A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either

directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits
and customers with capital surpluses.
Due to their importance in the financial system and influence on nationaleconomies, banks are highly regulated in
most countries. Most nations have institutionalised a system known as fractional reserve banking, under which
banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to
ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of
capital standards, known as the Basel Accords.
Banking in its modern sense evolved in the 14th century in the rich cities ofRenaissance Italy but in many ways was
a continuation of ideas and concepts of creditand lending that had its roots in the ancient world. In the history of
banking, a number of banking dynastiesnotably the Medicis, the Fuggers, the Welsers, the Berenbergs, and
the Rothschildshave played a central role over many centuries. The oldest existing retail bank is Monte dei Paschi
di Siena, while the oldest existing merchant bank is Berenberg Bank
In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable
instruments, including cheques, and this Act contains a statutory definition of the term banker: banker includes a
body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation).
Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank
transactions such as cheques does not depend on how the bank is structured or regulated.
The business of banking is in many English common law countries not defined by statute but by common law, the
definition above. In other English common law jurisdictions there are statutory definitions of the business of
banking or banking business. When looking at these definitions it is important to keep in mind that they are defining
the business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the
definitions are from legislation that has the purpose of regulating and supervising banks rather than regulating the
actual business of banking. However, in many cases the statutory definition closely mirrors the common law one.
Examples of statutory definitions:

"banking business" means the business of receiving money on current or deposit account, paying and
collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such
other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2,
Interpretation).

"banking business" means the business of either or both of the following:

1.

receiving from the general public money on current, deposit, savings or other similar account repayable on
demand or within less than [3 months] ... or with a period of call or notice of less than that period;

2.

paying or collecting checks drawn by or paid in by customers. [13]

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet
banking, the cheque has lost its primacy in most banking systems as a payment instrument. This has led legal
theorists to suggest that the cheque based definition should be broadened to include financial institutions that
conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do
not pay and collect checks.[14]

Banking[edit]
Standard activities[edit]

Large door to an old bank vault.

Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by
customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable
customer payments via other payment methods such as Automated Clearing House (ACH),Wire
transfers or telegraphic transfer, EFTPOS, and automated teller machine(ATM).
Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing
debt securities such as banknotes andbonds. Banks lend money by making advances to customers on current
accounts, by making installment loans, and by investing in marketable debt securities and other forms of money
lending.
Banks provide different payment services, and a bank account is considered indispensable by most businesses and
individuals. Non-banks that provide payment services such as remittance companies are normally not considered
as an adequate substitute for a bank account.
Banks can create new money when they make a loan. New loans throughout the banking system generate new
deposits elsewhere in the system. The money supply is usually increased by the act of lending, and reduced when
loans are repaid faster than new ones are generated. In the United Kingdom between 1997 and 2007, there was a
big increase in the money supply, largely caused by much more bank lending, which served to push up property
prices and increase private debt. The amount of money in the economy as measured by M4 in the UK went from
750 billion to 1700 billion between 1997 and 2007, much of the increase caused by bank lending.

[15]

If all the

banks increase their lending together, then they can expect new deposits to return to them and the amount of
money in the economy will increase. Excessive or risky lending can cause borrowers to default, the banks then
become more cautious, so there is less lending and therefore less money so that the economy can go from boom to
bust as happened in the UK and many other Western economies after 2007.

Banks in the economy[edit]

SEB main building in Tallinn,Estonia

See also: Financial system

Economic functions[edit]
The economic functions of banks include:
1. Issue of money, in the form of banknotes and current accounts subject tocheck or payment at the
customer's order. These claims on banks can act as money because they are negotiable or repayable on
demand, and hence valued at par. They are effectively transferable by mere delivery, in the case of
banknotes, or by drawing a check that the payee may bank or cash.
2. Netting and settlement of payments banks act as both collection and paying agents for customers,
participating in interbank clearing and settlement systems to collect, present, be presented with, and pay
payment instruments. This enables banks to economize on reserves held for settlement of payments, since
inward and outward payments offset each other. It also enables the offsetting of payment flows between
geographical areas, reducing the cost of settlement between them.
3. Credit intermediation banks borrow and lend back-to-back on their own account as middle men.
4. Credit quality improvement banks lend money to ordinary commercial and personal borrowers (ordinary
credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's
assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However,
banknotes and deposits are generally unsecured; if the bank gets into difficulty and pledges assets as
security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an
economically subordinated position.
5. Asset liability mismatch/Maturity transformation banks borrow more on demand debt and short term debt,
but provide more long term loans. In other words, they borrow short and lend long. With a stronger credit
quality than most other borrowers, banks can do this by aggregating issues (e.g. accepting deposits and
issuing banknotes) and redemptions (e.g. withdrawals and redemption of banknotes), maintaining reserves
of cash, investing in marketable securities that can be readily converted to cash if needed, and raising
replacement funding as needed from various sources (e.g. wholesale cash markets and securities
markets).
6. Money creation whenever a bank gives out a loan in a fractional-reserve banking system, a new sum of
virtual money is created.

Bank crisis[edit]
Banks are susceptible to many forms of risk which have triggered occasional systemic crises. These include liquidity
risk(where many depositors may request withdrawals in excess of available funds), credit risk (the chance that
those who owe money to the bank will not repay it), and interest rate risk (the possibility that the bank will become
unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loans).
Banking crises have developed many times throughout history, when one or more risks have emerged for a banking
sector as a whole. Prominent examples include the bank run that occurred during the Great Depression, the
U.S. Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and
the sub-prime mortgage crisis in the 2000s.

Size of global banking industry[edit]

Assets of the largest 1,000 banks in the world grew by 6.8% in the 2008/2009 financial year to a record
US$96.4 trillion while profits declined by 85% to US$115 billion. Growth in assets in adverse market conditions was
largely a result of recapitalization. EU banks held the largest share of the total, 56% in 2008/2009, down from 61%

in the previous year. Asian banks' share increased from 12% to 14% during the year, while the share of US banks
increased from 11% to 13%. Fee revenue generated by global investment banking totaled US$66.3 billion in 2009,
up 12% on the previous year.[18]
The United States has the most banks in the world in terms of institutions (7,085 at the end of 2008) and possibly
branches (82,000).[citation needed] This is an indicator of the geography and regulatory structure of the USA, resulting in a
large number of small to medium-sized institutions in its banking system. As of Nov 2009, China's top 4 banks have
in excess of 67,000 branches (ICBC:18000+, BOC:12000+, CCB:13000+, ABC:24000+) with an additional 140
smaller banks with an undetermined number of branches. Japan had 129 banks and 12,000 branches. In 2004,
Germany, France, and Italy each had more than 30,000 branchesmore than double the 15,000 branches in the
UK.[18]

Regulation[edit]
Main article: Banking regulation
See also: Basel II
Currently commercial banks are regulated in most jurisdictions by government entities and require a special bank
license to operate.
Usually the definition of the business of banking for the purposes of regulation is extended to include acceptance of
deposits, even if they are not repayable to the customer's orderalthough money lending, by itself, is generally not
included in the definition.
Unlike most other regulated industries, the regulator is typically also a participant in the market, being either a
publicly or privately governed central bank. Central banks also typically have a monopoly on the business of
issuing banknotes. However, in some countries this is not the case. In the UK, for example, the Financial Services
Authority licenses banks, and some commercial banks (such as the Bank of Scotland) issue their own banknotes in
addition to those issued by the Bank of England, the UK government's central bank.
Banking law is based on a contractual analysis of the relationship between the bank (defined above) and
the customerdefined as any entity for which the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:
1. The bank account balance is the financial position between the bank and the customer: when the account is
in credit, the bank owes the balance to the customer; when the account is overdrawn, the customer owes
the balance to the bank.
2. The bank agrees to pay the customer's checks up to the amount standing to the credit of the customer's
account, plus any agreed overdraft limit.
3. The bank may not pay from the customer's account without a mandate from the customer, e.g. a check
drawn by the customer.
4. The bank agrees to promptly collect the checks deposited to the customer's account as the customer's
agent, and to credit the proceeds to the customer's account.
5. The bank has a right to combine the customer's accounts, since each account is just an aspect of the same
credit relationship.
6. The bank has a lien on checks deposited to the customer's account, to the extent that the customer is
indebted to the bank.

7. The bank must not disclose details of transactions through the customer's accountunless the customer
consents, there is a public duty to disclose, the bank's interests require it, or the law demands it.
8. The bank must not close a customer's account without reasonable notice, since checks are outstanding in
the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the customer and the bank. The
statutes and regulations in force within a particular jurisdiction may also modify the above terms and/or create new
rights, obligations or limitations relevant to the bank-customer relationship.
Some types of financial institution, such as building societies and credit unions, may be partly or wholly exempt from
bank license requirements, and therefore regulated under separate rules.
The requirements for the issue of a bank license vary between jurisdictions but typically include:
1. Minimum capital
2. Minimum capital ratio
3. 'Fit and Proper' requirements for the bank's controllers, owners, directors, or senior officers
4. Approval of the bank's business plan as being sufficiently prudent and plausible.

Types of banks[edit]
Banks' activities can be divided into:

retail banking, dealing directly with individuals and small businesses;

business banking, providing services to mid-market business;

corporate banking, directed at large business entities;

private banking, providing wealth management services to high net worth individuals and families;

investment banking, relating to activities on the financial markets.

Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit
organizations.

Types of retail banks[edit]

National Bank of the Republic, Salt Lake City 1908

ATM Al-Rajhi Bank

National Copper Bank, Salt Lake City 1911

Commercial banks: the term used for a normal bank to distinguish it from an investment bank. After
the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas
investment banks were limited to capital market activities. Since the two no longer have to be under separate
ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals
with deposits and loans from corporations or large businesses.

Community banks: locally operated financial institutions that empower employees to make local decisions to
serve their customers and the partners.

Community development banks: regulated banks that provide financial services and credit to under-served
markets or populations.

Land development banks: The special banks providing Long Term Loans are called Land Development
Banks, in the short, LDB. The history of LDB is quite old. The first LDB was started at Jhang in Punjab in 1920.
The main objective of the LDBs are to promote the development of land, agriculture and increase the
agricultural production. The LDBs provide long-term finance to members directly through their branches. [19]

Credit unions or Co-operative Banks: not-for-profit cooperatives owned by the depositors and often offering
rates more favorable than for-profit banks. Typically, membership is restricted to employees of a particular
company, residents of a defined area, members of a certain union or religious organizations, and their
immediate families.

Postal savings banks: savings banks associated with national postal systems.

Private banks: banks that manage the assets of high net worth individuals. Historically a minimum of USD 1
million was required to open an account, however, over the last years many private banks have lowered their
entry hurdles to USD 250,000 for private investors.[citation needed]

Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are
essentially private banks.

Savings bank: in Europe, savings banks took their roots in the 19th or sometimes even in the 18th century.
Their original objective was to provide easily accessible savings products to all strata of the population. In some
countries, savings banks were created on public initiative; in others, socially committed individuals created
foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their
focus on retail banking: payments, savings products, credits and insurances for individuals or small and
medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly
decentralized distribution network, providing local and regional outreachand by their socially responsible
approach to business and society.

Building societies and Landesbanks: institutions that conduct retail banking.

Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to
be socially responsible investments.

A Direct or Internet-Only bank is a banking operation without any physical bank branches, conceived and
implemented wholly with networked computers.

Types of investment banks[edit]

Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts,
make markets, provide investment management, and advise corporations on capital market activities such as
mergers and acquisitions.

Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however,
refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital
firms, they tend not to invest in new companies.

Both combined[edit]

Universal banks, more commonly known as financial services companies, engage in several of these
activities. These big banks are very diversified groups that, among other services, also distribute insurance
hence the termbancassurance, a portmanteau word combining "banque or bank" and "assurance", signifying
that both banking and insurance are provided by the same corporate entity.

Other types of banks[edit]

Central banks are normally government-owned and charged with quasi-regulatory responsibilities, such as
supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the
banking system and act as the lender of last resort in event of a crisis.

Islamic banks adhere to the concepts of Islamic law. This form of banking revolves around several wellestablished principles based on Islamic canons. All banking activities must avoid interest, a concept that is
forbidden in Islam. Instead, the bank earns profit (markup) and fees on the financing facilities that it extends to
customers.

The necessity of saving money was felt by people even in olden days. They used to
hoard money
in their homes. With this practice, savings were available for use whenever needed, but
it also
involved the risk of loss by theft, robbery and other accidents. Thus, people were in need
of a
place where money could be saved safely and would be available when required. Banks
are
such places where people can deposit their savings with the assurance that they will be
able to
withdraw money from the deposits whenever required. People who wish to borrow
money for
business and other purposes can also get loans from the banks at reasonable rate of
interest.
Bank is a lawful organisation, which accepts deposits that can be withdrawn on
demand. It also lends money to individuals and business houses that need it.
Banks also render many other useful services like collection of bills, payment of foreign
bills,
safe-keeping of jewellery and other valuable items, certifying the credit-worthiness of
business,
and so on.
Banks accept deposits from the general public as well as from the business community.
Any one
who saves money for future can deposit his savings in a bank. Businessmen have
income from
sales out of which they have to make payment for expenses. They can keep their
earnings from
sales safely deposited in banks to meet their expenses from time to time. Banks give
two assurances
to the depositors
a. Safety of deposit, and
b. Withdrawal of deposit, whenever needed
On deposits, banks give interest, which adds to the original amount of deposit. It is a
great
incentive to the depositor. It promotes saving habits among the public. On the basis of
deposits

banks also grant loans and advances to farmers, traders and businessmen for productive
purposes.
Thereby banks contribute to the economic development of the country and well being of
the
people in general. Banks also charge interest on loans. The rate of interest is generally
higher than
the rate of interest allowed on deposits. Banks also charge fees for the various other
services,
which they render to the business community and public in general. Interest received on
loans
and fees charged for services which exceed the interest allowed on deposits are the
main sources
of income for banks from which they meet their administrative expenses.
The activities carried on by banks are called banking activity. Banking as an activity
involves
acceptance of deposits and lending or investment of money. It facilitates business
activities by
providing money and certain services that help in exchange of goods and services.
Therefore,
banking is an important auxiliary to trade. It not only provides money for the production
of
goods and services but also facilitates their exchange between the buyer and seller.
You may be aware that there are laws which regulate the banking activities in our
country.
Depositing money in banks and borrowing from banks are legal transactions. Banks are
also
under the control of government. Hence they enjoy the trust and confidence of people.
Also
banks depend a great deal on public confidence. Without public confidence banks cannot
survive
Types of Advances
Banks grant short-term financial assistance by way of cash credit, overdraft and bill
discounting.
Let us learn about these.
a) Cash Credit

Cash credit is an arrangement whereby the bank allows the borrower to draw amount
upto
a specified limit. The amount is credited to the account of the customer. The customer
can
withdraw this amount as and when he requires. Interest is charged on the amount
actually
withdrawn. Cash Credit is granted as per terms and conditions agreed with the
customers.
b) Overdraft
Overdraft is also a credit facility granted by bank. A customer who has a current account
with the bank is allowed to withdraw more than the amount of credit balance in his
account.
It is a temporary arrangement. Overdraft facility with a specified limit may be allowed
either
on the security of assets, or on personal security, or both.
c) Discounting of Bills
Banks provide short-term finance by discounting bills, that is, making payment of the
amount
before the due date of the bills after deducting a certain rate of discount. The party gets
the
funds without waiting for the date of maturity of the bills. In case any bill is dishonoured
on
the due date, the bank can recover the amount from the customer.Banking
11
ii) Secondary functions
In addition to the primary functions of accepting deposits and lending money, banks
perform a
number of other functions, which are called secondary functions. These are as followsa.
Issuing letters of credit, travellers cheque, etc.
b. Undertaking safe custody of valuables, important document and securities by
providing
safe deposit vaults or lockers.
c. Providing customers with facilities of foreign exchange dealings.
d. Transferring money from one account to another; and from one branch to another
branch of the bank through cheque, pay order, demand draft.

e. Standing guarantee on behalf of its customers, for making payment for purchase of
goods, machinery, vehicles etc.
f. Collecting and supplying business information.
g. Providing reports on the credit worthiness of customers.
i. Providing consumer finance for individuals by way of loans on easy terms for purchase
of consumer durables like televisions, refrigerators, etc.
j. Educational loans to students at reasonable rate of interest for higher studies,
especially
for prof

CONCLUSIONS AND SUGGESTIONS

1.
The Indian banking can be broadly categorized into nationalized(government owned),
private banks and specialized banking institutions.The Reserve Bank of India is
the apex institution in the Indian bankingsystem & acts a regulator and a centralized body for
monitoring anydiscrepancies and shortcoming in the system.2.
Before Nationalisation, banks in the beginning aced severs financialcrisis. During and after Wor
ld War I, 87 banks were liquidated.Development of banks in India was characterized by bank
failures. AfterIndependence, the Indian banking underwent a thorough and moral change.The
government of India announced Banking Regulations Act in 1949 toconsolidate and regulate
the banking growth in India3.
After Nationalisation, however, growth of banking during the
first 3plan periods resembles that of capitalist growth. There was need forstimulating the saving
s and investment to meet the growing demand forbank credit for economic development.
Therefore government focused onsocial banking than capitalistic banking. Hence, in February
1961,announcement of 14 banks was made for the purpose of nationalisation.Since then, the
performance of banking has been remarkable in the manyaspects such as branch expansion,
expansion of business, priority sectoradvances, development and spread of banking.4.
Currently, banking system has entered into the third phase of developmentwhich is
characterized by innovation & diversification in order to meet newchallenges. New services
have been started such as merchant
banking,investment banking, housing finance , investment banking, internetbanking,
telebanking , branch banking, electronic money transfers,
SMSbanking, mobile banking, proxy banking, plastic money such as creditcards , ATM cards,
debit cards, smart cards, etc.

5.

Banks have indulged in activities such as service area approach, mutualfunds, housing finance,
factoring services, commercial papers, certificate of deposit, stock invest and other money and
capital market instruments.6.
The unleashing of products and services through the net has galvanizedplayers at all levels of
the banking and financial institutions market grid tolook anew at their existing portfolio
offering. Banks have been benefiteda lot with the internet and information technology.
As a result bankshave become more efficient and costeffective. Indian nationalized bankscontinue to be the major lenders in the economy
due to their sheer size andpenetrative networks which
assures them high deposit mobilization.However there is a need to create more awareness regar
ding socialdevelopment. There is need for taking decisive actions .7.
Industry estimates indicate that out of 274 commercial banks operatingin India, 223 banks
are in the public sector & 51 are in the privatesector. The private sector bank grid also includes
24 foreign banks.8.
Indian banking market is growing at an astonishing rate, with assetsexpected to reach US$1
trillion by 2010. The Indian banking industry
isin the middle of an IT revolution, focusing on the expansion of retail andrural
banking. Players are becoming increasingly customer-centric intheir approach, which has
resulted in innovative methods of offering newbanking products & services. Banks are now
realizing the importance of being a big player & are beginning to focus their attention on
mergers& acquisitions to take
advantage
of economies of scale.

BIBLIOGRAPHY
There was immense need and flow of the information while preparing theproject report which
was gathered through various sources mentionedbelow:
Websites:

www.rbi.org.in

www.wikipedia.com
Books:

Money , Banking & Finance in India

Indian Banking Managing Transformation

New Paper:
I.
The Economic Times
ess

and constantly setting new standards in banking, ING VysyaBank has many credits to its accou
nt.
List of Private Banks in India

Bank of Punjab

Bank of Rajasthan

Centurion Bank

City Union Bank

Dhanalakshmi Bank

Development Credit Bank

Federal Bank

HDFC Bank

ICICI Bank

Jammu & Kashmir Bank

Karnataka Bank

South Indian Bank

United Western Bank

UTI Bank
III] Regional rural banks in India
Rural banking in India started since the establishment of bankingsector in India. Rural Banks in those days
mainly focused upon theagro sector. Regional rural banks in India penetrated every corner of the country
and extended a helping hand in the growth process of the country.
SBI has 30 Regional Rural Banks in
India known asRRBs. The rural banks of SBI is spread in 13 states extending fromKashmir to Karnataka
and Himachal Pradesh to North East. Thetotal number of SBIs Regional Rural
Banks in India branches is2349 (16%). Till date in rural banking in India, there are 14,475rural banks in
the country of which 2126 (91%) are located in

remote rural areas Regional Rural Banks in India are an integralpart of the rural credit structure
of the country. Since the verybeginning, when the Regional Rural
Banks in India (RRBs) wereestablished in October 2, 1975, these banks played a pivotal role in
theeconomic development of the rural India. The main goal of establishingregional rural banks in India
was to provide credit to the
rural peoplewho are not economically strong enough, especially the small and marginalfarmers, artisans,
agricultural labours, and even small entrepreneurs . Apartfrom SBI, there are many other banks which
function for the developmentof the rural areas in India. These banks are listed below:

Chhattisgarh Gramin Bank

Madhya Bihar Gramin Bank

Dena Gujarat Gramin Bank


Baroda Gujarat Gramin Bank

Harayana Gramin Bank

Gurgaon Gramin Bank

Assam Gramin Vikash Bank

Jharkhand Gramin Bank

Madhya Bharath Gramin Bank

Chambal-Gwalior Kshetriya Gramin Bank

Himachal Gramin Bank

Punjab Gramin Bank

Aurangabad -Jalna Gramin Bank

Thane Gramin Bank

Baroda Rajasthan Gramin Bank

Rajasthan Gramin Bank

Baroda Western Uttar Pradesh Gramin Bank

B] Co-Operative Bank in India :

The Co

operative banks in India started functioning almost 100

yearsago. The Cooperative bank is an important constituent of the IndianFinancial System,
judging by the role assigned to co operative, theexpectations the co operative
is supposed to fulfil, their number, andthe number of offices
the cooperative bank operate. Though the cooperative movement originated in the West, but
the importance of suchbanks have assumed in India is rarely paralleled anywhere else
inthe world. The cooperative banks in India play an important role eventoda y in rural financing
. The businesses of cooperative bank in the urbanareas also have increased phenomenally in rec
ent years due to thesharp increase in the number of primary co-operative banks. Co-operative
Banks in India are registered under the CooperativeSocieties Act. The cooperative bank is also regulated by the RBI. Theyare governed b
y the Banking Regulations Act 1949 and Banking Laws(Co-operative Societies) Act , 1965
ional courses

Asian Paints Ltd

2
Table of Contents
Executive Summary1. Company History2. Industry Structure3. Environment4.
Products5. Price6. Distribution Network7.
Promotion8. Financial Analysis9. Customer Survey Analysis10. Suggestions11.
Appendixa. Sample Customer Questionnaireb. Sample Dealer Questionnairec. Financial S
tatementsd. Bibliography

3
Executive Summary
The purpose and scope of document is to study, analyze and understand the business
andmarketing practices of Asian Paints Limited. In order to achieve this objective, two
stageswere identified Data collection stage and the Analysis stage. The first stage includes
thedata collected from various sources regarding the following:1. The Origin, History of the
company, its growth, The board of Directors,Operation units in India and abroad2. The three
closest competitors in the paint industry Goodlass Nerolac, BergerPaints, ICI , their origin
and growth3. Financial statements of the Company4. Information about the 4 Ps of marketing
Product, Price, Place and Promotion inthe Orissa market5. A customer and dealer survey in
Orissa to understand their decision makingprocessThe analysis stage includes understanding the
implications and relevance of the datacollected and drawing conclusions about the companys
business and marketingdecisions.Asian Paints (AP) Limited is an out-an-out Indian firm in the
paint industry thatmanufactures and markets a wide spectrum of decorative as well as industrial
paints.Though it had a corporate position of a focused national paint company by catering
toindustrial and household customers in Indian market in the past, it has beensystematically
repositioning itself in the recent years to become a global player byentering into a number of
other country markets.The Indian Paint industry is mainly divided into two segments
decorative paintssegment and industrial paints segment. Asian Paints is the market leader in the
decorativepaints segment with a market share of 44 % followed by Berger Paints (17 %),
GoodlassNerolac (15 %) and ICI (12 %). However in the Industrial Paints, Goodlass Nerolac
isthe leader followed by ICI, Berger Paints and Asian paints.Known for its innovative
marketing and distribution strength, Asian Paints is oneof the consistent performers in the
Indian corporate scene. The company has a track record of profitability, transparency in
operations and strong balance sheet. Factors thathave been given emphasis here include the low
per capita consumption of paints (1.0kilogram), growth in construction sector (it is being
offered industry status) & growth inthe auto/white goods market respectively spurring demand
for decorative & industrialpaints. The impact of recent issues & trends (like raw material costs,
excise dutyrationalizations, quality consciousness in user segments) on the industry dynamics
canalso be seen. The industry has also witnessed increased activity in the industrial variety
of paints with the entry of Multi-National Companies in auto, consumer durables etc, whichhas
been gaining steadily over decorative paints in the last one decade. With the industryto grow at
a CAGR of 8-9 % for the next five years with growth level of 27.4 % for carsand 8.9 % for two
wheelers we see a lot of opportunity in the automobile sector for thepaint industry. Moreover
housing industry is also likely to do well in the current yearwith the growth rate for the last year
being 35 %. So the expected rate of growth for paintindustry for the next five years is around 910 %.