RESEARCH REPORT ON

CASH MANAGEMENT OF ICICI BANK

SUBMITTED FOR PARTIAL FULFILLMENT OF AWARD OF

Post Graduate Diploma in Management

BY

MS. RINI NIGAM

ROLL NO:

MBF201014

UNDER THE SUPERVISION OF

PROF. J. S. SHUKLA

APEEJAY INSTITUTE OF TECHNOLOGY,

SCHOOL OF MANAGEMENT

February, 2012

DECLARATION

The work in this report is based on the original work carried out by me at “Apeejay Institute of Technology, School of Management, Greater Noida”. No part of this report has been submitted elsewhere for any other degree or qualification and it is all my own work unless referenced to the contrary in the text.

Rini Nigam

MBF201014

CERTIFICATE

This to certify that Ms. Rini Nigam, Roll No.: MBF201014 a student of PGDM (B&F) 2010-2012 batch of Apeejay Institute of Technology, School Of Management, Greater Noida has done the project work on Cash Management of ICICI Bank under my supervision and guidance. I understand this project report is being submitted to Apeejay Institute of Technology, Greater Noida for award of degree of Post Graduate Diploma in Management. To the best of my knowledge, this report has not been submitted to any other University for award of any other degree.

During this period, I have found the performance of her work satisfactory.

Prof. J. S. Shukla Date:

Prof. D. N. Bajpai Date:

Director,

Apeejay Institute of Technology,

Greater Noida

ACKNOWLEDGEMENT

I, hereby take the opportunity to express my deep and profound

gratitude to Prof. J. S. Shukla, my research project guide for

giving me an opportunity to do a project on CASH

MANAGEMENT OF ICICI BANK. I thank him for his

valuable guidance and support which proved indispensable in

the completion of this report.

Last but not the least I would also like to thank my family and friends for their support during the completion of the project.

All may not have been mentioned but none is forgotten.

Name: Rini Nigam

Course: PGDM (B&F)

Roll No. MBF201014

TABLE OF CONTENTS

CHAPTER NO. TITLE PAGE NO.

DECLARATION i

CERTIFICATE ii

ACKNOWLEDGEMENT iii

1) CORPORATE PROFILE

i. OVERVIEW

ii. HISTORY

iii. GRAPHICAL PRESENTATION

iv. FINANCIAL POSITION

v. COMPETITORS

2) CASH MANAGEMENT SERVICE

3) RESEARCH METHODOLOGY

4) RESULT AND ANALYSIS

5) CASE STUDY

i. CASE STUDY

ii. ANALYSIS OF THE CASE STUDY

6) LIMITATIONS , CONCLUSION &

RECOMMENDATION

i. LIMITATIONS

ii. CONCLUSIONS

iii. RECOMMENDATIONS

7) REFERENCES

8) APPENDIX

i. QUESTIONNAIRE

ABSTRACT

In a business done financially affects cash eventually. Cash

is to a business is what blood is to a living body. A business cannot

operate without its life-blood cash, and without cash management, there

may remain no cash to operate. Cash movement in a business is two-way

traffic. It keeps on moving in and out of business. The inflow and outflow

of cash never coincides. Important aspect which is unique to cash

management is time dimension associated with the movement of cash.

Due to non-synchronicity of cash inflow and outflow, the inflow may be

more than the outflow or the outflow is more than the inflow at a

particular point of time. Left to shift cash flow is apart to follow

monotonic pattern, and showers of cash may be heavy, scanty or just

normal. Hence there is a dire need to control its movement through

skillful cash management. The primary aim of cash management is to

ensure that there should be enough cash availability when the needs arise,

not too much, but never too little.

OBJECTIVES:

It helps us to know more about the topic that is being

undertaken and helps us to explore future prospects of the organization.

Basically it tells what all have been studied while making the project.

➢ To learn about various aspects of ICICI BANK cash management.

➢ To gain insights about functioning of ICICI cash management.

➢ To explore the future prospects of ICICI cash management.

CHAPTER -1

CORPORATE PROFILE

OVERVIEW

ICICI Bank is India's second-largest bank with total assets of Rs.

3,793.01 billion (US$ 75 billion) at March 31, 2011 and profit after tax

Rs. 37.58 billion for the year ended March 31, 2011. The Bank has a

network of 1,443 branches and about 4,721 ATMs in India and presence

in 18 countries. ICICI Bank offers a wide range of banking products and

financial services to corporate and retail customers through a variety of

delivery channels and through its specialized subsidiaries and affiliates in

the areas of investment banking, life and non-life insurance, venture

capital and asset management.

The ICICI Bank currently has subsidiaries in the United

Kingdom, Russia and Canada, branches in United States, Singapore,

Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance

Centre and representative offices in United Arab Emirates, China, South

Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK

subsidiary has established branches in Belgium and Germany.

ICICI 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).

The Bank is expanding in overseas markets and has the largest

international balance sheet among Indian banks. ICICI Bank now has

wholly-owned subsidiaries, branches and representatives offices in 18

countries, including an offshore unit in Mumbai. This includes wholly

owned subsidiaries in Canada, Russia and the UK (the subsidiary through

which the hisave savings brand is operated), offshore banking units in

Bahrain and Singapore, an advisory branch in Dubai, branches in

Belgium, Hong Kong and Sri Lanka, and representative offices in

Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the

United Arab Emirates and USA. Overseas, the Bank is targeting the NRI

(Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on

a 1.29% increase in total income to Rs. 9,712.31 crore in Q2 September

2011 over Q2 September 2010. The bank's current and savings account

(CASA) ratio increased to 28% in 2011 from 25% in 2010.

HISTORY

1955 The Industrial Credit and Investment Corporation of India

Limited (ICICI) was incorporated at the initiative of World Bank, the

Government of India and representatives of Indian industry, with the

objective of creating a development financial institution for providing

medium-term and long-term project financing to Indian businesses.

1994 ICICI established Banking Corporation as a banking

subsidiary. formerly Industrial Credit and Investment Corporation of

India. Later, ICICI Banking Corporation was renamed as 'ICICI Bank

Limited'. ICICI founded a separate legal entity, ICICI Bank, to

undertake normal banking operations - taking deposits, credit cards,

car loans etc.

2001 ICICI acquired Bank of Madura (est. 1943). Bank of Madura

was a Chettiar bank, and had acquired Chettinad Mercantile Bank (est.

1933) and Illanji Bank (established 1904) in the 1960s.

2002 The Boards of Directors of ICICI and ICICI Bank approved

the reverse merger of ICICI, ICICI Personal Financial Services

Limited and ICICI Capital Services Limited, into ICICI Bank. After

receiving all necessary regulatory approvals, ICICI integrated the

group's financing and banking operations, both wholesale and retail,

into a single entity.

Also in 2002, ICICI Bank bought

the Shimla and Darjeeling branches that Standard Chartered Bank had

inherited when it acquired Grindlays Bank.

ICICI started its international expansion by opening representative

offices in New York and London.

2003 ICICI opened subsidiaries in Canada and the United Kingdom

(UK), and in the UK it established an alliance with Lloyds TSB.

2003 ICICI opened subsidiaries in Canada and the United Kingdom

(UK), and in the UK it established an alliance with Lloyds TSB.

It also opened an Offshore Banking Unit (OBU) in Singapore and

representative offices in Dubai and Shanghai.

2004 ICICI opens a rep office in Bangladesh to tap the extensive trade

between that country, India and South Africa.

2005 ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia

bank with about US$4mn in assets, head office in Balabanovo in

the Kaluga region, and with a branch in Moscow. ICICI renamed the

bank ICICI Bank Eurasia.

Also, ICICI established a branch in Dubai International Financial

Centre and in Hong Kong.

2006 ICICI Bank UK opened a branch in Antwerp, in Belgium. ICICI

opened representative offices in Bangkok, Jakarta, and Kuala Lumpur.

2007 ICICI amalgamated Sangli Bank, which was headquartered

in Sangli, in Maharashtra State, and which had 158 branches in

Maharashtra and another 31 in Karnataka State. Sangli Bank had been

founded in 1916 and was particularly strong in rural areas.

ICICI also received permission from the government of Qatar to

open a branch in Doha.

ICICI Bank Eurasia opened a second branch, this time in St.

Petersburg.

2008 The US Federal Reserve permitted ICICI to convert its representative office in New York into a branch.

GRAPHICAL REPRESENTATION OF ICICI GROUP AND SOME GROWTH REPORT OF ICICI BANK

ICICI GROUP

FINANCIAL POSITION

Mar ' 08 Mar ' 09 Mar ' 10 Mar ' 11

Operating income  39,467.92 28,457.13 17,517.83 11,838.10

Material consumed  - - - -

Manufacturing expenses 

- - - -

Personnel expenses 2,078.90 1,616.75 1,082.29 737.41

Selling expenses 1,750.60 1,741.63 840.98 601.71

Administrative expenses 6,447.32 4,946.69 2,727.18 1,248.31

Expenses capitalized - - - -

Cost of sales 10,276.82 8,305.07 4,650.45 2,587.43

Operating profit 5,706.85 3,793.56 3,269.94 2,679.78

Other recurring income 65.58 309.17 466.02 448.46

Adjusted PBDIT 5,772.43 4,102.73 3,735.96 3,128.25

Financial expenses 23,484.24 16,358.50 9,597.45 6,570.89

Depreciation  578.35 544.78 623.79 590.36

Other write offs - - - -

Adjusted PBT 5,194.08 3,557.95 3,112.17 2,537.88

Tax charges  1,611.73 984.25 556.53 522.00

Adjusted PAT   4,092.12   2,995.00   2,532.95   2,007.28

Non recurring items 65.61 115.22 7.12 -2.08

Other non cash - - - -

adjustments

Reported net profit 4,157.73 3,110.22 2,540.07 2,005.20

Earnings before appropriation

5,156.00 3,403.66 2,728.30 2,058.29

Equity dividend 1,227.70 901.17 759.33 632.96

Preference dividend - - - -

Dividend tax 149.67 153.10 106.50 90.10

Retained earnings 3,778.63 2,349.39 1,862.46 1,335.22

COMPETITORS

The financial sector in India has become stronger in terms

of capital and the number of customers. It has become globally

competitive and diverse aiming, at higher productivity and efficiency.

Exposure to worldwide competition and deregulation in

Indian financial sector has led to the emergence of better quality

products and services. Reforms have changed the face of Indian

banking and finance. The banking sector has improved manifolds in

terms of capital adequacy, asset classification, profitability, income

recognition, provisioning, exposure limits, investment fluctuation

reserve, risk management, etc.

Sum of the competitors of ICICI bank from last few years are

State Bank of India, Citibank, Canara Bank and HDFC Bank. The

details of the competitors are as follows:

State Bank of India was established in the year 1806. It has

network of more than 14,000 domestic and 70 foreign offices

and branches. The new infrastructure has enabled the bank to

further grow its ATM network with plans to add another 3,000

by the end of 2007 raising the total number to 8,600 but it has

7236 numbers of ATMs. The new infrastructure serves as the

bank's backbone, carrying all applications, such as the IP

telephone network, ATM network, Internet banking and internal

e-mail.

The Citibank was incorporated in the year 1812, when a group

of New York merchants came together to found it. It is an

International bank with its operations spreading across many

countries. It has more than 100 branches all over the countries

and territories around the world, where half of its 1,400 offices

and ATMs are over 5,500re in the United States. It has $3.5

billion in assets and approximately 120,000 new customers in

the state. It provides various strategic financial advisory services

including acquisitions, mergers, financial restructurings, loans,

foreign exchange, cash management, etc.

The products and services offered by the bank are Loans,

Citibusiness, Banking, Insurance services, Credit cards,

Investment, Online services, NRI services, Wealth management

etc.

HDFC Bank Limited was incorporated in August 1994. The

bank has a Pan India network of 758 branches in 325 cities and

over 1716 ATMs. Net Profit for the year ended March 31, 2006

was Rs. 1,141 crores. It has technical expertise, maintains

product quality and has set global standards for itself. The bank

has corporate governance and aims to attain fairness for the

stakeholders. Some of the products & services offered by the

bank are Accounts & Deposits - saving, current & fixed deposits,

Private Banking, Loans, Cards - Credit Cards, Debit Cards,

Prepaid Cards, Investment & Insurance, Forex Services,

Payment Services, Internet Banking etc.

Canara Bank was established in 1906 . The bank, along with 13

other major commercial banks of India, was nationalized on 19th

July, 1969, by the Government of India. It has a network of 2542

branches, spread over 25 States/4 Union Territories of India. Its

head office is located in Bangalore, India. In terms of business it

is one of the largest nationalized commercial banks in India,

with a total business of about Rs. 2 trillion.

CUSTOMERS

This is a common believe among the customers that, credit

cards are no longer tools of personal finance. They provide an

alternative means of raising working capital for companies, especially

in the small and medium sector. Typically, this business segment

operates by availing themselves of overdraft facility against current

accounts to meet the credit requirements. However, ICICI's credit card

offers them credit for short periods, without waiting for the bank to

approve the overdraft. Due to which the customers have some of the

follows reactions:

Most of the customers say that when they took a home

loan from ICICI Bank, got a credit card free shortly thereafter, without

asking for it or having to fill any form. These customers have the

impression that the products of this bank must be having several hidden

charges which are reveled later on.

Similarly many customers say they have been paying

annual fee on different companies like Citibank and Standard

Chartered bank credit cards for eight years. But they also have been

waiving their fee for the last two years. They have got an SBI credit

card free, even without asking for it. But this facility is not possible in

case of ICICI bank credit card.

The customers believe that, the credit card which is

recently launched by ICICI Bank i.e. Future card is more beneficial

then other credit cards. This card provides lots of benefits and facilities

to the customer, who can use the card in all the retail stores of future

group. It is a life time free card, at the time of your survey we found

that people where more interested to know about this card.

Due to recent controversy with ICICI bank the customers have

lost faith upon this bank. When we approach them or create an awareness

of future card of ICICI Bank, they try to give some reasons like they

don’t have time or they are busy.

INTRODUCTION:

Cash management is a marketing term for certain services

offered primarily to larger business customers. It may be used to

describe all bank accounts (such as checking accounts) provided to

businesses of a certain size, but it is more often used to describe specific

services such as cash concentration, zero balance accounting,

and automated clearing house facilities. Sometimes, private

banking customers are given cash management services.

Cash Management Services offered.

The following is a list of services generally offered by banks and utilized

by larger businesses and corporations:

Account Reconcilement Services: Balancing a checkbook can be

a difficult process for a very large business, since it issues so many

checks it can take a lot of human monitoring to understand which

checks have not cleared and therefore what the company's true balance

is. To address this, banks have developed a system which allows

companies to upload a list of all the checks that they issue on a daily

basis, so that at the end of the month the bank statement will show not

only which checks have cleared, but also which have not. More

recently, banks have used this system to prevent checks from being

fraudulently cashed if they are not on the list, a process known

as positive pay.

Armored Car Services: Large retailers who collect a great deal of

cash may have the bank pick this cash up via an armored car , instead of

asking its employees to deposit the cash.

Positive Pay: Positive pay is a service whereby the company

electronically shares its check register of all written checks with the

bank. The bank therefore will only pay checks listed in that register,

with exactly the same specifications as listed in the register (amount,

payee, serial number, etc.). This system dramatically reduces check

fraud.

Sweep accounts: are typically offered by the cash management

division of a bank. Under this system, excess funds from a company's

bank accounts are automatically moved into a money market mutual

fund overnight, and then moved back the next morning. This allows

them to earn interest overnight. This is the primary use of money

market mutual funds.

Zero Balance Accounting: Companies with large numbers of

stores or locations can very often be confused if all those stores are

depositing into a single bank account. Traditionally, it would be

impossible to know which deposits were from which stores without

seeking to view images of those deposits. To help correct this problem,

banks developed a system where each store is given their own bank

account, but all the money deposited into the individual store accounts

are automatically moved or swept into the company's main bank

account. This allows the company to look at individual statements for

each store. U.S. banks are almost all converting their systems so that

companies can tell which store made a particular deposit, even if these

deposits are all deposited into a single account. Therefore, zero balance

accounting is being used less frequently.

Wire Transfer: A wire transfer is an electronic transfer of funds.

Wire transfers can be done by a simple bank account transfer, or

by a transfer of cash at a cash office. Bank wire transfers are often

the most expedient method for transferring funds between bank

accounts. A bank wire transfer is a message to the receiving bank

requesting them to effect payment in accordance with the

instructions given. The message also includes settlement

instructions. The actual wire transfer itself is virtually

instantaneous, requiring no longer for transmission than a

telephone call.

Controlled Disbursement: This is another product offered by

banks under Cash Management Services. The bank provides a daily

report, typically early in the day, that provides the amount of

disbursements that will be charged to the customer's account. This early

knowledge of daily funds requirement allows the customer to invest any

surplus in intraday investment opportunities, typically money market

investments. This is different from delayed disbursements, where

payments are issued through a remote branch of a bank and customer is

able to delay the payment due to increased float time.

Optimum Utilization of Operating Cash:

Implementation of a sound cash management programme is based on

rapid generation, efficient utilization and effective conversation of its

cash resources. Cash flow is a circle. The quantum and speed of the flow

can be regulated through prudent financial planning facilitating the

running of business with the minimum cash balance. This can be

achieved by making a proper analysis of operative cash flow cycle along

with efficient management of working capital.

Cash Forecasting:

Cash forecasting is backbone of cash planning. It forewarns a business

regarding expected cash problems, which it may encounter, thus assisting

it to regulate further cash flow movements.

Cash Management Techniques:

Every business is interested in accelerating its cash

collections and decelerating cash payments so as to exploit its scarce

cash resources to the maximum. There are techniques in the cash

management which a business to achieve this objective.

Liquidity Analysis:

The importance of liquidity in a business cannot be over

emphasized. If one does the autopsies of the businesses that failed, he

would find that the major reason for the failure was their usability to

remain liquid. Liquidity has an intimate relationship with efficient

utilization of cash. It helps in the attainment of optimum level of

liquidity.

Profitable Deployment of Surplus Funds

Due to non-synchronization of ash inflows and cash

outflows the surplus cash may arise at certain points of time. If this cash

surplus is deployed judiciously cash management will itself become a

profit centre. However, much depends on the quantum of cash surplus

and acceptability of market for its short-term investments.

Economical Borrowings

Another product of non-synchronization of cash inflows

and cash outflows is emergence of deficits at various points of time. A

business has to raise funds to the extent and for the period of deficits.

Rising of funds at minimum cost is one of the important facets of cash

management.

Purpose of Cash Management

Cash management is the stewardship or proper use of an

entity’s cash resources. It serves as the means to keep an organization

functioning by making the best use of cash or liquid resources of the

organization.

The function of cash management at the U.S. Treasury is threefold:

1. To eliminate idle cash balances. Every dollar held as cash

rather than used to augment revenues or decrease expenditures

represents a lost opportunity. Funds that are not needed to cover

expected transactions can be used to buy back outstanding debt

(and cease a flow of funds out of the Treasury for interest

payments) or can be invested to generate a flow of funds into the

Treasury’s account. Minimizing idle cash balances requires

accurate information about expected receipts and likely

disbursements.

2. To deposit collections timely. Having funds in-hand is

better than having accounts receivable. The cash is easier to

convert immediately into value or goods. A receivable, an item to

be converted in the future, often is subject to a transaction delay or

a depreciation of value. Once funds are due to the Government,

they should be converted to cash-in-hand immediately and

deposited in the Treasury's account as soon as possible.

3. To properly time disbursements. Some payments must be

made on a specified or legal date, such as Social Security

payments. For such payments, there is no cash management

decision. For other payments, such as vendor payments, discretion

in timing is possible.

Government vendors face the same cash management needs as the

Government. They want to accelerate collections. One way vendors can

do this is to offer discount terms for timely payment for goods sold.

TYPES OF CASH MANAGEMENT SERVICES

IN

ICICI BANK

There are two types of Cash Management Services they are as:

COLLECTIONS :-

ICICI Bank's Cash Management Services helps you make

optimum use of your working capital, leveraging the float between

faster collections and just-in-time payments.

ICICI Bank’s vast network across the length and

breadth of the country uses superior technology based solutions to

deliver speedy, efficient collections. You get customized daily

transaction reports and online reports. CMS solutions are customized

to your specific needs for the most productive use of your cash flow.

The collection services are of two types:

1- Local cheque collections(LCC) and

2- Upcountry cheque collection (UCC).

4. Local Cheque Collections (LCC) – Internet Clear Collect

& Internet Swift Collect.

Under LCC, they offer collection facility for local

cheques from more than 340 own branch locations apart from over

315 tie-up locations and providing funds centrally on guaranteed

basis. This service includes location wise MIS, which is available

online too. We offer courier pick-up facility, flexible day

arrangement, competitive pricing and customized MIS.

5. Upcountry cheque collection (UCC) – Internet smart

Collect, Internet quick Collect & Internet Anywhere

Collect.

Under UCC, we offer collection facility for upcountry

cheques, which a customer can draw on any location in India and

deposit at more than 340 ICICI Bank centers. We offer a huge

network of more than 4,900 locations covering the length and breadth

of the country. This network includes our own branch network at

more than 340 locations apart from our tie-up locations. Under this

product, we offer flexible day arrangement, competitive pricing and

customized MIS.

Processing Fees & Other Charges

Processing Fees for CMS (cash management system) Facilities : 3%

Other Charges: Charges would be subject to volumes & value of

collections / disbursements & Locations for pickup with a maximum

limit of Rs. 10/- per ‘000 subject to minimum charges per instrument.

Minimum Charges - Rs 10/- to Rs 30/- per instrument.

Courier Charges - maximum of Rs 50/- per instrument

Cheque Return Charges - maximum of Rs 500/- per instrument.

PAYMENTS:-

ICICI Bank's Cash Management Services helps

you make optimum use of your working capital, leveraging the float

between faster collections and just-in-time payments. Our vast

network across the length and breadth of the country uses superior

technology based solutions to deliver speedy, efficient payments. Our

solution is customized to your needs. So you can leave the burden of

bulk demand drafts and pay orders, dividend and interest warrants,

fund transfers, cheque writing and more to ICICI Bank. You also get

customized daily transaction reports and online reports for complete

MIS.

Payments/Internet Multi Pay:-

Under payments, who offers the following services?

Bulk DD/PO printing.

DDs can be issued payable at more than 540 locations in India.

Remote printing of pay orders at 46 major centers.

Fund Transfers.

Cheque writing.

Benefiiciry advices.

A secure technology platform to meet bulk payment requests from

client quickly.

ERP integration.

At Par Payments – Internet Safe Pay

Make payments through dividend warrants, interest

warrants, refund orders, redemption warrants, etc. These warrants are

payable at par at the centers/locations selected by you. You can avail of

this service through over 340 ICICI Bank locations and 200

correspondent bank locations. You get monthly reconciliation

statement showing the account status and unpaid list of warrants on a

monthly basis.

I-Safe Pay offers you a complete solution for executing

your payments through different modes including Warrants, Demand

Drafts / PO, ECS, Direct Credit, Swift Remittances and Foreign DD.

Cash Management to benefit from Electronic Payments

The new electronic payment products and services offer the

corporate clients an improved bottom line by helping manage cash

requirements. It helps corporate to make the best use of their funds and

provides an effective means of managing their financial requirements. 

Several of the trends in cash flow forecasting favor the use of

electronic payment products like Electronic Funds Transfer (EFT) and

card payments. Improved technology and systems integration makes it

more attractive to use electronic payment products because these

methods of payment can be incorporated into firm-wide computing

systems. Electronic payments and cards provide control over incoming

funds, and allow companies to limit access to these funds to authorized

parties. In addition, limiting corporate purchases to electronic payments

makes it easier for firms to monitor cash outflows and prevent

unauthorized expenditures, because these payments are easier to

document and provide an audit trail. 

From the perspective of a Corporate, the electronic payment

systems ensure speed and security of the transaction processing chain,

from verification and authorization to clearing and settlement. Also it

gives a great deal of freedom from more costly labor, materials, and

accounting services that are required in paper-based processing, better

management of cash flow, inventory, and financial planning due to swift

bank payments. 

BANK OF INDIA (BoI) & ICICI Bank Tie Up For

Cash Management

The state-owned Bank of India (BoI) has entered into a

strategic correspondent banking arrangement with ICICI Bank for making

use of the former’s wide branch network covering 1,000 branches for the

latter’s cash management services. BoI expects an Rs 2,000-crore

turnovers through the arrangement which will generate fee-based income

for it.

The Mumbai-based BoI has its cash management service available

at 29 operating branches and 11 polling branches. More centres are being

set up to provide wider coverage to corporates.

ICICI Bank, with its network of 409 branches and extension

counters, (another 100 ICICI centres will be converted into branches in

the future) and over 1,000 ATMS, is making efforts to spread into larger

part of the country via correspondent-banking relationship with more

public sector banks to implement its retail focus.

The second largest bank in the country is also one of the top 12

internet banks in the world. Recently, it took over two branches of

StanChart Grindlays in Shimla and Darjeeling with a deposit base of over

Rs 100 crore. BoI has a tie-up with ICICI Prudential Life Insurance —

the insurance subsidiary of ICICI Bank — to provide reference of its

customers to the life risk firm. BoI charges a referral fee for the service.

The scheme is being piloted at seven centers, covering 70 branches,

which will be expanded to other centers in a phased manner.

Bank of India has been constantly exploring uncharted viable and

profitable business opportunities. Well distributed branch network and

wide customer base are the bank’s strength. These are being leveraged for

generating new business to augment fee income.

Meanwhile, BoI has entered into a strategic tie-up with the

Securities Trading Corporation of India in facilitating secondary market

sale of government securities to retail investors through the bank’s

branches.

The bank has taken several initiatives in providing value additon

through various products and services to satisfy the needs of the

customers using technology to its full advantage. Multi-branch banking

project of the bank has been extended to cover around 194 branches in

five cities which will give the operational flexibility to the customers.

The bank is also in the advanced stage of covering another 80

branches within the network. The bank has already commissioned 48

ATMs (both on-site and off-site) and another 102 ATMs are at various

stages of implementation through an outsourcing model.

SOILED AND MUTILATED CURRENCY

NOTES

Members of public are hereby informed that the Reserve

Bank of India (RBI) has authorized all branches of public sector banks

and all currency chest branches of private sector banks to accept and

exchange all types of soiled/mutilated notes of all denominations. Refund

value of such notes in exchange is, however, paid as per RBI (note

Refund) Rules, 1975.

With a view to render better service to the public the exchange

facility for mutilated notes is also offered by RBI through TLR (Triple

Lock Receptacle) covers. Members of public can obtain from the Enquiry

Counter of all the Regional offices of RBI such TLR cover and put their

notes in the cover with particulars and deposit them in the respective RBI

office against a paper token. This box is kept at the Enquiry counter at

each Issue Office of RBI. The admissible exchange value of the mutilated

notes will be remitted by means of a bank draft or a pay order. Mutilated

notes can also be sent to any of the RBI Offices by registered/insured

post.

Notes which have become excessively soiled, brittle or burnt and

therefore cannot withstand normal handling can be tendered only at Issue

Office of the RBI. Persons holding such notes may approach the Officer-

in-Charge of the Claims Section, Issue Department of the Reserve Bank

for this purpose.

The facilities provided to the members of public for exchange of

their soiled, mutilated etc. notes are as under.

Soiled Notes

Soiled

notes are those

which have

become dirty and slightly cut. Notes which have numbers on two ends,

i.e. notes in the denomination of Rs.10 and above which are in two

pieces, are also treated as soiled note. The cut in such notes, should,

however, not have passed through the number panels. All these notes can

be exchanged at the counters of any public sector bank branch, any

currency chest branch of a private sector bank or any Issue Office of the

Reserve Bank of India. There is no need to fill any form for doing this.

Mutilated Notes

Notes which are in pieces and/or of which the essential portions are

missing can also be exchanged. Essential portions in a currency note are

name of issuing authority, guarantee, promise clause, signature, Ashoka

Pillar emblem/portrait of Mahatma Gandhi, water mark. Refund value of

these notes is, however, paid as per RBI (Note Refund) Rules. These can

also be exchanged at the counters of any public sector bank branch, any

currency chest branch of a private sector bank or any Issue Office of the

RBI without filling any form.

GUIDELINES FOR ASSESSMENT OF MUTILATED NOTES

There are three categories of redemption value of a mutilated note as

follows :-

(i) Full value should be awarded to any piece of note which is more than

two-thirds (2/3) in size of the original note or;

(ii) Half value should be awarded to any piece of note which is more than

half (1/2) but less than two-thirds (2/3) in size of the original note.

(iii) No value should be awarded to any piece of note which is less than

half (1/2) in size of the original note.

Other facilities for exchange

To suit public convenience, the exchange facility for mutilated

notes is also offered through TLR (Triple Lock Receptacle) covers.

Members of public can obtain from the Enquiry Counter of the Reserve

Bank a TLR cover and put their notes in the cover with particulars, such

as, name, address, denominations of notes deposited, etc. filled in the

columns provided on the cover, close it and deposit it in a box called

Triple Lock Receptacle against issue of a paper token. This box is kept at

the Enquiry counter at each Issue Office of the Reserve Bank. The

admissible exchange value of the mutilated notes will be remitted by

means of a bank draft or a pay order. Mutilated notes can also be sent to

any of the RBI offices by registered/insured post.

Excessively soiled, brittle, burnt notes

Notes which have become excessively soiled, brittle or are burnt

and, therefore, cannot withstand normal handling can be exchanged only

at Issue Office of the RBI. Persons holding such notes may approach the

Officer-in-charge of the Claims Section, Issue Department of the Reserve

Bank for this purpose.

Minting & Issue

The Government of India has the sole right to mint coins. The

responsibility for coinage vests with the Government of India in terms of

the Coinage Act, 1906 as amended from time to time. The designing and

minting of coins in various denominations is also the responsibility of the

Government of India. Coins are minted at the four India Government

Mints at Mumbai, Alipore(Kolkata), Saifabad(Hyderabad), Cherlapally

(Hyderabad) and NOIDA (UP).

The coins are issued for circulation only through the Reserve

Bank in terms of the RBI Act.

Denominations

Coins in India are presently being issued in denominations of 10

paisa, 20 paisa, 25 paisa, 50 paisa, one rupee, two rupees and five rupees.

Coins upto 50 paisa are called 'small coins' and coins of Rupee one and

above are called 'Rupee Coins'. Coins can be issued up to the

denomination of Rs.1000 as per the Coinage Act, 1906.

Distribution

Coins are received from the Mints and issued into circulation

through its Regional Issue offices/sub-offices of the Reserve Bank and a

wide network of currency chests and coin depots maintained by banks

and Government treasuries spread across the country. The RBI Issue

Offices/sub-offices are located at Ahmedabad, Bangalore, Belapur (Navi

Mumbai), Bhopal, Bhubaneshwar, Chandigarh, Chennai, Guwahati,

Hyderabad, Jammu, Jaipur, Kanpur, Kolkata, Lucknow, Mumbai,

Nagpur, New Delhi, Patna and Thiruvananthapuram. These offices issue

coins to the public directly through their counters and also send coin

remittances to the currency chests and small coin depots. There are 4422

currency chest branches and 3784 small coin depots spread throughout

the country. The currency chests and small coin depots distribute coins to

the public, customers and other bank branches in their area of operation.

The members of the public can approach the RBI offices or the above

agencies for requirement of coins.

Measures to improve the supply of coins

The various Mints in the country have been modernized and

upgraded to enhance their production capacities.

Government has in the recent past, imported coins to augment the

indigenous production.

Notes in denomination of Rs.5 have been reintroduced to

supplement the supply of coins.

New initiatives for distribution

Coin Dispensing Machines have been installed at select Regional

Offices of the Reserve Bank on pilot basis.

Dedicated Single-window counters have been opened in several of

the Reserve Bank's offices for issuing coins of different

denominations packed in pouches.

Mobile counters are being organized by the Reserve Bank in

commercial and other important areas of the town where soiled

notes can be exchanged for coins.

Research Methodology

Research is a process through which we attempt to

achieve systematically and with the support of data the answer to a

question, the resolution of a problem, or a greater understanding of a

phenomenon. This process, which is frequently called research

methodology, has eight distinct characteristics:

1. Research originates with a question or problem.

2. Research requires a clear articulation of a goal.

3. Research follows a specific plan of procedure.

4. Research usually divides the principal problem into more

manageable sub problems.

5. Research is guided by the specific research problem, question, or

hypothesis.

6. Research accepts certain critical assumptions.

7. Research requires the collection and interpretation of data in

attempting to resolve the problem that initiated the research.

8. Research is, by its nature, cyclical; or more exactly, helical.

Descriptive research is used in this project report in order to

know about cash management services to clients and determining their

level of satisfaction. This is the most popular type of research technique,

generally used in survey research design and most useful in describing

the characteristics of consumer behavior. The methods used were

following:

Questionnaire method

Direct Interaction with the clients.

MODE OF DATA COLLECTION

Primary Data: - The sources of Primary data was questionnaire

Secondary data: - the sources of secondary data were internet,

books and newspaper articles.

RESULT AND ANALYSIS

1) Are you aware of ICICI bank straight to bank services?

(a) Yes

(b) No

Analysis of the above diagram

It’s very good for the ICICI bank as most of the population is aware of

the cash management services provided by the bank. The bank can look

into companies as to propose its services to the concerned company

personals.

2. In which company bank do you have your account?

(a) Axis Bank

(b) ICICI Bank

(c) HSBC Bank

(d) standard chartered Bank

Analysis of the above diagram

From the above diagram it can be easily inferred that ICICI bank is

facing neck to neck competition from HSBC Bank and it should keep

on improving to remain at the top position.

3. Are you satisfy with your company services?

(a) Yes

(b) No

Analysis of the above diagram

From the above analysis it can be interpreted that most of the companies

were satisfied by there CMS provider but still they found few areas of

improvement ICICI Bank can give solutions for those areas So as to

attain business rom these companies.

4. What are your main modes making payments?

(a) Cheque

(b) Cash

(c) DD

Analysis of the above diagram

Like premium most of the companies distribute their payments

through cheques only DD and cash are made out under special

circumstances

5. Do you reinsure your polices?

(a) Yes

(b) No

Analysis of the above diagram

Most of the companies re-insure themselves from one another or by a re-

insurer it helps them to reduce risk on there part ICICI Bank can look into

to the opportunity to become the re-insuring bank as its quite rewarding

CASE STUDY (ICICI BANK)

GROUND REALITIES:

THE ABC LTD. IS A FMCG COMPANY. THE COMPANY HAS

PRESENCE IN MORE THAN 15 CITIES AND HAS ITS HEAD

QUARTER IN MUMBAI. THE COMPANY HAS DEPOTS AT

THESE CITIES. AND EACH DEPOT HAS SOME TURNOVER

EVERY MONTH. THE NAME OF CITIES, THE MONTHLY

TURNS OVER OF THE EACH DEPOTS AND NO. OF

RETAILERS IN EACH CITIES ARE AS FOLLOWS:

Sr. No. Cities Monthly

Turnover (Rs. In

Crore)

No. of Retailers

1 Mumbai 1.5 200

2 New Delhi 1.25 180

3 Calcutta 1.00 175

4 Madras 0.75 180

5 Ahmedabad 0.75 150

6 Banglore 0.70 160

7 Hyderabad 1.00 155

8 Pune 0.50 140

9 Jaipur 0.60 150

10 Indore 0.75 120

11 Cochin 0.50 130

12 Agra 0.50 120

13 Jalandhar 0.40 110

14 Jammu 0.10 115

15 Nagpur 0.10 135

16 Lucknow 0.10 140

The requirements of the ABC Ltd. are as follows:

1. All money should be deposited at ABC Ltd. a/c at New Delhi.

2. All money should be collected on the next day basis.

3. Details of cheques deposited at different location on daily basis:

Location

No. of cheques deposited

Cheque number

Cheque amount

Date of deposit

Clearing date

Retailer name/code

Returned cheques

Date

Reason

Location

Amount

4. Courier pick-up service at each location.

5. Monthly reports of each location about sales, collection,

expenditures etc.

6. Other MIS reports

ANALYZING PROCESS:

These are the conditions and facts of the organization. Now,

what the bank will do? I have taken the case of ICICI BANK Cash

Management Service. This is regarding how the bank makes deal with

the company.

The ICICI BANK will analyze the location of the company. The

ABC Ltd. has sixteen locations in the country. This is not always possible

to have the branches at each location of the client for the banks. In this

case, we are taking the assumptions as follows:

In 10 locations of the company, the bank has its own presence.

In 2 locations of the company, the bank has tie-up with correspondent

bank

And in remaining 4 locations, the bank has no presence as well as

no tie-up with any other bank.

1 How the bank makes allocation of the different instruments?

The bank broadly categorized the instruments into two types:

I. Local Cheque Collections (LCC)

LCC are the cheques, which are drawn and deposited at the same

location. Eg. A Cheque drawn at Jaipur and deposited at Jaipur only.

The LCC is again categorised into two types:

1) LCC BRN:

A local Cheque which is drawn and deposited at the same location

where the bank has its own presence.

2) LCC COR:

A local Cheque which is drawn and deposited at the same location

where the bank doesn’t have its own presence but has tied up with

correspondent Bank.

II. Upcountry Cheque Collections (UCC)

The UCC are the cheques, which are drawn and deposited at

different locations. Eg. A Cheque drawn at Jaipur and deposited at Delhi.

The UCC is again categorised into three types:

1) UCC BRN:

An upcountry Cheque which is drawn at one location and

deposited at another location where the bank has its own presence.

2) UCC COR:

An upcountry Cheque which is drawn at one location and

deposited at another location where the bank has tie-up with

correspondent Bank.

3) UCC ONW:

An upcountry Cheque which is drawn at one location and

deposited at another location where the bank neither has its own

presence nor have tie-up with correspondent bank.

PRICING:

Pricing is competitive; varies from centre to centre. It also varies

from instruments to instruments.

Special pricing can be worked out taking into account the volume

of funds & the centres. The pricing part of the CMS is very complex.

Normally, the ICICI bank takes into account the following factors while

going for pricing:

1) Bank In Funds/ Out of Funds & Correspondent Bank Charges:

When Cheque is deposited in the bank it passes through the

clearing house. In India, clearing is done through RBI, SBI and PNB

banks. The RBI has presence in 15 cities in India while SBI has 938

locations in India including its associates. Other cities where clearing

house is not there, the clearing is done through Correspondent Bank,

mostly these are PNB Banks or Co-operative Banks.

Suppose I deposit the Cheque on day 0, then the time taken by the

clearing houses to debit the bank account would be different. The

ICICI BANK has to debit its customer’s account on the next day basis

irrespective of days to clear.

Day when the

Cheque will be

credited

Clearing Bank Days for

which bank

is out fund

Bank In

Fund/Out of

Fund

Day1 RBI 0 Not out of funds

Day2 SBI 1 1 Day out of

funds

Day3 Correspondent Bank 1 1 Day out of

funds

In this case, the bank charges interest on the money which it gives

in form of “Credit Against Uncleared Cheque”, to the company. When

it comes to the Correspondent bank, the bank has to pay extra charges to

these banks. It depends upon the Banks.

2) Overheads:

The bank takes into account the outstanding charges, which occurs

in the process. The outstanding charges include salary, administration

charges, maintenance etc.

3) Margin:

After including the transaction and other outstanding charges, the

bank gets the cost of transaction. On this the bank adds its margin for

being in the business.

In pricing, other elements like courier charges return cheques etc. also

considered. Pricing in CMS in generally negotiable between the company

and the Bank.

Features of ICICI Bank CMS:

Exclusive Cash Management Process desks with infrastructure

Debit Transfers

Courier pick-up at branches

No collection a/cs needed at branches

Customized Reports

Transmission of data through Internal LAN system

Direct credit to accounts

Benefits to Customers:

Centralized Control of cash

Cost reduction

Enhanced Liquidity

Interchange of Information between treasury & operating units

Reduced excess cash balance

Cash forecasting & scheduling

Effective control over disbursements

Timely & effective investments

LIMITATIONS OF THE REPORT

Following are the limitations faced by me during this project:

1. The allotted time period for the research study was relatively

insufficient.

2. The study might not produce absolutely accurate results as it was

based on a sample taken from the population.

.CONCLUSION

The study allowed us get answers regarding the service awareness among

people and the problems it faces. The key findings and analysis of the

research are as follows:.

All the respondents wanted to carry out the banking needs at their

convenience. This means the service caters the banking needs that

customers generally require.

Few of the respondents were aware about the service which was

desired by 100% respondents clearly showing that there has been a

fault in its promotion and awareness strategies.

Customers were not aware that the service was a free one, this is

clear that almost all the attributes of the services are favorable to

the customers still customers are not using the service and are not

even aware of it.

Almost all customers once educated about the service readily

enrolled for it whereas a mere portion did not trust the bank and

thought that the bank would have some hidden charges that they

are not putting forward.

RECOMMENDATIONS

We suggest following measures, which ICICI Bank could

take so as to take on heavy competition from HSBC Bank, SBI, PNB and

other Banks:

Try to reduce cost, so that benefits can be passed on to

customers.

ICICI Bank should provide competitive prices as now-a-days a

lot business is being acquired by SBI, AXIS bank and HSBC bank and

ICICI is facing a lot competition from these banks.

ICICI Bank should contact with their clients regularly for

knowing the problems faced by them. This will help ICICI Bank in

providing best services to customers. This will result in additional

customer base by getting further references from satisfied clients.

REFERENCES

Books/ Magazines:

Managerial Decision Modeling with spreadsheets – Nagraj

Balakrishnan, Barry Render & Ralph M. Stair

Business Research Methods – William G. Zikmund

Business today

Websites:

www.icicibank.com

www.inc.com

www.investopedia.com

www.google.com

APPENDIXE

QUESTIONNAIRE

Dear Respondent,

I am student of Apeejay Institute of Technology, School of Management,

Greater Noida. I am doing this research to know awareness of Cash

Management Services.

1. Are you aware of ICICI bank straight to bank services?

(a) Yes

(b) No

2. In which company bank do you have your account?

(a) Axis bank (b) ICICI Bank

(c) HSBC Bank (d) SBI Bank

(e) HDFC Bank

3. Are you satisfy with your company services?

(a) Yes

(b) No

4. What are your main modes making payments?

(a) Cheque

(b) Cash

(c) DD

5. Do you reinsure your polices?

(a) Yes

(b) No

Personal Information

Name:

Age:

Sex: ( ) Male ( ) Female

Phone No:

Occupation: