A PROJECT REPORT

ON

“A COMPARATIVE STUDY ON PERSONAL

BANKING SERVICES OF SBI AND ICICI”
 CONTENTS

0 Introduction to the banks

1
0 Objective of the study
2
0 Methodology
3
0 Observation and Findings
4
0 Conclusion
5
0 Limitations
6
0 Bibliography
7
 INTRODUCTION TO BANKS
Introduction of SBI (State bank of
India):

The State Bank of India, the country’s oldest Bank

and a premier in terms of balance sheet size, number
of branches, market capitalization and profits is
today going through a momentous phase of Change
and Transformation – the two hundred year old Public
sector behemoth is today stirring out of its Public
Sector legacy and moving with an ability to give the
Private and Foreign Banks a run for their money. The
origin of the state bank of India goes back to the first
decade of the nineteenth century with the
establishment of the Bank of Calcutta in Calcutta on
2 June 1806.

The bank is operating into many businesses with

strategic tie ups – Pension Funds, General Insurance,
Custodial Services, Private Equity, Mobile Banking,
Point of Sale Merchant Acquisition, Advisory Services,
structured products etc – each one of these
initiatives having a huge potential for growth.
It is also focusing at the top end of the market, on
whole sale banking capabilities to provide India’s
growing mid / large Corporate with a complete array
of products and services. It is consolidating its global
treasury operations and entering into structured
products and derivative instruments. Today, the
Bank is the largest provider of infrastructure debt
and the largest arranger of external commercial
borrowings in the country. It is the only Indian bank
to feature in the Fortune 500 list.

SBI have about 8500 of its own 10000 branches and

another 5100 branches of its Associate Banks, today
it offers the largest banking network to the Indian
customer. The Bank is also in the process of
providing complete payment solution to its clientele
with it’s over 8500 ATMs.
It presently has 52 foreign offices in 34 countries
across the globe. It has also 5 Subsidiaries in India –
SBI Capital Markets- SBICAP Securities, SBI DFHI, SBI
Factors and Commercial Services Pvt Ltd (SBI
FACTORS), SBI Funds Management Pvt Ltd (SBI
FUNDS) and SBI Cards & Payments Services Pvt. Ltd.
(SBICPSL) - forming a formidable group in the Indian
Banking scenario. It is in the process of raising
capital for its growth and also consolidating its
various holdings

Introduction of ICICI:
ICICI Bank was originally promoted in 1994 by ICICI
Limited, an Indian financial institution, and was its
wholly owned subsidiary. ICICI's shareholding in ICICI
Bank was reduced to 46% through a public offering
of shares in India in fiscal 1998.

ICICI Bank is India's second-largest bank with total

assets of Rs. 3,997.95 billion at March 31, 2008. The
Bank has a network of about 1,308 branches and
3,950 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 specialized 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 Unites
States, Singapore, Bahrain, Hong Kong, Sri Lanka,
Qatar and Dubai International Finance Centre and
representative offices in United Arab Emirates, China,
South Africa, Bangladesh, Thailand, Malaysia and
Indonesia. Our UK subsidiary has established
branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on

Bombay Stock Exchange and the National Stock
Exchange of India Limited and its American
Depositary Receipts (ADRs) are listed on the New
York Stock Exchange (NYSE).

INTODUCTION TO THE TOPIC

Personal Banking:-
 • Personal banking refers to banking in which a
person can do transaction and deposits with
the banks for their personal expense.

OBJECTIVE OF THE STUDY

My objective was to find out the personal banking

scheme of SBI and ICICI to find out the advantage of
SBI over ICICI and vice-versa.

For this I have to find various scheme provided by

SBI and ICICI.

METHEDOLOGY
• Primary Data is taken from Mr. Amit Yadav
(manager in SBI) Manoj Kumar(staff in ICICI )
• Secondary data is taken by internet

VARIABLES

PERSONAL BANKING SCHEMES:-

• DEPOSITS SCHEMES
• LOAN
o PERSONAL
o CAR
o HOME
o EDUCATION

OBSERVATIONS & FINDINGS

SCHEMES PROVDED BY SBI:-
• Terms deposit scheme
• Recurring deposits scheme
• Loans
• SBI SARAL Personal loan
• Education loan
• Car loan
• Home loan
• Medi-Plus loan

TERM DEPOSITS

• Provide security, trust and competitive rate

of interest.
• Flexibility in period of term deposit from 15
days to 10 years
• Affordable Low Minimum Deposit Amount:
One can open a term deposit with SBI for a
nominal amount of Rs.1000/- only.
• Flexibility in choosing the amount one wish
to invest and the maturity period.

BENIFITS OF SCHEME:-

Safety: – SBI IS continues to deliver on its promise of

safety and security over 200 years.
Liquidity Loan /overdraft facility: One can avail a
loan/overdraft against his deposit. SBI provides loan /
overdraft up to 90% of deposit amount at nominal
cost. So one can continue to earn interest in his
deposit and still can meet his urgent financial
requirements.

Premature Withdrawal
Interest to be charged on premature withdrawal of
term deposits at 1.00% below the rate applicable for
the period deposit has remained with the Bank.
Transferability- Transfer of Term Deposits between
wide networks of branches without any charge.

Compounding / Flexible / Timely Payment of Interest

- Under Special Term Deposit Scheme, interest
accrues in account and gets compounded quarterly.
• Term Deposits are available at all SBI Branches

• Easy and convenient access of information at

SBI Internet Banking.
Tax Implications:

• Tax Deductible at Source, as per Income Tax Act

Flexibility to convert Special Term Deposit to Term
Deposit and vice versa

• One can convert his special Term Deposit to a

Term Deposit to receive monthly/quarterly
interest payments to match his financial
requirements.
 • One can also convert his Term Deposit to a
Special Term Deposit, which provides
compounded rate of interest to multiply his
money faster.

RECURRING DEPOSIT:-
Recurring deposit refers to a little investment by an
investor to meet his financial goals of future
(Children’s education or marriage, buy a car etc.)
Recurring deposit provides the element of
compulsion to save at high rates of interest, wide
choice in period of deposit.

Features:-
• Flexibility in period of deposit with maturity
ranging from 12 months to 120 months.
• Low minimum monthly deposit amount.
• One can start a Recurring Deposit with SBI for a
monthly instalment of Rs.100/- only.
Benefits:-
Including all the benefits of terms deposits there are
some more benefits of recurring benefits:-
 Nomination Facility is available in this scheme
  one can save a monthly instalment of multiple
of 10 every month
 One can monitor his deposit through SBI
Internet Banking or through a passbook
issued to you.

LOANS:-

Type Amount Rate Security Eligibility

Min. of
Max. intere
st
SBI SARAL 10,000 17.75 Nil A person having a good
Personal 10,00,000 profession and income
loan
Education - 4,00, 12.25 Nil Graduation courses
loan 000 %
Post graduation
Professional courses
Tangible
4,00,000 13.75 Other courses approved by
collateral
7,50,000 % UGC/Government/AICTE etc
security

suitable
third
4,00,000 12.25 party
7,50,000 % guarante
e
Car loan - As per person having a income
15,00,000 bank's >1,00,000
extant
Used instructio
vehicle ns.
16.25
Up to 3 - %
years 15,00,000 16.50
Above 3 - %
years 15,00,000

New
vehicle
12.75
Up to 3 - %
years 7,50,000 12.50
1 7,50,000 %
2 15,00,000

Above 3 12.75
years - %
3-5years 15,00,000 13.00
5-7years - %
15,00,000

Home loan Availabili Equitable mortgage of the

ty of property or
Up to 5 sufficient Other tangible security
years 0 10.50 , regular of adequate value like NSCs
30,00,000 % and Life Insurance policies etc.,
30,00,000 11.75 continuo if the property cannot be
75,00,000 % us source mortgaged
5 to15 30,00,000 11.75 of
years 75,00,000 % income
for
0 10.75 servicing
30,00,000 % the loan
Up to 15 30,00,000 12.00 repayme
years 75,00,000 % nt.
30,00,000 12.00
75,00,000 % Age
18-60
0 11.00 years
30,00,000 %
30,00,000 12.25
75,00,000 %
30,00,000 12.50
75,00,000 %
Medi-Plus 50,000 14.50 As per Govt emp. From 10 years
loan 1,00,000 % bank's self-employed professional
50,000 extant employee/agent
2,00,000 instructio (income>3lakhs)
50,000 ns.
1,00,000

SCHEMES PROVDED BY ICICI:-

• DEPOSITS

• CARDS
• ONLINE INVESTEMENT
• Loans
• Personal loan
• Education loan
• Car loan
• Home loan
• Property loan

Deposits:-
• ICICI BANK offers wide variety of deposit
products to suit your requirements.
Convenience of networked branches/ Atms
and facility of e-channels like internet and
mobile banking.

Some of the ICICI deposit

products are:-

Saving account:-

A Savings Account for

everyone 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.
 Life Plus Senior Citizens Savings
Account:-
This is a plan of ICICI bank for
senior citizens, who are of 60 years
and above

Young Stars Savings Account:-

It's really important to help
children learn the value of
finances and money
management at an early
age. This is a plan for
children and their future. In
a tiny age Children learn
how to manage their
personal finances.
Recurring Deposits:-

When people don’t have so

much money to invest then
according to this scheme
ICICI provides scheme to a
person to invest a little
amount of money.

CARDS :-
ICICI Bank offers a variety of cards to
suit your different transactional
needs. One can use these cards for
shopping, traveling or any other type
of payments. These cards are of
many types and used for different
purpose.

The different types of cards are:-

1. Credit cards: - Credit Cards

give a smart way to shop, and
offer flexibility and convenience
in managing finances. ICICI
credit cards provide a lot of
exciting offers like low interest
rate and high cash and credit
limit.
2. Travel cards: - Travel cards give
a flexibility to travel around the
world. One can pay in currency
of various countries for traveling
with the help of this card.
3. Debit Card: - this is a most
common card. This can be used
for shopping, billing of electricity
and telephony.

ONLINE INVESTEMENT:-

Along with the cards and deposits

ICICI provides online investments.

With the help of online investment

one can manage his finances by
investing in following schemes of
 ICICI:-

• 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
• Loans:-
ICICI provides various loan
schemes. It is a no. one home
loan and car loan provider. Along
with this it provides personal and
education loan.

Type Amount Rate Security Eligibility

Min. of
Max. intere
st
Personal 1,5
loan 00000
Education - 4,00, Nil Graduation courses
loan 000
Post graduation
For all Professional courses
10- Tangible
4,00,000 12% Other courses approved by
collateral
7,50,000 UGC/Government/AICTE etc
security

suitable
third
4,00,000 party
 7,50,000 guarante
e
Car loan - 11- As per person having a income
15,00,000 13% bank's >1,00,000
extant
instructio
ns.

Home loan 0 11.5- Availabili Equitable mortgage of the

75,00,000 12.5% ty of property or
sufficient Other tangible security
, regular of adequate value like NSCs
and Life Insurance policies etc.,
continuo if the property cannot be
us source mortgaged
of
income
for
servicing
the loan
repayme
nt.
ANALYSIS

ADVANTAGES OF ICICI OVER SBI:

ICICI is growing at a very fast rate with a total

asset of Rs. 3,744.10 billion.

In the area of human relations, the two are taking

divergent paths. SBI, which had over 1 lacks
employees, has reduced headcount through a
voluntary retirement scheme and is cautious about
adding headcount.
ICICI Bank, on the other hand, is setting up
regional hubs where its workforce would be
 concentrated and plans to add 20,000 to its
headcount every year. The group plans to add
between 75,000 and 1, 00,000 employees in the
next few years.

ICICI Bank is also set to outdo SBI is in its

international book
- An area where it has been very aggressive.

ADVANTAGES OF SBI OVER ICICI:

 SBI is the largest and oldest bank of India. Its

major stocks are held by government of India. So
this bank enjoys the trust of its Customers a
lot.

 SBI offers flexible tenures of loan repayment.

 State bank of India has vast experience in the

field of SME
(Small and Medium Enterprises) Financing.

 As it is the oldest name so it enjoys public trust a

lot.
SBI have four national level Apex Training
Colleges and 54
Learning Centers spread all over the country
the Bank is
Continuously engaged in skill enhancement of
its employees.
Some of the training programs are attended by
bankers from
banks in other countries.
  SBI group, which has over 10,000 branches, is
planning to add another 3,000 branches.

 It is also set to become the largest issuer of

debit cards and is the second largest credit card
issuer.

Six reasons why we currently prefer SBI

over ICICI

Reason #1 - Stronger CASA base

 CASA franchise of 42% provides comfort on

margin sustainability for SBI.
 Though CASA for ICICI will also improve from the
current 27%, we believe SBI’s liability franchise
will strengthen further with the opening of
~2,000 branches in FY09.
Reason #2 – Asset-liability match of SBI is
better

 SBI has a better asset-liability match, with 60%

of liabilities of more than 1-year maturity, while
~71% of assets have more than 1-year maturity.
 ICICI has 43% of its liabilities with more than 1-
year maturity, while ~61% of assets have more
 than 1-year maturity.

Reason #3 - Proxy insurance plays on

both

 Any upside on insurance reforms can be

played through SBI as well.
 Cost ratios of SBI Life are better than ICICI
Prudential Life due to its strong
bancassurance model and better agency
productivity.
Reason #4 - SBI has more diversified loan
book

 While asset quality risks persist for both

banks, SBI’s loan book is well diversified
across a variety of segments; ICICI’s loan
book is still skewed towards retail.
 According to our analysis, over the next 18
months the retail segment is likely to be
more vulnerable than the corporate
segment.
Reason #5 - Market share gain in favor
of SBI

 SBI will continue to gain market share in

both advances and deposits at ICICI’s
expense due to the latter’s strategy of
going slow.
 Advances growth for SBI as at Q1FY09 was
28% versus 13% for ICICI.
 Deposit growth for SBI was at 25%, while
for ICICI it was 2% as at Q1FY09.
Reason #6 - Return ratios for SBI are
better

 SBI is trading at 0.94x FY10E adjusted

book, while ICICI is trading at 1.0x FY10E
adjusted book (assuming value of
subsidiaries for SBI at INR 301 and for
ICICI at INR 283 on FY10E basis).
 ROE for ICICI is expected to be in the
range of 8-10% in FY09-10E, while that of
SBI will be in the range of 14-16%.
Key risks

 SBI’s low provisioning coverage (44%) will

lead to higher provisioning cost in FY10E,
considering the aggressive balance sheet
growth.
 For ICICI, the expectation of bad asset
quality is priced in and further negative
surprises look unlikely.
Like any other PSU bank, the bulk of SBI’s
loan origination happens through branches
where underwriting standards are stricter,
unlike the DSA model that ICICI follows.
Hence, while we expect NPAs to increase for
SBI in FY10E and FY11E, we do not expect
SBI to go through a similar experience as
ICICI.
 Also, revised loan waiver guidelines could
keep SBI’s Q2FY09 profits muted due to
higher provision requirement.
 CONCLUSION:
The gap between SBI and the rest of the bank is so
wide that SBI comes out as number one on almost all
counts. This includes assets, branch network, ATM
network, number of employees, and size of profits.
The only place that ICICI Bank has been able to upset
the monolith has been in the area of market
capitalization.
One reason why SBI has lagged in market cap
despite its size has been its inability to unlock value
from its various businesses. However, there are signs
that this is changing and the bank is making
attempts to realize the value of its investments in the
life insurance and asset management business.

SBI and ICICI are both India’s largest banks. Their

growth means India’s growth. And by this
competition customers will be benefited and Indian
economy will get a boost.

LEARNINGS

 More flexible requirement given by this bank.

 Creating an efficient and effective organization.

 This live project topic gives opportunity to know

about various loan schemes provided by the
bank.
 The study shows all the important aspects of
Bank loan schemes & how this affects to current
financial trends.

 It also describes the core features of borrowers

as well as bankers for financing loan which is a
complex process.

LIMITATIONS

 TIME CONSTRAINT
  I COLLECTED THE INFORMATION FROM THE
MANAGER OF SBI AND STAFF OF ICICI BY
PHONE I COULD NOT MEET HIM PERSONALLY

BIBLIOGRAPHY

Primary data:-

• Mr. Amit Yadav (Manager, Loan SBI)

• Mr. Manoj Kumar(Cashier, ICICI)

Secondary data:

• Internet website :

www.Google.com
www.Statebankofindia.com
www.Icicibank.com