A PROJECT REPORTONCOMPARISON ANALYSIS OF SBI & ICICI BANK

V/S

SUBMITTED BYMR.HARDIK RAJENDRA KADUM.COM SEMESTER- I

CHINCHANI TARAPUR EDU. SOCITY'SP.L. SHROFF COLLEGE OF ARTS & COMMERCE2013-2014

SUBMITTED TOUNIVERSITY OF MUMBAIIN PARTIAL FULFILLMENT OF THE REQUIREMENTS FORTHE AWARD OF MASTER DEGREE OF COMMERCEPROJECT GUIDEPROF. S.V.KARVIR

DECLARATION

I, Mr. Hardik Rajendra kadu of P.L.Shroff College of Arts & Commerce, M.Com( sem-I ) hereby declare that I have completed project on " project name " in the academic year 2013-14. The information is original and authentic to the best of my knowledge as lot of dedication and hard work been put in by me for the same.

Signature of student

To whomsoever it may concern

This is to certify thatName : Hardik Rajendra KaduClass & semester : M.com, SIM - IRoll No. : 22Month & year : Oct 2013-2014Subject : Advance Finance AccountTopic : COMPARISON ANALYSIS OF SBI & ICICI BANK

Has completed the above project under our guidance as a part of curriculum of University of Mumbai.

To the best of our knowledge, his work is original

Signature of the Internal Guide Signature of the External Examiner

Signature of the M.Com co-ordinator Signature of Principal

ACKNOWLEDGEMENT

Initially, it was a thought, then it was an opportunity, later it became a challenge and not it is succeeded of course I enjoyed my research report on COMPARISON ANALYSIS OF SBI & ICICI BANK

I would like to thanks University Of Mumbai for providing me the opportunity to express my view on this topic.

A special thanks to our Principal Dr. P. S. Raut for giving us an opportunity to do this project.

I am graceful to my project guide Prof .S.V. Karvir for allotting me the project where I could learn so much. I extended my special thanks to all prof. of the college for giving me advice and suggestions.

And last but not the last I am thankful to all those who helped me directly and indirectly in successful completion of my project.

INDEXSR. NOPARTICULARS

1INTRODUCTION

2HISTORY

3GROWTH

4CURRENT SCENARIO

5PRODUCTS AND SERVICES

6CUSTOMER SATISFACTION

7INTERNATIONAL BANKING

8ADVANTAGES

9COMPARISON

10ANALYSIS AND INTERPRETATIONOF SERVICES

11ANALYSIS OF PERFORMANCE

12SBI vs. ICICI:Which is the better bank?

INTRODUCTION OF STATE BANK OF INDIA (SBI)

The State Bank Of India, the countrys oldest Bank & a premier in terms of balance sheet size, number of branchres, market capitazation & profits is today going through a momentous phase of Change & Tranfomation- the two hundred year old public secter behemoth is today stirring out of its public sector legacy & moving with an ability to give the private & Foreign Bank a run for their money. The origin of the State Bank of India goes bank to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 JUNE 1806. The Bank is opreating into many businesses with strategic tie ups pension Funds, General Insurance, custodial servies, Private Equite, Mobile Banking, point of sales Merchant Acquisition, Advisory services, structured products etc each one of these initiatives having a huge potential for growth.

The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921.

An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and state-sponsored bank.

The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries. The State Bank of India emerged as a pacesetter, with its operations carried out by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development.

INTRODUCTION OF INDUSTRIALCREDIT & INVESTMENT ( ICICI )

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy.

The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.

HISTORY OF STATE BANK OF INDIA ( SBI )

The evolution of State Bank of India can be traced back to the first decade of the 19th century. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921.

An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and the rural sector of the country, in particular. Until the Plan, the commercial banks of the country, including the Imperial Bank of India, confined their services to the urban sector. Moreover, they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in particular, the All India Rural Credit Survey Committee recommended the formation of a state-partnered and state-sponsored bank.

The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India, and integrating with it, the former state-owned or state associate banks. Subsequently, an Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries.

The State Bank of India emerged as a pacesetter, with its operations carried out by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited from the Imperial Bank. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties, the State Bank of India catered to the needs of the customers, by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development.

HISTORY INDUSTRIAL CREDIT & INVESTMENT( ICICI )

ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. Four years later, when the company offered ICICI Bank's shares to the public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby becoming the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary market sales to institutional investors.

With a change in the corporate structure and the budding competition in the Indian Banking industry, the management of both ICICI and ICICI Bank were of the opinion that a merger between the two entities would prove to be an essential step. It was in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the following year, the merger was approved by its shareholders, the High Court of Gujarat at Ahmedabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of India.

GROWTH OF STATE BANK OF INDIA

State bank of india has often acted as guarantor to the Indian government, most notably during chandara Shekhars trnure as Prime minister of India. With 62500 branches a further 6500 + associate bank branches, the SBI has extensive coverage. Stabe Bank of India has electronically networked all of its branches under Core Banking System (CBS). The Bank has one of the largest ATM networks in the region. More than 2100 ATMs across India. The State Bank of India has had steady growth over its history, though it was marred by the Harshad mehta scan in 1912. In recent years, the bank has sought to expand its over seas opration by buying foreign bank. Its the only Indian Bank to feature in the 100 world bank in the Fortune Global 500 rating & various other ranking.

CURRENT SCENARIO OF STATE BANK OF INDIA

Branches :

The corporate center of SBI is located in Mumbai. In order to cater to different functions, there are several other establishments in and outside Mumbai, apart from the corporate center. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices, located at major cities throughout India. It is recorded that SBI has about 10000 branches, well networked to cater to its customers throughout India.

ATM Services :

SBI provides easy access to money to its customers through more than 8500 ATMs in India. The Bank also facilitates the free transaction of money at the ATMs of State Bank Group, which includes the ATMs of State Bank of India as well as the Associate Banks State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You may also transact money through SBI Commercial and International Bank Ltd by using the State Bank ATM-cum- Debit (Cash Plus) card.

CURRENT SCENARIO OF INDUSTRIAL CREDIT & INVESTMENT( ICICI )

Financial performance:

ICICI Bank is India's second-largest bank with total assets of Rs. 3,634.00 billion (US$ 81 billion) at March 31, 2010 and profit after tax Rs. 40.25 billion (US$ 896 million) for the year ended March 31, 2010. The Bank has a network of 2,016 branches and about 5,219 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 in the areas of investment banking, life and non-life insurance, venture capital and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. 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).

Established in 1994, ICICI Bank is today the second largest bank in India and among the top 150 in the world. In less than a decade, the bank has become a universal bank offering a well diversified portfolio of financial services. It currently has assets of over US$ 79 billion and a market capitalization of US$ 9 billion and services over 14 million customers through a network of about 950 branches, 3300 ATM's and a 3200 seat call center (as of 2007). The hall mark of this exponential growth is ICICI Bank.s unwavering focus on technology.

Branches & ATMs :

ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has 1,420 branches and about 4,644 ATMs. Talking about foreign countries, ICICI Bank has made its presence felt in 18 countries - 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. The Bank proudly holds its subsidiaries in the United Kingdom, Russia and Canada out of which, the UK subsidiary has established branches in Belgium and Germany.

PRODUCTS AND SERVICES OF STATE BANK OF INDIA( SBI )

Personal Banking :

SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme

Other Services : Agriculture/Rural Banking NRI Services ATM Services Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift chaque

PRODUCTS & SERVICES INDUSTRIAL CREDIT & INVESTMENT( ICICI )

Personal Banking

Deposits Loans Cards Investments Insurance Demat Services Wealth Management

NRI Banking

Money Transfer Bank Accounts Investments Property Solutions Insurance Loans

Business Banking

Corporate Net Banking Cash Management Trade Services FXOnline SME Services Online Taxes

CUSTOMER SATISFACTION OF SBI

Demographic and banking profile of the customers of State Bank of India. The demographic profile of select customers of State Bank of India reveals that, 67.2 percent of them are male. In term of age, it is evident that 27.6 percent of the customers are falling in the age group ranging between 31-40 years. Graduates accounted for 37.6 percent. Business and profession people dominated the sample with 44.8 percent and 22 percent respectively. In term of marital status, 87.2 percent of the respondents were married. The income statistics revealed that 32.8 percent of the customers were earning their income between Rs.2,50,001 Rs.5,00,000 yearly.

The Banking profile of the customers reveals that 53.2 percent of the select customers maintain current account in State Bank of India. 53.6 percent of them are having banking experience ranging between 6-10 years. The convenience of all the customers would be greatly enhanced by an electronic, 24 hour branch. As a result 90.4 percent of the respondents prefer e-banking rather then conventional banking system. 59.2 percent of the respondents have e-banking experience ranging between 1-3 years. 41.6 percent of the respondents use e-banking channels every day.

CUSTOMER SATISFACTION OF ICICI BANK

I am very happy with the services provided by ICICI, especially the help provided by Mr. Deborah Choudhary of your Guwahati Branch. She is the person who has made my banking with ICICI convenient. She is an asset to your organization. Shirish Sharma, Guwahati, September 30, 2006, Savings Account Your loan on phone is a wonderful feature. I have been sanctioned a loan for a vehicle within 30 minutes. Thanks to ICICI. Milind Ektare, Mumbai, September 30, 2006, Vehicle Loan everything is simpaly superb in ICICI Bank. Internet Banking is something which everyone should experience. It.s very convenient to operate my accounts being at home...Good Job...Keep up the good work...Hats off to ICICI Bank staff and management...! Thanks for a wonderful service...! I am really happy and satisfied...!! Ida Rachel, USA, September 30, 2006, Savings Account I am very happy to be an ICICI Bank customer. The services are excellent. ICICI has also motivated other public sector banks to increase their facilities to their customers. K Venkata Vamsy, Eluru, September 30, 2006, General Recently, I have requested to get my new debit card as it was getting expired. After I submitted my request, I got my debit card delivered to USA address promptly and safely within 3 business days. That was an excellent service.

Savings Account:I am really happy with the services of ICICI Bank. ATM, Net Banking, and Customer Care everything is super. I really enjoy banking with ICICI Bank. I am very happy while using your services. Especially the 8 to 8 banking facility is very convenient for us. I am using your Demat, Phone Banking, Mobile Banking facility. It really satisfies all my requirements relating to banking transactions.

Credit Cards :

I think your internet banking team needs to take a bow. I must say the internet banking experience of ICICI is unmatched. Right from having an integrated view of all my relationships, to simpler things like providing beneficiary details in statements, to Mobile Banking alerts. It's Fantastic.

Net Banking:

I heard from my friends that ICICI Bank is pleasant and fast. I witnessed this today at your Hazaratganj Branch, Lucknow. It has excited me when I got my savings account opened within a few minutes with ATM Card and net banking details. It's really excellent banking.

INTERNATIONAL BANKING OF STATE BANK OF INDIA ( SBI )

International banking services of State Bank of India are delivered for the benefit of its Indian customers, non-resident Indians, foreign entities and banks through a network of 189offices/branches in 35countries as on 2nd September 2013, spread over all time zones. The network is augmented by a cluster of Overseas and NRI branches within India and correspondent links with over 483 banks, the world over. Bank's Joint Ventures and Subsidiaries abroad further underline the Bank's international presence.

The services include corporate lending, loan syndications, merchant banking, handling Letters of Credit and Guarantees, short-term financing, collection of clean and documentary credits and remittances. The Bank has carved a niche for itself in the Euroland with branches located in Antwerp, Paris and Frankfurt. Indian banks and corporates are able to avail single-window Euro services from the Bank's Frankfurt branch.

INTERNATIONAL PRESENCE ICICI BANKICICI Bank, Indias second largest commercial bank, has decided to boost its international banking operations by opening branches in new locations like the US, Sri Lanka & Hong Kong. Besides services to Indian companies by assisting them in rising corporate and project finance for investment abroad.They are received approvals to set up a branch office in Sri Lanka & have applied for licenses in the US & Hong Kong ICICI Bank deputy managing director Kalpana Morparia told in an interview. ICICI Banks international presence spans 13 locations & includes three wholly owned subsidiaries.The bank has subsidiaries in Britain, Canada & Russia, branchs in Sigapore & Bahrain & representative offices in the US, China, the United Arab Emirates, and Bangladesh & South Africa. we believe the International market presents a major growth opportunity fir us. Ouri international strategy till now has largely been based on leveraging home country links, said Morparia.The Bank has so far focused on locations where there is a large populaton of non-resident Indians so as to fulfill their personal financial services need like remitting money to India for this purpose, the Mumbai-head quartered ICICI Bank, Which ranks second after government-owned State Bank of India with total assets of about $ 42 billion, has entered into allianaces with banks like Lloyds in Britan & wells Forgo in the US. According to Morph aria, the bank has already achieved leadership position in the $20-Billion annual remittance market with a share of nearly 20 percent.

ADVANTAGES OF ICICI over SBI

With total asset of Rs.3, 744.10 billion, the ICICI bank is going up at very fast rate.

The SBI and ICICI banks are taking different paths in human relations area.

SBI comprises nearly one lakh employees. But it is careful in adding the headcount and by means of voluntary retirement scheme its tries to reduce the headcount. Every year ICICI bank will set up regional hubs for the reason that the plans as well as the workforce will be concentrated for adding 20,000 to its headcount.

In coming few years among employees range from 75, 000 and 1, 00, 000, the group plans will be added by ICICI.

The ICICI bank tries to exceed the SBI bank .

ADVANTAGES OF SBI over ICICI

Flexible loan repayment tenures are provided by the SBI.

SBI is the second largest issuer of credit cards as well as placed to turn into a largest debit card issuer

. In Small and Medium Enterprises (SME) financing field, the SBI restrains huge experience.

TheIndias one of the oldest and largest bank is SBI and the Indian government holds the main stock of SBI. Therefore the customers trust this bank.

The SBI bank group is planning to insert more 3, 000 branches though it comprises 10,000 branches nearly.

Public trusts this bank a lot because this is the oldest bank. Across the country it contains 54LearningCentersand four national levelApexTrainingColleges. So this bank strives constantly in enhancing the skills of its employees.

Bankers from the banks located in some other countries also attend the training programs.

COMPARISON BETWEEN ICICI BANK AND SBI

SBI V/S ICICI SBI stands for State Bank of India. It is a public sector institution (government owned), with a huge customer base all over India. It has seven associate banks operating under its SBI name. It has over thirteen thousand branches across India and in some selected international countries and a 56,000 ATM network across India. The Standard Bank of India inherited. the Bank of Calcutta, which was founded in 1806, and has been in existence for over two hundred years. On the other hand, the ICICI is a private sector bank (privately owned), with a relatively smaller clientele base. It is one of the major banks in India (precisely the second largest), but much smaller than the SBI. It has 950 branches, with 3,500 branches across India. The bank has deposits of Rs 1.65 lakh crore compared to SBI.s Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net worth of Rs 22,000 against Rs 27,000 for the State Bank of India. This represents Rs 9 crore business generated by each ICICI employee per year, compared to Rs 3 crore worth of business per employee of the ICICI. While the State Bank pays 4.7 percent on deposits, and earns less on advances, the ICICI pays 0.7 less (4 percent), while earning more on advances, and thus earns 0.4 percent more on assets than the SBI. This is no surprise, as there.s seemingly limitless access to funds from the government for the state owned SBI.

On money transfers from overseas accounts, with the SBI, once a transfer transaction is completed, you will be able to know the exchange rate used, and there are no restrictions on the amounts you can transfer a day. However, the ICICI transfer is somewhat different. After completion of a money transfer transaction, the exchange rate can only be known after five days, and there is a daily limit of $5000 that can be transferred a day.

Although the SBI has generally performed well in the past, in recent years, the ICICI has seen very good performance, almost edging out the SBI in every aspect, especially financially. The financial years between 2001-2002 and 2005, and 2006, saw very strong gains for the ICICI bank. Its deposits grew by 200 percent, five times more than the SBI.s, and while SBI.s revenue grew by 30 percent and the ICICI bank.s revenue grew by seven times that percentage. This trend means that ICICI.s growth will eventually overtake SBI.s in the future, in terms of deposits. The SBI is a government owned bank (public sector), while ICICI is a privately owned bank (private sector).

The SBI is much older (more than 200 years old) and more established than the ICICI, which is less than 25 years old. The SBI does not limit daily international transfer amounts, while the ICICI limits daily transfers to $5000 a day. The SBI bank pays a higher percentage on deposits than the ICICI bank.

ANALYSIS AND INTERPRETATION OF SERVICES

1) Sale of Gold during Akshya Tritiya (2012)

SBI & ICICI

We can see here that SBI advertises sale of mutual fund units in their Gold Fund scheme during the festival of Akshaya Tritiya. Investors who have knowledge about the market will know very well that gold as a commodity yields an average 20% YoY and has since never saw a negative rate of return. SBI also had a scheme that offered 1% discount on all denominations of Gold coins except those above 100gms during their campaign. The drawback of advertising like this is, many do not know the benefits of investing in paper. gold. Which means, gold mutual funds or gold exchange traded funds; this form of investment has superior advantages than investing in gold as a physical commodity. ICICI however had decorated all its branches during the festival and even offered a larger discount, 8% on gold coins being purchased online. Many Indians today still choose gold as a physical commodity and it is possible that ICICI had better sales than SBI in comparison to gold coins.

SBI could simply mention the rate of return on its gold mutual funds or offer the advantages of paper. Gold over physical gold in its advertisements during Akshaya Tritiya. The advantages of investing in paper gold are not even mentioned on their mutual funds website by means of a flash advertisement.

2) Branch Service Delivery:

The below floor design matches the SBI Branch located in V.V. Puram in MUMBAI

Demand Drafts Operations Manager (Queries) Deposits / Withdrawals Deposits / Withdrawals Pass Book Entries Queries Clearing May I Help You

SBI has very limited space for the number of customers who transact daily. This crosses more than 500 daily just for deposits and withdrawals. Only two counters manage this which is highly inadequate; thus leading to crowding and frustration among customers at the VV Puram branch. SBI could reduce the time spent by customers for waiting by simply adding additional counters or better yet in order to save cost, they could have the existing counters perform multiple services rather than only one.

To improve order among customers at the branch, they have installed a token machine that dispenses small slips of paper that show when the customer gets his turn to complete the transaction.

These dispense tokens only for deposits or withdrawals. It would be more convenient if they had a smart token machine that dispenses tokens for those wanting demand drafts, opening fixed or recurring deposits, NRI accounts or more importantly those seeking loans; which happen to be a major revenue source for the bank. There are very little advertisements displayed at the branch regarding the variety of services offered by the bank. SBI could do so much more, by putting up advertisements on the variety of accounts it offers for businesses, corporate and individuals. They have a 32 inch television that displays some of the services it offers but the television is placed at an angle which is not visible for the customers seated in the branch. The seating arrangements are for 15 but only 4 can view the television screen.

There is one excellent move by SBI to reduce time spent by customers in writing the deposit slips. The SBI Green Channel Counters, where the customer can simply swipe his debit card and deposit the required cash at the counter. The cashier would provide an acknowledgement slip thereafter. This is a boon to they need not scavenge for a deposit slip, write the details and customers as verify them in the crowded branch and instead get a token and wait.

The floor design below is that of the ICICI Bank Branch in MumbaiOperations Manager (Complaints)

New Accounts NRI / Forex Deposits Deposits Deposits May I Help You Fixed Deposits and Others Loans DEMAT, Mutual Funds It is seen that the bank branch is much larger and has more counters to cater to the needs of the customer. ICICI branch employees take up multi tasking during times when there are more customers to cater to. From 3 counters that accept deposits, they increase it to 4 or sometimes 5 to ensure waiting times of the customers are reduced. The token system is very well organized, with separate tokens disbursed for non customers, customers and Gold Customers. The last set mentioned being customers who avail privilege banking services. There are also tokens disbursed for each service, which means if a customer wants to enquire mutual funds or DEMAT services, then all that needs to be done would be to select the customer type and then press the button which has the label for the service needed. To make it even more easier, the token machine prioritizes deposit values as well. If you are a customer wanting to deposit more than Rs.50, 000/-there is a separate option for the same. This is not present in SBI, a customer who wants to deposit upwards of Rs.50,000/-would not get any priority than someone else who has to deposit say Rs.500/3-ATM Services

SBI v/s ICICI

SBI ICICI

Cash Withdrawal Cash Withdrawal

Mobile Recharge Mobile Recharge

Fund Transfers Pay Utility Bills (All)

Mini Statement Pay ICICI credit card bills

Balance Enquiry Pay ICICI Prudential Insurance premium

Donate to temple trusts Request cheque book

Donate to relief funds Fund Transfers

Pay Utility Bills (MTNL and Bescom only) Mini Statement

Pay SBI Credit Card Bills Balance Enquiry

Pay SBI Life Insurance premium

Pay fees of certain colleges

SBI ATMs do have more services than what ICICI ATMs offer. But there is a small glitch in their service delivery and marketing. SBI offers the basic services (highlighted purple) in all the ATMs. However, the rest are available only in a select few. The data for which is unavailable.

Only on their website in a link that shows up when you type ATM in the search bar. Poor advertising of its ATM functionality has resulted in lack of awareness among consumers regarding the services available. In fact, the SBI website also does not advise any details on what services their ATMs offer.

The irony is, SBI keeps advertising on the number of ATMs and cash withdrawals made by consumers over the years in these ATMs. This advertising is irrelevant. As a customer of SBI, it makes no difference on the number of ATMs added over the years since the data is irrelevant. ICICI however offers all the services in all of its ATMs. And the advertising of its services has been clearly seen on all its branches. There is even a flash demo on the bank. s website that provides details on the services available at its ATMs. Their current marketing campaign, suggests Our ATM is almost a bank branch indicating customers the improvised convenience offered to them.

ANALYSIS OF PERFORMANCE OF ICICI BANK

25.5% increase in standalone profit after tax from Rs. 51.51 bn in FY2011 (April 2010-March 2011) to Rs. 64.65 bn in FY2012 (April 2011-March 2012). Net interest income increased by 19.0% year-on year; full year NIM improved by 9 basis points to 2.73%. Fee income increased by 4.5% 30.8% reduction in provisions to Rs. 15.83 bn. 25.4% increase in consolidated profit after tax from Rs. 60.93 bn in FY2011 to Rs. 76.43 bn in FY2012, despite additional third party motor pool losses for ICICI General. 31.0% increase in standalone profit after tax from Rs. 14.52 bn in Q4-2011 (January-March 2011) to Rs.19.02 bn in Q4-2012 (January-March 2012). Net interest income increased by 23.7% year-on year; net interest margin at 3.01% compared to 2.74% in Q4-2011. 35.8% year-on-year increase in non-interest income driven by increased dividends from subsidiaries. Increase in provisions on account of restructuring of exposures in Q4-2012. Advances increased by 17.3% year-on-year to Rs.2,537.28 billion at March 31,2012 . CASA ratio at 43.5% at March 31, 2012; average CASA ratio at 39.0% in Q4 2012 . Net NPA ratio decreased to 0.62% at March 31, 2012 from 0.70% at December31, 2011 (March 31, 2011: 0.94%)

ANALYSIS OF PERFORMANCE OF SBI

Net Profit increased from Rs.8,265 crores in FY11 to Rs.11,707 crores in FY12 (41.66% YOY growth) Operating Profit increased from Rs.25,336 crores in FY11 to Rs.31,574 crores in FY12 (24.62%YOY growth). Capital Adequacy Ratio of the Bank increased from 11.98% (Tier I: 7.77%) in Mar 11 to 13.86% (Tier I: 9.79%) in Mar 2012 (188 bps YOY growth). Net Interest Income increased from Rs.32,526 crores in FY11 to Rs.43,291 crores in FY12 (33.10%YOY growth). Net Interest Margin (Whole Bank) increased from 3.32% in FY11 to 3.85% in FY12 (53 bps YOY growth). Domestic NIM increased from 3.63% in FY11 to 4.17% in FY12. Dividend of Rs.35 per share (350%) proposed for the year ended 31st March 12. Interest Income on Advances increased from Rs.59,976 crores in FY11 toRs.81,078 crores in FY12 (35.18%YOY growth). Interest Income on Resources Operations increased from Rs.20,062 crores in FY11 to Rs.24,300 crores in FY12 (21.12%YOY growth). Interest paid on deposits increased from Rs.43,235 crores in FY11 to Rs.55,644 crores in FY12 (28.70%YOY growth). Non Interest Income decreased from Rs.15,825 crores in FY11 to Rs.14,351 crores in FY12 (9.31%YOY decline).

SBI vs. ICICI: Which is the better bank?

Comparison of behemoths in any sector brings with it the risk of overlooking some competitive advantages. For instance, take a look at the biggest banking entities in India. Comparing SBI with ICICI Bank could be at the risk of ignoring their inherent traits. SBI being the government's de-facto banker has the upper hand in collecting taxes or public investments (PPF). ICICI Bank on the other hand makes the best use of its private (largely foreign) ownership and international presence. But having said that, each of the entities have been the biggest beneficiaries of India's economic evolution. Nevertheless, they chose separate ways to cash in on the same.

The fight for market share :

SBI has had more than a century's presence in India's banking space. This can be one an important reason for the lion's share that SBI has in the sector. But given the scale of fragmentation in Indian banking, credit must be given to SBI's ability to retain the share. Broadly, over the last decade, SBI has commanded double the share of the second largest player in the sector. ICICI Bank on the other hand, has been the pioneer of retail banking in India. Building on its rapid growth in the space, the private sector behemoth acquired the highest share of retail assets by FY07. But the economic crisis that unfolded thereafter forced it to sacrifice market share for quality of assets.

Margins: Then and now :

The difference in the business models of SBI and ICICI Bank is evident from the pattern of their respective net interest margins (NIMs). SBI has maintained NIMs in excess of 2.6% over the past decade. On the contrary, that of ICICI has crossed 2.5% just once in the past 8 years. What this means is that the former has concentrated on high margin business Or rather on sustained margins despite larger volume of lending. ICICI on the other hand resorted to low margin lending to grow balance sheet size as also failed to accumulate a large low cost deposit base like SBI. Nevertheless, the gap in margins has narrowed in FY10. This was equally due to the fallout of SBI's affinity to teaser loans as also ICICI Bank's focus on low cost deposits (CASA). Ability to re-price loans has also had an impact on the margins.

Recognition of quality:

Neither SBI nor ICICI has a stellar record when it comes to asset quality. Their smaller PSU and private sector peers have beaten them hands down in retention of asset quality. Nevertheless between the two, SBI has been more cautions in terms of quality of lending. Most of SBI's asset slippages have been due to government induced lending to priority sectors. Or they have borne the brunt of restructured assets. ICICI's on the other hand has been bad primarily due to its voluntary effort to lend for poor quality of assets.Having said that, over the past two years, ICICI has stepped up both its focus on quality as well as its provisioning efforts.

Returns to shareholders:

SBI wins hands down when it comes to the returns that the banks have generated for shareholders. Both higher market share and better margins have played a role in this. But more importantly, SBI has never resorted to investments in high risk speculative instruments and instead focused on its strengths of large franchise and low cost deposit base. ICICI Bank's frequent equity dilution has also impacted its return on equity.

Which is the better bank?

As we said earlier, SBI's government backing makes it the more 'safer' entity. ICICI by itself does not have the reputation of good quality assets. But it is certainly striving to achieve the same. Both in terms of margins and returns, SBI has had an edge and will continue to have it in the medium term.Having said that investors must carefully weigh the future prospects of both the entities vis-a-vis their respective valuations before taking their pick.