IDBI BANK LTD.

A Project Report On

A project study on The environmental factors responsible for IDBI Banks performance (Positively !e"atively# in $A%&T'(
$ubmitted by) Vikash kumar Mishra

Institute Of Rural Management, Jodhpur In Partial Fulfillment Of The Requirement For The Award Of Two Year Full Time Post Graduate iploma In !usiness Management" '(()*'((+ #$qui%alent To M!A&

IDBI BANK LTD.

Project Guide : Mr" Ashish Kumar

IDBI BANK LTD.

Project Guide : Ashish Kumar

Institute Of Rural Management, Jodhpur

Certificate

This is to ,e -ertified that Mr. Vikash Kumar Mishra , student of final .ear of Post Graduate Dip oma in !usiness Mana"ement from #nstitute of Rura Mana"ement, $odhpur *ajasthan has under ta/en two month final pro0e-t program while doing 0o, with #D!# !ank %td. from 1st of Ma. '((2 to 3(th of June '((2"

4ith the ,an/ and for the ,an/ he himself offered the pro0e-t title Will promotional activities change the perception of consumers towards IDBI bank? While rest all factors are constant in Saket"5, and gi%en his all efforts in spite of he-ti- s-hedule of 0o," 6is -ontri,ution through this pro0e-t is reall. -ommenda,le"

ated7 * 3(8(2 8'((2 Pro0e-t 9oordinator7 Mr"Satish Khureja

IDBI BANK LTD.

Ackno+led"ement To a-/nowledge all the persons who had helped for the fulfillment of the pro0e-t is not possi,le for an. resear-her ,ut in spite of all that it ,e-omes the foremost responsi,ilit. of the resear-her and also the part of resear-h ethi-s to a-/nowledge those who had pla.ed a great role for the -ompletion of the pro0e-t" :o in the same sequen-e at %er. first, I would li/e to a-/nowledge m. parents ,e-ause of whom I got the e;isten-e in the world for the in-eption and the -on-eption of this pro0e-t" <ater on I would li/e to -onfer the flower of a-/nowledgement to ,s' *itika -u"nani and other fa-ult. mem,ers who taught me that how to do pro0e-t through appropriate tools and te-hniques" !e-ause I !I ,an/ has trusted me and gi%en me a -han-e to do m. integrated resear-h stud., I would li/e to gi%e than/s to the organi=ation and espe-iall. to ,r' !imesh $rivastava from the depth of m. heart" Rest all those people who helped me are not onl. matter of a-/nowledgment ,ut also authori=ed for sharing m. su--ess"

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Preface Decision makin" is a fundamental part of the research process' Decisions re"ardin" that +hat you +ant to do. ho+ you +ant to do. +hat tools and techni/ues must be used for the successful completion of the project' In fact it is the researchers efficiency as a decision maker that makes project fruitful for those +ho concern to the area of study' Basically +hen +e are playin" +ith computer in every part of life. I used it in my project not for the ease of my but for the ease of result e0planation to those +ho +ill read this project' The project presents the role of financial system in life of persons' I had toiled to achieve the "oals desired' Bein" a neophyte in this hi"hly competitive +orld of business. I had come across several difficulties to make the objectives a reality' I am presentin" this hand carved efforts in black and +hite' If any+here somethin" is found not in tandem to the theme then you are +elcome +ith your valuable su""estions'

IDBI BANK LTD.

Table of content Certificate of the compan& Ackno' ed"e Preface

1hapter 2 1hapter 4

)3 Introduction) &0ecutive summary of the project )3 Industry Introduction IndustryIintroduction IDBI Bank: All About Industry Bank performance !orrelation between Industry and IDBI bank"s movement IDBI Bank

1hapter 5

)3*esearch ,ethodolo"y #b$ective of the study Scope of the study %ools & techni'ues used Applied principles and concepts Sources of primary and secondary data Data collection Statistical analysis

IDBI BANK LTD.

%heoretical interpretations 6indin"s

1hapter 7

)3 1onclusions and *ecommendations

Appendi0 2) 8uestionnaire Appendi0 4) *eference material

IDBI BANK LTD.

Chapter 1
Introduction) &0ecutive summary of the project &0ecutive $ummary !an/ing Industr. whi-h is ,asi-all. m. -on-ern industr. around whi-h m. pro0e-t has to ,e re%ol%ed is reall. a %er. -omple; industr." And to wor/ for this was reall. a -omple; and he-ti- tas/ and few times I felt so frustrated that I thought to left the pro0e-t and go for an. new industr. and new pro0e-t" 9hallenges whi-h I fa-ed while doing this pro0e-t were following* !an/ing se-tor was quite similar in offering and produ-ts and ,e-ause of that it was %er. diffi-ult to dis-riminate ,etween our produ-t and produ-ts of the -ompetitors" Target -ustomers and respondents were too ,us. persons that to get their time and %iew for spe-ifi- questions was %er. diffi-ult" :ensiti%it. of the industr. was also a %er. frequent fa-tor whi-h was %er. important to measure -orre-tl." Area -o%ered for the pro0e-t while doing 0o, also was %er. large and it was %er. diffi-ult to -orrelate two different

-ustomers8respondents %iews in a one"

IDBI BANK LTD.

$%er. finan-ial -ustomer has his8her own need and a--ording to the requirements of the -ustomer produ-t -ustomi=ation was not possi,le" :o a,o%e -hallenges some time for-ed me to lea%e the pro0e-t ,ut an. how I did m. pro0e-t in all -ir-umstan-es" !asi-all. in this pro0e-t I anal.=ed that* 4hat fa-tors are reall. responsi,le for performan-e of I !I !an/>s performan-e in this -ompetiti%e era"

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1hapter 2

Chapter 2

Industry status

IDBI Banks interface

Industry introduction The Indian !an/ing industr., whi-h is go%erned ,. the !an/ing Regulation A-t of India, 1?@? -an ,e ,roadl. -lassified into two ma0or -ategories, non*s-heduled ,an/s and s-heduled ,an/s" :-heduled ,an/s -omprise -ommer-ial ,an/s and the -o*operati%e ,an/s" In terms of ownership, -ommer-ial ,an/s -an ,e further grouped into nationali=ed ,an/s, the :tate !an/ of India and its group ,an/s, regional rural ,an/s and pri%ate se-tor ,an/s #the old8 new domesti- and foreign&" These ,an/s ha%e o%er 2+,((( ,ran-hes spread a-ross the -ountr. in e%er. -it. and %illages of all noo/ and -orners of the land"

The first phase of finan-ial reforms resulted in the nationali=ation of 1@ ma0or ,an/s in 1?2? and resulted in a shift from 9lass ,an/ing to Mass ,an/ing" This in turn resulted in a signifi-ant growth in the geographi-al -o%erage of ,an/s" $%er. ,an/ had to earmar/ a minimum per-entage of their loan portfolio to se-tors identified as Apriorit. se-tors5" The manufa-turing se-tor also grew during the 1?+(s in prote-ted en%irons

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and the ,an/ing se-tor was a -riti-al sour-e" The ne;t wa%e of reforms saw the nationali=ation of 2 more -ommer-ial ,an/s in 1?B(" :in-e then the num,er of s-heduled -ommer-ial ,an/s in-reased four*fold and the num,er of ,an/ ,ran-hes in-reased eight*fold" And that was not the limit of growth"

After the se-ond phase of finan-ial se-tor reforms and li,erali=ation of the se-tor in the earl. nineties, the Pu,li- :e-tor !an/s #P:!& s found it e;tremel. diffi-ult to -ompete with the new pri%ate se-tor ,an/s and the foreign ,an/s" The new pri%ate se-tor ,an/s first made their appearan-e after the guidelines permitting them were issued in Januar. 1??3" $ight new pri%ate se-tor ,an/s are presentl. in operation" These ,an/s due to their late start ha%e a--ess to state*of*the*art te-hnolog., whi-h in turn helps them to sa%e on manpower -osts"

uring the .ear '(((, the :tate !an/ Of India #:!I& and its + asso-iates a--ounted for a ') per-ent share in deposits and 'B"1 per-ent share in -redit" The '( nationali=ed ,an/s a--ounted for )3"' per-ent of the deposits and @+") per-ent of -redit during the same period" The share of foreign ,an/s #num,ering @'&, regional rural ,an/s and other s-heduled -ommer-ial ,an/s a--ounted for )"+ per-ent, 3"? per-ent and 1'"' per-ent respe-ti%el. in deposits and B"@1 per-ent, 3"1@ per-ent and

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1'"B) per-ent respe-ti%el. in -redit during the .ear '((("a,out the detail of the -urrent s-enario we will go through the trends in modern e-onom. of the -ountr."

Current (cenario: The industr. is -urrentl. in a transition phase" On the one hand, the P:!s, whi-h are the mainsta. of the Indian !an/ing s.stem are in the pro-ess of shedding their fla, in terms of e;-essi%e manpower, e;-essi%e non Performing Assets #Cpas& and e;-essi%e go%ernmental equit., while on the other hand the pri%ate se-tor ,an/s are -onsolidating themsel%es through mergers and a-quisitions"

P:!s, whi-h -urrentl. a--ount for more than +B per-ent of total ,an/ing industr. assets are saddled with CPAs #a mind*,oggling Rs B3( ,illion in '(((&, falling re%enues from traditional sour-es, la-/ of modern te-hnolog. and a massi%e wor/for-e while the new pri%ate se-tor ,an/s are forging ahead and rewriting the traditional ,an/ing ,usiness model ,. wa. of their

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sheer inno%ation and ser%i-e" The P:!s are of -ourse -urrentl. wor/ing out -hallenging strategies e%en as '( per-ent of their massi%e emplo.ee strength has dwindled in the wa/e of the su--essful Doluntar. Retirement :-hemes #DR:& s-hemes"

The pri%ate pla.ers howe%er -annot mat-h the P:!>s great rea-h, great si=e and a--ess to low -ost deposits" Therefore one of the means for them to -om,at the P:!s has ,een through the merger and a-quisition #ME A& route" O%er the last two .ears, the industr. has witnessed se%eral su-h instan-es" For instan-e, 6 F9 !an/>s merger with Times !an/ I-i-i !an/>s a-quisition of IT9 9lassi-, Anagram Finan-e and !an/ of Madurai" 9enturion !an/, Indusind !an/, !an/ of Pun0a,, D.s.a !an/ are said to ,e on the loo/out" The FTI ,an/* Glo,al Trust !an/ merger howe%er opened a pandora>s ,o; and ,rought a,out the reali=ation that all was not well in the fun-tioning of man. of the pri%ate se-tor ,an/s"

Pri%ate se-tor !an/s ha%e pioneered internet ,an/ing, phone ,an/ing, an.where ,an/ing, mo,ile ,an/ing, de,it -ards, Automati- Teller Ma-hines #ATMs& and -om,ined %arious other ser%i-es and integrated them into the mainstream ,an/ing arena, while the P:!s are still grappling with disgruntled emplo.ees in the aftermath of su--essful DR: s-hemes" Also, following India>s -ommitment to the 4 To agreement in

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respe-t of the ser%i-es se-tor, foreign ,an/s, in-luding ,oth new and the e;isting ones, ha%e ,een permitted to open up to 1' ,ran-hes a .ear with effe-t from 1??B*?? as against the earlier stipulation of B ,ran-hes" Tas/s of go%ernment diluting their equit. from )1 per-ent to 33 per-ent in Co%em,er '((( has also opened up a new opportunit. for the ta/eo%er of e%en the P:!s" The F I rules ,eing more

rationali=ed in G1FY(' ma. also pa%e the wa. for foreign ,an/s ta/ing the ME A route to a-quire willing Indian partners" Meanwhile the e-onomi- and -orporate se-tor slowdown has led to an in-reasing num,er of ,an/s fo-using on the retail segment" Man. of them are also entering the new %istas of Insuran-e" !an/s with their phenomenal rea-h and a regular interfa-e with the retail in%estor are the ,est pla-ed to enter into the insuran-e se-tor" !an/s in India ha%e ,een allowed to pro%ide fee*,ased insuran-e ser%i-es without ris/ parti-ipation, in%est in an insuran-e -ompan. for pro%iding infrastru-ture and ser%i-es support and set up of a separate 0oint* %enture insuran-e -ompan. with ris/ parti-ipation"

A""re"ate Performance of the !ankin" #ndustr& Aggregate deposits of s-heduled -ommer-ial ,an/s in-reased at a -ompounded annual a%erage growth rate #9agr& of 1+"B per-ent during

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1?2?*??, while ,an/ -redit e;panded at a 9agr of 12"3 per-ent per annum" !an/s> in%estments in go%ernment and other appro%ed se-urities re-orded a 9agr of 1B"B per-ent per annum during the same period" In FY(1 the e-onomi- slowdown resulted in a Gross omesti- Produ-t

#G P& growth of onl. 2"( per-ent as against the pre%ious .ear>s 2"@ per-ent" The 4PI Inde; #a measure of inflation& in-reased ,. +"1 per-ent as against 3"3 per-ent in FY((" :imilarl., mone. suppl. #M3& grew ,. around 12"' per-ent as against 1@"2 per-ent a .ear ago"

The growth in aggregate deposits of the s-heduled -ommer-ial ,an/s at 1)"@ per-ent in FY(1 per-ent was lower than that of 1?"3 per-ent in the pre%ious .ear, while the growth in -redit ,.

:9!s slowed down to 1)"2 per-ent in FY(1 against '3 per-ent a .ear ago"

The industrial slowdown also affe-ted the earnings of listed ,an/s" The net profits of '( listed ,an/s dropped ,. 3@"@3 per-ent in the quarter ended Mar-h '((1" Cet profits grew ,. @("+) per-ent in the first quarter of '(((*'((1, ,ut dropped to @")2 per-ent in the fourth quarter of '(((* '((1"

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On the 9apital Adequa-. Ratio #9AR& front while most ,an/s managed to fulfill the norms, it was a feat a-hie%ed with its own share of diffi-ulties" The 9AR, whi-h at present is ?"( per-ent, is li/el. to ,e hi/ed to 1'"( per-ent ,. the .ear '((@ ,ased on the !asle 9ommittee

re-ommendations" An. ,an/ that wishes to grow its assets needs to also shore up its -apital at the same time so that its -apital as a per-entage of the ris/*weighted assets is maintained at the stipulated rate" 4hile the IPO route was a mu-h*fan-ied one in the earl. H?(s, the -urrent s-enario doesn>t loo/ too attra-ti%e for ,an/ ma0ors"

9onsequentl., ,an/s ha%e ,een for-ed to e;plore other a%enues to shore up their -apital ,ase" 4hile some are wooing foreign partners to add to the -apital others are emplo.ing the ME A route" Man. are also going in for right issues at pri-es -onsidera,l. lower than the mar/et pri-es to woo the in%estors"

#nterest Rate (cene The two .ears, post the $ast Asian -rises in 1??+*?B saw a -lim, in the glo,al interest rates" It was onl. in the later half of FY(1 that the F: Fed -ut interest rates" India has howe%er

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remained more or less insulated" The past ' .ears in our -ountr. was -hara-teri=ed ,. a mounting intention of the Reser%e !an/ Of India #R!I& to steadil. redu-e interest rates resulting in a narrowing differential ,etween glo,al and domesti- rates"

The R!I has ,een affe-ting ,an/ rate and 9RR -uts at regular inter%als to impro%e liquidit. and redu-e rates" The onl. e;-eption was in Jul. '((( when the R!I in-reased the 9ash Reser%e Ratio #9RR& to stem the fall in the rupee against the dollar" The stead. fall in the interest rates resulted in squee=ed margins for the ,an/s in general"

Go)ernmenta Po ic&: After the first phase and se-ond phase of finan-ial reforms, in the 1?B(s -ommer-ial ,an/s ,egan to fun-tion in a highl. regulated en%ironment, with administered interest rate stru-ture, quantitati%e restri-tions on -redit flows, high reser%e requirements and reser%ation of a signifi-ant proportion of lenda,le resour-es for the priorit. and the go%ernment se-tors" The restri-ti%e regulator. norms led to the -redit rationing for the pri%ate se-tor and the interest rate -ontrols led to the unprodu-ti%e use of -redit and low le%els of in%estment and growth" The resultant

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Hfinan-ial repression> led to de-line in produ-ti%it. and effi-ien-. and erosion of profita,ilit. of the ,an/ing se-tor in general" This was when the need to de%elop a sound -ommer-ial ,an/ing s.stem was felt" This was wor/ed out mainl. with the help of the

re-ommendations of the 9ommittee on the Finan-ial

:.stem #9hairman7 :hri M" Carasimham&, 1??1" The resultant finan-ial se-tor reforms -alled for interest rate fle;i,ilit. for ,an/s, redu-tion in reser%e requirements, and a num,er of stru-tural measures" Interest rates ha%e thus ,een steadil. deregulated in the past few .ears with ,an/s ,eing free to fi; their Prime <ending Rates#P<Rs& and deposit rates for most ,an/ing produ-ts" 9redit mar/et reforms in-luded introdu-tion of new instruments of -redit, -hanges in the -redit deli%er. s.stem and integration of fun-tional roles of di%erse pla.ers, su-h as, ,an/s, finan-ial institutions and non*,an/ing finan-ial -ompanies #C,f-s&" omesti- Pri%ate :e-tor !an/s were allowed to ,e set up, P:!s were allowed to a--ess the mar/ets to shore up their 9ars"

#mp ications Of (ome Recent Po ic& Measures: The allowing of P:!s to shed manpower and dilution of equit. are mo%es that will lend greater autonom. to the industr." In order to lend more

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depth to the -apital mar/ets the R!I had in Co%em,er '((( also -hanged the -apital mar/et e;posure norms from ) per-ent of ,an/>s in-remental deposits of the pre%ious .ear to ) per-ent of the ,an/>s total domesti- -redit in the pre%ious .ear" !ut this mo%e did not ha%e the desired effe-t, as in, while most ,an/s /ept awa. almost -ompletel. from the -apital mar/ets, a few pri%ate se-tor ,an/s went o%er,oard and e;-eeded limits and indulged in du,ious sto-/ mar/et deals" The -han-es of seeing ,an/s ma/ing a -ome,a-/ to the sto-/ mar/ets are therefore quite unli/el. in the near future"

The mo%e to in-rease Foreign from '( per-ent

ire-t In%estment F I limits to @? per-ent

during the first quarter of this fis-al -ame as a wel-ome announ-ement to foreign pla.ers wanting to get a foot hold in the Indian Mar/ets ,. in%esting in willing Indian partners who are star%ed of net worth to meet 9AR norms" 9eiling for FII in%estment in -ompanies was also in-reased from '@"( per-ent to @?"( per-ent and ha%e ,een in-luded within the am,it of F I in%estment"

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IDBI bank) all about
The e-onomi- de%elopment of an. -ountr. depends on the e;tent to whi-h its finan-ial s.stem effi-ientl. and effe-ti%el. mo,ili=es and allo-ates resour-es" There are a num,er of ,an/s and finan-ial institutions that perform this fun-tionI one of them is the de%elopment ,an/" e%elopment ,an/s are unique finan-ial institutions that perform

the spe-ial tas/ of fostering the de%elopment of a nation, generall. not underta/en ,. other ,an/s" e%elopment ,an/s are finan-ial agen-ies that pro%ide medium*and long*term finan-ial assistan-e and a-t as -atal.ti- agents in promoting ,alan-ed de%elopment of the -ountr." The. are engaged in promotion and de%elopment of industr., agri-ulture, and other /e. se-tors" The. also pro%ide de%elopment ser%i-es that -an aid in the a--elerated growth of an e-onom." The o,0e-ti%es of de%elopment ,an/s are7 To ser%e as an agent of de%elopment in %arious se-tors, %i=" industr., agri-ulture, and international trade *o acce erate the "ro'th of the econom& *o a ocate resources to hi"h priorit& areas *o foster rapid industria i+ation, particu ar & in the pri)ate sector, so as to pro)ide emp o&ment opportunities as 'e production as hi"her

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*o de)e op entrepreneuria ski s

*o promote the de)e opment of rura areas *o finance housin", sma uti ities. In addition, the. are assigned a spe-ial role in7 Planning, promoting, and de%eloping industries to fill the gaps in industrial se-tor" 9oordinating the wor/ing of institutions engaged in finan-ing, promoting or de%eloping industries, agri-ulture, or trade, rendering promotional ser%i-es su-h as dis-o%ering pro0e-t ideas, underta/ing feasi,ilit. studies, and pro%iding te-hni-al, finan-ial, and managerial assistan-e for the implementation of pro0e-ts sca e industries, infrastructure, and socia

#ndustria de)e opment ,ank of #ndia The industrial de%elopment ,an/ of India#I !I& was esta,lished in 1?2@ ,. parliament as wholl. owned su,sidiar. of reser%e ,an/ of India" In 1?+2, the ,an/>s ownership was transferred to the go%ernment of India" It was a--orded the status of prin-ipal finan-ial institution for -oordinating the wor/ing of institutions at national and state le%els engaged in finan-ing, promoting, and de%eloping industries"

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I !I has pro%ided assistan-e to de%elopment related pro0e-ts and -ontri,uted to ,uilding up su,stantial -apa-ities in all ma0or industries in India" I !I has dire-tl. or indire-tl. assisted all -ompanies that are presentl. re-/oned as ma0or -orporates in the -ountr." It has pla.ed a dominant role in ,alan-ed industrial de%elopment" I !I set up the small industries de%elopment ,an/ of India #:I !I& as wholl. owned su,sidiar. to -ater to spe-ifi- the needs of the small*s-ale se-tor"

I !I has engineered the de%elopment of -apital mar/et through helping in setting up of the se-urities e;-hange ,oard of India#:$!I&, Cational sto-/ e;-hange of India limited#C:$&, -redit anal.sis and resear-h limited#9AR$&, sto-/ holding -orporation of India limited#:69I<&, in%estor ser%i-es of India limited#I:I<&, national se-urities depositor.

limited#C: <&, and -learing -orporation of India limited#99I<& In 1??', I !I a--essed the domesti- retail de,t mar/et for the first time ,. issuing inno%ati%e ,onds /nown as the deep dis-ount ,onds" These new ,onds ,e-ame highl. popular with the Indian in%estor" In 1??@, I !I A-t was amended to permit pu,li- ownership up to @? per -ent" In Jul. 1??), it raised o%er Rs '( ,illion in its first initial pu,li#IPO& of equit., there,. redu-ing the go%ernment sta/e to +'"1@ per -ent" In June '(((, a part of go%ernment shareholding was -on%erted to

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preferen-e -apital" This -apital was redeemed in Mar-h '((1, whi-h led to a redu-tion in go%ernment sta/e" The go%ernment sta/e -urrentl. is )1 per -ent" In august '(((, I !I ,e-ame the first all India finan-ial institution to o,tain I:O ?(('7 1??@ -ertifi-ation for its treasur. operations" It also ,e-ame the first organi=ation in the Indian finan-ial se-tor to o,tain I:O ?((17'((( -ertifi-ation for its fore; ser%i-es"

Mi estones

$u & -./0: :et up under an A-t of Parliament as a wholl.*owned su,sidiar. of Reser%e !an/ of India"

1e,ruar& -.2/: Ownership transferred to Go%ernment of India" esignated Prin-ipal Finan-ial Institution for -o*-oordinating the wor/ing of institutions at national and :tate le%els engaged in finan-ing, promoting and de%eloping industr."

March -.34: International Finan-e

i%ision of I !I transferred to

$;port*Import !an/ of India, esta,lished as a wholl.*owned -orporation of Go%ernment of India, under an A-t of Parliament"

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Apri -..5: :et up :mall Industries

e%elopment !an/ of India

#:I !I& under :I !I A-t as a wholl.*owned su,sidiar. to -ater to spe-ifi- needs of small*s-ale se-tor" In terms of an amendment to :I !I A-t in :eptem,er '(((, I !I di%ested )1J of its

shareholding in :I !I in fa%our of ,an/s and other institutions in the first phase" I !I has su,sequentl. di%ested +?"13J of its sta/e in its erstwhile su,sidiar. to date"

$anuar& -..4: A--essed domesti- retail de,t mar/et for the first time with inno%ati%e ,rea/ing su--ess" eep is-ount !ondsI registered path*

Decem,er -..6: :et up I !I 9apital Mar/et :er%i-es <td" as a wholl.*owned su,sidiar. to offer a ,road range of finan-ial ser%i-es, in-luding !ond Trading, $quit. !ro/ing, 9lient Asset Management and leading Primar. epositor. :er%i-es" I !I 9apital is -urrentl. a ealer in the -ountr."

(eptem,er -..0: :et up I !I !an/ <td" in asso-iation with :I !I as a pri%ate se-tor -ommer-ial ,an/ su,sidiar., a sequel to R!IKs poli-. of opening up domesti,an/ing se-tor to pri%ate

parti-ipation as part of o%erall finan-ial se-tor reforms"

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Octo,er -..0: I !I A-t amended to permit pu,li- ownership upto @?J"

$u & -..7: Made Initial Pu,li- Offer of $quit. and raised o%er Rs"'((( -rore, there,. redu-ing Go%ernment sta/e to +'"1@J"

March 4555:$ntered into a JD agreement with Prin-ipal Finan-ial Group, F:A for parti-ipation in equit. and management of I !I In%estment Management 9ompan. <td", erstwhile a 1((J

su,sidiar." I !I di%ested its entire shareholding in its asset management %enture in Mar-h '((3 as part of o%erall -orporate strateg."

March 4555: :et up I !I Inte-h <td" as a wholl.*owned su,sidiar. to underta/e IT*related a-ti%ities"

$une 4555: A part of Go%ernment shareholding -on%erted to preferen-e -apital, sin-e redeemed in Mar-h '((1I Go%ernment sta/e -urrentl. )B"@+J"

Au"ust 4555: !e-ame the first All*India Finan-ial Institution to o,tain I:O ?(('71??@ 9ertifi-ation for its treasur. operations" Also ,e-ame the first organisation in Indian finan-ial se-tor to o,tain I:O ?((17'((( 9ertifi-ation for its fore; ser%i-es"

March 455-: :et up I !I Trusteeship :er%i-es <td" to pro%ide te-hnolog.*dri%en information and professional ser%i-es to

su,s-ri,ers and issuers of de,entures"

IDBI BANK LTD.

1e,urar& 4554: Asso-iated with sele-t ,an/s8institutions in setting up Asset Re-onstru-tion 9ompan. #India& <imited #AR9I<&, whi-h will ,e in%ol%ed with the

:trategi- management of non*performing and stressed assets of Finan-ial Institutions and !an/s"

(eptem,er 4556: I !I a-quired the entire shareholding of Tata Finan-e <imited in Tata 6omefinan-e <td, signalling I !IKs fora. into the retail finan-e se-tor" The housing finan-e su,sidiar. has sin-e ,een renamed KI !I 6omefinan-e <imitedK"

Decem,er 4556: On The Industrial

e-em,er 12, '((3, the Parliament appro%ed

e%elopment !an/ #Transfer of Fnderta/ing and

Repeal !ill& '((' to repeal I !I A-t 1?2@" The PresidentKs assent for the same was o,tained on e-em,er 3(, '((3" The Repeal A-t

is aimed at ,ringing I !I under the 9ompanies A-t for in%esting it with the requisite operational fle;i,ilit. to underta/e -ommer-ial ,an/ing ,usiness under the !an/ing Regulation A-t 1?@? in addition to the ,usiness -arried on and transa-ted ,. it under the I !I A-t, 1?2@"

IDBI BANK LTD.

$u &

4550: The Industrial

e%elopment !an/ #Transfer of

Fnderta/ing and Repeal& A-t '((3 -ame into for-e from Jul. ', '((@"

$u & 4550: The !oards of I !I and I !I !an/ <td" ta/e in* prin-iple de-ision regarding merger of I !I !an/ <td" with proposed Industrial e%elopment !an/ of India <td" in their

respe-ti%e meetings on Jul. '?, '((@"

(eptem,er 4550: The Trust

eed for :tressed Assets :ta,ilisation

Fund #:A:F& e;e-uted ,. its Trustees on :eptem,er '@, '((@ and the first meeting of the Trustees was held on :eptem,er '+, '((@"

(eptem,er 4550: The new entit. LIndustrial

e%elopment !an/ of

IndiaL was in-orporated on :eptem,er '+, '((@ and 9ertifi-ate of -ommen-ement of ,usiness was issued ,. the Registrar of 9ompanies on :eptem,er 'B, '((@"

(eptem,er 4550:Cotifi-ation issued ,. Ministr. of Finan-e spe-if.ing :A:F as a finan-ial institution under :e-tion '#h&#ii& of Re-o%er. of e,ts due to !an/s E Finan-ial Institutions A-t, 1??3"

IDBI BANK LTD.

(eptem,er 4550:Cotifi-ation issued ,. Ministr. of Finan-e on :eptem,er '?, '((@ for issue of non*interest ,earing GoI I !I :pe-ial :e-urit., '('@, aggregating Rs"?((( -rore, of '(*.ear tenure"

(eptem,er 4550: Cotifi-ation for appointed da. as O-to,er 1, '((@, issued ,. Ministr. of Finan-e on :eptem,er '?, '((@"

(eptem,er 4550:R!I issues notifi-ation for in-lusion of Industrial e%elopment !an/ of India <td" in :-hedule II of R!I A-t, 1?3@ on :eptem,er 3(, '((@"

Octo,er 4550: Appointed da. * O-to,er (1, '((@ * Transfer of underta/ing of I !I to I !I <td" I !I <td" -ommen-es operations as a ,an/ing -ompan." I !I A-t, 1?2@ stands repealed" $anuar& 4557:The !oard of ire-tors of I !I <td", at its meeting held on

Januar. '(, '((), appro%ed the :-heme of Amalgamation, en%isaging merging of I !I !an/ <td" with I !I <td" Pursuant to the s-heme appro%ed ,. the !oards of ,oth the ,an/s, I !I <td" will issue 1(( equit. shares for 1@' equit. shares held ,. shareholders in I !I !an/ <td" $GM has ,een -on%ened on Fe,ruar. '3, '(() for see/ing shareholder appro%al for the s-heme"

IDBI BANK LTD.

IDBI Bank Business 1hart

IDBI BANK

RETAIL BANKING

DEVELOPMENT BANK.

SAVING ACCOUNT

CURRENT ACCOUNT

INVESTMENT

PERSONAL SAVING

CORPORATE SAVING

IDBI BANK LTD.

IDBI Bank 9r"ani:ational 1hart

Chairman

President

Vi e !resident "inan e

Vi e !resident &. R.

Vi e !resident Mar#etin$

Vi e !resident O!erati%ns

Re$i%na( &ead

)%na( &ead

Di'isi%na( Sa(es Mana$er

Territ%r* In har$e

IDBI BANK LTD.

Chapter 3
*esearch ,ethodolo"y 9bjective of the study Pro0e-t stud. whi-h is ,eing -ondu-ted ,. me for the last two month is not onl. a formalit. for the fulfillment of the two .ear full time Post Graduate iploma in !usiness Management" !ut ,eing a management

student and a good emplo.ee I tried m. ,est to e;tra-t ,est of the information a%aila,le in the mar/et for the use of so-iet. and people" The o,0e-ti%es ha%e ,een -lassified ,. me in this pro0e-t form personal to professional, ,ut here I am not dis-losing m. personal o,0e-ti%e whi-h ha%e ,een a-hie%ed ,. me while doing the pro0e-t" Onl. professional o,0e-ti%es whi-h are ,eing -o%ered ,. me in this pro0e-t are as following* To kno+ about environmental factors affectin" IDBI Banks performance' To analy:e the role of advertisement for bank performance' To kno+ the perception and conception of customers to+ards bankin" products and specially focused for IDBI Banks product'

IDBI BANK LTD.

To e0plore the potential areas for the ne+ bank branches +hich +ill provide both price and people to the bank +ith constant promotion and placin" strate"y'

$cope of the $tudy $a-h and e%er. pro0e-t stud. along with its -ertain o,0e-ti%es also ha%e s-ope for future" And this s-ope in future gi%es to new resear-hes a new need to resear-h a new pro0e-t with a new s-ope" :-ope of the stud. not onl. -onsist one or two future ,usiness plan ,ut sometime it also gi%es idea a,out a new ,usiness whi-h ,e-omes mu-h more profita,le for the resear-hes then the older one" :-ope of the stud. -ould gi%e the pro0e-ted s-enario for a new su--essful strateg. with a proper implementation plan" 4hate%er s-ope I o,ser%ed in m. pro0e-t are not e;a-tl. ha%ing all the features of the s-ope whi-h I des-ri,ed a,o%e ,ut also not la-/ing all the features( *esearch study could "ive an idea of net+ork e0pansion for capturin" more market and customer +ith better services and lo+er cost. +ith out compromisin" +ith /uality' In future customer re/uirements could be added +ith the product and services for "ettin" an ed"e over competitors' 1onsumer behavior could also be used for the purpose of launchin" a ne+ product +ith e0tra benefits +hich are

IDBI BANK LTD.

re/uired by customers for their account (savin" or current # and;or for their investments' 6actors +hich are responsible for the performance for bank can also be used for the modification of the strate"y and product for bein" more profitable' 6actors +hich I observed +hile doin" project study are follo+in"3 1ompetitors 1ustomer Behaviour Advertisement;promotional activities

Attitude of manpo+er and &conomic conditions These all could also be interchan"ed +ith each other for each other in banks strate"ies for makin" a final business plan to effect the market +ith a positive +ay +ithout disturbin" a lot to market. customers and competitors +ith disturbance in market shares'

IDBI BANK LTD.

Tools and Techni/ues As no stud. -ould ,e su--essfull. -ompleted without proper tools and te-hniques, same with m. pro0e-t" For the ,etter presentation and right e;planation I used tools of statisti-s and -omputer %er. frequentl." And I am %er. than/ful to all those tools for helping me a lot" !asi- tools whi-h I used for pro0e-t from statisti-s are* * !ar Charts 8 Pie charts 8 *a, es ,ar -harts and pie -harts are reall. useful tools for e%er. resear-h to show the result in a well -lear, ease and simple wa." !e-ause I used ,ar -harts and pie -ahrts in pro0e-t for showing data in a s.stemati- wa., so it need not ne-essar. for an. o,ser%er to read all the theoreti-al detail, simple on seeing the -harts an. ,od. -ould /now that what is ,eing said"

*echno o"ica *oo s Ms8 9:ce Ms8Access Ms8;ord

IDBI BANK LTD.

A,o%e appli-ation software of Mi-rosoft helped me a lot in ma/ing pro0e-t more intera-ti%e and produ-ti%e"

Mi-rosoft*$;-el had a great role in m. pro0e-t, it -reated for me a situation of A.ou sit and get5" I pro%ided it simpl. all the detail of data and in return it gi%en me all the rele%ant information"" Mi-rosoft*A--ess did the performan-e of m. personal assistant who organi=es m. all the details of do-ument without distur,ing them e%en a single time in all the pro0e-t duration" And in last Mi-rosoft*4ord did help me for the do-umentation of the pro0e-t in a presenta,le form" Applied Principles and 1oncepts 4hile I started to do the pro0e-t the main thing whi-h was the matter of -on-ern was that around what prin-iples I ha%e to re%ol%e m. pro0e-t" !e-ause with out ha%ing an. h.pothesis and o,0e-ti%e we -an not determine that what output or result we are e;pe-ting form the pro0e-t" And se-ond thing is that ha%ing onl. tools and te-hniques for the purpose of pro0e-t is not rele%ant until unless we ha%e the prin-ipals for whi-h we ha%e to use those tools and te-hniques" Mathematica A)era"es (tandard De)iation

IDBI BANK LTD.

Corre ation

$ources of Primary and $econdary data) For the purpose of pro0e-t data is %er. mu-h required whi-h wor/s as a food for pro-ess whi-h will ultimatel. gi%e output in the form of information" :o ,efore mentioning the sour-e of data for the pro0e-t I would li/e to mention that what t.pe of data I ha%e -olle-ted for the purpose of pro0e-t and what it is e;a-tl." -. Primar& Data: Primar. data is ,asi-all. the li%e data whi-h I -olle-ted on field while doing -old -alls with the -ustomers and I shown them list of question for whi-h I had required their responses" In some -ases I got no response form their side and than on the ,asis of m. pre%ious e;perien-es I filled those fields" (ource: Main sour-e for the primar. data for the pro0e-t was questionnaires whi-h I got filled ,. the -ustomers or some times filled m.self on the ,asis of dis-ussion with the -ustomers" 4. (econdar& Data:

IDBI BANK LTD.

:e-ondar. data for the ,ase of the pro0e-t I -olle-ted from intranet of the !an/ and from internet, R!I !ulletin, Journal ,. I9FAI Fni%ersit."

$tatistical Analysis In this segment I will show my findings in the form of graphs and charts( All the data which I got form the market will not be disclosed over here but e)tract of that in the form of information will definitely be here( Detail) $i:e of Data Area Type of Data Industry *espondent ) 4<= ) $aket ) 2' Primary ) Bankin" ) 1ustomers 4' $econdary

IDBI BANK LTD.

Table2) 1orrelation bet+een a+areness of customers about IDBI bank their A"e AG9 '(*') ')*3( 3(*3) 3)*@( @(*@) @)*)( )(*2( 2(*A!OD$ <O. O1 R9(PO<(9 ') @2 3@ '3 '1 '' '@ ))

IDBI BANK LTD.

60 50 40 30 20 10 0
-6 -A 0 BO VE 0 0 5 5 5 -3 -4 20 -2 30 -3 -4 45 -5 25 35 40 50 0

AGE GROUP

*A!%9 4: P9RC9P*#O< O1 #D!# A( A !A<K

*=P9 O1 !A<K PRIDAT$ PF!<I9 PRIDAT$8PF!<I9 OCKT MCO4

60

RESPONSES

NO. OF RESPONSE

R9(PO<(9( )( @) 1(( ))

IDBI BANK LTD.

RESPONSES

DON'T KNOW

PRIVATE PUBLIC

PRIVATE PUBLIC PRIVATE/PUBLIC DON'T KNOW

PRIVATE/PUB LIC

*A!%9 6 : RA*#<G O1 C>(*OM9R( 1OR #D!# !A<K A( A GOOD !A<K PARAM9*9R *++I!I*,!I,%*.,*% BA,/I,0 A%1s 2.#D3!% .A,0* ,*%W#./ 24#,* BA,/I,0 R9(PO<(9( +)J ')J ?)J 33J ''J

IDBI BANK LTD.

33

22 75

EFFICIENC" INTERNET BANKIN#/AT$% PRODUCT RAN#E NETWORK

!5 25

P&ONE BANKIN#

*A!%9 0: MARK9* (?AR9( #< (AK9* #< COMPAR#(#O< *O COMP9*#*OR( !A<K <AM9 SBI IDBI I!I!I 2,B 4D+! 4SB! #%4*.S @ O1 (?AR9 3(J 1)J ')J 1(J )J )J 1(J

IDBI BANK LTD.

SBI 30 ICICI 25 20 IDBI 15 PNB 10 &DFC&SBC 5 0 OT&ERS SBI IDBI ICICI PNB &DFC &SBC OT&ERS

OF S&ARE

*A!%9 7: 1AC*OR( R9(PO<(#!%9 1OR P9R1ORMA<C9 O1 #D!# !A<K #< <O#DA PARAM9*9R( 2.#D3!% AD5*.%IS1*,% 1A,2#W*. ,*%6BA,/I,0 @ O1 (?AR9 )(J )J ')J 'J

IDBI BANK LTD.

24#,* BA,/I,0 I,5*S%1*,% S!4*1* ,*%W#./ )J 1(J 3J

60 PERSENTAGE 50 40 30 20 10 0 OF S&ARE PARAMETERS 10 5 2 5 3 25 50 PRODUCT ADVERTIS$ENT $ANPOWER NET-BANKIN# P&ONE BANKIN# INVEST$ENT SC&E$E NETWORK

*A!%9 / : COMPARA*#V9 (*>D= ;#*? MA$OR COMP9*#*OR( O< !A(#C PARAM9*9R( PARAM9*9R(A!A<K( #D!# #C#C# (!# P<! ?(!C CA<ARA !A<K

IDBI BANK LTD.

2.#D3!% AD5*.%IS1*,% 1A,2#W*. ,*%6BA,/I,0 24#,* BA,/I,0 I,5*S%1*,% S!4*1* ,*%W#./ !.*DIBI7I%'(J 3J 1(J 3J 1(J )J 'J '(J 1)J @)J )(J )(J @(J ')J @(J 1(J 3(J 1)J 'J 1(J )J )(J @(J @(J 1)J '(J 3J 1'J )J 1(J )J '(J 1(J +J ')J BJ 3(J )J 3J )J 1(J 1(J 1(J 1+J 1(J )J 1(J )J

COMPARATIVE GRAPHS
60 50 40 30 20 10 0
IC IC I ID BI CA &S NA BC RA BA NK SB I PN B

PERCENTAGE

PRODUCT ADVERTIS$ENT $ANPOWER NET-BANKIN# P&ONE BANKIN# INVEST$ENT SC&E$E NETWORK CREDIBILIT"

BANKS

IDBI BANK LTD.

*A!%9 2: *?9 9119C*#V9<9(( O1 COMM9RC#A%( O1 #D!# !A<K

DA=( A1*9R *?9 AD #( (99< 869 days :6;8 days ;;6;9 days more than ;9 days

PO(#*#V9 R9(PO<(9 1(( 2+ @3 @(

IDBI BANK LTD.

POSITIVE RESPONSE NO. OF PEOPLE REMEMBERED THE AD 120 100 '0 60 40 20 0 0-5 ()*% 6-10 ()*% 11-15 ()*% +,-. /0)1 15 ()*% POSITIVE RESPONSE

NO. OF DAYS AFTER AD

1indin"s +. *he credi,i it& of #D!# ,ank is "ood in comparison to its competitors as GO# BGo)ernment Of #ndiaC is a major share

ho der in the compan&.

4. #D!# ,ank has potentia a tapped market in (AK9* in re"ion and hence has an opportunities for "ro'th.

6. *he products of #D!# ,ank has "ood credi,i it& in the re"ion compare to its competitors.

IDBI BANK LTD.

0. *he ad)ertisement of the ,ank 'as )er& effecti)e from the first da& of its airin" ti dec inin". the fifth da& and there after it starts

,. *he initia ,a ance for AAC openin" is Rs, 7555A8 'h& peop e are re uctant in openin" the same.

and thatDs

1onclusions and *ecommendations 1onclusions

Chapter 4

+. !onsumers of Saket have good awareness level about IDBI bank as well as about its services and products( -. %he advertising campaign has successfully been able to increase the market share of IDBI in Saket(

IDBI BANK LTD.

<( %he modern days technology like internet banking= phone banking= used by IDBI bank for providing banking services has sent positive signals in the mind of consumes( .. %he network of IDBI in Saket is lagging behind a little than its competitors like I!I!I bank and 4D+! bank( 9( It can be distilled from data that IDBI bank has good market share as compared to its competitors considering the amount of resources deployed by them in the market(

*ecommendations +. Since there is only two branch of IDBI bank and only three atms in Saket= so it is necessary for IDBI bank to open more branches and install more atms to serve the vast market of saket especially(

IDBI BANK LTD.

-. 1ore resources should be allocated in the market of Saket as there is big untapped market in saket= so it becomes necessary for IDBI bank for taking an edge over the competitors( /. A short advertising campaign in Saket has produced good results in a short span of times= so to gain long term benefits is very necessary for IDBI bank to carry on this campaign with more intensity( .. Besides opening more branches it should also look for opening some e)tension counter in /utub near meherauli and one in /hanpur( 9( As 0overnment is the ma$ority share holder in the shares of IDBI bank= which makes this bank more reliable than other private banks= this thing can be used in the favour of IDBI bank by making people aware about this fact and winning their faith(

Appendix1: Questionnaire
<AM9NNNNNNNNNNNNNNNNNNNNNNNNNNNNNN AG9NNNNNNNNNNNNNN" (9E: MA%9A19MA%9

IDBI BANK LTD.

ADDR9((:NNNNNNNNNNNNNNNNNNNNNNNNNNNNN""" N NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN COD9NNNNNNNNNNN

NC#*=NNNNNNNNNNNNNNNP#< N""""

CO<*AC* <O" NNNNNNNNNNNNNNNNNNNNNNNNNNNN -. O YOF MCO4 A!OFT I !I !ACM <T "O Y$: 4( IDBI BA,/ IS A > 2.I5A%* BA,/ 23B7I! BA,/ 2.I5A%* 23B7I! BA,/ D#,"% /,#W CO

5( .A,/ %4* IDBI BA,/ #, %4* +#77#W*I,0 +*A%3.*S >?.A,/ ; +#. B*S% A,D 9 +#. W#.S* #, ; %# 9 S!A7*@ 1A,2#W*. ,*%W#./ 24#,* BA,/I,0

*++I!*,!I,%*.,*% BA,/I,0 A%1s 2.#D3!% .A,0*

7' -#3 W#37D 7I/* %# B* A !3S%#1*. #+ BA,/ B*!A3S* > AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAA <( -#3 W#37D ,#% 7I/* %# B* A !3S%#1*. BA,/ B*!A3S*6 >( ,A1* %4* BA,/ W4I!4 !#1*S I, -#3. 1I,D A% 5*.- +I.S% A,D W4-?

IDBI BANK LTD.

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAA( ?( D# -#3 %4I,/ IDB IBA,/ IS A SA+* 27A!* +#. -#3. 1#,*-? -*S ,#

@( D# -#3 %4I,/ IDBI BA,/ ,**D 1#.* AD5*.%IS1*,%? -*S ,#

A( -#3. 7*5*7 #+ SA%IS+A!%I#, WI%4 IDBI BA,/6 5*.- SA%IS+I*D SA%IS+I*D ,#.1A7 DISA%( 2=( I+ -#3 WI77 4A5* #2%I#, A0AI,*S% IDBI BA,/ -#3 WI77 0# +#. > SBI I!I!I 2,B #%4*. DISSA%IS+I*D 5*.-

;;( D# -#3 .*1*1B*. %4* !#11*.!IA7 #+ IDBI BA,/? -*S ,#

;B( W4*, DID -#3 7AS% S** %4* AD5*.%IS*1*,% #+ IDBI BA,/? 869 DA-S BA!/ BA!/ ;;6;9 DA-S BA!/ DA-S BA!/ ;<( D# -#3 /,#W W4*.* IS %4* B.A,!4 #+ IDBI 7#!A%*D I, 1#.* %4A, ;9 :6;8 DA-S

SA/*%?

IDBI BANK LTD.

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAA 27( IDBI BA,/ 7%D( I, SA/*% IS *++*!%I5* B*!A3S*6 AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAA( 2<( IDBI BA,/ 7%D( I, SA/*% IS ,#% *++*!%I5* B*!A3S*6 AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAA(

2>( IDBI BA,/ 7%D( IS A 0##D BA,/ +#.6 S*.5I!* 2*#27* 2*.S#,S 2#7I%I!IA,S A77 #+ AB#5* 2?' ,A1* IDBI BA,/ 7%D( 0I5* B73*62.I,% I, -#3. 1I,D #+6 4I04 ,*%W#./ *++I!I*,% BA,/ 4I6%*!4 BA,/ !3S%#1*. +.I*,D7+I,A,!I7A770*,*.A7 23B7I! B3SI,*SS

#%4*. ?27*AS* S2*!I+-@AAAAAAAAAAAAAAAAAAAAAAA AAAA(

IDBI BANK LTD.

Appendix 2: Reference Materia

www(idbibank(com wwwB(idbibank(com www(google(com

IDBI BANK LTD.

.(S( Sharma= Business statistics= +irst India 2rint= India= B88C= Aaker /umar and Day= 1arketing research= :th *d(=$ohn willy & sons=;DDE( I!+AI Fournal of Banking %he *conomics times %he %imes of India