FUNDAMENTAL ANALYSIS OF BANKING SECTOR

A PROJECT SUBMITTED IN PARTIAL COMPLETION OF

MASTER OF MANAGEMENT STUDIES

TO
THAKUR INSTITUTE OF MANAGEMENT STUDIES AND
RESEARCH

BY
CHANDRANIL DESAI
(MMS FINANCE – 066)
UNDER THE GUIDANCE OF
CHITRA GOUNDER
TIMSR
FULL TIME BATCH 2017-19
1. Introduction
The economy development depends totally on thedevelopemnt of financial sector of the that
economy. The Banking industry plays a vital role in the financial system which provides
financial assistance not only to the industrial sector but also to the agriculture and household
sectors. Banks are the credit creators. The Indian Banking industry has a major role in
contribution to the economic growth of the country. This banking sector has undergone
significant developments and investments in the recent years. The Reserve Bank of India is
the central bank of the country; it regulates the banking industry in India and ensures
monetary stability in the economy. Banks are segregated into different groups such as
scheduled and unscheduled commercial banks, public sector banks, private banks, foreign
banks and cooperative banks. The Banking industry is a valuable contributor to the GDP,
works under a regulated environment and has government support. Technological
advancements have changed the way banking is done. A wide network of financial services
increases the welfare and productivity in the economy. It provides the opportunity to the
public to build savings, make investments, avail credit and provides safety against income
shocks and emergencies.
India’s banking sector is on a high-growth trajectory with around 3.5 ATMs and less than
seven bank branches per 100,000 people, according to a World Bank report. The statistics are
going to improve in near future as the Government aims to have maximum financial inclusion
in the country. Policymakers are making all the efforts to provide a facilitating policy
framework and infrastructure support to ensure meaningful financial inclusion. Apart from
that, financial institutions are collaborating with other service providers (in the fields of
telecom, technology and consumer product providers) to create an enabling environment.
A bank is a financial institution and a financial intermediary that accepts deposits and
channels those deposits into lending activities, either directly or through capital markets. A
bank connects customers that have capital deficits to customers with capital surpluses. Due to
their critical status within the financial system and the economy generally, banks are highly
regulated in most countries. They are generally subject to minimum capital requirements
which are based on an international set of capital standards, known as the Basel Accords.
Banking in India originated in the last decades of the 18th century. The first banks were The
General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790;
both are now defunct. The oldest bank in existence in India is the State Bank of India, which
originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank
of Bengal. This was one of the three presidency banks, the other two being the Bank of
 Bombay and the Bank of Madras, all three of which were established under charters from the
British East India Company. For many years the Presidency banks acted as quasi-central
banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of
India, which, upon India's independence, became the State Bank of India in 1955.

Statement of Problem
The study of fundamental analysis of banking industry in India is the SBI and ICICI is to
assess the performance of banking industry and select the most performing banking
companies through the analysis of various variables that affect the performance of particular
industry.

1.3 Research Objectives

 Fundamental analysis of public and private sector banks in India has been done with the
objective of analyzing the profitability position of the selected banks which is helpful in
taking investment decisions.
 The main objective of computing this ratio is to determine the overall profitability due to
various factors such as operational efficiency, trading on equity, etc. To study the role of public
sectors banks to Indian economy.
 To analyse fundamental of SBI & ICICI Bank. To make suggestion for investment decision by using
fundamental analysis
 To ascertain and analyze the strength and weakness of public and private sector banks
through measurement of performance indicators.
 To analyze the trends in significant balance sheet and profit and loss account. To find out the
scenario of Public and Private Sector Banks in India.
 To evaluate the major initiative taken by the private banks for better customer service quality.
To comparative analysis of the working efficiency of Public and Private Sector bank.
 The objectives of this study is to examine and compare the financial performance of SBI
Bank and ICICI Bank with the industry averages from
 the viewpoint of a neutral onlooker.
 To examine and compare the overall profitability of the SBI and ICICI bank with the industry
averages.

4 Scope and Limitations

 The scope of the project is limited to understanding the basics of fundamental analysis and
technical analysis and apply it to take a decision of investing in banking sector.
 The study gives the overview of banking industry to investor while investing.
The study consists of company analysis which includes companies project, growth and
management of the company.

Organization Profile
Name of the Company- Karvy Stock Broking Limited
Introduction of the company
 Karvy Group is one of the leading financial services conglomerates.
 Karvy was established in the year 1983.
 It is headed by Mr. C Parthasarathy as Chairman.
 It is a financial services company headquartered in Hyderabad, India
 Other than India, it also has a presence in Bahrain, Dubai, Malaysia, Philippines and the
United States.
 It offers a range of financial services including stock broking, distribution of financial
products, depository participant, commodities broking, wealth management, and more.
Internship Duration- 2 months (May 2018-June 2018)
Job Profile- Management Trainee
Department- Advisory
Job Description
 Internship included training and focus primarily on learning new skills and gaining a deeper
understanding of concepts through hands-on application.
 Dealing with various customer and suggesting and solving issues relating to share market
 Engaging in real business projects across the zone and get exposure to stock broking and life
skills.
 Understanding and learning of future and options
 Pitching to clients & learning from the clients on sales presentation.
 Learning various techniques of analyzing various sectors in shares.
Structure of Indian Banking

As per Section 5(b) of the Banking Regulation Act 1949: “Banking” means the accepting, for
the purpose of lending or investment, of deposits of money from the public, repayable on
demand or otherwise, and withdrawal by cheque, draft, order or otherwise.” All banks which
are included in the Second Schedule to the Reserve Bank of India Act, 1934 are scheduled
banks. These banks comprise Scheduled Commercial Banks and Scheduled Cooperative
Banks. Scheduled Commercial Banks in India are categorised into five different groups
according to their ownership and / or nature of operation. These bank groups are: (i) State
Bank of India and its Associates, (ii) Nationalised Banks, (iii) Regional Rural Banks, (iv)
Foreign Banks and (v) Other Indian Scheduled Commercial Banks (in the private sector).
Besides the Nationalized banks (majority equity holding is with the Government), the State
Bank of India (SBI) (majority equity holding being with the Reserve Bank of India) and the
associate banks of SBI (majority holding being with State Bank of India), the commercial
banks comprise foreign and Indian private banks.
While the State bank of India and its associates, nationalized banks and Regional Rural
Banks are constituted under respective enactments of the Parliament, the private sector banks
are banking companies as defined in the Banking Regulation Act. These banks, along with
regional rural banks, constitute the public sector (state owned) banking system in India.The
Public Sector Banks in India are back bone of the Indian financial system. The cooperative
zcredit institutions are broadly classified into urban credit cooperatives and rural credit
cooperatives. Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks
and Scheduled Urban Co-operative Banks. Regional Rural Banks (RRB’s) are state
sponsored, regionally based and rural oriented commercial banks. The Government of India
promulgated the Regional Rural Banks Ordinance on 26th September 1975, which was later
replaced by the Regional Rural Bank Act 1976. The preamble to the Act states the objective
to develop rural economy by providing credit and facilities for the development of
agriculture, trade, commerce, industry and other productive activities in the rural areas,
particularly to small and marginal farmers, agricultural labourers, artisans and small
entrepreneurs.
Bank Nationalization
The Government of India issued an ordinance and nationalised the 14 largest commercial
banks with effect from the midnight of July 19, 1969. Within two weeks of the issue of the
ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of
Undertaking) Bill, and it received the presidential approval on 9 August 1969. The need for
the nationalisation was felt mainly because private commercial banks were not fulfilling the
social and developmental goals of banking which are so essential for any industrialising
country. Despite the enactment of the Banking Regulation Act in 1949 and the nationalisation
of the largest bank, the State Bank of India, in 1955, the expansion of commercial banking
had largely excluded rural areas and small-scale borrowers. A second dose of nationalization
of 6 more commercial banks followed in 1980. The stated reason for the nationalization was
to give the government more control of credit delivery. With the second dose of
nationalization, the Government of India controlled around 91% of the banking business of
India. Later on, in the year 1993, the government merged New Bank of India with Punjab
National Bank. It was the only merger between nationalized banks and resulted in the
reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the
nationalised banks grew at a pace of around 4%, closer to the average growth rate of the
Indian economy.

Regulation of Banks by RBI

The Reserve Bank of India has been empowered under the Banking Regulation Act, 1949 to
regulate and supervise banks' activities in India and their branches abroad. While the
regulatory provisions of this Act prescribe the policy framework to be followed by banks, the
supervisory framework provides the mechanism to ensure banks' compliance with the policy
prescription. While the Department of Banking Operations and Development exercises
regulatory powers in respect of commercial banks and Local Area Banks (LABs), Regional
Rural Banks/District and State Co-operative Banks and Urban Cooperative Banks are
regulated by Rural Planning and Credit Department and Urban Banks Department,
respectively. Department of Banking Operations and Development The Department of
Banking Operations and Development is entrusted with the responsibility of regulation of
commercial banks and LABs under the regulatory provisions contained in the Banking
Regulation Act, 1949 and the Reserve Bank of India Act, 1934 and other related statutes
besides enunciation of banking polices. It's functions broadly relate to prescription of
regulations for compliance with various provisions of Banking Regulation Act on
establishment of banks such as licensing and branch expansion, maintenance of statutory
liquidity reserves, management and operations, amalgamation, reconstruction and liquidation
of banking companies. The other important activities of the Department include approval for
setting up of subsidiaries and undertaking of new activities by commercial banks.
After facing turmoil for quite a while, global economy rebounded in the preceding year.

The year gone by signified the beginning of the end of the easy money era. Federal Reserve
hiked interest rates thrice in 2017 and the same now stands in a range of 1.25% to 1.5%. The
Fed has forecasted another three rate hikes in 2018 and two hikes in 2019. The rate hike is on
account of an improving economy and labour market in the US. The unemployment rate has
dropped to lowest in seventeen years and now stands at 4.1%. With the US raising rates, the
European Central Bank (ECB) is expected to soon follow suit.

The crude prices over the year arrested its slide and saw some stability but oversupply issues
remained an anchor on the global oil prices. Recently, the International Monetary Fund (IMF)
revised upwards its global growth forecast. The IMF expects the global economy to grow by
3.9% in 2018 and 2019.

The improved prospects of global economic growth will be positive for the banking sector.
Post demonetization and transition to goods and service tax (GST), the Indian economy has
slowed down in FY 2017. The gross domestic product (GDP) grew by 7.1% in FY17, way
lower than the 8% growth registered in FY 2016.

The macro situation in India has deteriorated slightly on account of a spurt in the oil prices, a
higher inflation then the expectation and more importantly fiscal slippages on account of
lower than anticipated GST revenues.

The banking sector, being the barometer of the economy, is reflective of the weak macro-
economic variables. The Indian banking system continued to battle falling asset quality issues
and the need to maintain capital adequacy in the light of piling bad loans.

The government's plan to recapitalize public sector bank by Rs 2.11 trillion, will aid these
banks to make provisions for bad loans, lend money to the corporate and retail sector and
would help them in maintaining their Capital Adequacy Ratio (CAR) above the statutory
minimum. In FY17, the private sector banks continued to perform better than the public
sector banks. The banking sector continued to report high slippages on account of farm loan
waivers and default in their corporate loan portfolio.

A high and rising proportion of banks stressed loans, particularly those of public sector banks
(PSBs) and a consequent increase in provisioning for non-performing assets (NPAs)
continued to weigh on credit growth reflecting their lower risk appetite and stressed financial
position.
The ownership in the banking sector remained predominantly in the public sector despite a
gradual decline in their share.
After a last interest rate cut in August 2017, the Reserve Bank of India (RBI) has maintained
a status quo on interest rates. The repo rate in February 2018 stood at 6%. Given the
increasing inflation, it is highly unlikely that the RBI reduces interest rates from hereon.
The repo rates stand at 6%. Although banks have reduced base rates but not to the same
extent. For the full transmission of rates, the RBI has asked banks to follow the marginal cost
of funds while setting the base rate.

Risk Involved in Banking Sector

The risks associated with providing banking services differ by the type of service rendered.
Risk is the danger of an adverse deviation in the actual result from an expected result. High
returns are said to also accompany high risk. So the risks involved in the banking sector are

Credit Risk
 Credit risk is defined as the potential that a bank borrower or counterparty will fail to meet its
obligations in accordance with agreed terms. It is the negative consequence associated with
the defaults or non- fulfilment of concluded contracts in lending operations due to
deterioration in the counterparty’s credit quality.
The goal of credit risk management is to maximize a bank's risk-adjusted rate of return by
maintaining credit risk exposure within acceptable parameters. Banks need to manage the
credit risk inherent in the entire portfolio as well as the risk in individual credits or
transactions. Banks should also consider the relationships between credit risk and other risks.
The effective management of credit risk is a critical component of comprehensive approach
to risk management and essential to the long-term success of any banking organization.

Market Risk
Market risk is the risk of possible losses in, on- balance sheet and off balance sheet positions,
due to movement in the market prices. The market risk positions, subject to capital charge
requirement, are:

 Interest Rate Risk (IRR): The risks pertaining to interest rate related instruments and
equities in the trading book. IRR is defined as the change in banks portfolio value due to
interest rate fluctuations. The IRR management in concerned with measurement and control
of risk exposures, both in trading book (i.e. assets that are regularly traded and are liquid in
nature) and the banking book (i.e. assets that are usually held till maturity and rarely
traded).b.

 Equity Price Risk: the risk arising due to fluctuation in market prices of equity due to general-
market related operations.

 Foreign exchange risk throughout the bank. The risk arises due to fluctuation in the exchange
rate

Operation Risk
 Operational risk is defined as the risk to loss resulting from inadequate or failed internal
processes, people and systems or external events. This does not include strategic and
reputational risk. Some of the factors for operational risk could be lack of competent
management or proper planning and controls, incompetent staff, indiscipline, involvement of
staff in frauds, outdated systems, non-compliance, programming errors, failure of computer
systems, increased competition, deficiency in loan documentation etc.

Liquidity Risk
Liquidity risk arises from the bank‟s inability to meet its obligation when
they come due. Thevarious types of liquidity risks are:

 Term Liquidity Risk: this risk arises due to unexpected prolongation of the capital
commitment period in lending transactions. It is the unexpected delay in the repayment.

 Withdrawal/Call Risk: it is the risk that more deposits will be withdrawn than expected.
When large amount of deposits are taken away from the bank in a relatively span of time it
raises the risk that bank will not be able to meet all its obligations.

 Structural Liquidity Risk: it is the risk that rises when the necessary funding transactions
cannot be carried out. The risk is sometime also called as funding liquidity risk.

 Contingent Liquidity Risk: it is the risk associated with funding additional funds or replacing
maturing liabilities under potential, future stressed market conditions.

 Market Liquidity Risk: this is a risk which arises when positions cannot be sold within
desired time period or could only be sold at a discount. This is especially the case with
securities/derivatives in illiquid markets, or when bank hold such a large positions that they
cannot be easily sold.

Other Risk
Strategic Risk: it refers to the negative impact on capital and earnings due to business policy
decisions, changes in the macro economic environment, insufficient implementation of
decisions or failure to adopt in the changing economic environmental conditions.

Reputation Risk: it is the potential adverse effect that a bank can have if its reputation
deviates negatively from its expected position. A banks reputation refers to its image in
the eyes of interested public; the stakeholders.

Capital Risk: it is the imbalance in the internal capital structure in relation to the nature and
size of the bank, or from difficulties associated with raising additional risk coverage capital
quickly, if necessary.

Earnings Risk: this risk arises due to inadequate diversification of banks earnings or its
Inability to attain sufficient and lasting profitability.
State Bank Of India (SBI)

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 1806 in Calcutta. Three years later the bank
received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique
institution, it was the first joint-stock bank of British India sponsored by the Government of
Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843)
followed the Bank of Bengal. These three banks remained at the apex of modern banking in
India till their amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence either as a
result of the compulsions of imperial finance or by the felt needs of local European
commerce and were not imposed from outside in an arbitrary manner to modernize India's
economy. Their evolution was, however, shaped by ideas culled from similar developments
in Europe and England, and was influenced by changes occurring in the structure of both the
local trading environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework.
The State Bank of India, the countrys 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 bank is entering into many new 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.
The bank is forging ahead with cutting edge technology and innovative new banking models,
to expand its rural banking base, looking at the vast untapped potential in the hinterland and
proposes to cover 100,000 villages in the next two years. At the end March, 2011, the total
number of branches was 13,542 while the number of ATMs stood at 20,084 across the
country.
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.
The bank is actively involved since 1973 in non-profit activity called Community Services
Banking. All branches and administrative offices throughout the country sponsor and
participate in large number of welfare activities and social causes. Their business is more
than banking because they touch the lives of people anywhere in many ways.State Bank of
India (SBI) has received an approval from the Government of India (GOI) for acquisition of
SBI Commercial and International Bank (SBICI Bank). The government had issued the
'Acquisition of SBICI Bank Order 2011' vide order dated July 29, 2011.
SBI entered the UK's home loan market, the bank started with mortgages for landlords, best
known as buy-to-let mortgages, with amounts ranging from £50,000 to £1.5 million, and
loan to value of ratios of up to 60 per cent.
In April 2014 State Bank of India launched three digital banking facilities for the
convenience of SBI customers. Two at the customer door step using TAB banking - one for
customers opening Savings Bank accounts and another for Housing Loan applicants. The
third is e-KYC (Know your Customer).
History
The roots of the State Bank of India lie in the first decade of the 19th century, when the Bank
of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of
Bengal was one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July
1843). All three Presidency banks were [ as joint stock companies and were the result of
royal charters. These three banks received the exclusive right to issue paper currency till 1861
when, with the Paper Currency Act, the right was taken over by the Government of India.
The Presidency banks amalgamated on 27 January 1921, and the re-organized banking entity
took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock
company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,
which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On
1 July 1955, the imperial Bank of India became the State Bank of India. In 2008, the
Government of India acquired the Reserve Bank of India's stake in SBI so as to remove any
conflict of interest because the RBI is the country's banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made
SBI subsidiaries of eight that had belonged to princely states prior to their nationalization and
operatonal take-over between September 1959 and October 1960, which made eight state
banks associates of SBI. This acquisition was in tune with the first Five Year Plan, which
prioritized the development of rural India. The government integrated these banks into the
State Bank of India system to expand its rural outreach. In 1963 SBI merged State Bank of
Jaipur (est. 1943) and State Bank of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911), which
SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National
Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired
Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the
patronage of Maharaja Madho Rao Scindia. The bank had been theDukan Pichadi, a small
moneylender, owned by the Maharaja. The new bank's first manager was Jall N. Broacha, a
Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was
the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in
Kerala. There has been a proposal to merge all the associate banks into SBI to create a "mega
bank" and streamline the group's operations.
The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra
merged with SBI, reducing the number of associate state banks from seven to six. Then on 19
June 2009 the SBI board approved the absorption of State Bank of Indore. SBI holds 98.3%
in State Bank of Indore. (Individuals who held the shares prior to its takeover by the
government hold the balance of 1.7%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing network of
branches. Also, following the acquisition, SBI's total assets will inch very close to the 10
trillion mark (10 billion long scale). The total assets of SBI and the State Bank of
Indore stood at 9,981,190 million as of March 2009. The process of merging of State Bank
of Indore was completed by April 2010, and the SBI Indore branches started functioning as
SBI branches on 26 August 2010. On 7 October 2013, Arundhati Bhattacharya became the
first woman to be appointed Chairperson of the bank.
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, an equity offering
in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's 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 and
affiliates 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 group's universal banking strategy.
The merger would enhance value for ICICI shareholders through the merged entity's 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 ICICI's 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 wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was
approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and
the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's
financing and banking operations, both wholesale and retail, have been integrated in a single
entity.
ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion ($91
billion) at March 31, 2011 and profit after tax Rs. 51.51 billion ($1,155 million) for the year
ended March 31, 2011. The Bank has a network of 2,535 branches and 6,810 ATMs in India,
and has a presence in 19 countries, including India. ICICI Bank offers a wide range of
banking products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialised subsidiaries in the areas of investment banking,
life and non-life insurance, venture capital and asset management.
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Their UK subsidiary has established branches
in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National
Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE).
ICICI Bank is India's largest private sector bank with total consolidated assets of Rs.
11,242.81 billion (US$ 172.5 billion) at March 31, 2018 and profit after tax of Rs. 67.77
billion (US$ 1.0 billion) for the year ended March 31, 2018. ICICI Bank currently has a
network of 4,867 Branches and 14,367 ATMs across India.
History
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, an equity offering
in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's 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 and affiliates 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 group's universal banking strategy.
The merger would enhance value for ICICI shareholders through the merged entity's 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 ICICI's 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 wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was
approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and
 the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's
financing and banking operations, both wholesale and retail, have been integrated in a single
entity.
www.marketsmojo.com

2. Literature Review

Milan B. Udavia on November 16 the research topic is Fundamental analysis on public and
private sector banks in india, states that the Banking Sector plays an important role in
economic development of a country. The banking system of India is made by a large network
of bank branches, serving various kinds of financial services for the people. Fundamental
analysis gives knowledge of various financial, economic and industrial parameters that
influence the risk-return of securities and also helps in making investment decision. With the
help of fundamental analysis, investors can be able to track the past performance, recent
changes and future prospects in the banking sector. This research paper analyses the
fundamentals of banking companies using independent financial parameters. The
fundamental analysis also helps in knowing how profitable is the banks which will help in
making good investment decisions. The first basic objective of any investor is to get return or
yield on investments. The fundamental analysis helps in developing an insight into the
economic performance of banks. For every investor analysis of the economic performance is
very vital in taking investment decisions. Thus, the current study has been conducted to study
and examine the economic performance and sustainability of the banks from public sector
and private sector.
https://www.worldwidejournals.com/paripex/recent_issues_pdf/2016/November/November_
2016_1478613409__68.pdf

Deepika Dhingra on 6th June 2016 the research topic is fundamental analysis on public sector
banks, states that the study gives idea related to Indian banking sector and fundamental
analysis on public. The fundamental analysis makes an attempts to analyse various factors
affecting risk and return of securities. The analyst should take the entire three constituent that
helps in taking special steps in and in making special steps. the fundamental analysis also
helps to recognise the strength of basic Indian banking sector. Economic analysis helps to
covers the current changes in the world economy and its impact on Indian banking sector. It
component it includes is macro economic analysis and micro economic analysis. The Indian
banking sector is also connected with the world economy but the Indian banking system has
no direct exposure to the sub-prime mortgage assets or to the failed institutions. It has very
less off-balance sheet activities or securitized assets. In fact, Indian banks still continues to
remain safe and healthy. Public sector banks help the government to implement monetary and
fiscal policies by modifying their policies and priorities. The NPA growth icludes the need of
the provisions, which reduces the overall profits and shareholders value. The issue of Non
Performing Assets has been discussed as financial system all over the world. Not only the
banks but the whole economy is affected. The state of health of the industry and trade is
nothing but the reflection of high level of NPAs in Indian Banks.
http://www.irjcjournals.org/ijmssr/june2013/4.pdf

Partha S Mohanram on 17th August 2016 the research topic fundamental analysis in banks:
the use of financial statement information to screen winners and losers states that the
importance of the banking sector to the economy, prior to study the valuation in accounting
have tended to generally close the bank stocks. We normally examine the returns to a
fundamental analysis based on trading strategy for the U.S. bank stocks, using a bank
fundamentals index (BSCORE) based on bank specific valuation signals. A long–short
strategy based on BSCORE for all but one year during the 1994–2013 period yields positive
hedge returns. The risk factor is known for the results are robust to partitions based on size,
analyst following and exchange listing status, and persist after adjusting. Interestingly, strong
hedge returns during the 2007-2009 financial crisis are especially observed. Finally, the
results are significantly enhanced if we combine the relative valuation strategy based on an
intrinsic value approach with the BSCORE strategy. The results identifies that the
fundamental analysis can provide useful insights for analyzing banks, beyond the usual focus
on metrics such as return on equity (ROE). This study observes the returns to a fundamental
analysis based trading strategy for U.S. bank stocks. We ex–ante identify banks fundamental
signals related to profitability, risk and growth to make an index of bank fundamental
strength.
https://pdfs.semanticscholar.org/4816/83e02b62f5faf6c7c6108b2cef0a3c3e039f.pdf
Jeevitha, D. Sarvani 17th February 2018 the research Topic fundamental analysis of some
public sector bank published on states that Fundamental analysis is a technique used by
successful investors for security analysis. This study helps to know the fundamental strength
of public sector banks in an economy. It is a process of evaluating a security that helps to
measure it intrinsic value of private sector banks, by examining related economic, financial
and other qualitative and quantitative factors. A Good investment decisions are made with the
help of fundamental analysis. Based on findings investments in Canara bank is not suitable
and other two banks are good for investors, among these two banks Punjab National bank
showing highest P/E ratio and intrinsic value and it would be profitable for investors if they
invest in Punjab National bank. So based on fundamental analysis it is said that no investment
decision should take without processing and analyzing all relevant information. The analysis
is fully based on banks as well as industry. For this analysis we have selected three banks.
Intrinsic value of all banks except, Canara bank is under prized and P/E ratio of all banks
except Canara bank showing increasing trend. It indicates that investment in Canara Bank is
not possible and other two banks are good for investors, among these two banks PNB is
showing highest P/E ratio and intrinsic value and it would be profitable for investors to invest
in PNB.
http://data.conferenceworld.in/2018SVCET/59.pdf

K.P. Venugopal 1st January 2017 states that Indian Banking industry- A study of IDBI Bank
has led 80 percent market share of public sector banks (PSBs). The present study is to
compare the financial performance of IDBI Bank with the industry averages on the basis of
financial ratios for the period 2011-12 to 2015-16. It was found that the solvency position of
IDBI Bank and the employment of assets are in tune with the industry averages. The
employment of shareholders’ funds and the CASA which is relatively lower than the
bellwether suggests that the bank should improve its deposits that provide cheaper funds
which can translate in strong financial performance. The solvency position of IDBI Bank and
the employment of assets are in tune with the industry averages. The attention has to be paid
in the areas of shareholders funds and CASA which is relatively lower than bellwether. Net
profit margin of IDBI Bank indicates that the profits of the bank is declining and is well
below the industry averages suggesting that the operations of the bank has to improve. The
IDBI Bank should improve its deposits that provide cheaper funds, in order to translate into
strong financial performance the IDBI bank should improve its deposits that provide cheaper
funds. The ROA of IDBI Bank is showing a declining trend and the comparison with the
industry averages indicates that the IDBI Bank should pay attention towards the utilisation of
its assets more effectively.

Yusuf and Hakan, (2011) described the short term creditors of a company like suppliers of
goods of credit and commercial banks providing short-term loans are primarily interested in
knowing the company’s ability to meet its current or short-term obligation as and when these
become due.

Ross et al., (2007) implied that the most researchers divide the financial ratios into four
groups i.e. profitability, solvency, liquidity and activity ratios for detailed analysis.
Eugene F Brigham and Michael C Ehrhardt (2010) stated that financial ratios are designed to
help in evaluating financial statements and used as a planning and control tool.

Nadia Zedek (2016) investigated the controlling shareholders affects product diversification
performance of 710 European commercial banks, it was found that when banks have no
controlling shareholder or have only family and state shareholders diversification yields
diseconomies, while the involvement of banking institutions, institutional investors, industrial
companies or any other combination of these shareholder categories, produce diversification
economies: they display higher profitability, lower earnings volatility and lower default risk.

Abe De Jong, et al (2008) analysed the importance of firm-specific and country-specific

factors in the leverage choice of firms around the world. Data suggested that firm-specific
determinants of leverage differ across countries, and that there is an indirect impact of
country-specific factors on the roles of firm-specific determinants of leverage.

Dimitios Louzius (2012) In his study of Banking sector in Greece found that for all loan
categories, NPLs in the Greek banking system could be explained mainly by macroeconomic
variables (GDP, unemployment, interest rates, public debt) and management quality.

Research Methodology

Data Sources
Tools & Technique
Conceptual meaning of Ratios chapter 3 rm under tools and tecn

Basic eps– The basic earnings per share (eps) of a firms profit or loss for a reporting period
that is available to the share of the common stock that are outstanding during the reporting
period. It has been a useful measurement for companies with simplified capital structure. The
eps is the net income of a company divided by the number of outstanding shares which are
held by the stockholders. The proportion of a company’s profit is allocated to each
outstanding share of common stock. Earnings per share is an indicator of a company’s
profitability.

Book value- The book value of an asset is equal to its carrying value on the balance sheet. So
it is calculated by totalling or netting the asset against its accumulated depreciation. It is
calculated as total assets minus intangible assets (patents, goodwill) and liabilities, the book
value is also the net asset value of a company. For the initial outlay of an investment, book
value may be net or gross of expenses such as trading costs, sales taxes, service charges and
so on.
Operating revenue- The revenue generated from the primary business activity is known as
operating revenue. The operating profit is recorded separately on financial statements,
sometimes the firms may make an attempt to decrease in operating revenue by combining it
with non-operating revenue.

Net profit per share-The net profit per share means the profit we incur over and above the
price at which we have bought. The portion of a company’s profit allocated to each
outstanding share of common stock is known as net profit per share.Net profit is also known
as earning per share (EPS). It also serves as an indicator of company’s profitability.

Net profit margin- The Net profit margin is the percentage of revenue remaining after all
operating expenses interest taxes and preferred dividends have been deducted from the firms
total revenue. Net profit margin, or net margin, is equal to net income or profits divided by
total revenue and represents how much profit each dollar of sales generates. Net profit margin
is the ratio of net profits or net income to revenues for a company, business segment or
product. Net profit margin is normally represented in decimal form and can be typically
expressed as a percentage. The net profit margin shows how much of each dollar collected by
a company as revenue convert into profit. The term "net profits" is same as to "net income"
on the income statement and the terms can be used interchangeably. Most commonly,
investors will refer to net profit margin as the "net margin" and describe it as "net income"
divided by total sales instead of using the term "net profits."

Operating profit margin- The return on sales is also known as companies operating profit, it
is good indicator of how well it is managed and how risky is it. The reason why investor and
lenders pay close attention is that it shows the proportion of revenue that is available to cover
non-operating cost like paying interest. It also helps in gauging companys earnings by
looking at companies past operating margins.

Return on asset- Return on asset is an indicator of how profitable a company is relative to its
total assets. Return on assets gives a manager, investor or analyst an idea as to how efficient a
firms management in using its assets in using its assets to generate earnings.

Return on equity/ net worth- Return on equity is the income which the shareholders earned
from form the share market. ROE measures a corporation’s profitability by revealing how
much a profit a company generates with the money the shareholders haves invested.

Net interest margin- it is the net interest income earned by the banks on its earnings assets.
If the non-performing assets are high, their net interest margin will go down. So higher the
ratio indicates the efficiency of firm’s investment decision.

Cost to income- controlling overheads are critical for enhancing the banks return on equity.
Branch nationalization and technology upgrade account for major part of operating expenses
for new generation banks. Even though, these expense result in higher cost to income ratio, in
long term they help the bank in improving its return on equity. The ratio is calculated as a
proportion of operating profit including non-interest income

Valuation Ratios

Enterprise value- The enterprise value or EV for short normally measures the firms total
value, it is also often used as a comprehensive alternative to equity capitalisation. The EV is
normally calculated as the market capitalisation add debt, minority interest and preferred
shares, minus total cash and cash equivalents.

EV per net sales- The enterprise value to sales or we can called it as Ev-to-sales is a
valuation measures that compares the Ev of a company to company’s sales. Ev-to-sales also
gives the investors a quantifiable metric of how much is cost to purchase the company’s
sales.

Price to book value- The price to book compares the book value to firms market and it is
calculated by dividing per share by the book value per share. Hence, P/B ratio is calculated
P/B Ratio= Market Price per share/Book Value per Share
Book Value per Share= Total Assets – Total Liabilities/ Number of share outstanding

Price to sales- The price to sales ratio is also known as valuation ratio which compares
revenue to company’s stock price. Price to sales ratio is also an indicator of a value placed on
each dollar of a company’s revenue or sales. The calculation can also be done by dividing the
company’s market capitalisation with its total sales over a 12-month period or it can also be
done on a per share basis by dividing the stock price by sales per share for a 12-month period.

Retention ratios- The earning which is kept back by the business is known as Retained
earnings. The retention ratio refers to the percentage of net income that is retained to grow
the business, rather than paid out as dividends. It is opposite to payout ratio, which is the
percentage of earnings paid out to the shareholders in the form of dividends. The formula of
retention ratio is,
Retention ratio= Net income-Dividends/ Net income

Earnings yield- Earnings yield means the earnings per share for most of the 12-months
period divided by the current market price per share. The earnings yield is inverse or opposite
to P/E ratio which shows the percentage of each dollar invested in the stock which was
earned by the company. It is normally earned by many investment managers to determine
optimal asset allocation.

Technical analysis
Technical analysis is a form of security analysis that uses price and volume data, which is
often graphically displayed, in decision making. Technical analysis can be used for securities
in any freely traded market around the globe. A freely traded market is one in which willing
buyers trade with willing sellers without external intervention or impediment. Prices are the
result of the interaction of supply and demand in real time. Technical analysis is used on a
wide range of financial instruments, including equities, bonds, commodity futures, and
currency futures.

Technical analysis of any financial instrument does not require detailed knowledge of that
instrument. As long as the chart represents the action in a freely traded market, a technician
does not even need to know the name or type of the security to conduct the analysis.
Technical analysis can also be applied over any time frame—from short- term price
movements to long-term movements of annual closing prices. Trends that are apparent in
short-term charts may also appear over longer time frames. Because fundamental analysis is
more time consuming than technical analysis, investors with short-term time horizons, such
as traders, tend to prefer technical analysis—but not always. For example, fundamental
analysts with long time frames often perform technical analysis to time the purchase and sale
of the securities they have analyzed.

2.2.1 Technical analysis Tools

The primary tools used in technical analysis are charts and indicators. Charts are the
graphical display of price and volume data which can be displayed in many ways. Charts are
then subjected to various analyses, including the identification of trends, patterns, and cycles.
Technical indicators include a variety of measures of relative price level—for example, price
momentum, market sentiment, and funds flow.

2.2.1.1Charts

Charts are an essential component of the technical analysis. Charts provide information about
past price behaviour and provide a basis for inferring likely future price behaviour. A variety
of charts can be useful in studying the markets.
Line Charts: Line charts are familiar to all types of analysts and are a simple graphic display
of price trends over time. Usually, the chart is a plot of data points, such as share price, with a
line connecting these points. Line charts are typically drawn with closing prices as the data
points. The vertical axis (y-axis) reflects price level, and the horizontal axis (x-axis) is time.

Bar Charts: A line chart has one data point per time interval. A bar chart, in contrast, has
four bits of data in each entry—the high and low price encountered during the time interval
plus the opening and closing prices. Such charts can be constructed for any time period, but
they are customarily constructed from daily data. A vertical line connects the high and low
price of the day; a cross-hatch to the right indicates the closing price, and a cross-hatch to the
left indicates the opening price. The appeal of this chart is that the analyst immediately gets a
sense of the nature of that day’s trading. A short bar indicates little price movement during
the day; that is, the high, low, and close were near the opening price. A long bar indicates a
wide divergence between the high and the low for the day.

Candlestick Chart: Like a bar chart, a candlestick chart also provides four prices per data
point entry: the opening and closing prices and the high and low prices during the period. A
vertical line represents the range through which the security price traveled during the time
period. The line is known as the wick or shadow. The body of the candle is shaded if the
opening price was higher than the closing price, and the body is clear if the opening price was
lower than the closing price.
 White body means market has closed UP Dark Body means market has closed
DOWN

1) Scale: For any chart—line, bar, or candlestick—the vertical axis can be constructed with
either a linear scale (also known as an arithmetic scale) or a logarithmic scale, depending on
how you want to view the data. With a logarithmic scale, equal vertical distances on the chart
correspond to an equal percentage change. A logarithmic scale is appropriate when the data
move through a range of values representing several orders of magnitude (e.g., from 10 to
10,000); a linear scale is better suited for narrower ranges (e.g., prices from $35 to $50.) The
share price history of a particular company, for instance, is usually best suited to a linear
scale because the data range is usually narrow. The horizontal axis shows the passage of time.
The appropriate time interval depends on the nature of the underlying data and the specific
use of the chart.

2) Volume: Volume is an important characteristic that is included at the bottom of many charts.
Volume is used to assess the strength or conviction of buyers and sellers in determining a
security’s price. For example, on a daily price chart, below the price section would be a
column chart showing the volume traded for that day. If volume increases during a time
frame in which price is also increasing, that combination is considered positive and the two
indicators are said to “confirm” each other. The signal would be interpreted to mean that over
time, more and more investors are buying the financial instrument and they are doing so at
higher and higher prices. This pattern is considered a positive technical development.
 Conversely, if volume and price diverge—for example, if a stock’s price rises while its
volume declines—the implication is that fewer and fewer market participants are willing to
buy that stock at the new price. If this trend in volume continues, the price rally will soon end
because demand for the security at higher prices will cease and price will start to fall.

3) Time Intervals: For short-term trading, the analyst can create charts with one-minute or
shorter intervals. For long-term investing, the analyst can use weekly, monthly, or even
annual intervals. The same analytical approach applies irrespective of the time interval. Using
long intervals allows the analyst to chart longer time periods than does using short time
intervals for the simple reason that long intervals contain fewer data points, so a longer time
frame can be presented on the chart. Using short intervals allows the analyst to see more
detail. A useful step for many analysts is to begin the analysis of a security with the chart for
a long-time frame, such as a weekly or monthly chart, and then construct charts with shorter
and shorter time intervals, such as daily or hourly charts.

4) Relative Strength Analysis:Relative strength analysis is widely used to compare the

performance of a specific asset, such as a common stock, with that of some benchmark such
as, in the case of common stocks, the BSE 500, the BSE IT or the Nifty 50 Index or the
performance of another security. The intent is to show out- or underperformance of the
individual issue relative to some other index or asset. Typically, the analyst prepares a line
chart of the ratio of two prices, with the asset under analysis as the numerator and with the
benchmark or other security as the denominator. A rising line shows the asset is performing
better than the index or other stock; a declining line shows the opposite. A flat line shows
neutral performance.

2.2.1.2Trends

The concept of a trend is perhaps the most important aspect of technical analysis. Trend
analysis is based on the observation that market participants tend to act in herds and that
trends tend to stay in place for some time. A security can be considered to be in an upward
trend, a downward trend, a sideways trend or no apparent trend. Not all securities are in a
trend, and little useful forecasting information can be gleaned from technical analysis when a
security is not in a trend. Not every chart will have obvious or clear implications, so the
analyst must avoid the temptation to force a conclusion from every chart and thus reach a
wrong interpretation.

An uptrend for a security is when the price goes to higher highs and higher lows. As the
security moves up in price, each subsequent new high is higher than the prior high and each
time there is a retracement, which is a reversal in the movement of the security’s price, it
must stop at a higher low than the prior lows in the trend period. To draw an uptrend line, a
technician draws a line connecting the lows of the price chart. In an uptrend, the forces of
demand are greater than the forces of supply. So, traders are willing to pay higher and higher
prices for the same asset over time. Presumably, the strong demand indicates that investors
believe the intrinsic value of the security is increasing.

A downtrend is when a security makes lower lows and lower highs. As the security moves
down in price, each subsequent new high must be lower than the prior high and each time
there is a retracement, it must stop at a lower low than the prior lows in the trend period. To
draw a downtrend line, a technician draws a line connecting the highs of the price chart.
Major breakouts above the downtrend line (e.g., 5–10 percent) indicate that the downtrend is
over and a rise in the security’s price may occur. And as with an uptrend, the longer the
security price stays above the trendline, the more meaningful the breakout is considered to be.
In a downtrend, supply is overwhelming demand. Over time, sellers are willing to accept
lower and lower prices to exit long positions or enter new short positions. Both motives of the
sellers generally indicate deteriorating investor sentiment about the asset. However, selling
may be prompted by factors not related to the fundamental or intrinsic value of the stock. For
example, investors may be forced to sell to meet margin calls in their portfolios. From a
purely technical standpoint, the reason is irrelevant.

The downtrend is assumed to continue until contrary technical evidence appears. Combining
fundamental analysis with technical analysis in such a case, however, might reveal a security
that has attractive fundamentals but a currently negative technical position. In uptrends,
however, a security with an attractive technical position but unattractive fundamentals is rare
because most buying activity is driven by traders who expect the security price to increase in
the future. The rare exception is covering short positions after a sizable decline in the share
price.

Two concepts related to trend are support and resistance. Support is defined as a low price
range in which buying activity is sufficient to stop the decline in price. It is the opposite of
resistance, which is a price range in which selling is sufficient to stop the rise in price. The
psychology behind the concepts of support and resistance is that investors have come to a
collective consensus about the price of a security. Support and resistance levels can be sloped
lines, as in trendlines, or horizontal lines

2.2.1.3Chart Patterns

Chart patterns are formations that appear in price charts that create some type of recognizable
shape. Chart patterns can be divided into two categories: reversal patterns and continuation
patterns.

Reversal Pattern:A reversal pattern signals the end of a trend, a change in direction of the
financial instrument’s price. Evidence that the trend is about to change direction is obviously
important, so reversal patterns are noteworthy. There are different types of reversal pattern
like head & shoulder, double top and bottom, triple top and bottom.

Head and Shoulder: This is perhaps the most widely recognized pattern.The pattern consists
of three segments. Volume is an important characteristic in interpreting this pattern. Because
head and shoulders indicates a trend reversal, a clear trend must exist prior to the formation
of the pattern in order for the pattern to have predictive validity. For a head and shoulders
pattern, the prior trend must be an uptrend and inverse head and shoulder must be preceded
by downtrend. First is left shoulder which shows a strong rally with the slope of the

rally being greater than the prior uptrend, on strong volume. The rally then reverses back to
the price level where it started, forming an inverted V pattern, but on lower volume. Second
is Head in which a rally following the first shoulder takes the security to a higher high than
the left shoulder by a significant enough margin to be clearly evident on the price chart.
Volume is typically lower in this rally, however, than in the one that formed the first, upward
side of the left shoulder. This second rally also fails, with price falling back to the same level
at which the left shoulder began and ended. The third and the last is Right shoulder which is a
mirror image of the left shoulder but on lower volume. "Once the head and shoulders pattern
has formed, the expectation is that the share price will decline down through the neckline
price.

Double Tops and Bottoms:A double top is when an uptrend reverses twice at roughly the
same high price level. Typically, volume is lower on the second high than on the first high,
signalling a diminishing of demand. The longer the time is between the two tops and the
deeper the sell-off is after the first top, the more significant the pattern is considered to be.
Double bottoms are formed when the price reaches a low, rebounds, and then sells off back to
the first low level. Technicians use the double bottom to predict a change from a down- trend
to an uptrend in security prices.

Triple Tops and Bottoms: Triple tops consist of three peaks at roughly the same price level,
and triple bottoms consist of three troughs at roughly the same price level.

Continuation Patterns: A continuation pattern is used to predict the resumption of a market

trend that was in place prior to the formation of a pattern. Two main continuation patterns are
triangle and rectangle.

Triangle pattern: Triangle pattern comes in three forms symmetrical, ascending and
descending. A triangle pattern forms as the range between high and low prices narrows,
visually forming a triangle. In a triangle, a trend line connects the highs and a trend line
connects the lows. As the distance between the highs and lows narrows, the trendlines meet,
forming a triangle. In a daily price chart, a triangle pattern usually forms over a period of
several weeks. In an ascending triangle, the trend line connecting the high price is horizontal
and the trend line connecting the low prices from an uptrend. In the descending triangle, the
low prices form a horizontal trend line and the high prices form a series of lower and lower
highs. In a symmetrical triangle, the trend line formed by the highs angles down and the trend
line formed by the lows angles up, both at roughly the same angle, forming a symmetrical
pattern.

Rectangle pattern: A rectangle pattern is a continuation pattern formed by two parallel

trendlines, one formed by connecting the high prices during the pattern, and the other formed
by the lows. As is the case with other patterns, the rectangle pattern is a graphical
representation of what has been occurring in terms of collective market sentiment. The
horizontal resistance line that forms the top of the rectangle shows that investors are
repeatedly selling shares at a specific price level, bringing rallies to an end. The horizontal
support line forming

the bottom of the rectangle indicates that traders are repeatedly making large enough
purchases at the same price level to reverse declines. The support level in a bullish rectangle
is natural because the long-term trend in the market is bullish. The resistance line may simply
represent investors taking profits. Conversely, in a bearish rectangle, the support level may
represent investors buying the security. Again, the technician is not concerned with why a
pattern has formed, only with the likely next price movement once the price breaks out of the
pattern.

2.2.1.4 Technical Indicators

The technical analyst uses a variety of technical indicators to supplement the information
gleaned from charts. A technical indicator is any measure based on price, market sentiment,
or funds flow that can be used to predict changes in price. These indicators often have a
supply-and-demand underpinning; that is, they measure how potential changes in supply and
demand might affect a security’s price. Different type of indicators are as follow
Moving Average: A moving average is the average of the closing price of a security over a
specified number of periods. Moving averages smooth out short-term price fluctuations,
giving the technician a clearer image of market trend. Technicians commonly use a simple
moving average, which weights each price equally in the calculation of the average price.
Some technicians prefer to use an exponential moving average (also called an exponentially
smoothed moving average), which gives the greatest weight to recent prices while giving
exponentially less weight to older prices. The number of data points included in the moving
average depends on the intended use of the moving average. A 20-day moving average is
commonly used because a month contains roughly 20 trading days. Also, 60 days is
commonly used because it represents a quarter year (three months) of trading activity.
Investors often use moving-average crossovers as a buy or sell signal. When a short-term
moving average crosses from underneath a longer-term average, this movement is considered
bullish and is termed a golden cross. Conversely, when a short-term moving average crosses
from above a longer-term moving average, this movement is considered bearish and is called
a dead cross.
Bollinger Bands: Market veteran John Bollinger combined his knowledge of technical
analysis with his knowledge of statistics to create an indicator called Bollinger Bands.
Bollinger Bands consist of a moving average plus a higher line representing the moving
average plus a set number of standard deviations from average price (for the same number of
periods as used to calculate the moving average) and a lower line that is a moving average
minus the same number of standard deviations. Long-term investors might actually buy on a
significant breakout above the upper boundary band because a major breakout would imply a
change in trend likely to persist for some time. The long-term investor would sell on a
significant breakout below the lower band.
Momentum Oscillator: Momentum Oscillator are constructed from price data but they are
calculated in such a way that they either oscillate between a high and low typically 0 and 100
or oscillate around a number (such as 0 or 100). Because of this construction, extreme highs
or lows are easily discernible. These extremes can be viewed as graphic representations of
market sentiment when selling or buying activity is more aggressive than historically typical.
Because they are price based, momentum oscillators also can be analysed by using the same
tools technicians use to analyse price, such as the concepts of trend, support, and resistance.
Technicians also look for convergence or divergence between oscillators and price.
Convergence is when the oscillator moves in the same manner as the security being analysed,
and divergence is when the oscillator moves differently from the security. For example, when
price reaches a new high, this sign is considered bullish, but if the momentum oscillator being
used does not also reach a new high at the same time, this pattern is divergence. It is
considered to be an early warning of weakness, an indication that the uptrend may soon end.
Momentum oscillators should be used in conjunction with an understanding of the existing
market (price) trend. Oscillators alert a trader to overbought or oversold conditions. In an
overbought condition, market sentiment is unsustainably bullish. In an oversold condition,
market sentiment is unsustainably bearish. In other words, the oscillator range must be
considered separately for every security. Some securities may experience wide variations,
and others may experience only minor variations.Different types of oscillator are used and
they are Momentum or Rate of change oscillator(ROC), Relative Strength Index (RSI),
Stochastic Oscillator, and Moving Average Convergence/Divergence Oscillator (MACD).
BANKS 14-Mar 15-Mar 16-Mar 17-Mar Mar 18
Per Share Ratios
Basic EPS (Rs.) 189.85 22.76 15.95 0.31 -5.34
Book Value [Excl.
Reval
Reserve]/Share
(Rs.) 1,973.97 216.17 230.87 227.75 230.23
Book Value [Incl.
Reval
Reserve]/Share
(Rs.) 1,973.97 216.17 232.64 272.39 258.08
Operating Revenue
Per Share 2,532.41 278.57 285.79 289.02 256.56
Net Profit/Share
(Rs.) 194.08 23.46 16.42 -0.49 -4.69
Key Performance
Ratios
Net Profit Margin
(%) 7.66 8.42 5.74 -0.16 -1.82
Operating Profit

SBI Margin (%)

Return On Assets
(%)
-12.37

0.59
-15.28

0.62
-17.25

0.41
-29.76

0
-35.7

-0.12
Return On
Equity/Networth
(%) 9.61 10.53 6.82 0.13 -2.21
Net Interest
Margin (%) 2.82 2.77 2.65 2.36 2.27
Cost To Income
(%) 40.08 41.42 42.9 50.19 53.53
Valuation Ratios
Enterprise Value
(Rs.Cr) 20,91,730.99 23,52,670.89 25,02,478.14 30,08,462.44 31,63,692.11
EV Per Net Sales
(X) 11.06 11.31 11.28 13.05 13.82
Price To Book
Value (X) 0.97 1.24 0.84 1.28 1.09
Price To Sales (X) 0.76 0.96 0.68 1.01 0.97
Retention Ratios
(%) 84.21 84.33 83.48 -774.07 100
Earnings Yield (X) 0.1 0.09 0.08 0 -0.02

Per Share
Ratios
Basic EPS (Rs.) 72.2 84.99 19.32 16.75 16.84
 Book Value [Excl.
Reval
Reserve]/Share
(Rs.) 578.22 633.86 138.71 149.45 166.35
Book Value [Incl.
Reval
Reserve]/Share
(Rs.) 578.22 633.86 138.71 154.3 171.57
Operating Revenue
/ Share (Rs.) 347.39 382.48 84.66 90.68 92.96
Net Profit/Share
(Rs.) 72.17 84.94 19.27 16.72 16.82
Interest Income/
Employee (Rs.) 64,57,036.48 61,16,655.05 74,01,381.02 73,07,161.04 66,75,329.33
Net Profit/
Employee (Rs.) 13,41,411.86 13,58,302.69 16,84,887.74 13,47,597.82 12,08,087.19
Key Performance
Ratio
Net Profit Margin

ICICI (%)
Operating Profit
Margin (%)
20.77

-0.05
22.2

-1.39
22.76

-2.03
18.44

-10.61
18.09

-17.91
Return on Assets
(%) 1.55 1.64 1.72 1.34 1.26
Return on Equity /
Networth (%) 12.48 13.39 13.89 11.19 10.11
Net Interest
Margin (X) 2.58 2.77 2.94 2.94 2.81
Cost to Income
(%) 28.67 31.3 32.7 39.4 42.68
Valuation Ratios
Enterprise Value
(Rs. Cr) 5,39,497.75 6,08,705.91 6,91,147.70 7,06,700.41 7,67,318.40
EV Per Net Sales
(X) 13.46 13.78 14.08 13.4 14.17
Price To Book
Value (X) 1.81 1.96 2.27 1.58 1.67
Price To Sales (X) 3.01 3.26 3.72 2.61 2.98
Retention Ratios
(%) 72.28 72.92 74.06 70.1 100
Earnings Yield (X) 0.07 0.07 0.06 0.07 0.06
Per share Ratio
Basic EPS
300

250

200

150 Basic EPS (Rs.)

100 Basic EPS (Rs.)

50

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
-50

EPS is the indicator of profitability. As both bank's EPS is growing very well each year, it
means that these two banks will be a good option for investment purposes. As the reason why
sbi eps is has going negative is because npa of sbi has reached to 70680.24 core which was
32246.69vin the year 2017. The eps is the net income of a company divided by the number of
outstanding shares which are held by the stockholders.

Book Value [Excl.Reval Reverse]/ Share (Rs)

 3,000.00

2,500.00

2,000.00
Book Value [Excl. Reval
1,500.00 Reserve]/Share (Rs.)
Book Value [Excl. Reval
1,000.00 Reserve]/Share (Rs.)

500.00

0.00
14-Mar 15-Mar 16-Mar 17-Mar Mar 18

While the book value provide significant explonatory power. The book value is affected by
the asset quality of the banks as both banks book value is moving towards decreasing side
which means that the the If the book value of a particular company incrases it menas that
reserves are increasing keeping no of shares and equity ahare capital constant.

Book Value [Incl. Reval Reverse]/Share (Rs)

3,000.00

2,500.00

2,000.00
Book Value [Incl. Reval
1,500.00 Reserve]/Share (Rs.)
Book Value [Incl. Reval
1,000.00 Reserve]/Share (Rs.)

500.00

0.00
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
Operating Revenue Per Share

3,500.00

3,000.00

2,500.00

2,000.00 Operating Revenue /

Share (Rs.)
1,500.00 Operating Revenue Per
Share
1,000.00

500.00

0.00
14-Mar 15-Mar 16-Mar 17-Mar Mar 18

As seen in the graph the banks Operating Profit has increased comparatively every year. This
means that the company is performing well in its core business activities. The operating profit
is recorded seperatly in financial statements.

Net profit / Share

300

250

200

150 Net Profit/Share (Rs.)

100 Net Profit/Share (Rs.)

50

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
-50

The net profit per share is the profit which we earn over the current price of the share. As
seen in the graph the net profit of both the banks are increasing rapidly each year which is a
good indicator, as net profit is calculated after deducting all the taxes and interest. since the
net of both banks is increasing they can be seen as good investment option.
Key Performance Ratio

Net Profit Margin (%)

35

30

25

20
Net Profit Margin (%)
15
Net Profit Margin (%)
10

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
-5

Operating Profit Margin

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
-10

-20
Operating Profit Margin
(%)
-30
Operating Profit Margin
(%)
-40

-50

-60

The operating profit margin as seen in the graph is increasing which means that the the banks
are able to pay its non-operating expense or cost means the interest and taxes, which will
reduce the burden of the banks and can carry on its further operating expenses smoothly.
Return on Assets(%)
2.5

1.5

Return on Assets (%)

1
Return On Assets (%)

0.5

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
-0.5

As Seen in the graph the bank doesn’t have good asset management team to manage the
assets team which have results in going of returns. As seen in graph the SBI is not managing
its assets properly so that’s why the return of the bank is falling down. the quater one result
was negative of SBI bank this could also have been because of the negetive return on asset.
rhe icici bank return on asset has also gone down which show that tje bank is not earning
much from return onn assets.

Return on Equity/ Networth

30

25

20

Return on Equity /
15 Networth (%)

10 Return On
Equity/Networth (%)

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
-5
Net Interest margin(%)
6

3 Net Interest Margin (X)

Net Interest Margin (%)
2

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18

As seen in the graph the line of both the banks are almost constant which means the income
of the bank is fairly well. This also indicates that the income is more than the expenses, this
could help banks to make further new investments.

Cost to Income (%)

120

100

80

60 Cost to Income (%)

Cost To Income (%)
40

20

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18

As seen in the graph there is an increase in the cost of both the banks. The cost to income is
the relation between cost incured and income earned. The increase in the graph means there is
increase in the costs such as major expenses which leads to decrease in income. This also
show that the cost management team is not efficient.

Valuation Ratios

Enterprice Value (Rs. Cr)

4,500,000.00
4,000,000.00
3,500,000.00
3,000,000.00
2,500,000.00
Enterprise Value (Rs. Cr)
2,000,000.00
Enterprise Value (Rs.Cr)
1,500,000.00
1,000,000.00
500,000.00
0.00
14-Mar 15-Mar 16-Mar 17-Mar Mar 18

The enterprice value means the firms value. Since the enterprice value is increasing we can
say that the overall credibilty of the banks is good and these banks could could also be
considered as a good investment options.
EV Per Net Sales
30

25

20

15 EV Per Net Sales (X)

EV Per Net Sales (X)
10

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
According to the graph the banks ratio has increased which means the bank has a good cost
management team which is to control the cost of purchase of bank sales. As the cost is low
and eneterprice value is high that means the overall ratio has increased.

Price to Book Value

3.5

2.5

2
Price To Book Value (X)
1.5 Price To Book Value (X)

0.5

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18

The price to book value is the value of the company share. As seen in the above graph the
value of the share of both the banks differs from each other as the value of the share of SBI
bank is to volatile as compared to ICICI bank. As seen value of ICICI bank has also declined.
Hence it is analysed that both the share should be carefully studied and then invested by the
price to book value.

Price to Sales
5
4.5
4
3.5
3
2.5 Price To Sales (X)
2 Price To Sales (X)
1.5
1
0.5
0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
When the line in the graph goes down it means that the market capital is going down and
sales is going up which means the overall ratio will decrease and when the line in graph goes
up it means the market capital is going up and the sales is going down.

Retention Ratios(%)
400

200

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18
-200
Retention Ratios (%)
Retention Ratios (%)
-400

-600

-800

-1000

During the initial years the banks focus more on paying dividends. The retention ratio means
the banks are keeping a part of their earnings with itself. So as seen in the graph the retention
ratio has drastically gone down which means that the banks is giving more of its dividend to
increase the credibility in the market and build trust with its shareholders. as seen in the graph
the lines is moving upward which means the retention ratio has increased which means the
banks are keeping more of its earnings with them and use those earnings for expansion
purpose or they may reinvest in their own banks or in assets to enhance the performance of
the assets.
Earnings Yeild
 0.2

0.15

0.1
Earnings Yield (X)
Earnings Yield (X)
0.05

0
14-Mar 15-Mar 16-Mar 17-Mar Mar 18

-0.05

The earnigs yield is the earnings earned per share. As seen in the graph the earnings of both
the banks has drastically fallen down which results in less earnigs earned by this banks which
means the banks are spending more on maintaining shareholders funds as banks are more
focusing on their core activities.

SBI
As per the MACD the chart The red line indicates 20 days moving average which indicate
buy signal. The green line clearly shows that the price is in uptrend. Also, the green
horizontal line show a support level and when the price reaches the support level and if it
bounce back then start increasing then trend does not reverses. As seen in the chart both red
and green lines are moving in such a pattern that they do not cross over each other.

Also, RSI is neither at 30 and 70 thus it is neither oversold nor over brought thus contrarian
technique of doing against the market will not work. It can be observed that RSI is as 54
which means the current situation indicates that it is neither over buy or nor over sell situation
in this you if you have bought SBI shares it is better to hold the stocks..

Bollinger Band are type of bands which indicates the price of the stock by upper and lower
band of 21 days trading moving average. As seen in the chart the price is moving closer to the
upper band which means the stock is in overbought situation in the market.
ICICI

As per the MACD the chart The red line indicates 20 days moving average which indicate
buy signal. The green line clearly shows that the price is in uptrend. Also, the green
horizontal line show a support level and when the price reaches the support level and if it
bounce back then start increasing then trend does not reverses. As seen in the chart both red
and green lines are moving in such a pattern that they crossover each other in such a way that
there is not much gap between them and they are also moving together as the movement of
the lines are moving from decreasing to increasing.

Also, RSI is neither at 30 and 70 thus it is neither oversold nor over brought thus contrarian
technique of doing against the market will not work. It can be observed that RSI is as 58
which means the current situation indicates that it is neither over buy or nor over sell situation
in this you if you can buy ICICI or if you would have bought you can hold the shares as there
may be possibility of rise in the price of the stock in futures.

Bollinger Band are type of bands which indicates the price of the stock by upper and lower
band of 21 days trading moving average. As seen in the chart the price is moving closer to the
upper band which means the stock is in overbought situation in the market.
State Bank of India (SBI) CSR
SBI has a comprehensive CSR policy approved by the Board and the focus areas are
Supporting Education, Entrepreneur development & Health care, Assistance to Poor and
under privileged, Environmental protection, clean energy, and help in National calamities.
Pratip Chaudhuri, Chairman, State Bank of India, under State Bank’s Corporate Social
Responsibility Activity (CSR), donated a School Bus to Ramakrishna Math Saradha
Vidyalaya, Madurai. The school is run by Ramakrishna Math, Madurai. The school was
started in the year 2000, and having classes from KG to 5th standard with 627
inmates. Pratip Chaudhuri, Chairman also donated an Ambulance van to Sacred Heart
Hospital, Tuticorin.
The hospital provides high quality health care to the needy and downtrodden in Tuticorin, in
a befitting function arranged today at State Bank of India, Zonal Office, Madurai in the
presence of A.Krishna Kumar, Managing Director & Group Executive (NB), Corporate
Centre, Mumbai, Varsha Purandare Chief General Manager, Shri S.Krithivasan, Shri Sanjiv
Chadha, General Managers, Local Head Office Chennai and Shri Sundar Rajan Deputy
General Manager, Madurai.
SBI has a comprehensive CSR policy approved by the Board and the focus areas are
Supporting Education, Entrepreneur development & Health care, Assistance to Poor and
under privileged, Environmental protection, clean energy, and help in National calamities.
For the financial year 2012-13, SBI earmarked Rs.117.07 crore i.e. 1% of SBI’s previous
year profit for CSR activity. During the current financial year, the Bank has extended
financial assistance for 300 Ambulance Vans to needy and service organisations, 42,000
water purifiers and 1, 40,000 ceiling fans to more than fifty thousand schools to provide clean
water and conducive climate to school children. Under health care activities SBI has
extended assistance to a tune of Rs. 14 crores for support to hospitals in the form of Medical
equipments and others.
SBI is always in forefront to help states affected by natural calamities. During the current
fiscal SBI has lent its helping hand to the States of Assam, Sikkim, Uttarkhand, Maharashtra
etc. with donation to Chief Minister’s Relief fund to respective States to provide succour to
the people affected by flood to a tune of Rs.9.00 crore.
The Bank has constituted SBI’s Children’s Welfare scheme as a trust in 1983.The corpus of
the fund is made up of contribution by staff members with equal contribution by the Bank.
The Bank extends grants from this fund to institutions engaged in the welfare of under
privileged / downtrodden children like orphans, destitute, challenged and deprived etc.
CSR is not an isolated practice or initiative for STATE BANK OF INDIA but runs through
its entire business paradigm.
Your Bank believes that it has a solemn duty to make sustainable social change in the lives
of the less fortunate and underprivileged members of the society. Your Bank always places
the interest of the common man, especially the most marginalised, at its core. Your Bank
earmarked 1% of the previous year’s net profit as the budget for CSR spend for the year. Its
CSR activities are widespread and deep-rooted and have made true difference in the lives of
thousands from the underserved and downtrodden communities. CSR is a continuing
commitment of your Bank for developing the quality of life of the community and society as
a whole.
FOCUS AREAS
Healthcare
Education
Sanitation
Skill Development and Livelihood Creation
Environment Protection
Culture, Sports and others
CSR SPEND DURING FY2018
The CSR spend of the Bank for the FY2018 stood at ` 112.96 crore. This is the sixth
successive year, where your Bank’s CSR spend has crossed the mile stone of ` 100.00 crore.
SUPPORTING HEALTHCARE: National Health Policy, 2017 was approved by the
Government in March, 2017 with an objective to achieve highest possible level of good
health and well-being. It seeks to achieve universal access to quality health care. However,
since long healthcare sector has remained a thrust area for your Bank’s CSR activity. Your
Bank provides basic infrastructure to improve the conditions of the common man. To deliver
quality healthcare to those belonging to underprivileged and economically weaker sections of
the society. Your Bank has supported large number of hospitals. The major initiatives of your
Bank in health care sector are as under: Ambulances and Medical Vans: Your Bank has
donated ` 2.88 crore to over 23 charitable organisations for acquiring Ambulances and
Medical Vans Health Equipment and Surgeries: Your Bank has donated ` 5.33 crore to over
35 charitable organisations/hospitals for acquiring various medical/surgical equipment like
Stress Test Machine, Dialysis Machine, BIPAP Ventilators, Digital X-Ray Machines,
Artificial limbs, Automated Bio-chemistry Analysers, Surgical Microscopes and Retinal
Equipment. This has improved the capacity and potential of the hospitals to serve large
 number of deprived patients. Community Outreach Programmes: Your Bank organised
camps to focus on curative and preventive healthcare for the under privileged rural
population. The areas covered are mentioned below:
 Eye check-up
 Cancer detection
 Reproductive healthcare check-up
 Basic health check-up (Blood Pressure, HB and others)
 Diabetes check up
 Mammography for women
 Cataract operations

SUPPORTING EDUCATION
Your Bank always strives to support education of weaker social group in remote, unreachable
and underdeveloped area. The areas covered are given below: z Donated computers and
printers to various schools z Provided water filters for access to clean drinking water z
Provided toilets to the schools z Persons with Disabilities (PwDs) were given vocational
training z Donated ` 82 lakh for providing school buses/vehicles for transportation facilities
to underprivileged children
DRINKING WATER AND SANITATION
Your Bank is committed to the Government’s mission of “Swachh Bharat” and has
undertaken several initiatives across the country including building toilet blocks; providing
sanitary napkin vending machines and incinerators, dumper bins and dust bins, among others.
Also, provision of drinking water (R.O.) and toilets in schools is being made.
 ENVIRONMENT AND SUSTAINABILITY
Your Bank is committed to environment protection and contributes positively to reduce the
carbon footprint. Responsible interaction with environment to avoid depletion and
degeneration of natural resources and maintain long term quality of the environment is a
priority for your Bank. Your Bank has contributed ` 2.05 crore towards the following:
Acquiring solar power plant, solar water heater and solar street lamps
 Tree plantations
 Maintenance of parks and gardens
 Donating battery operated vehicles
SBI CHILDREN’S WELFARE FUND
Your Bank constituted SBI Children’s welfare Fund as a Trust in 1983, which extends grants
to Educational Institutions engaged in the welfare of underprivileged children like orphans,
destitute, and physically challenged. The corpus of the fund is made by the staff members and
matching contribution is provided by your Bank. During FY2018, your Bank has donated `
98 lakh to various educational institutes all across the country.

SKILL DEVELOPMENT INITIATIVES AND LIVELIHOOD CREATION

Rural Self Employment Training Institutes (RSETIs): India is one of the youngest nation in
the world with more than 54% of its population below 25 years of age. Employability of the
growing young demography is one of the important factors in the economic development of
the country. The skill development initiatives support the supply of trained manpower. Your
Bank has set up 151 Rural Self Employment Training Institutes (RSETIs) across the country
as institution to help mitigate the unemployment and underemployment problem among
youth in the country. Your Bank has contributed ` 9.03 crore for construction of 9 RSETI
buildings. The recurring expenditure for skill development programs for youth was ` 47.52
crore at 151 RSETIs of your Bank across the country

ICICI CSR
Digital villages – empowering rural india to transform lives
The Honourable Prime Minister, Shri Narendra Modi has laid out a grand vision for the
creation of a digital future for our villages. ICICI Bank’s innovation agenda for our villages is
driven by the future needs of a Digital India. Inspired by the success of India’s first Digital
Village at Akodara that stood out as a model cashless village in the wake of demonetisation,
 ICICI Bank pledged to transform 100 villages into ICICI Digital Villages across the country
within 100 days. On May 2, 2017, ICICI Bank dedicated the 100 villages to the nation in the
presence of Shri Arun Jaitley, the Honourable Finance Minister, Minister of Defence and
Minister of Corporate Affairs in the Cabinet of India. The Bank has extended the initiative to
500 more villages.
The Digital Villages initiative takes a holistic approach to the development of rural India and
encompasses the following:
Digitisation of retail and commercial payments and banking transactions
 Imparting vocational training to underprivileged villagers so that they can earn a sustainable
livelihood
 Provision of credit facilities to villagers and enablement of market linkages so that they can
enhance their livelihood opportunities
 We believe that the village empowerment programme is a key community change agent
which will transform the nation, one village at a time.
Women Empoverment- Empowering women through economic independence
We believe that empowering women to be economically independent and self-reliant is vital
for India’s future. With this view in mind, ICICI Bank launched the Self Help Group - Bank
Linkage Programme exclusively for underprivileged women in rural India. The programme
provides unsecured loans to these women-led groups and helps them in starting or expanding
their own businesses. Through this programme, the Bank aims at promoting entrepreneurship
among rural women and in helping them to earn sustainable livelihoods.
Skill development
We believe that skill training can contribute significantly towards the growth of our nation.
Driven by this belief, ICICI Foundation runs various skill development initiatives exclusively
for the underprivileged people across the country. These programmes provide trainees with
relevant vocational skills to enable them earn sustainable livelihoods.
ICICI Academy for Skills (IAS)
The Academy offers industry-relevant and job-oriented vocational training to youth from
economically weaker sections of the society. The Academy has trained over 79,000
candidates through its 24 centres free-of-cost and empowered them to build a better future for
the nation and themselves.
Education- empowering schools in rural India -It is believed that children should be taught
how to think, but not what to think. Driven by this philosophy, we at ICICI, have set out on
the journey of not only educating children, but also training teachers.
Access to quality education is fundamental to the growth of India. ICICI Foundation has
partnered with the government and various NGOs to improve the quality of the teaching staff
and the curriculum and is also working towards improving the infrastructure in schools, so
that we can make a real difference.
We have successfully empowered over 950 rural schools to provide their students and
teachers with a brighter future. The positive impact created by our initiative can be seen in
many schools across the country, from the remote areas of Kargil to the slums of Dharavi in
MumbaiClean India- Empowering people to build a cleaner tomorrow
ICICI tirelessly works on programmes that help make a difference to our society. As part of
our mission, we support initiatives that are aimed at cleaning India and making our living
spaces more hygienic. From construction of toilets in rural schools to cleanliness drives
around our branches, we have played an active role in supporting the cause of a cleaner
environment.
Green India – Preserving nature and transforming lives through sustainable practises
We believe in caring for nature that nurtures us. At ICICI Bank, we endeavour to celebrate
the infinite wonders of nature and support various initiatives to help create a sustainable
ecosystem.
The Bank has funded an array of eco-friendly projects across the country to help restore
ecological balance. We strive to uphold the principles of sustainability in every way we can.
From tree plantation drives to the solar electrification of villages, Public Health Centres and
the Bank’s branches across India; we leave no stone unturned in trying to build a sustainable
future for our planet. ICICI Bank has also been encouraging its employees to contribute to its
green initiatives for a wider reach and a much larger impact.
Health Care- empowering the underprivileged by giving them access to better
healthcare facilities
Caring for its sick and disadvantaged is the hallmark of an empathetic society. ICICI attempts
to go down to the grass-root levels to contribute to the better health of the disadvantaged
sections of society.
ICICI Foundation has partnered with the government and various NGOs to make healthcare
accessible to those who need it the most. Multiple projects have been planned and executed to
bring significant improvement in the health of the underprivileged, especially women and
children.

Contribution to organisation

Conclusion
Today the banking sector in India is fairly mature in terms of supply, product range and
reach. As far as private sector and foreign banks are concerned, the reach in rural India still
remains a challenge. A growing economy like India requires a right blend of risk capital and
long term resources for corporate to choose an appropriate mix of debt and equity,
particularly for infrastructure projects which is the need of the day. A well-functioning
domestic capital market is also necessary for the banking sector to raise capital and support
growth and also have suitable capital adequacy ratio to mitigate risk. Bank investments are
also showing an increasing trend. After researching banking sector researcher found that
different problems are increasing to banking sector because of the money market has always
down.