INTRODUCTION TO PRIVATE SECTOR BANKS

All those banks where greater parts of stake or equity are held by the private shareholders and not by government are called "private-sector banks". These are the major players in the banking sector as well as in expansion of the business activities India. The present private-sector banks equipped with all kinds of contemporary innovations, monetary tools and techniques to handle the complexities are a result of the evolutionary process over two centuries. They have a highly developed organisational structure and are professionally managed. Thus they have grown faster and stronger since past few years The part of the economy that is not state controlled, and is run by individuals and companies for profit. The private sector encompasses all for-profit businesses that are not owned or operated by the government. Companies and corporations that are government run are part of what is known as the public sector, while charities and other nonprofit organizations are part of the voluntary sector.

HISTORY AND EVALUTION OF PRIVATE SECTOR BANKS

Private-sector banks have been functioning in India since the very beginning of the banking system. Initially, during 1921, the private banks like bank of Bengal, bank of Bombay and bank of Madras were in service, which all together formed Imperial Bank of India. Reserve Bank of India(RBI) came in picture in 1935 and became the centre of every other bank taking away all the responsibilities and functions of Imperial bank. Between 1969 and 1980 there was rapid increase in the number of branches of the private banks. In April 1980, they accounted for nearly 17.5 percent of bank branches in India. In 1980, after 6 more banks were nationalised, about 10 percent of the bank branches were those of private-sector banks.The share of the private bank branches stayed nearly same between 1980 and 2000. Then from the early 1990s, RBI's liberalisation policy came in picture and with this the government gave licences to a few private banks, which came to be known as new private-sector banks. There are two categories of the private-sector banks: "old" and "new". The old private-sector banks have been operating since a long time and may be referred to those banks, which are in operation from before 1991 and all those banks that have commenced their business after 1991 are called as new privatesector banks.[ Housing Development Finance Corporation Limited was the first private bank in India to receive license from RBI as a part of the RBI's liberalization policy of the banking sector, to set up a bank in the private-sector banks in India.

LIST OF PRIVATE SECTOR BANKS

Old private sector banks

1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13)

New private banks

1) 2) 3) 4) 5) 6) 7)

Catholic Syrian Bank Ltd. City Union Bank Ltd. Dhanalakshmi bank Ltd. Federal Bank Ltd. ING Vysya Bank Ltd. Jammu & Kashmir Bank Ltd. Karnataka Bank Ltd. Karur Vysya Bank Ltd. Lakshmi Vilas Bank Ltd. Nainital Bank Ltd. Ratnakar Bank Ltd. South Indian Bank Ltd. Tamilnad Mercantile Bank Ltd.

Axis Bank Ltd. Development Credit Bank Ltd. HDFC Bank Ltd. ICICI Bank Ltd. Induslnd Bank Ltd. Kotak Mahindra Bank Ltd. Yes Bank Ltd.

THE 7 PS OF THE PRIVATE SECTOR BANKS

PRODUCT (A) DEPOSITS: Savings, Current, Fixed etc. (B) ADVANCES:a) Term Loan,b) Clean Loan, c) Bills Discounting, d) Advances, e) Pre-shipment Finance, f) Post-shipment finance, g) Secured and Unsecured lines of credit. (2) Non-fund oriented: a) Guarantees, and b) Letter of Credit. (C) INTERNATIONAL BANKING: a) Letter of Credit, and b) Foreign Currency. (D) CONSULTANCY: a) Investment Counselling, b) Project Counselling, c) Merchant Banking, and d) Tax Consultancy. (E) MISCELLANEOUS: a) Traveller Cheques, b) Credit card, c) Remittances, d) Collections, e) Sale of Drafts, f) Standing instructions, and g) Trusteeship. As seen in the goods-service continuum, your product can have both tangible and intangible aspects, and is the thing you offer to satisfy your customers wants and needs. Within this element, you need to consider such things as your product range; its quality and design; its features and the benefits it offers; sizing and packaging; and any add-on guarantees and customer service offerings. PRICE The price mix in the banking sector is nothing but the interest rates charged by the different banks. Let's understand this with an example. A particular buyer approaches for a car loan say for a period of 3 years. He is charged Rs. 20,000 as interest. however if a sales representative of another bank comes to know of this deal he will try to attract the customer by giving him a better deal that is a loan at a lower rate on interest. In this way due to the high level of competition the customer benefits. PROMOTION Promotion is nothing but making the customer more and more aware of the services and benefits provided by the bank. The banks today can use a lot of new technology to communicate to their customers. Two of the fastest growing modern tools of communicating with the customers are: 1. Internet Banking 2. Mobile Banking

PLACE Place mix is the location analysis for banks branches. There are number a factors affecting the determination of the location of the branch of bank. Like population characteristics, commercial, proximity of other commercial outlets. Your choice of such channels is important, as is the variety of channels you use. For example, a common issue for businesses beginning to trade on-line is how that will affect their off-line business, for example selling directly through the web could alienate retail outlets that have been the mainstay of your business in the past. PEOPLE The impact that your people can have on your marketing cannot be underestimated. At its most obvious, this element covers your front line sales and customer service staff who will have a direct impact on how your product is perceived. You need to consider the knowledge and skills of your staff; their motivation and investment in supporting your brand. Any element of the marketing mix will also have its impact on other elements of your business, but the people element is one where the importance of regarding marketing as an integral part of the way you do business is crystal clear. PROCESS The process mix constitutes the overall procedure involved in using the services offered by the bank. Let's take for example the process for application for a car loan. Now this mainly involves 3 things. 1. Producing of proper documents 2. Filling up of application form 3. Paying for the initial down payment PHYSICAL EVIDENCE Physical evidence is the overall layout of the place. How the entire bank has been designed. Physical evidence refers to all those factors that helps make the process much easier and smoother. For example in case of a bank the physical evidence would be the placement of the customer service executive's desk, or the location of the place for depositing Cheques.

INTRODUCTION TO ICICI BANK

ICICI Bank is Indias second-largest bank with total assets of Rs. 3,663.74 billion (US$ 76 billion) at September 30, 2009 and profit after tax Rs. 19.18 billion (US$ 398.8 million) for the half year ended September 30, 2009. The Bank has a network of 1,588 branches and about 4,883 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Banks equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

HISTORY OF ICICI BANK

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICIs shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Banks acquisition of Bank of Madura Limited in an all -stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries andaffiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI groups universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entitys access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICIs strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its whollyowned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank.

THE 7 Ps OF ICICI BANK

PRODUCT MIX: 1. DEPOSITS: ICICI Bank offers wide variety of Deposit Products to suit our requirements. Coupled with convenience of networked branches/ over 1800 ATMs and facility of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep. Savings Account: ICICI Bank offers a power packed Savings Account with a host of convenient features and banking channels to transact through. So now you can bank at your convenience, without the stress of waiting in queues. Senior Citizen Services: The Senior Citizen Services from ICICI Bank has several advantages that are tailored to bring more convenience and enjoyment in your life. Young Stars: Its really important to help children learn the value of finances and money management at an early age. Banking is a serious business, but we make banking a pleasure and at the same time children learn how to manage their personal finances. Fixed Deposits: Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable features of the Fixed Deposit from ICICI Bank. Recurring Deposits: Through ICICI Bank Recurring Deposit you can invest small amounts of money every month that ends up with a large saving on maturity. So you enjoy twin advantages- affordability and higher earnings. Roaming Current Account: Only Roaming Current Account from ICICI Bank travels the distance with your business. You can access your accounts at over 500 networked branches across the country.

Bank @ Campus: Thanks to bank@campus, child can now surf the Net and access all the details of his / her account at the click of a mouse! No need to visit the bank branch at all. ICICI Bank Salary Account: is a benefit-rich payroll account for Employers and Employees. As an organization, you can opt for our Salary Accounts to enable easy disbursements of salaries and enjoy numerous other benefits too. 2. INVESTMENTS Along with Deposit products and Loan offerings, ICICI Bank assists you to manage your finances by providing various investment options such as: ICICI Bank Tax Saving Bonds Government of India Bonds Investment in Mutual Funds Initial Public Offers by Corporate Investment in Pure Gold Foreign Exchange Services Senior Citizens Savings Scheme, 2004 3. ANYWHERE BANKING ICICI Bank is the second largest bank in the country. It services a customer base of more than 5 million customer accounts through a multi-channel access network. This includes more than 500 branches and extension counters, over 1800 ATMs, Call Centre and Internet Banking. Thus, one can access the various services ICICI Bank has to offer at anytime, anywhere and from anyplace. 4. LOAN a) Home Loans b) Personal Loans c) Car Loans d) Two Wheeler Loans e) Commercial Vehicle Loans f) Loans against Securities g) Farm Equipment Loans h) Construction Equipment Loans i) Office Equipment Loans j) Medical Equipment Loans

5. CARDS a) Credit Card: ICICI Bank Credit Cards give you the facility of cash, convenience and a range of benefits, anywhere in the world. These benefits range from life time free cards, Insurance benefits, global emergency assistance service, discounts, utility payments, travel discounts and much more. b) Debit ATM Card: The ICICI Bank Debit Card is a revolutionary form of cash that allows customers to access their bank account around the clock, around the world. The ICICI Bank Debit Card can be used for shopping at more than 100,000 merchants in India and 13 million merchants worldwide. c) Travel Card: Presenting ICICI Bank Travel Card. The Hassle Free way to Travel the world. Traveling with US Dollar, Euro, Pound Sterling or Swiss Francs; Looking for security and convenience; take ICICI Bank Travel Card. Issued in duplicate. Offers the Pin based security. Has the convenience of usage of Credit or Debit card. 6. DEMAT SERVICES ICICI Bank Demat Services boasts of an ever-growing customer base of over 7 lacs account holders. In their continuous endeavor to offer best of the class services to our customers we offer the following features: Digitally signed transaction statement by e-mail. Corporate benefit tracking. e-Instruction facility facility to transfer securities 24 hours a day, 7 days a week through Internet Interactive Voice Response (IVR) at a lower cost. Dedicated specially trained customer care executives at their call centre, to handle all queries.

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7. MOBILE BANKING With ICICI Bank, banking is no longer what it used to be. ICICI Bank offers Mobile Banking facility to all its Bank, Credit Card and Demat customers. ICICI Bank Mobile Banking enables you to bank while being on the move.

8. NRI SERVICES ONLINE MONEY TRANSFER facility available to NRIs worldwide through www.money2India.com at the click of a button Benefits: FREE Money transfers into accounts with over 30 banks in India Demand Drafts issued and payable at over 1250 locations in India ONLINE Tracking of the status of your funds SUPERIOR Exchange rates OFFLINE MONEY TRANSFER facility is also available across geographies through Local branches and in association with partner banks/ exchange houses.

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PRICING MIX: The pricing decisions or the decisions related to interest and fee or commission charged by banks are found instrumental in motivating or influencing the target market. The RBI and IBA are concerned with regulations. The rate of interest is regulated by the RBI and other charges are controlled by IBA. The pricing policy of a bank is considered important for raising the number of customers the accretion of deposits. Also the quality of service provided has direct relationship with the fees charged. Thus while deciding the price mix customer services rank the top position. The banking organizations are required to frame two- fold strategies. First, the strategy is concerned with interest and fee charged and the second strategy is related to the interest paid. Since both the strategies throw a vice- versa impact, it is important that banks attempt to establish a correlation between two. It is essential that both the buyers as well as the sellers have feeling of winning. Pricing ICICI Bank Products Starts With Three Basic Questions. 1. What rate does the bank need to meet its financial objectives? Some considerations for loan and deposit pricing are: Related income taxes Earning assets to total assets Equity-to-asset ratio Pricing for the activities and risks associated with the product Asset and liability mix Another element to consider in the pricing of earning assets is the risk of loss. Most notably, this is relevant in loan pricing. Many banks assign a risk weighting to individual loans over a certain size or based on loan type and assign a credit risk charge based on those ratings. Customer relationships are difficult to assign a value to in the pricing process. Customers will generally press for some price concessions in consideration of other relationships they have with the bank. Asset and liability mix also impacts pricing results. Generally speaking, banks operating with higher loan-to-asset ratios are able to afford to pay more for deposits. Likewise, banks can afford to be more competitive on certain deposit products if they have fewer maturities in a particular timeframe or less total outstanding balances in a product line.

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2. What is the market rate for the core product? Customers have more distribution channels available to them today than at any other point in history. In the past 10 years, the number of bank locations has increased 20%. Of course, there are the mortgage bankers, the Internet, and a host of other financial service providers competing for your customer loan and deposit business. The point is, the competitive marketplace always ensures that if a financial institution is charging too much for loans or paying too little for deposits, its share of the market will likely dwindle as existing and prospective customers find alternative providers. You can do all the math you want to determine required pricing points, but if your pricing is uncompetitive, your market share will shrink.

3. What would the bank have to do to sales and operations to make its rates the most competitive in its market? Pricing is a key issue for the associates who sell bank products to your customers. The fact is, lenders want the lowest rates, and people dealing with depositors want to pay the highest rates. You need the right balance of fee income, strategies to reduce operating costs, and a healthy asset and liability mix to change your required pricing.

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PLACE: This component of marketing mix is related to the offering of services. The services are sold through the branches. The 2 important decision making areas are: making available the promised services to the ultimate users and selecting a suitable place for bank branches. The number of branches OF ICICI: 1900 in India and 33 in Mumbai. LOCATION OF BRANCH: Vimal Shopping Centre, Near Post Office, Main Road, Vasai Road West, Thane - 401202 LOCATION OF ATMS: Vimal shoping centre With branch Stella Evershine City, Vasai(E) Gokhivare, Vasai (E Babola Naka Vasai (W) Why they select this place as branch? The selection of a suitable place for the establishment of a branch is significant with the view point of making place accessible. The safety and security provisions Convenient to both the parties, such as the users and the bankers Infrastructure facility Near to station and located on main road well crowded area. Market coverage

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PROMOTION MIX:

Advertising: Television, radio, movies, theatres Print media: hoardings, newspaper, magazines Publicity: road shows, campus visits, sandwich man, Sponsorship Sales promotion: gifts, discount and commission, incentives,etc. Personal selling: Cross-sale (selling at competitors place),personalized service. Telemarketing: ICICI one source Call center (mind space)

PEOPLE: All people directly or indirectly involved in the consumption of banking services are an important part of the extended marketing mix. Knowledge Workers, Employees, Management and other Consumers often add significant value to the total product or service offering. It is the employees of a bank which represent the organisation to its customers. In a bank organization, employees are essentially the contact personnel with customer. Therefore, an employee plays an important role in the marketing operations of a service organisation. To realize its potential in bank marketing, ICICI become conscious in its potential in internal marketing the attraction, development, motivation and retention of qualified employee-customers through need meeting job-products. Internal marketing paves way for external marketing of services. In internal marketing a variety of activities are used internally in an active, marketing like manner and in a coordinated way. The starting point in internal marketing is that the employees are the first internal market for the organization. The basic objective of internal marketing is to develop motivated and customer conscious employees. A service company can be only as good as its people. A service is a performance and it is usually difficult to separate the performance from the people.

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If the people meet customers expectations, then neither does the service. Therefore, investing in people quality in service business means investing in product quality.

PROCESS: Flow of activities: All the major activities of ICICI banks follow RBI guidelines. There has to be adherence to certain rules and principles in the banking operations. The activities have been segregated into various departments accordingly. Standardization: ICICI bank has got standardized procedures got typical transactions. In fact not only all the branches of a single-bank, but all the banks have some standardization in them. This is because of the rules they are subject to. Besides this, each of the banks has its standard forms, documentations etc. Standardization saves a lot of time behind individual transaction. Customization: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives. Number of steps: Numbers of steps are usually specified and a specific pattern is followed to minimize time taken. Simplicity: In ICICI banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to deposits counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further . Customer involvement: ATM does not involve any bank employees. Besides, during usual bank transactions, there is definite customer involvement at some or the other place because of the money matters and signature requires.

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PHYSICAL EVIDENCE: Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the following: Internet/web pages Paperwork Brochures Furnishings Business cards The building itself (such as prestigious offices or scenic headquarters) The physical evidences also include signage, reports, punch lines, other tangibles, employees dress code etc. Signage: Each and every bank has its logo by which a person can identify the company. Thus such sign ages are significant for creating visualization and corporate identity. Financial reports: The Company financial reports are issued to the customers to emphasis or credibility. Tangibles: Bank gives pens, writing pads to the internal customers. Even the passbooks, cheque books, etc reduce the inherent intangibility of services. Punch lines: Punch lines or the corporate statement depict the philosophy and attitude of the bank. Banks have influential punch lines to attract the customers. Employees dress code: ICICI bank follows a dress code for their internal customers. This helps the customers to feel the ease and comfort.

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ICICI STRATEGY FOR PROMOTION OF FINANCIAL INCLUSION:

ICICI Bank has taken up specific initiatives to ramp up financial literacy as well as intermediation to the underserved and under banked segments in both rural and urban areas. ICICI Banks financial intermediation models, both through the microfinance institutions and business correspondents have been designed to build a repository of information with regard to financial behaviour of the customers. ICICI Banks Financial Intermediation Models: With focus on low-income segments, ICICI Bank has come up with innovative delivery channels: Microfinance ICICI Bank works closely with MFIs and NGOs to adapt its products to suit consumer needs. Two innovative models have helped achieve scale in serving the low-income household: a) Partnership Model being implemented with NGOs and MFIs: Under this model ICICI Bank forges an alliance with existing MFIs wherein the MFI undertakes the promotional role of identifying, training and promoting the micro-finance clients and the ICICI Bank finances the clients directly on the recommendation of the MFI, so the customer and portfolio resides in the Banks book. b) Securitisation of Portfolios of MFIs: Under this model ICICI Bank buys out portfolios from MFIs. The MFI continues to service the clients and acts as the collection agent. Here again, the MFI shares the credit risk with the Bank. A variant of the securitisation model is on-tap securitisation, wherein the MFI receives an advance purchase consideration to create a portfolio of loans that could then be periodically sold to ICICI Bank.

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Technology The Bank has been actively looking at technology solutions to scale up the micro finance portfolio. Further, the Bank has been considering adopting a 'Core Banking System' (CBS) for managing the loan portfolio generated under the partnership model. In this regard, the Bank has found an able partner in FINO to provide technology solutions to the micro finance sector. The technology solution comprises of core banking and smart card systems. In light of the technology solutions available through FINO, the Bank has designed a new process for delivering loans under the partnership model. Some of the key aspects where a strong technology platform will add value to the micro finance operations include reduction in transaction cost; better data management and reporting capacities and capability to interface with multiple peripherals, etc. This will also enable enhanced disclosure and transparency in the operations of MFIs, setting a platform for robust securitisation / buyout opportunities to meet the priority sector lending objectives of the regulator.

Business Correspondent In line with the RBI guidelines ICICI Bank employs Business Correspondent (BC) model to extend financial services, especially the much-needed savings services to rural customers. In the pilot stage, the transactions by BC are being done with the help of an 'ePassbook' and an Authentication Device (AD). The e-Passbook can display and store the customer KYC information, customer account details and the transactions in each account. It also has a unique feature of biometric authentication by the way of fingerprints, thereby mitigating the risk related to PIN (Personal Identification Number) in the rural scenario. ADs provide Customer interface with user-friendly menu options, enabling transactions. An authorized operator is enrolled by capturing the fingerprints of all the 10 fingers to mitigate fraud risk, can operate each AD. The transaction is recorded on the AD, which at specific intervals would be uploaded and updated in the Bank's system through a normal telephone line, which is a widely available infrastructure even in remote rural areas. Further connectivity through GSM and CDA would also be made possible to ensure that the transaction details are updated in the Banks system at higher frequency.

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Multiple products ICICI Bank offers a complete suite of products and services to meet the individual financial requirements of customer segments. Savings, investments and insurance products are made available to its rural and agri customer base. The Bank also offers microfinance services to low-income households and crop loans, farm equipment loans, commodity based loans to farmers. Hybrid channels ICICI Bank employs delivery channels backed by technological innovations to achieve scale and outreach in a sustainable manner. The Banks channel architecture includes branch and non-branch channels. Branches act as a business hub providing banking services on the one hand, while facilitating the fulfilment of products that have been sourced by the business facilitators and business correspondents. Non-branch channels are of two types, business facilitators and business correspondents.

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CONCLUSION

Thus ICICI BANK has a great facility and services which attract the customer, also has a good staff which provides with all the requirements of the customers. It has great physical evidence and owns a huge share in regional market. Also gives all the securities related to banking activities.

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