analysis of banking sector

7/29/2019 ANALYSIS of Banking Sector

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A PROJECT ON ANALYSIS OF

BANKING SECTOR

SUBMITTED BY: KETAN JAIN

RIZVI INSTITUTE OF MANAGEMENT STUDIES

AND RESEARCH

SUBMITTED TO: Mr. KALPESH DODIA


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CERTIFICTE OF APPROVAL

The following Summer Project Report Title Sector Analysis is hereby approved as certificatestudies in management carried out in a manner satisfactory to warrant its acceptance as a

prerequisite for the award ofPGDBM for which they have been submitted. It is understood that

by this approval the undersigned do not necessarily endorse or approve any statement made,

opinion expressed or conclusion drawn therein but approve the summer Project only for the

purpose it is submitted. Summer Project Report Examination Committee for evaluation of

Summer Project Report.

Name Signature

1. Faculty Examiner _________________ _________________

2. Summer Project __________________ _________________

Co. coordinator


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CERTIFICATE FROM SUMMER PROJECT GUIDE.

This is to certify that Ms _____________________________a student ofPGDBM has worked

under our guidance and supervision. This Summer Project Report has the requisite standard and

to the best of our knowledge no part of it has been reproduced from any other summer project,

monograph, report or book.

Project Guide Project Guide

Date: Date:


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ACKNOWLEDGEMENT

It gives me immense pleasure, having done a project on an interesting and knowledgeable topic

like Sector Analysis.

This project has not only widened my horizon as far as academics are concerned but also helped

me to enlarge my knowledge bank. Marketing Management and Human resources are not topics,

which could be handled with certain amount of casualty. It requires a deep study and hard work,

which is a key to success. There are many people associated with this project without which this

project would not have been possible.

I thank my Institute who has given me an opportunity to show my skills. I also thank all my

nearer and dearer ones without whose support this project would not been possible.

I would like to thank______________, who allowed me to do this project in Max New York

Life successfully.


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Table of contents

1 Industrial Profile of Life Insurance Sector 01

2 History of Life Insurance Sector 03

3 Company Profile of Max New York Life Insurance 11

4 Global Banking Industry 24

5 Indian Banking Rates 26

6 Analysis of Banks (ICICI, Union and Sbi) 28

7 Comparison, Conclusion & Recommendation 47


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2.0 Insurance Company

2.1 Introduction:-

Life is a roller coaster ride and is full of twists and turns. You cannot take anything for

granted in life. Insurance policies are a safeguard against the uncertainties of life. Insurance

is system by which the losses suffered by a few are spread over many, exposed to similar

risks. Insurance is a protection against financial loss arising on the happening of an

unexpected event. Insurance policy helps in not only mitigating risks but also provides a

financial cushion against adverse financial burdens suffered.

Insurance is a contract between two parties, the insurer or the insurance company, and the

insured, the person seeking the cover. Within this contract, the insurer agrees to pay the

insurer for financial losses arising out of any unforeseen events or risk in return for a regular

payment of premium. Thus, these insurance plans are also called as a Risk Cover Plans,

which means to financially compensate for losses that occur uncertainly through accident,

illness, theft, natural disaster. As you cannot fight against these man-made and natural

calamities, so at least be prepared for them and their aftermath by taking insurance policies.

Insurance is an attractive option for investment but most people are not aware of its

advantages as an investment option. Remember that first and foremost, insurance is about

risk cover and protection. By buying life insurance, you buy peace of mind. Insurance also

serves as an excellent tax saving mechanism. The Government of India has offered tax

incentives to life insurance products in order to facilitate the flow of funds into productive

assets.

2.2 Types of Insurance:-

1. Endowment Policy


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An endowment policy covers risk for a specified period, at the end of which the sum

assured is paid back to the policyholder, along with the bonus accumulated during the term

of the policy.

2. Unit Linked Insurance Plan

Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits

of risk protection and flexibility in investment.

3. Term Life Policy

Term life insurance policy covers risk only during the selected term period. If the

policyholder survives the term, the risk cover comes to an end.

4. Pension Plan or Annuities

A pension plan or an annuity is an investment that is made either in a single lump sum

payment or through installments paid over a certain number of years.

5. Group Insurance Policy

Group insurance offers life insurance protection under group policies to various groups

such as employers-employees, professionals, co-operatives.

6. Loan Cover Term Assurance Policy

Loan cover term assurance policy is an insurance policy, which covers a home loan. Such

a policy covers the individual's home loan amount in case of an eventuality.

7. Unit Linked Insurance Plan


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Unit linked insurance plan (ULIP) is life insurance solution that provides for the

benefits of risk protection and flexibility in investment.

8. Joint Life Policy

Joint life insurance policies are similar to endowment policies as they too offer maturity

benefits to the policyholders, apart from covering risks like all life insurance policies.

9. Whole Life Policy

A whole life policy runs as long as the policyholder is alive. As risk is covered for the

entire life of the policyholder, therefore, such policies are known as whole life policies.

10. Money-back Policy

Money back policy provides for periodic payments of partial survival benefits during the

term of the policy, as long as the policyholder is alive.

2.3 History & background of Insurance industry:-

The story of insurance is probably as old as the story of mankind. The same instinct that

prompts modern businessmen today to secure themselves against loss and disaster existed in

primitive men also. They too sought to avert the evil consequences of fire and flood and loss

of life and were willing to make some sort of sacrifice in order to achieve security. Though

the concept of insurance is largely a development of the recent past, particularly after the

industrial era past few centuries yet its beginnings date back almost 6000 years.

Ancient Indian history has preserved the earliest traces of insurance in the form of marine

trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing

from other countries, England in particular. The changes in life insurance industry in India is

seen in four different phases

2.4 Benefits of Insurance:-


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Life Insurance Policy is a form of security for the person who insures his life and his

family. Life insurance policies have helped trade and other economic activities to flourish in

a great manner. It has generated lots of job opportunities. It is looked upon as a lucrative

career option.

Benefits of Client:-

A life insurance policy vouchsafes security for your dependents after your demise. They

can seek out their living even at the absence of other active source of income. Moreover the

amount that you are going to get at the end of the policy period in a term life policy also

makes it a rewarding investment. The following reasons substantiate benefit of a life

insurance policy for an individual.

Early Deaths

The mortality rate is experiencing a declining trend in many parts of the world. However

it is also important to note that the age at which People die is also ever decreasing. Some

reasons for this include unhealthy living style, stress, pollution, and some natural calamities.

This necessitates people to make adequate measures to yield income for their family and

dependents. This could be a serious concern if the insured happens to be the sole bread

winner. Some individuals see this as an option to plan their retirement.

Advancements in Health Care

The mortality rate has declined rapidly even though the fact remains that the number of

people who die at an early age is on the increase. This is mainly due to the advancement in

healthcare and the awareness on medical facilities. This results in an increased spending at an

old age. This increased spending is also due to increase in the costs of living apart from

paying expensive medical bills. Unless they invest in Life insurance or other forms of

insurance like health insurance it becomes next only to impossible to meet the financial

demands especially during the old days.

Increase in the Cost of Living and Spending Power

The purchasing power of the consumers and the standard of living has experienced a

steep rise over the years. The increase in National Income and gross domestic product are


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partly responsible for this. Individuals incur many unexpected expenses due to the growing

needs. Insurance comes in handy to meet such an unexpected expense. It also makes sure that

an individual is able to meticulously plan his finances.

Insurance option is more or less an interest free loan. An individual can cancel his insurance

policy and obtain a huge amount if it is imperative in meeting an urgent expenses and he

does not have alternative sources for finance. Life insurance companies therefore do the

needful to consumers.

Tax Concessions

Income tax concessions are available to individuals and corporate houses who adopt

insurance policies. Many have been making investments in Insurance with the sole aim of

enjoying tax benefits. This naturally increases spending power. Since the investments

increases the economic activities in the country automatically increases.

Best Option for Salaried Youth

Insurance is by and large regarded as one of the savings scheme. Students who earn while

studying and those who take up full time employment after their studies see insurance as a

profitable scheme to regulate their savings. Apart from tax concessions life insurance entails

individuals to enjoy more benefits as they have special and attractive schemes for this

segment.

Benefits of Economy & Society:-

Provides Employment.

Channelizes Capital Flow.

Attracts international trading partners thereby bringing in more FDI and FII, along with

technical expertise (actuarial knowledge domain).

Supports ancillary industries by way of bonded product marketing.


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Supports a social cause, and hence sometimes looked up as social responsibility by the

Corporate.

Provides coverage and safeguard against potential loses.

Insurance of Risk gives higher flexibility to Business.

Phase I [1800-1900]

Life Insurance in its modern came to India from England in the year 1818. The advent of

life insurance business in India can be seen with the establishment of the Oriental Life

Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras

Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw

the enactment of the British Insurance Act and in the last three decades of the nineteenth

century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were

started in the Bombay Residency. This era, however, was dominated by foreign insurance

offices which did good business in India, namely Albert Life Assurance, Royal Insurance,

Liverpool and London Globe Insurance and the Indian offices were up for hard competition

from the foreign companies.

Phase II [1900-1955]

In 1914, the Government of India started publishing returns of Insurance Companies in

India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to

regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable

the Government to collect statistical information about both life and non-life business

transacted in India by Indian and foreign insurers including provident insurance societies. In

1938, with a view to protecting the interest of the Insurance public, the earlier legislation

was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions

for effective control over the activities of insurers. The Insurance Amendment Act of 1950

abolished Principal Agencies. However, there were a large number of insurance companies

and the level of competition was high. There were also allegations of unfair trade practices.

The Government of India, therefore, decided to nationalize insurance business.

An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and

Life Insurance Corporation came into existence in the same year. The LIC absorbed 154


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Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign

insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was

reopened to the private sector. The history of general insurance dates back to the Industrial

Revolution in the west and the consequent growth of sea-faring trade and commerce in the

17th century. It came to India as a legacy of British occupation. General Insurance in India

has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in

Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd was set up. This was

the first company to transact all classes of general insurance business.

Phase III [1956-2000]:

Nationalization of Insurance Sector

In 1957, a General Insurance Council, a wing of the Insurance Association of India was

formed. The General Insurance Council framed a code of conduct for ensuring fair conduct

and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum solvency

margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing ofthe General Insurance Business (Nationalization) Act, general insurance business was

nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and

grouped into four companies, namely National Insurance Company Ltd., the New India

Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India

Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a

company in 1971 and it commence business on January 1sst 1973.

In 1993, the Government set up a committee under the chairmanship of RN Malhotra,

former Governor of RBI, to propose recommendations for reforms in the insurance sector.

The objective was to complement the reforms initiated in the financial sector.

Phase IV [FROM 2000]

Insurance Regulatory & Development Authority:-


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Insurance Regulatory & Development Authority is regulatory and development authority

under Government of India in order to protect the interests of the policyholders and to

regulate, promote and ensure orderly growth of the insurance industry. It is basically a ten

members' team comprising of a Chairman, five full time members and four part-time

members, all appointed by Government of India. This organization came into being in 1999

after the bill of IRDA was passed in the Indian parliament.

Impact of IRDA in Insurance Sector:-

The creation of IRDA has brought revolutionary changes in the Insurance sector. In last

10 years of its establishment the insurance sector has seen tremendous growth. When IRDA

came into being; only players in the insurance industry were Life Insurance Corporation of

India (LIC) and General Insurance Corporation of India (GIC), however in last decade 23

new players have emerged in the field of insurance. The IRDA also successfully deals with

any discrepancy in the insurance sector.

Liberalization of Insurance sector:

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in April

2000 has fastidiously stuck to its schedule of framing regulations and registering the private

sector insurance companies. Since being set up as an independent statutory body the IRDA

has put in a framework of globally compatible regulations. In the private sector 14 life

insurance companies have been registered.

Under the IRDA Act, private companies can now operate in India's insurance industry.

However, they must obtain a license from the IRDA before being permitted to write

business. To have its license application considered, a domestic private company must be

registered in accordance with the Companies Act of 1956 and have approximately US$ 20

million of investment capital. The specific licensing requirements that Private Indian

Companies must fulfill are set forth in the Registration on Indian Insurance Companies

Regulations, published by the IRDA 2000.

The IRDA Act also lifts certain barriers to foreign direct investment in Indian insurance

industry. Global insurers are now permitted to set up and register a domestic company in

order to write business in India. However, regulations stipulate that they have a capital base


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of at least US $ 20 million, and their investment in such company is capped at 26 percent.

Thus, to participate in the market, they must form a joint venture with an Indian partner that

is able to invest the remaining funds. The equity investments limit is the same for global

reinsures seeking to write business in India, but they are required to put up a capital of

approximately US$ 45 million in order to establish a domestic company.

Since the IRDA first enacted these rules, 13 new life insurance companies have entered the

market. The IRDA Insurance Brokers Act in India 2002 permitted overseas insurance and

reinsurance brokers to enter the market, but with the same equity cap as that governing the

operations of foreign insurers and reinsurers. Thus, foreign brokers must also form a joint

venture with an Indian partner in order to establish an Indian broking house.

2.5 Competition:-In the years since the IRDA Act initiated market reforms, the insurance sector has

experienced some remarkable changes.

The entry of a large number of Indian and Foreign private companies in life insurance

business has to lead greater choice in terms of products and services. Increased consumer

awareness of the benefits and importance of insurance and reinsurance has generated many

more buyers; and new distribution channels among them brokers, banc assurance, the

Internet, and corporate agents have provided additional ways of getting products and

services to customers. Private insurance companies have to date written a small percentage

of business in this sector during the last three years, but they have ushered in a competitive

environment that has accelerated market growth. At present there are 23 private insurers

with two standalone private players and remaining private-foreign joint venture. The no of

Life insurance companies are:-

AEGON Religare Life Insurance Company Limited.

Aviva Life Insurance Co. India Pvt. Ltd.

Bajaj Allianz Life Insurance Company Limited.

Birla Sun Life Insurance Co. Ltd.

Bharti AXA Life Insurance Company Ltd.

Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd.


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DLF Pramerica Life Insurance Co. Ltd.

Future Generali Life Insurance Company Ltd.

HDFC Standard Life Insurance Co. Ltd.

IDBI Fortis Life Insurance Company Ltd.

ICICI Prudential Life Insurance Co. Ltd.

ING Vysya Life Insurance Company Ltd.

Kotak Mahindra Old Mutual Life Insurance Limited.

Life Insurance Corporation of India.

Max New York Life Insurance Co. Ltd.

Met Life India Insurance Company Ltd.

Reliance Life Insurance Company Limited.

SBI Life Insurance Co. Ltd.

Shriram Life Insurance Co, Ltd.

Star Union Dai-ichi Life Insurance Comp. Ltd.

Sahara India Life Insurance Co, Ltd.

Tata AIG Life Insurance Company Limited.

3.0 Max New York Life Insurance Co. Ltd.

3.1 Companys Introduction:-

Max New YorkLife Insurance Company is a joint venture between New York Life

International Inc., a Fortune 100 company and America's largest life insurance provider and

Max India Limited one of the leading multi-business corporations in India. Max New York

Life Insurance Co Ltd is a Rs. 250 cr. joint venture with a paid up capital of Rs. 807 cr. Max

New York Life Insurance started its commercial operations in India in 2001. It is the first

life insurance company in India to be awarded the IS0 9001:2000 certifications. The

company has around 133 offices all over the country.

3.2 Values:-

Knowledge:


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Knowledge leads to expertise; and our expertise is in helping people protect themselves.

Perfectly combining global expertise with local knowledge, we are India's life insurance

Specialist. Max New York Life believes that for knowledge to be of value it must be focused,

Current, tested and shared.

Excellence:

Excellence at Max New York Life implies the ability to perform at a consistently high

level. Focused on the value of continuous improvement in people, processes and the

organization, the company strives for the highest standards of quality in every aspect of its

business.

Honesty:Honesty is the heart of the life insurance business. It is all about trust. Transparency,

integrity And dependability from the cornerstones of the Max New York Life experience.

The Company ensures that everyone who represents the brand carries a promise: we care in

word as well as deed.

Caring:

Max New York Life is redefining the life insurance paradigm by focusing on customers

first. The service process is responsive, personalized, humane and empathetic. Every

individual who represents the company is for us our brand champion.

3.3 Company Profile:-

Max New York Life Insurance Company Ltd. is a joint venture between New York Life;

a Fortune 100 company and Max India Limited; one of India's leading multi-business

corporations. The company has positioned itself on the quality platform. In line with its

vision to be the Most Admired Life Insurance Company in India, it has developed a strong

corporate governance model based on the core values of excellence, honesty, knowledge,


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caring, integrity and teamwork. The strategy is to establish itself as a Trusted Life Insurance

Specialist through a quality approach to business.

3.4 Products:-

Max New York Life brings to you specially customized products and services that are

flexible and can be customized to suit your needs. It now has 30 life insurance products

and health insurance including 8 riders that can be customized to over 800 combinations

enabling customers to choose the policy or plan that best fits their need. Max New York Life

also offers 6 products and 7 riders in group insurance business. The company has a plan for

every need, designed as to meet your long term financial goals & aspirations. They help you

fulfilling your dreams & commitments. The list of few plans provided by Max New York

Life Insurance Company Limited is given below:

1. Individual Insurance:

Protection Plan (including Whole Life Plan, Life Protector, Life Protector Plus, Life

Partner Plus).

Children Plan (Children Endowment Plan, Stepping Stones).

Savings Plan (Life Gain Endowment Plan, Life Pay Money Back Plan, Life Gain Plus, 20

Year Endowment).

Retirement (Easy Life Retirement Plan, Endowment to age 60 Plan).

Unit Linked (Life Maker Investment Plan, Life Maker Pension Plan).

Riders.

2. Group Insurance:

Group Term Life.

Group Gratuity.

Employee Deposit Linked Insurance.

Credit Shield.

Unit-Linked Group Gratuity.


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3. Max Assure:

Max Assure Bonus Builder.

Max Assure Business Builder.

Max Assure Future Builder.

Max Assure Family Money Back.

Max Assure secure returns builder.

4. Rural insurance:

Max Suraksha.

Easy Term.

Max Mangal Endowment Plan.

Max Vriksha Money Back Plan).

5. NAV:

Life Maker Investment.

Life Maker Pension Plan.

Life Maker Premium.

Smart Steps.

3.5 Promoters:-

Founded in 1985, Max India Limited is a Public Limited company listed on the NSE and

BSE of India with over 26,000 shareholders. Today, Max India Limited is a multi-business

corporate, driven by the spirit of Enterprise, focused on Knowledge, People and Service

oriented businesses of:
http://www.maxindia.com/http://www.maxindia.com/


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Healthcare (Max Healthcare)

Life Insurance (Max New York Life Insurance)

Clinical Research (Neeman Medical International)

Till 1999, The Companys Main Interests and Partnerships were the following:

Business

Bulk Active Pharmaceuticals.

Electronic Component Distribution,

Mobile Telephony.

V-SAT Communications.

Plating Chemicals.

Information Technology.

Max also maintains Interests in:

Specialty Plastic Products for the packaging industry (Max Specialty Products).

Healthcare Staffing (Max Health Staff).

Prominent shareholders are Mr. Analjit Singh and a leading private equity firm, Warburg

Pincus which accounts for 28.7% of the total shareholding. The balance shareholding is held

by the public and Institutional Investors.

Partners

DSM Gist Brocades

Motorola, USA

Avnet Inc., USA

Hutchison Telecom Ltd. Hong Kong


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Comsat Investment Inc., USA & Lockheed Martin, USA

Atotech, Germany

Mind Crossing, USA

In 2000, the Company reinvented and restructured itself to focus on the businesses of Life

under the theme, LifeOur Focus. Max New York Life Insurance, founded as a Joint

Venture between Max India Limited and New York Life, a Fortune 100 company, is one of

the leading private life insurers in India.

Max Healthcare, a subsidiary of Max India Limited is Indias first provider of

comprehensive, standardized, seamless, and integrated world-class healthcare services.

3.6 Mission:-

Become one of the top quartile life insurance companies in India.

Be a national player.

Be the brand of first choice.

Be the employer of choice.

Become principal of choice for agents.

3.7 Vision:-

To become the most admired life Insurance company in India.

The insurance agents employed at Max New York Life Insurance Co Ltd are trained in-

house with a rigorous training program of over 152 hrs, much higher than the standard 100

hrs of mandatory training laid down by the IRDA. Around 345 Max New York Agent

Advisors qualified for Million Dollar Round table (MDRT) membership in 2006.

It is an internationally renowned congregation of world's top insurance agents.

3.8 Board of Directors:-

Mr. Analjit Singh,

Chairman, Max India Limited.


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Mr. Anuroop (Tony) Singh,

Vice Chairman, Max New York Life Insurance.

Mr. Rajesh Sud,

CEO & Managing Director, Max New York Life Insurance

Mr. Rajit Mehta,

Executive Director, & Chief Operating Officer, Max New York Life Insurance.

Mr. John Harrison,

Director, Max New York Life Insurance

Mr. Richard Mucci,


Dr. Omkar Goswami,


Mr. Rajesh Khanna,Director, Max New York Life Insurance.

3.9 Management of Company:-

Rajesh Sud,

Chief Executive Officer, Managing Director and Executive Director of Distribution

Rajesh is a founder team member of Max New York Life Insurance Co Ltd (MNYL), a jointventure formed in the year 2000 between Max India Ltd and New York Life International of

USA, to establish life insurance operations in India.


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Rajit Metha,

Chief Operating Officer

Rajit is a founder team member of the Max New York Life team and has seen the company

through its formative years and in dealing with the challenge of recruiting the best talent

available in the marketplace and building team spirit among people from diverse backgrounds.

Anil Mehta,

Senior Director - NewMarkets SBU Anil Mehta has successfully led the companys sales efforts to large corporate

houses. He earlier led the companys Product Management team through coordination across all

functions and transfer of best practices from New York Life. Prior to his appointment at Max

New York Life Insurance, Anil was regional Head of Credit, Personal Finance Services, Middle

East and South Asia at ANZ Grindlays Bank. He has been responsible for Risk Management and

Product

Sunil Kakar,

Senior Director & Chief Financial Officer


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Sunil Kakar is in charge of finance, accounts, investment management and risk management.

Prior to joining Max New York Life, Sunil has 20 years of diversified banking experience with

Bank of America in areas of Financial Control.

Ajay Seth,

Senior Director- Legal & ComplianceAjay Seth joined the company in April 2003 and in a short period of time he has helped evolve

the companys legal and compliance strategy, striking a balance between business objectives and

statutory and regulatory requirements.

Debashis Sarkar,

Senior Director & Chief Marketing Officer

Debashis Sarkar is responsible in strengthening and steering the Max New York Lifes

marketing programme with a vision towards building Indias most admired life insurance

company. He was also instrumental in establishing additional channels of distribution across the

country.

John Poole,


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Appointed Actuary

John Poole is the Chief Actuary at Max New York life and is also the Appointed Actuary for

the Company in terms of Indian insurance Regulations.

John joined MNYL in early 2005 following an 18th month sabbatical at his home town in

Cairns, Far North Queensland, during which time he was studying at James Cook University

and working on a contract basis for Sydney based Citicorp Life the reinsurer for all

Citibank generated business in Asia.

3.10 Organizational Structure:-

Assistant Sales Mana er &Sales

Associate

Partn

Partner In

Multi Partner & Multiple

Regional

Associate Vice

Vice

M.


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Max New York Life Insurance FACT SHEET As of September 30th, 2008

Founded 2000

Started Operations April 2001

Headquarters New Delhi, India

World Wide Web Address http://www.maxnewyorklife.com

Chairman Analjit Singh

Managing Director & CEO Rajesh Sud

Paid-Up Capital Rs. 1,432 crore

Employees 14,568

Number of Products (Individual) 35Number of Riders/Options (Individual) 8

Product Combinations Possible

(Individual)

Over 800

Number of Products (Group) 6

Number of Riders/Options (Group) 4

Number of Offices 443

Number of Offices Dedicated To Rural

Business

39 (9 hub offices 30 spoke offices)

Number of Cities 277MDRTs 343 (for calendar year 2007)

Advisor &
http://www.maxnewyorklife.com/http://www.maxnewyorklife.com/


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History of Banking in India

Without a sound and effective banking system in India it cannot have a healthy economy. The

banking system of India should not only be hassle free but it should be able to meet new

challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its

credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or

cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of

country.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the

journey of Indian Banking System can be segregated into three distinct phases. They are as

mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

New phase of Indian Banking System with the advent of Indian Financial & Banking

Sector Reforms after 1991.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and

BengaThe East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and

Bank of Madras (1843) as independent units and called it Presidency Banks.l BaIn 1865

Allahabad Bank was established and first time exclusively by Indiansnk.


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Phase II

Government took major steps in this Indian Banking Sector Reform after independence. In 1955

The following are the steps taken by the Government:

1949 : Enactment of Banking Regulation Act.

1955 : Nationalisation of State Bank of India.

1959 : Nationalisation of SBI subsidiaries.

1961 : Insurance cover extended to deposits.

1969 : Nationalisation of 14 major banks.

1971 : Creation of credit guarantee corporation.

1975 : Creation of regional rural banks.

1980 : Nationalisation of seven banks with deposits over 200 crore.

After the nationalisation of banks, the branches of the public sector bank India rose to

approximately 800%

Phase III


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In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which

worked for the liberalisation of banking practices.

The gross and net non-performing assets of 13 private banks have increased by a 36.5 percent

and 36.1 percent respectively during the financial year 2008-09.

PSBs with a major share of corporate borrowings have been able to work around the norms. SBI,

major public sector lender, restructured nearly 50,000 small and medium enterprise loans. Dena

Bank and Bank of India restructured loans worth Rs 5,350 crore and Rs 4,800 crore respectively.

Amongst the private banks, Yes Bank has shown the highest growth in NNPA, followed by

South Ind Bank. The NNPA(National Newspaper Publishers Association) of the major private

lender, ICICI Bank increased to Rs 4,554 crore during FY2008-09.


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Rates of bank

CRR : 5.00%

SLR : 24.0%

Bank Rate : 6.0%

Repo Rate : 4.75%

Repo Rate : 4.75%

Reverse Repo Rate : 3.25%

INR / 1 USD : 48.1300

INR / 1 Euro : 67.0300

INR / 1 Euro : 67.0300

INR / 100 Jap. YEN : 49.6900

INR / 100 Jap. YEN : 49.6900

INR / 1 Pound Sterling : 78.6637

INR / 1 Pound Sterling

PLR : 12.75%-13.25%

Savings Bank Rate : 3.5%


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Savings Bank Rate : 3.5%

Deposit Rate : 7.50%-9.60%

ICICIBank

ICICIBankLtd., Indias largest private bank

ICICI said its net profit after tax for the January to March quarter was 7.44 billion rupees ($147

million), down from 11.5 billion rupees in the same quarter last year. Total income slid to 92.0

billion rupees ($1.8 billion) from 103.9 billion rupees.

Despite the headwinds, ICICI has continued to invest in its branch network. ICICI has 1,438

branches across India, up from 755 branches two years ago, and says it is in the process of

opening 580 more.12% year-on-year increase in operating profit for the year ended March

31,2009.14% year-on-year reduction in costs due to cost rationalization measures Increase of Rs.

5,286 crore in CASA deposits in quarter ended March 31, 2009


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About share holding pattern.

As we can see in the investment patternof Promoter and Promoter Group that 1367 of sub unites

is being invested and from all insurance sector had made a investment of5.12 % (70) which is a

good sign for an investor to invest it an earn profit. In all FII has a major stand of677 (49%) and

than by mutual funds of369 (26%).


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Graph of ICICI bank

Study

This table shows an investment and growth of company. Rate of bank before two year was down

as compare to present year but as we can see the graph that Bank has made its investment in

smart manner so it had touch the high rate but due to some reasons (rumors) it had came down


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and now these script is moving good if a person wants to invest in these script for long term than

a investor will earn a handsome amount of profit.

Balance Sheet

About Balance Sheet


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Share capital of bank had being increased of almost 46% from past five year and pulse point ofthis bank is that it provide best service to its all costumers so bank had gain revenue of almost320% as compared to year 2005 which is very good for any company as it attract more and morecostumer as well as investors towards the bank. Along with revenue deposits, borrowing, andother liabilities & provision had also shown a good face to investor and costumes because of all

this bank had became a no.1 bank and costumer also started trusting the bank.

Profit and Loss of company


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About P/L


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Total income of bank had increased by more than 200 % but it has taken a stop in 2008 due to

some of the major reason (rumors) total income of bank had came down by 3 % as compared to

previous year along with these expenditure, intrest expand and operating expenses had also saw a

small fall but all over icici bank had moved good. While PBT of bank had increased this shows a

posetive mark in market.

On other hand bank had shown a good EPS(Earning Per Share) it has almost growth of 20% but

2008-09 was a turning point of its profit it has faced a of loss of11% but all over it has saw a

good profit. So, to buy this share for long-term is good.

If a person, investor or any layman wants to know his/her profit than he can find it easily by

calculating EPS of his share.

Unionbank


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Union Bank of India was inaugurated by Mahatma Gandhi eight decades ago. Union Bank of

India is having more than 600 branches and extension counters all over the country. Nearly 351

ATMs are installed. Union Bank of India is a Public Sector Unit with 60.85% Share Capital held

by the Government of India.

Today there are more than 26,000 employees in Union Bank of India

Key Performance figures of Union Bank of India for March 2005

Union Bank of India proposes a total dividend of35% for2004-05.

Total business crosses the landmark figure of Rs.1 lakh crores.

Bank posted a net profit

Of Rs.719 crores for the year ended March 2005.

Operating profit

For the year ended March 2005 was Rs.1, 573 crores showing a growth of 6.07%

Capital Adequacy stands at 12.09% as of March 2005.

Earnings per share at Rs.15.64.

Deposits at Rs. 61,822 crores.

Advances Rs.41, 103 crores.

Net Interest Margin is 3.31%.

Cost of Deposits has come down from 5.64% in March'04 to 4.97% in March 05.

Yield on Advances which was 9.03% in the year 2004 fell to 8.33% in the year 2005

Yield on Investment declined from 9.00% in March 2004 to 8.20% in the year under

report.

The Ratio of Net NPA to Net Advances has improved from 2.87% in 2004 to 2.64% in

2005


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Union Bank of India IPO

Union Bank of India came out with its Initial Public Offer (IPO) in August 20, 2002 and 39.15 %

of Share Capital is presently held by Institutions, Individuals and Others.


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About share holding pattern

We can see the investment pattern of union bank. Central, State Government and Foreign

investor had invested in same ratio of55.43 which is good for a Bank so its also good to invest in

these bank as a long term as well as for short term also. But ,I would like to invest for long

term as we can see that Central, State Government and Foreign investor had invested in these

bank from long term as we know that Foreign investor play a VITAL role to move script so we

should invest it as a long term investor. Total investment in the bank is of Rs.226,768(100%),

from which Rs. 6(3.3%) is being covered by insurance company like MNYL.

Graph


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Study

This graph shows a progress in the script so to invest as a long term investor is good opportunity

as from past two years its facing a Bull market. This script has shown almost a change of 75m

so its good to enter in market to buy a script .

Black line shows an AVERAGE of a script.


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Balance Sheet


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About Balance Sheet

Share capital of union bank was 4601.18 (100%) in financial year 2005 which is being increased

to 5051.18 a growth of almost 12% which had being remain constant till year 2008-09 .Though

share capital was EQUAL bank had saw a bull market an enjoyed Revenue growth of almost

15% Y.O.Y .

Bank also has a good borrowing, but had faced a loss of20% from financial year 2008-07. In

amount of liabilities it had taken a huge jump of 220% which is good for the bank. Other, total

assets had also given a good response in all Total assets had sleeps up to 220%.

I would like to suggest to all investor to invest it as a short term (INTRA DAY.)

Profit and Loss OF UNION BANK


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About P/L of UNION BANK

Script of this bank is interesting as interest of this bank is growing by 15% each year so it

is expected to increase further in coming year. But other income of this bank has taken

different face (loss), which shows a loss of22%. As bank started working smoothly bank

was again able to take off its flight and had became a stable company and had generated


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income of more than 40% which was unbelievable. And from that bank was so

successful that it has faced 100% growth as compared to financial year 2005 04. As

well as total income had also saw a growth of100%.

As income had increased side by side expenses (operating expenses) had also increased.

PBT (Profit before Tax) has saw a hick of more than 380% as compared to financial year

2004 05 .Taxes were negative in financial year 2004 05.As bank had moved good in

that year so it came in profit and had able to pay tax .In financial year 2004 05 tax

amount was -2149.40, but in financial year 2008 09 bank had paid tax of12600 which

is abig amount of tax to pay.

Total Profit & Loss had also increased 150% .while EPS had become 2.5 times of

financial year 2004 05.


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State Bank of India

State Bank of India net profit up 45.62 percent

May 9th, 2009 MUMBAI - The country's largest lender State Bank of India (SBI) Saturday

reported a 45.62 percent rise in its net profit for the quarter ended March 31. State Bank of India

(SBI), the countrys largest lender, has posted a net profit of Rs 9, 121 crore for 2008-09 as

against Rs.6,729 crore the year before, a rise of35.5 percent.

Net profit for the fourth quarter (January-March) of 2008-09 increased 45.62 percent to

Rs.2,742 crore from Rs.1,883 crore in the corresponding quarter of 2007-08, SBI chairman O.P.

Bhatt told reporters here.

The net non-performing asset (NPA) ratio for 2008-09 stood at 1.76 percent, compared to 1.78

percent in 2007-08. The total amount restructured during the year was Rs.8,310 crore .SBIs

total income for the fiscal rose 33 percent to Rs.76,479.2 crore from the

previous years Rs.57,645.2 crore. Consolidated net profit was at

Rs.10,955.2 crore, a 22 percent increase from Rs.8,960.6 crore in 2007-08.

The groups consolidated net income crossed the trillion rupee mark to

Rs.113,093 crore (Rs.1.1 trillion) in 2008-09, 25 percent up from the

previous fiscals Rs.90,218.8 crore. The bank is already present in 33


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countries. SBI has plans to increase its Singapore operations from the

present five branches to 12 this year and to 20 next fiscal.


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About share holding pattern

We can see the investment pattern of bank. Central, State Government and Foreign investor had

invested in same ratio of62.07 which is good for a Bank so its also good to invest in this bank

for long term as we can see that Central, State Government and Foreign investor had invested


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in these bank from long term as we know that Foreign investor play a VITAL role to move

script so we should invest it as a long term investor. Among all three banks insurance company

had invested the major amount among all. As insurance company had invested an good amount

so if a normal investor wants to invest in it can earn a good profit in the investment of bank there

is a investor like TRUST which is a good sign for bank

Graph of SBI


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Study

The banks price is volatile throughout its journey. It has shown a change of 10m from 215 225

only. During this period it has touch 290 as the highest and 150 as the lowest. So, this script has

a good movement. If an investor wants to invest in this script than he should invest for short term

may be as intraday investor

Balance Sheet


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About Balance Sheet

Share capital had increased to 6348.80 from 5262.99. i.e., 20% of financial year 2004 05 .were

in journey of five year in financial year 2005 06 in financial year 2006 07 capital was sameof 5262.99. total revenue had also increased in the journey of almost 111% as base year of 2004

05,along with Total RevenueDeposits, Borrowings, Other Liabilities & Provisions had

increased .About funds Cash and balance ,Balances with banks and money at call and short

notice , Investments , Advances , Gross Block , Other Assets , Total Assets , Contingent Liability

Had also taken an good walk .But,Net Block was a fall for bank


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Profit and Loss OF SBI

AboutProfit and Loss


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Bank had earned 100% more interest in terse five finance year. Other Income, Total Income,

Interest Expended, Operating Expenses, Operating Profit, Provisions and Contingencies has also

shown a positive response. While PBT had moved good in five years .But, it has not given a

good response as compare to past financial year 2007 2008, it has fall by 9.20%

Again if will see on Total Expenditure, Profit & Loss, Reported Net Profit, Equity Dividend %,

Earnings Per Share, Book Value per Share all of them had given a good profit.

Ratios

All red marks indicates downturn and green shows up turn.


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Conclusion:-

Above compression made of all three banks I came to Conclusion that ICICI Bank is the most

preferred bank by many costumers as it provides the best service among all the banks and its the

most TRUSTED BRAND amongst private bank and all private insurance, due to lot of efforts

made by bank it had lead bank to No.1

There was an major fall in the share price of ICICI bank in financial year 2008 2009 because

some of the rumors in the market ,as bank has its wide arms of network it has large numbers of

branches ,1,438branches across India, up from 755 branches two years ago, and says it is in the

process of opening 580 more and also has a numbers of ATMS through with the help of his

arms and trusted costumers bank was again able to stand on its position by doing these bank had

proved its value to its costumer in market.

Today the world is suffering through crisis but as the demand improves than we can see its

benefit on the stock price, bank had proved him in the crisis market all because of its trust whicw

his costumers has on bank

Any countries Economy can be said developed or developing by its infrastructure and Banking,

bank are the hidden face of any country. India is a developing country so if economy wants to

regains than country needs money which will be lead by banks, banks are backbone of country

and ICICI bank is backbone of all banks.

Banking is the booming sector in country like India which is on the egad to fly needs lot of

support to country which will open million of doors of jobs and numbers of opportunity for many

people which will all lead to the growth of country.

Recommendation:-


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Its great opportunity for all investor and for all intraday traders as insurance company, FII, and

many traders has invested for long term. So, its easy to get profit and come with full handed.

As EPS of bank is 34 which were 27 in finance year 2004 05 .Bank has good returns in all

banks had moved smoothly in given graph ICICI had shown a fast take off and gives a good

return.

If will see at present scenario rate of ICICI bank is 628.65 with a fall of 13 %( 8.25) but if will

have an watch on SBI than rate of bank is 1543.54 with an fall of 40 % (60.40) and all others

bank had an fall of more than 10 %. So would like to suggest that share of ICICI bank is green

for long term expected with an return of almost 30%.

analysis of banking sector

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