Description
Executive Summary: Banking Industry which is basically my concern industry around which my project has to be revolved is really a very complex industry.
A Project Report On
A project study on “The environmental factors responsible for
IDBI Banks performance!
Submitted by:
"""""" """""""
XXXXX University, Mumbai
MBA in Banking (Finance)
Acknowledgement
To acknowledge all the ersons who had heled !or the !ul!illment o! the ro"ect is not
ossible !or any researcher but in site o! all that it becomes the !oremost resonsibility
o! the researcher and also the art o! research ethics to acknowledge those who had
layed a great role !or the comletion o! the ro"ect#
$o in the same se%uence at very !irst, & would like to acknowledge my arents because o!
whom & got the e'istence in the world !or the incetion and the concetion o! this ro"ect#
(ater on & would like to con!er the !lower o! acknowledgement to Ms. XXXXX XXXXX
and other !aculty members who taught me that how to do ro"ect through aroriate
tools and techni%ues# Because &)B& bank has trusted me and given me a chance to do my
integrated research study, & would like to give thanks to the organi*ation and esecially to
Mr. XXXXX XXXXX !rom the deth o! my heart#
+est all those eole who heled me are not only matter o! acknowledgment but also
authori*ed !or sharing my success#
Preface
Decision making is a fundamental part of the research process. Decisions regarding
that what you want to do, how you want to do, what tools and techniues must be used
for the successful completion of the pro!ect. "n fact it is the researcher#s efficiency as a
decision maker that makes pro!ect fruitful for those who concern to the area of study.
$asically when we are playing with computer in e%ery part of life, " used it in my
pro!ect not for the ease of my but for the ease of result e&planation to those who will
read this pro!ect. 'he pro!ect presents the role of financial system in life of persons.
" had toiled to achie%e the goals desired. $eing a neophyte in this highly competiti%e
world of business, " had come across se%eral difficulties to make the ob!ecti%es a
reality. " am presenting this hand car%ed efforts in black and white. "f anywhere
something is found not in tandem to the theme then you are welcome with your
%aluable suggestions.
'able of content
#ertificate of the company
Ackno$led%e
Preface
(hapter ) :* "ntroduction: +&ecuti%e summary of the pro!ect
(hapter , :* "ndustry "ntroduction - "D$" $ank
IndustryIintroduction
IDBI Bank: All About
Industry/Bank performance
Correlation between Industry and IDBI bank’s
movement
(hapter . :*/esearch Methodology
Objective of te study
!cope of te study
"ools # tecni$ues used
Applied principles and concepts
!ources of primary and secondary data
Data collection
!tatistical analysis
"eoretical interpretations
0indings
(hapter 1 :* (onclusions and /ecommendations
Appendi& ): 2uestionnaire
Appendi& ,: /eference material
"ntroduction: +&ecuti%e summary of the pro!ect
+&ecuti%e Summary
Banking &ndustry which is basically my concern industry around which my ro"ect
has to be revolved is really a very comle' industry# And to work !or this was really a
comle' and hectic task and !ew times & !elt so !rustrated that & thought to le!t the ro"ect
and go !or any new industry and new ro"ect# ,hallenges which & !aced while doing this
ro"ect were !ollowing-
- Banking sector was %uite similar in o!!ering and roducts and because o! that it
was very di!!icult to discriminate between our roduct and roducts o! the
cometitors#
- Target customers and resondents were too busy ersons that to get their time and
view !or seci!ic %uestions was very di!!icult#
- $ensitivity o! the industry was also a very !re%uent !actor which was very
imortant to measure correctly#
- Area covered !or the ro"ect while doing "ob also was very large and it was very
di!!icult to correlate two di!!erent customers.resondents views in a one#
- /very !inancial customer has his.her own need and according to the re%uirements
o! the customer roduct customi*ation was not ossible#
$o above challenges some time !orced me to leave the ro"ect but any how & did my
ro"ect in all circumstances# Basically in this ro"ect & analy*ed that-
0hat !actors are really resonsible !or er!ormance o! &)B& Bank1s er!ormance in this
cometitive era#
(hapter )
(hapter )
"ndustry status - "D$" $ank#s interface
"ndustry introduction
The &ndian Banking industry, which is governed by the Banking +egulation Act o! &ndia,
2343 can be broadly classi!ied into two ma"or categories, non-scheduled banks and
scheduled banks# $cheduled banks comrise commercial banks and the co-oerative
banks# &n terms o! ownershi, commercial banks can be !urther groued into nationali*ed
banks, the $tate Bank o! &ndia and its grou banks, regional rural banks and rivate
sector banks (the old. new domestic and !oreign)# These banks have over 56,777
branches sread across the country in every city and villages o! all nook and corners o!
the land#
The !irst hase o! !inancial re!orms resulted in the nationali*ation o! 24 ma"or banks in
2353 and resulted in a shi!t !rom ,lass banking to Mass banking# This in turn resulted in
a signi!icant growth in the geograhical coverage o! banks# /very bank had to earmark a
minimum ercentage o! their loan ort!olio to sectors identi!ied as 8riority sectors9# The
manu!acturing sector also grew during the 2367s in rotected environs and the banking
sector was a critical source# The ne't wave o! re!orms saw the nationali*ation o! 5 more
commercial banks in 23:7# $ince then the number o! scheduled commercial banks
increased !our-!old and the number o! bank branches increased eight-!old# And that was
not the limit o! growth#
A!ter the second hase o! !inancial sector re!orms and liberali*ation o! the sector in the
(hapter ,
early nineties, the ;ublic $ector Banks (;$B) s !ound it e'tremely di!!icult to comete
with the new rivate sector banks and the !oreign banks# The new rivate sector banks
!irst made their aearance a!ter the guidelines ermitting them were issued in 777, the $tate Bank ?! &ndia ($B&) and its 6 associates accounted !or a
>@ ercent share in deosits and >:#2 ercent share in credit# The >7 nationali*ed banks
accounted !or @=#> ercent o! the deosits and 46#@ ercent o! credit during the same
eriod# The share o! !oreign banks (numbering 4>), regional rural banks and other
scheduled commercial banks accounted !or @#6 ercent, =#3 ercent and 2>#> ercent
resectively in deosits and :#42 ercent, =#24 ercent and 2>#
ercent resectively in
credit during the year >777#about the detail o! the current scenario we will go through the
trends in modern economy o! the country#
#urrent &cenario'
The industry is currently in a transition hase# ?n the one hand, the ;$Bs, which are the
mainstay o! the &ndian Banking system are in the rocess o! shedding their !lab in terms
o! e'cessive manower, e'cessive non ;er!orming Assets (Aas) and e'cessive
governmental e%uity, while on the other hand the rivate sector banks are consolidating
themselves through mergers and ac%uisitions#
;$Bs, which currently account !or more than 6: ercent o! total banking industry assets
are saddled with A;As (a mind-boggling +s :=7 billion in >777), !alling revenues !rom
traditional sources, lack o! modern technology and a massive work!orce while the new
rivate sector banks are !orging ahead and rewriting the traditional banking business
model by way o! their
sheer innovation and service# The ;$Bs are o! course currently working out challenging
strategies even as >7 ercent o! their massive emloyee strength has dwindled in the
wake o! the success!ul Boluntary +etirement $chemes (B+$) schemes#
The rivate layers however cannot match the ;$B1s great reach, great si*e and access to
low cost deosits# There!ore one o! the means !or them to combat the ;$Bs has been
through the merger and ac%uisition (MC A) route# ?ver the last two years, the industry
has witnessed several such instances# For instance, D)F, Bank1s merger with Times
Bank &cici Bank1s ac%uisition o! &T, ,lassic, Anagram Finance and Bank o! Madurai#
,enturion Bank, &ndusind Bank, Bank o! ;un"ab, Bysya Bank are said to be on the
lookout# The UT& bank- Elobal Trust Bank merger however oened a andora1s bo' and
brought about the reali*ation that all was not well in the !unctioning o! many o! the
rivate sector banks#
;rivate sector Banks have ioneered internet banking, hone banking, anywhere banking,
mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various
other services and integrated them into the mainstream banking arena, while the ;$Bs are
still graling with disgruntled emloyees in the a!termath o! success!ul B+$ schemes#
Also, !ollowing &ndia1s commitment to the 0 To agreement in resect o! the services
sector, !oreign banks, including both new and the e'isting ones, have been ermitted to
oen u to 2> branches a year with e!!ect !rom 233:-33 as against the earlier stiulation
o! : branches#
Tasks o! government diluting their e%uity !rom @2 ercent to == ercent in Aovember
>777 has also oened u a new oortunity !or the takeover o! even the ;$Bs# The F)&
rules being more
rationali*ed in F2FG7> may also ave the way !or !oreign banks taking the MC A route
to ac%uire willing &ndian artners#
Meanwhile the economic and cororate sector slowdown has led to an increasing number
o! banks !ocusing on the retail segment# Many o! them are also entering the new vistas o!
&nsurance# Banks with their henomenal reach and a regular inter!ace with the retail
investor are the best laced to enter into the insurance sector# Banks in &ndia have been
allowed to rovide !ee-based insurance services without risk articiation, invest in an
insurance comany !or roviding in!rastructure and services suort and set u o! a
searate "oint-venture insurance comany with risk articiation#
A%%re%ate Performance of the Bankin% Industry
Aggregate deosits o! scheduled commercial banks increased at a comounded annual
average growth rate (,agr) o! 26#: ercent during 2353-33, while bank credit e'anded
at a ,agr o! 25#= ercent er annum# Banks1 investments in government and other
aroved securities recorded a ,agr o! 2:#: ercent er annum during the same eriod#
&n FG72 the economic slowdown resulted in a Eross )omestic ;roduct (E)
growth o!
only 5#7 ercent as against the revious year1s 5#4 ercent# The 0;& &nde' (a measure o!
in!lation) increased by 6#2 ercent as against =#= ercent in FG77# $imilarly, money
suly (M=) grew by around 25#> ercent as against 24#5 ercent a year ago#
The growth in aggregate deosits o! the scheduled commercial banks at 2@#4 ercent in
FG72 ercent was lower than that o! 23#= ercent in the revious year, while the growth
in credit by
$,Bs slowed down to 2@#5 ercent in FG72 against >= ercent a year ago#
The industrial slowdown also a!!ected the earnings o! listed banks# The net ro!its o! >7
listed banks droed by =4#4= ercent in the %uarter ended March >772# Aet ro!its grew
by 47#6@ ercent in the !irst %uarter o! >777->772, but droed to 4#@5 ercent in the
!ourth %uarter o! >777->772#
?n the ,aital Ade%uacy +atio (,A+) !ront while most banks managed to !ul!ill the
norms, it was a !eat achieved with its own share o! di!!iculties# The ,A+, which at
resent is 3#7 ercent, is likely to be hiked to 2>#7 ercent by the year >774 based on the
Basle ,ommittee recommendations# Any bank that wishes to grow its assets needs to also
shore u its caital at the same time so that its caital as a ercentage o! the risk-
weighted assets is maintained at the stiulated rate# 0hile the &;? route was a much-
!ancied one in the early H37s, the current scenario doesn1t look too attractive !or bank
ma"ors#
,onse%uently, banks have been !orced to e'lore other avenues to shore u their caital
base# 0hile some are wooing !oreign artners to add to the caital others are emloying
the MC A route# Many are also going in !or right issues at rices considerably lower than
the market rices to woo the investors#
Interest Rate &cene
The two years, ost the /ast Asian crises in 2336-3: saw a climb in the global interest
rates# &t was only in the later hal! o! FG72 that the U$ Fed cut interest rates# &ndia has
however
remained more or less insulated# The ast > years in our country was characteri*ed by a
mounting intention o! the +eserve Bank ?! &ndia (+B&) to steadily reduce interest rates
resulting in a narrowing di!!erential between global and domestic rates#
The +B& has been a!!ecting bank rate and ,++ cuts at regular intervals to imrove
li%uidity and reduce rates# The only e'cetion was in 777 when the +B& increased
the ,ash +eserve +atio (,++) to stem the !all in the ruee against the dollar# The steady
!all in the interest rates resulted in s%uee*ed margins !or the banks in general#
(overnmental Policy'
A!ter the !irst hase and second hase o! !inancial re!orms, in the 23:7s commercial
banks began to !unction in a highly regulated environment, with administered interest
rate structure, %uantitative restrictions on credit !lows, high reserve re%uirements and
reservation o! a signi!icant roortion o! lendable resources !or the riority and the
government sectors# The restrictive regulatory norms led to the credit rationing !or the
rivate sector and the interest rate controls led to the unroductive use o! credit and low
levels o! investment and growth# The resultant H!inancial reression1 led to decline in
roductivity and e!!iciency and erosion o! ro!itability o! the banking sector in general#
This was when the need to develo a sound commercial banking system was !elt# This
was worked out mainly with the hel o! the recommendations o! the ,ommittee on the
Financial
$ystem (,hairmanI $hri M# Aarasimham), 2332# The resultant !inancial sector re!orms
called !or interest rate !le'ibility !or banks, reduction in reserve re%uirements, and a
number o! structural measures# &nterest rates have thus been steadily deregulated in the
ast !ew years with banks being !ree to !i' their ;rime (ending +ates(;(+s) and deosit
rates !or most banking roducts# ,redit market re!orms included introduction o! new
instruments o! credit, changes in the credit delivery system and integration o! !unctional
roles o! diverse layers, such as, banks, !inancial institutions and non-banking !inancial
comanies (Ab!cs)# )omestic ;rivate $ector Banks were allowed to be set u, ;$Bs were
allowed to access the markets to shore u their ,ars#
Implications of &ome Recent Policy )easures'
The allowing o! ;$Bs to shed manower and dilution o! e%uity are moves that will lend
greater autonomy to the industry# &n order to lend more deth to the caital markets the
+B& had in Aovember >777 also changed the caital market e'osure norms !rom @
ercent o! bank1s incremental deosits o! the revious year to @ ercent o! the bank1s
total domestic credit in the revious year# But this move did not have the desired e!!ect,
as in, while most banks ket away almost comletely !rom the caital markets, a !ew
rivate sector banks went overboard and e'ceeded limits and indulged in dubious stock
market deals# The chances o! seeing banks making a comeback to the stock markets are
there!ore %uite unlikely in the near !uture#
The move to increase Foreign )irect &nvestment F)& limits to 43 ercent !rom >7 ercent
during the !irst %uarter o! this !iscal came as a welcome announcement to !oreign layers
wanting to get a !oot hold in the &ndian Markets by investing in willing &ndian artners
who are starved o! net worth to meet ,A+ norms# ,eiling !or F&& investment in
comanies was also increased !rom >4#7 ercent to 43#7 ercent and have been included
within the ambit o! F)& investment#
"D$" bank: all about
The economic develoment o! any country deends on the e'tent to which its !inancial
system e!!iciently and e!!ectively mobili*es and allocates resources# There are a number
o! banks and !inancial institutions that er!orm this !unctionJ one o! them is the
develoment bank# )eveloment banks are uni%ue !inancial institutions that er!orm the
secial task o! !ostering the develoment o! a nation, generally not undertaken by other
banks#
)eveloment banks are !inancial agencies that rovide medium-and long-term !inancial
assistance and act as catalytic agents in romoting balanced develoment o! the country#
They are engaged in romotion and develoment o! industry, agriculture, and other key
sectors# They also rovide develoment services that can aid in the accelerated growth o!
an economy#
The ob"ectives o! develoment banks areI
To serve as an agent o! develoment in various sectors, vi*# industry, agriculture, and
international trade
To accelerate the %ro$th of the economy
To allocate resources to hi%h priority areas
To foster rapid industriali*ation+ particularly in the private sector+ so as to provide
employment opportunities as $ell as hi%her production
To develop entrepreneurial skills
To promote the development of rural areas
To finance housin%+ small scale industries+ infrastructure+ and social utilities,
&n addition, they are assigned a secial role inI
;lanning, romoting, and develoing industries to !ill the gas in industrial sector#
,oordinating the working o! institutions engaged in !inancing, romoting or develoing
industries, agriculture, or trade, rendering romotional services such as discovering
ro"ect ideas, undertaking !easibility studies, and roviding technical, !inancial, and
managerial assistance !or the imlementation o! ro"ects
Industrial development bank of India
The industrial develoment bank o! &ndia(&)B&) was established in 2354 by arliament as
wholly owned subsidiary o! reserve bank o! &ndia# &n 2365, the bank1s ownershi was
trans!erred to the government o! &ndia# &t was accorded the status o! rincial !inancial
institution !or coordinating the working o! institutions at national and state levels
engaged in !inancing, romoting, and develoing industries#
&)B& has rovided assistance to develoment related ro"ects and contributed to building
u substantial caacities in all ma"or industries in &ndia# &)B& has directly or indirectly
assisted all comanies that are resently reckoned as ma"or cororates in the country# &t
has layed a dominant role in balanced industrial develoment#
&)B& set u the small industries develoment bank o! &ndia ($&)B&) as wholly owned
subsidiary to cater to seci!ic the needs o! the small-scale sector#
&)B& has engineered the develoment o! caital market through heling in setting u o!
the securities e'change board o! &ndia($/B&), Aational stock e'change o! &ndia
limited(A$/), credit analysis and research limited(,A+/), stock holding cororation o!
&ndia limited($D,&(), investor services o! &ndia limited(&$&(), national securities
deository limited(A$)(), and clearing cororation o! &ndia limited(,,&()
&n 233>, &)B& accessed the domestic retail debt market !or the !irst time by issuing
innovative bonds known as the dee discount bonds# These new bonds became highly
oular with the &ndian investor#
&n 2334, &)B& Act was amended to ermit ublic ownershi u to 43 er cent# &n 7 billion in its !irst initial ublic (&;?) o! e%uity, thereby
reducing the government stake to 6>#24 er cent# &n 777, a art o! government
shareholding was converted to re!erence caital# This caital was redeemed in March
>772, which led to a reduction in government stake# The government stake currently is @2
er cent#
&n august >777, &)B& became the !irst all &ndia !inancial institution to obtain &$? 377>I
2334 certi!ication !or its treasury oerations# &t also became the !irst organi*ation in the
&ndian !inancial sector to obtain &$? 3772I>777 certi!ication !or its !ore' services#
)ilestones
• -uly ./01' $et u under an Act o! ;arliament as a wholly-owned subsidiary o!
+eserve Bank o! &ndia#
• 2ebruary ./30' ?wnershi trans!erred to Eovernment o! &ndia# )esignated
;rincial Financial &nstitution !or co-coordinating the working o! institutions at
national and $tate levels engaged in !inancing, romoting and develoing
industry#
• )arch ./45' &nternational Finance )ivision o! &)B& trans!erred to /'ort-
&mort Bank o! &ndia, established as a wholly-owned cororation o! Eovernment
o! &ndia, under an Act o! ;arliament#
• April .//6' $et u $mall &ndustries )eveloment Bank o! &ndia ($&)B&) under
$&)B& Act as a wholly-owned subsidiary to cater to seci!ic needs o! small-scale
sector# &n terms o! an amendment to $&)B& Act in $etember >777, &)B& divested
@2K o! its shareholding in $&)B& in !avour o! banks and other institutions in the
!irst hase# &)B& has subse%uently divested 63#2=K o! its stake in its erstwhile
subsidiary to date#
• -anuary .//5' Accessed domestic retail debt market !or the !irst time with
innovative )ee )iscount BondsJ registered ath-breaking success#
• December .//7' $et u &)B& ,aital Market $ervices (td# as a wholly-owned
subsidiary to o!!er a broad range o! !inancial services, including Bond Trading,
/%uity Broking, ,lient Asset Management and )eository $ervices# &)B& ,aital
is currently a leading ;rimary )ealer in the country#
• &eptember .//1' $et u &)B& Bank (td# in association with $&)B& as a rivate
sector commercial bank subsidiary, a se%uel to +B&Ls olicy o! oening u
domestic banking sector to rivate articiation as art o! overall !inancial sector
re!orms#
• October .//1' &)B& Act amended to ermit ublic ownershi uto 43K#
• -uly .//8' Made &nitial ;ublic ?!!er o! /%uity and raised over +s#>777 crore,
thereby reducing Eovernment stake to 6>#24K#
• )arch 5666'/ntered into a 77= as art o! overall cororate
strategy#
• )arch 5666' $et u &)B& &ntech (td# as a wholly-owned subsidiary to undertake
&T-related activities#
• -une 5666' A art o! Eovernment shareholding converted to re!erence caital,
since redeemed in March >772J Eovernment stake currently @:#46K#
• Au%ust 5666' Became the !irst All-&ndia Financial &nstitution to obtain &$?
377>I2334 ,erti!ication !or its treasury oerations# Also became the !irst
organisation in &ndian !inancial sector to obtain &$? 3772I>777 ,erti!ication !or
its !ore' services#
• )arch 566.' $et u &)B& Trusteeshi $ervices (td# to rovide technology-driven
in!ormation and ro!essional services to subscribers and issuers o! debentures#
• 2eburary 5665' Associated with select banks.institutions in setting u Asset
+econstruction ,omany (&ndia) (imited (A+,&(), which will be involved with
the
• $trategic management o! non-er!orming and stressed assets o! Financial
&nstitutions and Banks#
• &eptember 5667' &)B& ac%uired the entire shareholding o! Tata Finance (imited
in Tata Dome!inance (td, signalling &)B&Ls !oray into the retail !inance sector#
The housing !inance subsidiary has since been renamed L&)B& Dome!inance
(imitedL#
• December 5667' ?n )ecember 25, >77=, the ;arliament aroved The &ndustrial
)eveloment Bank (Trans!er o! Undertaking and +eeal Bill) >77> to reeal
&)B& Act 2354# The ;residentLs assent !or the same was obtained on )ecember
=7, >77=# The +eeal Act is aimed at bringing &)B& under the ,omanies Act !or
investing it with the re%uisite oerational !le'ibility to undertake commercial
banking business under the Banking +egulation Act 2343 in addition to the
business carried on and transacted by it under the &)B& Act, 2354#
• -uly 5661' The &ndustrial )eveloment Bank (Trans!er o! Undertaking and
+eeal) Act >77= came into !orce !rom , >774#
• -uly 5661' The Boards o! &)B& and &)B& Bank (td# take in-rincile decision
regarding merger o! &)B& Bank (td# with roosed &ndustrial )eveloment Bank
o! &ndia (td# in their resective meetings on 3, >774#
• &eptember 5661' The Trust )eed !or $tressed Assets $tabilisation Fund ($A$F)
e'ecuted by its Trustees on $etember >4, >774 and the !irst meeting o! the
Trustees was held on $etember >6, >774#
• &eptember 5661' The new entity M&ndustrial )eveloment Bank o! &ndiaM was
incororated on $etember >6, >774 and ,erti!icate o! commencement o!
business was issued by the +egistrar o! ,omanies on $etember >:, >774#
• &eptember 5661'Aoti!ication issued by Ministry o! Finance seci!ying $A$F as
a !inancial institution under $ection >(h)(ii) o! +ecovery o! )ebts due to Banks C
Financial &nstitutions Act, 233=#
• &eptember 5661'Aoti!ication issued by Ministry o! Finance on $etember >3,
>774 !or issue o! non-interest bearing Eo& &)B& $ecial $ecurity, >7>4,
aggregating +s#3777 crore, o! >7-year tenure#
• &eptember 5661' Aoti!ication !or aointed day as ?ctober 2, >774, issued by
Ministry o! Finance on $etember >3, >774#
• &eptember 5661'+B& issues noti!ication !or inclusion o! &ndustrial )eveloment
Bank o! &ndia (td# in $chedule && o! +B& Act, 23=4 on $etember =7, >774#
• October 5661' Aointed day - ?ctober 72, >774 - Trans!er o! undertaking o!
&)B& to &)B& (td# &)B& (td# commences oerations as a banking comany# &)B&
Act, 2354 stands reealed# -anuary 5668'The Board o! )irectors o! &)B& (td#, at
its meeting held on 7, >77@, aroved the $cheme o! Amalgamation,
envisaging merging o! &)B& Bank (td# with &)B& (td# ;ursuant to the scheme
aroved by the Boards o! both the banks, &)B& (td# will issue 277 e%uity shares
!or 24> e%uity shares held by shareholders in &)B& Bank (td# /EM has been
convened on February >=, >77@ !or seeking shareholder aroval !or the scheme#
"D$" $ank $usiness (hart
"D$" $ank 3rgani4ational (hart
"D$" $A56
&AB/$TM/AT ,U++/AT A,,?UAT $AB&AE A,,?UAT
)/B/(?;M/AT BAAN# +/TA&( BAAN&AE
,?+;?+AT/ $AB&AE ;/+$?AA( $AB&AE
/esearch Methodology
,hairman
;resident
Bice resident
Finance
Bice resident
Marketing
Bice resident
?erations
Bice resident
D# +#
(hapter .
)ivisional $ales
Manager
Oonal Dead
Territory &n charge
+egional Dead
3b!ecti%e of the study
;ro"ect study which is being conducted by me !or the last two month is not only a
!ormality !or the !ul!illment o! the two year !ull time ;ost Eraduate )iloma in Business
Management# But being a management student and a good emloyee & tried my best to
e'tract best o! the in!ormation available in the market !or the use o! society and eole#
The ob"ectives have been classi!ied by me in this ro"ect !orm ersonal to ro!essional,
but here & am not disclosing my ersonal ob"ective which have been achieved by me
while doing the ro"ect# ?nly ro!essional ob"ectives which are being covered by me in
this ro"ect are as !ollowing-
- 'o know about en%ironmental factors affecting "D$" $ank#s performance.
- 'o analy4e the role of ad%ertisement for bank performance.
- 'o know the perception and conception of customers towards banking products
and specially focused for "D$" $ank#s product.
- 'o e&plore the potential areas for the new bank branches which will pro%ide
both price and people to the bank with constant promotion and placing strategy.
Scope of the Study
/ach and every ro"ect study along with its certain ob"ectives also have scoe !or !uture#
And this scoe in !uture gives to new researches a new need to research a new ro"ect
with a new scoe# $coe o! the study not only consist one or two !uture business lan but
sometime it also gives idea about a new business which becomes much more ro!itable
!or the researches then the older one#
$coe o! the study could give the ro"ected scenario !or a new success!ul strategy
with a roer imlementation lan# 0hatever scoe & observed in my ro"ect are not
e'actly having all the !eatures o! the scoe which & described above but also not lacking
all the !eatures%
- /esearch study could gi%e an idea of network e&pansion for capturing more
market and customer with better ser%ices and lower cost, with out
compromising with uality.
- "n future customer reuirements could be added with the product and ser%ices
for getting an edge o%er competitors.
- (onsumer beha%ior could also be used for the purpose of launching a new
product with e&tra benefits which are reuired by customers for their account
7sa%ing or current 8 and9or for their in%estments.
- 0actors which are responsible for the performance for bank can also be used
for the modification of the strategy and product for being more profitable.
- 0actors which " obser%ed while doing pro!ect study are following*
(ompetitors
(ustomer $eha%iour
Ad%ertisement9promotional acti%ities
Attitude of manpower and
+conomic conditions
'hese all could also be interchanged with each other for each other in banks
strategies for making a final business plan to effect the market with a positi%e
way without disturbing a lot to market, customers and competitors with
disturbance in market shares.
'ools and 'echniues
As no study could be success!ully comleted without roer tools and techni%ues, same
with my ro"ect# For the better resentation and right e'lanation & used tools o! statistics
and comuter very !re%uently# And & am very thank!ul to all those tools !or heling me a
lot# Basic tools which & used !or ro"ect !rom statistics are-
- Bar #harts
9 Pie charts
9 Tables
bar charts and ie charts are really use!ul tools !or every research to show the result in a
well clear, ease and simle way# Because & used bar charts and ie cahrts in ro"ect !or
showing data in a systematic way, so it need not necessary !or any observer to read all the
theoretical detail, simle on seeing the charts any body could know that what is being
said#
Technolo%ical Tools
)s9 :;cel
)s9Access
)s9@K
0,OD1C" ,A*.( 3@K
*("2O,- ==K
03O*( BA*-I*. >>K
75%
25%
95%
33%
22%
EFFICIENCY
INTERNET
BANKING/ATM
PRO!"CT RANGE
NET#ORK
P$ONE BANKING
TAB>: 1' )AR?:T &BAR:& I= )A)BAI I= #O)PARI&IO= TO
#O)P:TITOR&
BA=? =A): C O2 &BAR:
!BI =7K
IDBI 2@K
ICICI >@K
0*B 27K
3D)C @K
3!BC @K
O"3(,! 27K
TAB>: 8' 2A#TOR& R:&PO=&IB>: 2OR P:R2OR)A=#: O2 IDBI BA=? I=
)A)BAI
PARA):T:R& C O2 &BAR:
0,OD1C" @7K
AD4(,"I!/(*" @K
/A*0O2(, >@K
*("5BA*-I*. >K
03O*( BA*-I*. @K
I*4(!"/(*" !C3(/( 27K
*("2O,- =K
TAB>: 0 ' #O)PARATID: &TAD@ K :K 26K
03O*( BA*-I*. 27K 47K @K @K =7K 27K
I*4(!"/(*" !C3(/( @K >@K @7K 27K @K @K
*("2O,- >K 47K 47K @K =K 27K
C,(DIBI6I"+ >7K 27K 47K >7K @K @K
TAB>: 3' TB: :22:#TID:=:&& O2 #O)):R#IA>& O2 IDBI BA=?
DA@& A2T:R TB: AD I&
&::= PO&ITID: R:&PO=&:
758 days 277
95:7 days 56
::5:8 days 4=
more tan :8 days 47
2indin%s
., The credibility of IDBI bank is %ood in comparison to its competitors as
(OI F(overnment Of IndiaG is a major share holder in the company,
5, IDBI bank has potential a tapped market in )umbai in re%ion and hence has
an opportunities for %ro$th,
7, The products of IDBI bank has %ood credibility in the re%ion compare to its
competitors,
1, The advertisement of the bank $as very effective from the first day of its
airin% till the fifth day and there after it starts declinin%,
8, The initial balance for AE# openin% is Rs+ 8666E9 and thats $hy people are
reluctant in openin% the same,
(onclusions and /ecommendations
(onclusions
:% Consumers of /umbai ave &ood awareness level about IDBI bank as well as
about its services and products%
;% "e advertisin& campai&n as successfully been able to increase te market sare
of IDBI in /umbai%
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Appendi& ,: /eference Material
doc_711617936.doc
Executive Summary: Banking Industry which is basically my concern industry around which my project has to be revolved is really a very complex industry.
A Project Report On
A project study on “The environmental factors responsible for
IDBI Banks performance!
Submitted by:
"""""" """""""
XXXXX University, Mumbai
MBA in Banking (Finance)
Acknowledgement
To acknowledge all the ersons who had heled !or the !ul!illment o! the ro"ect is not
ossible !or any researcher but in site o! all that it becomes the !oremost resonsibility
o! the researcher and also the art o! research ethics to acknowledge those who had
layed a great role !or the comletion o! the ro"ect#
$o in the same se%uence at very !irst, & would like to acknowledge my arents because o!
whom & got the e'istence in the world !or the incetion and the concetion o! this ro"ect#
(ater on & would like to con!er the !lower o! acknowledgement to Ms. XXXXX XXXXX
and other !aculty members who taught me that how to do ro"ect through aroriate
tools and techni%ues# Because &)B& bank has trusted me and given me a chance to do my
integrated research study, & would like to give thanks to the organi*ation and esecially to
Mr. XXXXX XXXXX !rom the deth o! my heart#
+est all those eole who heled me are not only matter o! acknowledgment but also
authori*ed !or sharing my success#
Preface
Decision making is a fundamental part of the research process. Decisions regarding
that what you want to do, how you want to do, what tools and techniues must be used
for the successful completion of the pro!ect. "n fact it is the researcher#s efficiency as a
decision maker that makes pro!ect fruitful for those who concern to the area of study.
$asically when we are playing with computer in e%ery part of life, " used it in my
pro!ect not for the ease of my but for the ease of result e&planation to those who will
read this pro!ect. 'he pro!ect presents the role of financial system in life of persons.
" had toiled to achie%e the goals desired. $eing a neophyte in this highly competiti%e
world of business, " had come across se%eral difficulties to make the ob!ecti%es a
reality. " am presenting this hand car%ed efforts in black and white. "f anywhere
something is found not in tandem to the theme then you are welcome with your
%aluable suggestions.
'able of content
#ertificate of the company
Ackno$led%e
Preface
(hapter ) :* "ntroduction: +&ecuti%e summary of the pro!ect
(hapter , :* "ndustry "ntroduction - "D$" $ank
IndustryIintroduction
IDBI Bank: All About
Industry/Bank performance
Correlation between Industry and IDBI bank’s
movement
(hapter . :*/esearch Methodology
Objective of te study
!cope of te study
"ools # tecni$ues used
Applied principles and concepts
!ources of primary and secondary data
Data collection
!tatistical analysis
"eoretical interpretations
0indings
(hapter 1 :* (onclusions and /ecommendations
Appendi& ): 2uestionnaire
Appendi& ,: /eference material
"ntroduction: +&ecuti%e summary of the pro!ect
+&ecuti%e Summary
Banking &ndustry which is basically my concern industry around which my ro"ect
has to be revolved is really a very comle' industry# And to work !or this was really a
comle' and hectic task and !ew times & !elt so !rustrated that & thought to le!t the ro"ect
and go !or any new industry and new ro"ect# ,hallenges which & !aced while doing this
ro"ect were !ollowing-
- Banking sector was %uite similar in o!!ering and roducts and because o! that it
was very di!!icult to discriminate between our roduct and roducts o! the
cometitors#
- Target customers and resondents were too busy ersons that to get their time and
view !or seci!ic %uestions was very di!!icult#
- $ensitivity o! the industry was also a very !re%uent !actor which was very
imortant to measure correctly#
- Area covered !or the ro"ect while doing "ob also was very large and it was very
di!!icult to correlate two di!!erent customers.resondents views in a one#
- /very !inancial customer has his.her own need and according to the re%uirements
o! the customer roduct customi*ation was not ossible#
$o above challenges some time !orced me to leave the ro"ect but any how & did my
ro"ect in all circumstances# Basically in this ro"ect & analy*ed that-
0hat !actors are really resonsible !or er!ormance o! &)B& Bank1s er!ormance in this
cometitive era#
(hapter )
(hapter )
"ndustry status - "D$" $ank#s interface
"ndustry introduction
The &ndian Banking industry, which is governed by the Banking +egulation Act o! &ndia,
2343 can be broadly classi!ied into two ma"or categories, non-scheduled banks and
scheduled banks# $cheduled banks comrise commercial banks and the co-oerative
banks# &n terms o! ownershi, commercial banks can be !urther groued into nationali*ed
banks, the $tate Bank o! &ndia and its grou banks, regional rural banks and rivate
sector banks (the old. new domestic and !oreign)# These banks have over 56,777
branches sread across the country in every city and villages o! all nook and corners o!
the land#
The !irst hase o! !inancial re!orms resulted in the nationali*ation o! 24 ma"or banks in
2353 and resulted in a shi!t !rom ,lass banking to Mass banking# This in turn resulted in
a signi!icant growth in the geograhical coverage o! banks# /very bank had to earmark a
minimum ercentage o! their loan ort!olio to sectors identi!ied as 8riority sectors9# The
manu!acturing sector also grew during the 2367s in rotected environs and the banking
sector was a critical source# The ne't wave o! re!orms saw the nationali*ation o! 5 more
commercial banks in 23:7# $ince then the number o! scheduled commercial banks
increased !our-!old and the number o! bank branches increased eight-!old# And that was
not the limit o! growth#
A!ter the second hase o! !inancial sector re!orms and liberali*ation o! the sector in the
(hapter ,
early nineties, the ;ublic $ector Banks (;$B) s !ound it e'tremely di!!icult to comete
with the new rivate sector banks and the !oreign banks# The new rivate sector banks
!irst made their aearance a!ter the guidelines ermitting them were issued in 777, the $tate Bank ?! &ndia ($B&) and its 6 associates accounted !or a
>@ ercent share in deosits and >:#2 ercent share in credit# The >7 nationali*ed banks
accounted !or @=#> ercent o! the deosits and 46#@ ercent o! credit during the same
eriod# The share o! !oreign banks (numbering 4>), regional rural banks and other
scheduled commercial banks accounted !or @#6 ercent, =#3 ercent and 2>#> ercent
resectively in deosits and :#42 ercent, =#24 ercent and 2>#
ercent resectively incredit during the year >777#about the detail o! the current scenario we will go through the
trends in modern economy o! the country#
#urrent &cenario'
The industry is currently in a transition hase# ?n the one hand, the ;$Bs, which are the
mainstay o! the &ndian Banking system are in the rocess o! shedding their !lab in terms
o! e'cessive manower, e'cessive non ;er!orming Assets (Aas) and e'cessive
governmental e%uity, while on the other hand the rivate sector banks are consolidating
themselves through mergers and ac%uisitions#
;$Bs, which currently account !or more than 6: ercent o! total banking industry assets
are saddled with A;As (a mind-boggling +s :=7 billion in >777), !alling revenues !rom
traditional sources, lack o! modern technology and a massive work!orce while the new
rivate sector banks are !orging ahead and rewriting the traditional banking business
model by way o! their
sheer innovation and service# The ;$Bs are o! course currently working out challenging
strategies even as >7 ercent o! their massive emloyee strength has dwindled in the
wake o! the success!ul Boluntary +etirement $chemes (B+$) schemes#
The rivate layers however cannot match the ;$B1s great reach, great si*e and access to
low cost deosits# There!ore one o! the means !or them to combat the ;$Bs has been
through the merger and ac%uisition (MC A) route# ?ver the last two years, the industry
has witnessed several such instances# For instance, D)F, Bank1s merger with Times
Bank &cici Bank1s ac%uisition o! &T, ,lassic, Anagram Finance and Bank o! Madurai#
,enturion Bank, &ndusind Bank, Bank o! ;un"ab, Bysya Bank are said to be on the
lookout# The UT& bank- Elobal Trust Bank merger however oened a andora1s bo' and
brought about the reali*ation that all was not well in the !unctioning o! many o! the
rivate sector banks#
;rivate sector Banks have ioneered internet banking, hone banking, anywhere banking,
mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various
other services and integrated them into the mainstream banking arena, while the ;$Bs are
still graling with disgruntled emloyees in the a!termath o! success!ul B+$ schemes#
Also, !ollowing &ndia1s commitment to the 0 To agreement in resect o! the services
sector, !oreign banks, including both new and the e'isting ones, have been ermitted to
oen u to 2> branches a year with e!!ect !rom 233:-33 as against the earlier stiulation
o! : branches#
Tasks o! government diluting their e%uity !rom @2 ercent to == ercent in Aovember
>777 has also oened u a new oortunity !or the takeover o! even the ;$Bs# The F)&
rules being more
rationali*ed in F2FG7> may also ave the way !or !oreign banks taking the MC A route
to ac%uire willing &ndian artners#
Meanwhile the economic and cororate sector slowdown has led to an increasing number
o! banks !ocusing on the retail segment# Many o! them are also entering the new vistas o!
&nsurance# Banks with their henomenal reach and a regular inter!ace with the retail
investor are the best laced to enter into the insurance sector# Banks in &ndia have been
allowed to rovide !ee-based insurance services without risk articiation, invest in an
insurance comany !or roviding in!rastructure and services suort and set u o! a
searate "oint-venture insurance comany with risk articiation#
A%%re%ate Performance of the Bankin% Industry
Aggregate deosits o! scheduled commercial banks increased at a comounded annual
average growth rate (,agr) o! 26#: ercent during 2353-33, while bank credit e'anded
at a ,agr o! 25#= ercent er annum# Banks1 investments in government and other
aroved securities recorded a ,agr o! 2:#: ercent er annum during the same eriod#
&n FG72 the economic slowdown resulted in a Eross )omestic ;roduct (E)
growth o!only 5#7 ercent as against the revious year1s 5#4 ercent# The 0;& &nde' (a measure o!
in!lation) increased by 6#2 ercent as against =#= ercent in FG77# $imilarly, money
suly (M=) grew by around 25#> ercent as against 24#5 ercent a year ago#
The growth in aggregate deosits o! the scheduled commercial banks at 2@#4 ercent in
FG72 ercent was lower than that o! 23#= ercent in the revious year, while the growth
in credit by
$,Bs slowed down to 2@#5 ercent in FG72 against >= ercent a year ago#
The industrial slowdown also a!!ected the earnings o! listed banks# The net ro!its o! >7
listed banks droed by =4#4= ercent in the %uarter ended March >772# Aet ro!its grew
by 47#6@ ercent in the !irst %uarter o! >777->772, but droed to 4#@5 ercent in the
!ourth %uarter o! >777->772#
?n the ,aital Ade%uacy +atio (,A+) !ront while most banks managed to !ul!ill the
norms, it was a !eat achieved with its own share o! di!!iculties# The ,A+, which at
resent is 3#7 ercent, is likely to be hiked to 2>#7 ercent by the year >774 based on the
Basle ,ommittee recommendations# Any bank that wishes to grow its assets needs to also
shore u its caital at the same time so that its caital as a ercentage o! the risk-
weighted assets is maintained at the stiulated rate# 0hile the &;? route was a much-
!ancied one in the early H37s, the current scenario doesn1t look too attractive !or bank
ma"ors#
,onse%uently, banks have been !orced to e'lore other avenues to shore u their caital
base# 0hile some are wooing !oreign artners to add to the caital others are emloying
the MC A route# Many are also going in !or right issues at rices considerably lower than
the market rices to woo the investors#
Interest Rate &cene
The two years, ost the /ast Asian crises in 2336-3: saw a climb in the global interest
rates# &t was only in the later hal! o! FG72 that the U$ Fed cut interest rates# &ndia has
however
remained more or less insulated# The ast > years in our country was characteri*ed by a
mounting intention o! the +eserve Bank ?! &ndia (+B&) to steadily reduce interest rates
resulting in a narrowing di!!erential between global and domestic rates#
The +B& has been a!!ecting bank rate and ,++ cuts at regular intervals to imrove
li%uidity and reduce rates# The only e'cetion was in 777 when the +B& increased
the ,ash +eserve +atio (,++) to stem the !all in the ruee against the dollar# The steady
!all in the interest rates resulted in s%uee*ed margins !or the banks in general#
(overnmental Policy'
A!ter the !irst hase and second hase o! !inancial re!orms, in the 23:7s commercial
banks began to !unction in a highly regulated environment, with administered interest
rate structure, %uantitative restrictions on credit !lows, high reserve re%uirements and
reservation o! a signi!icant roortion o! lendable resources !or the riority and the
government sectors# The restrictive regulatory norms led to the credit rationing !or the
rivate sector and the interest rate controls led to the unroductive use o! credit and low
levels o! investment and growth# The resultant H!inancial reression1 led to decline in
roductivity and e!!iciency and erosion o! ro!itability o! the banking sector in general#
This was when the need to develo a sound commercial banking system was !elt# This
was worked out mainly with the hel o! the recommendations o! the ,ommittee on the
Financial
$ystem (,hairmanI $hri M# Aarasimham), 2332# The resultant !inancial sector re!orms
called !or interest rate !le'ibility !or banks, reduction in reserve re%uirements, and a
number o! structural measures# &nterest rates have thus been steadily deregulated in the
ast !ew years with banks being !ree to !i' their ;rime (ending +ates(;(+s) and deosit
rates !or most banking roducts# ,redit market re!orms included introduction o! new
instruments o! credit, changes in the credit delivery system and integration o! !unctional
roles o! diverse layers, such as, banks, !inancial institutions and non-banking !inancial
comanies (Ab!cs)# )omestic ;rivate $ector Banks were allowed to be set u, ;$Bs were
allowed to access the markets to shore u their ,ars#
Implications of &ome Recent Policy )easures'
The allowing o! ;$Bs to shed manower and dilution o! e%uity are moves that will lend
greater autonomy to the industry# &n order to lend more deth to the caital markets the
+B& had in Aovember >777 also changed the caital market e'osure norms !rom @
ercent o! bank1s incremental deosits o! the revious year to @ ercent o! the bank1s
total domestic credit in the revious year# But this move did not have the desired e!!ect,
as in, while most banks ket away almost comletely !rom the caital markets, a !ew
rivate sector banks went overboard and e'ceeded limits and indulged in dubious stock
market deals# The chances o! seeing banks making a comeback to the stock markets are
there!ore %uite unlikely in the near !uture#
The move to increase Foreign )irect &nvestment F)& limits to 43 ercent !rom >7 ercent
during the !irst %uarter o! this !iscal came as a welcome announcement to !oreign layers
wanting to get a !oot hold in the &ndian Markets by investing in willing &ndian artners
who are starved o! net worth to meet ,A+ norms# ,eiling !or F&& investment in
comanies was also increased !rom >4#7 ercent to 43#7 ercent and have been included
within the ambit o! F)& investment#
"D$" bank: all about
The economic develoment o! any country deends on the e'tent to which its !inancial
system e!!iciently and e!!ectively mobili*es and allocates resources# There are a number
o! banks and !inancial institutions that er!orm this !unctionJ one o! them is the
develoment bank# )eveloment banks are uni%ue !inancial institutions that er!orm the
secial task o! !ostering the develoment o! a nation, generally not undertaken by other
banks#
)eveloment banks are !inancial agencies that rovide medium-and long-term !inancial
assistance and act as catalytic agents in romoting balanced develoment o! the country#
They are engaged in romotion and develoment o! industry, agriculture, and other key
sectors# They also rovide develoment services that can aid in the accelerated growth o!
an economy#
The ob"ectives o! develoment banks areI
To serve as an agent o! develoment in various sectors, vi*# industry, agriculture, and
international trade
To accelerate the %ro$th of the economy
To allocate resources to hi%h priority areas
To foster rapid industriali*ation+ particularly in the private sector+ so as to provide
employment opportunities as $ell as hi%her production
To develop entrepreneurial skills
To promote the development of rural areas
To finance housin%+ small scale industries+ infrastructure+ and social utilities,
&n addition, they are assigned a secial role inI
;lanning, romoting, and develoing industries to !ill the gas in industrial sector#
,oordinating the working o! institutions engaged in !inancing, romoting or develoing
industries, agriculture, or trade, rendering romotional services such as discovering
ro"ect ideas, undertaking !easibility studies, and roviding technical, !inancial, and
managerial assistance !or the imlementation o! ro"ects
Industrial development bank of India
The industrial develoment bank o! &ndia(&)B&) was established in 2354 by arliament as
wholly owned subsidiary o! reserve bank o! &ndia# &n 2365, the bank1s ownershi was
trans!erred to the government o! &ndia# &t was accorded the status o! rincial !inancial
institution !or coordinating the working o! institutions at national and state levels
engaged in !inancing, romoting, and develoing industries#
&)B& has rovided assistance to develoment related ro"ects and contributed to building
u substantial caacities in all ma"or industries in &ndia# &)B& has directly or indirectly
assisted all comanies that are resently reckoned as ma"or cororates in the country# &t
has layed a dominant role in balanced industrial develoment#
&)B& set u the small industries develoment bank o! &ndia ($&)B&) as wholly owned
subsidiary to cater to seci!ic the needs o! the small-scale sector#
&)B& has engineered the develoment o! caital market through heling in setting u o!
the securities e'change board o! &ndia($/B&), Aational stock e'change o! &ndia
limited(A$/), credit analysis and research limited(,A+/), stock holding cororation o!
&ndia limited($D,&(), investor services o! &ndia limited(&$&(), national securities
deository limited(A$)(), and clearing cororation o! &ndia limited(,,&()
&n 233>, &)B& accessed the domestic retail debt market !or the !irst time by issuing
innovative bonds known as the dee discount bonds# These new bonds became highly
oular with the &ndian investor#
&n 2334, &)B& Act was amended to ermit ublic ownershi u to 43 er cent# &n 7 billion in its !irst initial ublic (&;?) o! e%uity, thereby
reducing the government stake to 6>#24 er cent# &n 777, a art o! government
shareholding was converted to re!erence caital# This caital was redeemed in March
>772, which led to a reduction in government stake# The government stake currently is @2
er cent#
&n august >777, &)B& became the !irst all &ndia !inancial institution to obtain &$? 377>I
2334 certi!ication !or its treasury oerations# &t also became the !irst organi*ation in the
&ndian !inancial sector to obtain &$? 3772I>777 certi!ication !or its !ore' services#
)ilestones
• -uly ./01' $et u under an Act o! ;arliament as a wholly-owned subsidiary o!
+eserve Bank o! &ndia#
• 2ebruary ./30' ?wnershi trans!erred to Eovernment o! &ndia# )esignated
;rincial Financial &nstitution !or co-coordinating the working o! institutions at
national and $tate levels engaged in !inancing, romoting and develoing
industry#
• )arch ./45' &nternational Finance )ivision o! &)B& trans!erred to /'ort-
&mort Bank o! &ndia, established as a wholly-owned cororation o! Eovernment
o! &ndia, under an Act o! ;arliament#
• April .//6' $et u $mall &ndustries )eveloment Bank o! &ndia ($&)B&) under
$&)B& Act as a wholly-owned subsidiary to cater to seci!ic needs o! small-scale
sector# &n terms o! an amendment to $&)B& Act in $etember >777, &)B& divested
@2K o! its shareholding in $&)B& in !avour o! banks and other institutions in the
!irst hase# &)B& has subse%uently divested 63#2=K o! its stake in its erstwhile
subsidiary to date#
• -anuary .//5' Accessed domestic retail debt market !or the !irst time with
innovative )ee )iscount BondsJ registered ath-breaking success#
• December .//7' $et u &)B& ,aital Market $ervices (td# as a wholly-owned
subsidiary to o!!er a broad range o! !inancial services, including Bond Trading,
/%uity Broking, ,lient Asset Management and )eository $ervices# &)B& ,aital
is currently a leading ;rimary )ealer in the country#
• &eptember .//1' $et u &)B& Bank (td# in association with $&)B& as a rivate
sector commercial bank subsidiary, a se%uel to +B&Ls olicy o! oening u
domestic banking sector to rivate articiation as art o! overall !inancial sector
re!orms#
• October .//1' &)B& Act amended to ermit ublic ownershi uto 43K#
• -uly .//8' Made &nitial ;ublic ?!!er o! /%uity and raised over +s#>777 crore,
thereby reducing Eovernment stake to 6>#24K#
• )arch 5666'/ntered into a 77= as art o! overall cororate
strategy#
• )arch 5666' $et u &)B& &ntech (td# as a wholly-owned subsidiary to undertake
&T-related activities#
• -une 5666' A art o! Eovernment shareholding converted to re!erence caital,
since redeemed in March >772J Eovernment stake currently @:#46K#
• Au%ust 5666' Became the !irst All-&ndia Financial &nstitution to obtain &$?
377>I2334 ,erti!ication !or its treasury oerations# Also became the !irst
organisation in &ndian !inancial sector to obtain &$? 3772I>777 ,erti!ication !or
its !ore' services#
• )arch 566.' $et u &)B& Trusteeshi $ervices (td# to rovide technology-driven
in!ormation and ro!essional services to subscribers and issuers o! debentures#
• 2eburary 5665' Associated with select banks.institutions in setting u Asset
+econstruction ,omany (&ndia) (imited (A+,&(), which will be involved with
the
• $trategic management o! non-er!orming and stressed assets o! Financial
&nstitutions and Banks#
• &eptember 5667' &)B& ac%uired the entire shareholding o! Tata Finance (imited
in Tata Dome!inance (td, signalling &)B&Ls !oray into the retail !inance sector#
The housing !inance subsidiary has since been renamed L&)B& Dome!inance
(imitedL#
• December 5667' ?n )ecember 25, >77=, the ;arliament aroved The &ndustrial
)eveloment Bank (Trans!er o! Undertaking and +eeal Bill) >77> to reeal
&)B& Act 2354# The ;residentLs assent !or the same was obtained on )ecember
=7, >77=# The +eeal Act is aimed at bringing &)B& under the ,omanies Act !or
investing it with the re%uisite oerational !le'ibility to undertake commercial
banking business under the Banking +egulation Act 2343 in addition to the
business carried on and transacted by it under the &)B& Act, 2354#
• -uly 5661' The &ndustrial )eveloment Bank (Trans!er o! Undertaking and
+eeal) Act >77= came into !orce !rom , >774#
• -uly 5661' The Boards o! &)B& and &)B& Bank (td# take in-rincile decision
regarding merger o! &)B& Bank (td# with roosed &ndustrial )eveloment Bank
o! &ndia (td# in their resective meetings on 3, >774#
• &eptember 5661' The Trust )eed !or $tressed Assets $tabilisation Fund ($A$F)
e'ecuted by its Trustees on $etember >4, >774 and the !irst meeting o! the
Trustees was held on $etember >6, >774#
• &eptember 5661' The new entity M&ndustrial )eveloment Bank o! &ndiaM was
incororated on $etember >6, >774 and ,erti!icate o! commencement o!
business was issued by the +egistrar o! ,omanies on $etember >:, >774#
• &eptember 5661'Aoti!ication issued by Ministry o! Finance seci!ying $A$F as
a !inancial institution under $ection >(h)(ii) o! +ecovery o! )ebts due to Banks C
Financial &nstitutions Act, 233=#
• &eptember 5661'Aoti!ication issued by Ministry o! Finance on $etember >3,
>774 !or issue o! non-interest bearing Eo& &)B& $ecial $ecurity, >7>4,
aggregating +s#3777 crore, o! >7-year tenure#
• &eptember 5661' Aoti!ication !or aointed day as ?ctober 2, >774, issued by
Ministry o! Finance on $etember >3, >774#
• &eptember 5661'+B& issues noti!ication !or inclusion o! &ndustrial )eveloment
Bank o! &ndia (td# in $chedule && o! +B& Act, 23=4 on $etember =7, >774#
• October 5661' Aointed day - ?ctober 72, >774 - Trans!er o! undertaking o!
&)B& to &)B& (td# &)B& (td# commences oerations as a banking comany# &)B&
Act, 2354 stands reealed# -anuary 5668'The Board o! )irectors o! &)B& (td#, at
its meeting held on 7, >77@, aroved the $cheme o! Amalgamation,
envisaging merging o! &)B& Bank (td# with &)B& (td# ;ursuant to the scheme
aroved by the Boards o! both the banks, &)B& (td# will issue 277 e%uity shares
!or 24> e%uity shares held by shareholders in &)B& Bank (td# /EM has been
convened on February >=, >77@ !or seeking shareholder aroval !or the scheme#
"D$" $ank $usiness (hart
"D$" $ank 3rgani4ational (hart
"D$" $A56
&AB/$TM/AT ,U++/AT A,,?UAT $AB&AE A,,?UAT
)/B/(?;M/AT BAAN# +/TA&( BAAN&AE
,?+;?+AT/ $AB&AE ;/+$?AA( $AB&AE
/esearch Methodology
,hairman
;resident
Bice resident
Finance
Bice resident
Marketing
Bice resident
?erations
Bice resident
D# +#
(hapter .
)ivisional $ales
Manager
Oonal Dead
Territory &n charge
+egional Dead
3b!ecti%e of the study
;ro"ect study which is being conducted by me !or the last two month is not only a
!ormality !or the !ul!illment o! the two year !ull time ;ost Eraduate )iloma in Business
Management# But being a management student and a good emloyee & tried my best to
e'tract best o! the in!ormation available in the market !or the use o! society and eole#
The ob"ectives have been classi!ied by me in this ro"ect !orm ersonal to ro!essional,
but here & am not disclosing my ersonal ob"ective which have been achieved by me
while doing the ro"ect# ?nly ro!essional ob"ectives which are being covered by me in
this ro"ect are as !ollowing-
- 'o know about en%ironmental factors affecting "D$" $ank#s performance.
- 'o analy4e the role of ad%ertisement for bank performance.
- 'o know the perception and conception of customers towards banking products
and specially focused for "D$" $ank#s product.
- 'o e&plore the potential areas for the new bank branches which will pro%ide
both price and people to the bank with constant promotion and placing strategy.
Scope of the Study
/ach and every ro"ect study along with its certain ob"ectives also have scoe !or !uture#
And this scoe in !uture gives to new researches a new need to research a new ro"ect
with a new scoe# $coe o! the study not only consist one or two !uture business lan but
sometime it also gives idea about a new business which becomes much more ro!itable
!or the researches then the older one#
$coe o! the study could give the ro"ected scenario !or a new success!ul strategy
with a roer imlementation lan# 0hatever scoe & observed in my ro"ect are not
e'actly having all the !eatures o! the scoe which & described above but also not lacking
all the !eatures%
- /esearch study could gi%e an idea of network e&pansion for capturing more
market and customer with better ser%ices and lower cost, with out
compromising with uality.
- "n future customer reuirements could be added with the product and ser%ices
for getting an edge o%er competitors.
- (onsumer beha%ior could also be used for the purpose of launching a new
product with e&tra benefits which are reuired by customers for their account
7sa%ing or current 8 and9or for their in%estments.
- 0actors which are responsible for the performance for bank can also be used
for the modification of the strategy and product for being more profitable.
- 0actors which " obser%ed while doing pro!ect study are following*
(ompetitors
(ustomer $eha%iour
Ad%ertisement9promotional acti%ities
Attitude of manpower and
+conomic conditions
'hese all could also be interchanged with each other for each other in banks
strategies for making a final business plan to effect the market with a positi%e
way without disturbing a lot to market, customers and competitors with
disturbance in market shares.
'ools and 'echniues
As no study could be success!ully comleted without roer tools and techni%ues, same
with my ro"ect# For the better resentation and right e'lanation & used tools o! statistics
and comuter very !re%uently# And & am very thank!ul to all those tools !or heling me a
lot# Basic tools which & used !or ro"ect !rom statistics are-
- Bar #harts
9 Pie charts
9 Tables
bar charts and ie charts are really use!ul tools !or every research to show the result in a
well clear, ease and simle way# Because & used bar charts and ie cahrts in ro"ect !or
showing data in a systematic way, so it need not necessary !or any observer to read all the
theoretical detail, simle on seeing the charts any body could know that what is being
said#
Technolo%ical Tools
)s9 :;cel
)s9Access
)s9@K
0,OD1C" ,A*.( 3@K
*("2O,- ==K
03O*( BA*-I*. >>K
75%
25%
95%
33%
22%
EFFICIENCY
INTERNET
BANKING/ATM
PRO!"CT RANGE
NET#ORK
P$ONE BANKING
TAB>: 1' )AR?:T &BAR:& I= )A)BAI I= #O)PARI&IO= TO
#O)P:TITOR&
BA=? =A): C O2 &BAR:
!BI =7K
IDBI 2@K
ICICI >@K
0*B 27K
3D)C @K
3!BC @K
O"3(,! 27K
TAB>: 8' 2A#TOR& R:&PO=&IB>: 2OR P:R2OR)A=#: O2 IDBI BA=? I=
)A)BAI
PARA):T:R& C O2 &BAR:
0,OD1C" @7K
AD4(,"I!/(*" @K
/A*0O2(, >@K
*("5BA*-I*. >K
03O*( BA*-I*. @K
I*4(!"/(*" !C3(/( 27K
*("2O,- =K
TAB>: 0 ' #O)PARATID: &TAD@ K :K 26K
03O*( BA*-I*. 27K 47K @K @K =7K 27K
I*4(!"/(*" !C3(/( @K >@K @7K 27K @K @K
*("2O,- >K 47K 47K @K =K 27K
C,(DIBI6I"+ >7K 27K 47K >7K @K @K
TAB>: 3' TB: :22:#TID:=:&& O2 #O)):R#IA>& O2 IDBI BA=?
DA@& A2T:R TB: AD I&
&::= PO&ITID: R:&PO=&:
758 days 277
95:7 days 56
::5:8 days 4=
more tan :8 days 47
2indin%s
., The credibility of IDBI bank is %ood in comparison to its competitors as
(OI F(overnment Of IndiaG is a major share holder in the company,
5, IDBI bank has potential a tapped market in )umbai in re%ion and hence has
an opportunities for %ro$th,
7, The products of IDBI bank has %ood credibility in the re%ion compare to its
competitors,
1, The advertisement of the bank $as very effective from the first day of its
airin% till the fifth day and there after it starts declinin%,
8, The initial balance for AE# openin% is Rs+ 8666E9 and thats $hy people are
reluctant in openin% the same,
(onclusions and /ecommendations
(onclusions
:% Consumers of /umbai ave &ood awareness level about IDBI bank as well as
about its services and products%
;% "e advertisin& campai&n as successfully been able to increase te market sare
of IDBI in /umbai%
:E2
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www%idbibank%com
www;%idbibank%com
www%&oo&le%com
,%!% !arma= Business statistics= )irst India 0rint= India= ;77>=
Aaker -umar and Day= /arketin& researc= 9
t
(d%=jon willy # sons=:??@%
IC)AI Aournal of Bankin&
"e (conomics times
"e "imes of India
Appendi& ,: /eference Material
doc_711617936.doc