriptions for, or the sale of, primary market, where the new securities of issuing companies are initially sold. Portfolio: A collection of investment vehicles assembled to meet one or more investment goals.

Preference Shares: A corporate security that pays a fixed dividend each period. It is senior to ordinary shares but junior to bonds in its claims on corporate income and assets in case of bankruptcy. Premium (Warrants): The difference of the market price of a warrant over its intrinsic value.

Premium Bond: Bond selling above par.

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Present Value: The amount to which a future deposit will discount back to present when it is depreciated in an account paying compound interest.

Present Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will discount back to present when it is depreciated in an account paying compound interest. Price/Earnings Ratio (P/E): The measure to determine how the market is pricing the companys common stock. The price/earnings (P/E) ratio relates the companys earnings per share (EPS) to the market price of its stock.

Privatization: The sale of government-owned equity in nationalized industry or other commercial enterprises to private investors. Prospectus: A detailed report published by the Initial Public Offering company, which includes all terms and conditions, application procedures, IPO prices etc, for the IPO

Put Option: The right to sell the underlying securities at a specified exercise price on of before a specified expiration date. Rate of Return: A percentage showing the amount of investment gain or loss against the initial investment.

Real Interest Rate: The net interest rate over the inflation rate. The growth rate of purchasing power derived from an investment. Redemption Value: The value of a bond when redeemed. Reinvestment Value: The rate at which an investor assumes interest payments made on a bond which can be reinvested over the life of that security. Relative Strength Index (RSI): A stocks price that changes over a period of time relative to that of a market index such as the Standard & Poors 500, usually measured on a scale from 1 to 100, 1 being the worst and 100 being the best.

Repurchase Agreement: An arrangement in which a security is sold and later bought back at an agreed price and time. Resistance Level: A price at which sellers consistently outnumber buyers, preventing further price rises.

Return: Amount of investment gain or loss.

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Rights Issue: An offer by way of rights to current holders of securities that allows them to subscribe for securities in proportion to their existing holdings.

Risk-Averse, Risk-Neutral, Risk-Taking: Risk-averse describes an investor who requires greater return in exchange for greater risk. Risk-neutral describes an investor who does not require greater return in exchange for greater risk. Risk-taking describes an investor who will accept a lower return in exchange for greater risk. Senior Bond: A bond that has priority over other bonds in claiming assets and dividends. Short Hedge: A transaction that protects the value of an asset held by taking a short position in a futures contract. Settlement: Conclusion of a securities transaction when a customer pays a broker/dealer for securities purchased or delivered, securities sold, and receives from the broker the proceeds of a sale.

Short Position: Investors sell securities in the hope that they will decrease in value and can be bought at a later date for profit. Short Selling: The sale of borrowed securities, their eventual repurchase by the short seller at a lower price and their return to the lender.

Speculation: The process of buying investment vehicles in which the future value and level of expected earnings are highly uncertain. Stock Splits: Wholesale changes in the number of shares. For example, a two for one split doubles the number of shares but does not change the share capital.

Subordinated Bond: An issue that ranks after secured debt, debenture, and other bonds, and after some general creditors in its claim on assets and earnings. Owners of this kind of bond stand last in line among creditors, but before equity holders, when an issuer fails financially. Substantial Shareholder: A person acquires an interest in relevant share capital equal to, or exceeding, 10% of the share capital.

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Chapter 7:BIBLIOGRAPHY
BOOKS MARKETING MANAGEMENT BY KOTLER PHILIPS MARKETING AND SALESMANSHIP BY B S RAMAN

NEWSPAPER THE HINDUSTAN TIMES MINT NEWSPAPER WEBSITES

www.askultra.com

www.icici.co.in
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 www.icicihelp.com www.moneycontrol.com

www.wikipedia.com

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