1. ACCOMPLISHING
PERFORMANCE
BREAKTHROUGHS
IN RETAIL
BANKING
SERVICES
BANKING – AHMEDABAD MANAGEMENT ASSOCIATION
Submitted By :
Jaydip Rawal
Theju Paul
Submitted To :
Mr. K. Rajshekaran
(Dy. Director – Academics)

2. Retail Banking Sector
2
Acknowledgement
First, we thank Mr. K. Rajasekaran, for his continuous support to enable me to complete
my project. Mr. K. Rajasekaran was always there to listen and to give advice. He showed us
different ways to approach to this research problem and the need to be persistent to accomplish
any goal. Sir has provided with all the helpful suggestions for the accomplishment of this project
report.
We are also greatly indebted to Ms. Nguyen Minh Hau - Interbank Staff, Techcom bank -
Vietnam for providing information and who gave insightful comments and reviewed my work
on a very short notice
A special thanks goes to Mr. Jay Shah – Marketing Executive, ICICI bank for his valuable
efforts by providing helpful information as and when needed.
Sincere efforts have been made to work interesting and studding. However, we welcome
helpful suggestions.
Ahmedabad
7th Jan, 2006
Jaydip Rawal
Theju Paul

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Contents
Executive Summary.........................................................................................................4
Retail Banking................................................................................................................ 4
Best Practices in Retail Banking Sector............................................................................ 4
Significance of Product Innovation in Retail banking sector .....................................5
Retail banking in India .....................................................................................................7
Drivers of retail business in India ..................................................................................... 7
Opportunities and Challenges of Retail Banking in India ........................................10
ICICI, India......................................................................................................................12
Retail Banking in ICI CI..................................................................................................13
Key focus areas which need to be examined..................................................................14
ICICI Bank’s Mega Issue...............................................................................................19
Technology led initiatives ..............................................................................................20
Wells Fargo, USA...........................................................................................................21
Retail banking strategies ...............................................................................................21
Techcom Bank, Vietnam...............................................................................................26
Retail banking Strategy.................................................................................................27
The Excellence in Retail Financial Services..............................................................28
Top 5 Imperatives for Banks (Infosys Banking Domain Competency Group) ...................29
Conclusions & Recommendations ..............................................................................34
Appendix..........................................................................................................................36
Wells Fargo - Balance sheet.........................................................................................36
Techcom – Balance Sheet ............................................................................................37
ICICI – Balance sheet ...................................................................................................38

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Executive Summary
Retail Banking
Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks
with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current
/ savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and
educational) on the assets side, are the more important of the products offered by banks. Related
ancillary services include credit cards, or depository services. Today’s retail banking sector is
characterized by three basic characteristics:
• Multiple products (deposits, credit cards, insurance, investments and securities);
• Multiple channels of distribution (call centre, branch, Internet and kiosk); and
• Multiple customer groups (consumer, small business, and corporate).
Best Practices in Retail Banking Sector
The financial services industry has been widely recognized as a leader in customer intimacy.
Retail banks in particular are often praised as pioneers in deploying best-in-class strategy and
technology to develop profitable customer relationships. Much of this progress has been built on
gaining insight into customer value and then using this insight for strategic and tactical decision
making.
Companies that have demonstrated a consistently high level of performance over time tend to
share the attribute of successful innovation within one of these characteristics and often within
more than one. It is no different in the financial services industry.
The latest competitive schemes in the banking industry tend to exhibit innovation in “place” in the
form of distribution channels or “price” in the form of relationship pricing or individual product
pricing.
The large banks have invested great sums in technology and statistical analysis to develop more
effective promotional skills. With the explosion of new channel options over the past decade
financial institutions have appropriately invested heavily in delivery channel innovation,
In this report, we have tried to explore the state of art in product development in the world retail
banking sector. Information was drawn from the three top banks in di fferent developing countries,
supplemented by in-depth interview/emails from these banks. We are also trying to explore the
potential new directions in product innovation.
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Significance of Product Innovation
in Retail banking sector
Innovation can be broadly defined as the process of developing and implementing ideas to
improve customer experience, with the ultimate goal of enriching the company’s value proposition
as seen by its current and future customer loyalty, retention and shareholder return.
Innovation can be achieved in any or all of the following areas:
• Product,
• Service,
• Channel, and
• Pricing
To compete successfully in the future, retail banks need to offer a superior customer experience
across all interactions with the bank. Bank have been aggressive deployers of new self-service
technologies to improve access and increase convenience while reducing expenses by moving
transactions from expensive branches to lower cost telephone or web based channels.
Consumers have enthusiastically adopted the new channels that offer convenient 24/7 access to
their money and account information
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Product innovation has historically had a limited impact on the consumer banking market, which
has long been characterized by commoditized products. The role of product innovation has been
limited to incremental changes to existing products. Considering the definition of product,
electronic bills presentment and payment (EBPP) possibly represents the first successful new
product in over 30 years.
Following exhibit out lines the chronology of important regulations, product innovations,
technology and distribution channel events over the past 40 years.
Many product innovations have been influenced by changes in regulation, which in turn change
the balance of market and competitive forces. Innovations in distribution channels have principally
been driven by advances in technology.

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Retail banking in India
Retail banking in India is not a new phenomenon. It has always been prevalent in India in various
forms. For the last few years it has become synonymous with mainstream banking for many
banks.
The typical products offered in the Indian retail banking segment are housing loans, consumption
loans for purchase of durables, auto loans, credit cards and educational loans. The loans are
marketed under attractive brand names to differentiate the products offered by different banks. As
the Report on Trend and Progress of India, 2003-04 has shown that the loan values of these
retail lending typically range between Rs.20,000 to Rs.100 lakh. The loans are generally for
duration of five to seven years with housing loans granted for a longer duration of 15 years. Credit
card is another rapidly growing sub-segment of this product group.
In recent past retail lending has turned out to be a key profit driver for banks with retail portfolio
constituting 21.5 per cent of total outstanding advances as on March 2004. The overall
impairment of the retail loan portfolio worked out much less then the Gross NPA ratio for the
entire loan portfolio. Within the retail segment, the housing loans had the least gross asset
impairment. In fact, retailing make ample business sense in the banking sector.
While new generation private sector banks have been able to create a niche in this regard, the
public sector banks have not lagged behind. Leveraging their vast branch network and outreach,
public sector banks have aggressively forayed to garner a larger slice of the retail pie. By
international standards, however, there is still much scope for retail banking in India. After all,
retail loans constitute less than seven per cent of GDP in India vis-à-vis about 35 per cent for
other Asian economies — South Korea (55 per cent), Taiwan (52 per cent), Malaysia (33 per
cent) and Thailand (18 per cent). As retail banking in India is still growing from modest base,
there is a likelihood that the growth numbers seem to get somewhat exaggerated. One, thus, has
to exercise caution is interpreting the growth of retail banking in India.
Drivers of retail business in India
What has contributed to this retail growth? Let me briefly highlight some of the basic reasons.
First, economic prosperity and the consequent increase in purchasing power has given a fillip to a
consumer boom. Note that during the 10 years after 1992, India's economy grew at an average
rate of 6.8 percent and continues to grow at the almost the same rate – not many countries in the
world match this performance.
Second, changing consumer demographics indicate vast potential for growth in consumption both
qualitatively and quantitatively. India is one of the countries having highest proportion (70%) of
the population below 35 years of age (young population). The BRIC report of the Goldman-
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8. Retail Banking Sector
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Sachs, which predicted a bright future for Brazil, Russia, India and China, mentioned Indian
demographic advantage as an important positive factor for India.
Third, technological factors played a major role. Convenience banking in the form of debit cards,
internet and phone-banking, anywhere and anytime banking has attracted many new customers
into the banking field. Technological innovations relating to increasing use of credit / debit cards,
ATMs, direct debits and phone banking has contributed to the growth of retail banking in India.
Fourth, the Treasury incom e of the banks, which had strengthened the bottom lines of banks for
the past few years, has been on the decline during the last two years. In such a scenario, retail
business provides a good vehicle of profit maximization. Considering the fact that retail’s share in
impaired assets is far lower than the overall bank loans and advances, retail loans have put
comparatively less provisioning burden on banks apart from diversifying their income streams.
Fifth, decline in interest rates have also contributed to the growth of retail credit by generating the
demand for such credit.
In this backdrop let me now come two specific domains of retail lending in India, viz., (a) credit
cards and (b) housing.
Credit Cards in India
While usage of cards by customers of banks in India has been in vogue since the mid-1980s, it is
only since the early 1990s that the market had witnessed a quantum jump. The total number of
cards issued by 42 banks and outstanding, increased from 2.69 crore as on end December 2003
to 4.33 crore as on end December 2004. The actual usage too has registered increases both in
terms of volume and value. Almost all the categories of banks issue credit cards. Credit cards
have found greater acceptance in terms of usage in the major cities of the country, with the four
major metropolitan cities accounting for the bulk of the transactions.
In view of this ever increasing role of credit cards a Working Group was set up for regulatory
mechanism for cards. The terms of reference of the Working Group were fai rly broad and the
Group was to look into the type of regulatory measures that are to be introduced for plastic cards
(credit, debit and smart cards) for encouraging their growth in a safe, secure and efficient
manner, as also to take care of the best customer practices and grievances redressal mechanism
for the card users. The Reserve Bank has been receiving a number of complaints regarding
various undesirable practices by credit card issuing institutions and their agents. Some of them
are:
• Unsolicited calls to members of the public by card issuing banks/ direct selling agents
pressurizing them to apply for credit card.
• Communicating misleading / wrong information regarding credit cards regarding
conditions for issue, amount of service charges/ waiver of fees, gifts/prizes.
• Sending credit cards to persons who have not applied for them / activating unsolicited
cards without the approval of the recipient.
• Charging very high interest rates /service charges.
• Lack of transparency in disclosing fees/charges/penalties. Non-disclosure of detailed
billing procedure.
The Working Group deliberated a number of major issues relating to: a) to customer grievances
and rights: a) Transparency and Disclosure, b) Customer Rights Protection, and c) Code of
Conduct. The Group recommended that the Most Important Terms and Conditions should be
highlighted and advertised and sent separately to the prospective customer. These terms and

9. Retail Banking Sector
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conditions include various issues relating to: a) fees and charges, (b) drawal limits, (c) billing, (d)
default, (e) termination / revocation of card membership, (f) loss / theft / misuse of card, and (g)
disclosure.
These recommendations are being processed within the RBI and a set of guidelines would be
issued which are going to pave the path of a healthy growth in the development of plastic money
in India. The RBI is also considering bringing credit card disputes within the ambit of the Banking
Ombudsman scheme. While building a regulatory oversight in this regard we need to ensure that
neither does it reduce the efficiency of the system nor does it hamper the credit card usage.
Housing Credit in India
In view of its backward and forward linkages with other sectors of the economy, housing finance
in developing countries is seen as a social good. In India, growth of housing finance segment has
accelerated in recent years. Several supporting policy measures (like tax benefits) and the
supervisory incentives instituted had played a major role in this market.
Housing credit has increased substantially over last few years, but from a very low base. During
the period 1993-2004, outstanding housing loans by scheduled commercial banks and housing
finance companies grew at a trend rate of 23 per cent. The share of housing loans in total non-
food credit of scheduled commercial banks has increased from about 3 per cent in 1992-93 to
about 7 per cent in 2003-04. Recent data reveal that non-priority sector housing loans
outstanding as on February 18, 2005 were around Rs. 74 thousand crore, which is, however, only
8.0 per cent of the gross bank credit. As already pointed out, direct housing loans up to Rs. 15
lakh irrespective of the location now qualify as priority sector lending; housing loans are
understood to form a large component of such lending. In addition, housing credit is also being
provided by housing finance companies, which in turn are also receiving some bank finance.
Thus, from miniscule amounts, the exposure of the banking sector to housing loans has gone up.
Unlike many other countries, asset impairment on account of housing finance constitutes a very
small portion. However, with growing competition in the housing finance market, there has been a
growing concern over its likely impact on the asset quality. While no immediate financial stability
concerns exist, there is a need to put in place appropriate risk management systems, strengthen
internal control procedures and also improve regulatory oversight in this area. Banks also need to
monitor their exposure and the credit quality. In a fiercely competitive market, there may be some
temptation to slacken the loan scrutiny procedures and this needs to be severely checked.
Having delineated the broad contours of retail banking in India let me now come to its
opportunities and challenges.

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Opportunities and Challenges of
Retail Banking in India
Retail banking has immense opportunities in a growing economy like India. As the growth story
gets unfolded in India, retail banking is going to emerge a major driver. How does the world view
us? I have already referred to the BRIC Report talking India as an economic superpower. A. T.
Kearney, a global management consulting firm, recently identified India as the "second most
attractive retail destination" of 30 emergent markets.
The rise of the Indian middle class is an important contributory factor in this regard. The
percentage of middle to high income Indian households is expected to continue rising. The
younger population not only wields increasing purchasing power, but as far as acquiring personal
debt is concerned, they are perhaps more comfortable than previous generations. Improving
consumer purchasing power, coupled with more liberal attitudes toward personal debt, is
contributing to India's retail banking segment.
The combination of the above factors promises substantial growth in the retail sector, which at
present is in the nascent stage. Due to bundling of services and delivery channels, the areas of
potential conflicts of interest tend to increase in universal banks and financial conglomerates.
Some of the key policy issues relevant to the retail banking sector are: financial inclusion,
responsible lending, access to finance, long-term savings, financial capability, consumer
protection, regulation and financial crime prevention. What are the challenges for the industry and
its stakeholders?
First, retention of customers is going to be a major challenge. According to a research by
Reichheld and Sasser in the Harvard Business Review, 5 per cent increase in customer retention
can increase profitability by 35 per cent in banking business, 50 per cent in insurance and
brokerage, and 125 per cent in the consumer credit card market. Thus, banks need to emphasize
retaining customers and increasing market share.
Second, rising indebtedness could turn out to be a cause for concern in the future. India's
position, of course, is not comparable to that of the developed world where household debt as a
proportion of disposable income is much higher. Such a scenario creates high uncertainty.
Expressing concerns about the high growth witnessed in the consumer credit segments the
Reserve Bank has, as a temporary measure, put in place risk containment measures and
increased the risk weight from 100 per cent to 125 per cent in the case of consumer credit
including personal loans and credit cards (Mid-term Review of Annual Policy, 2004-05).
Third, information technology poses both opportunities and challenges. Even with ATM machines
and Internet Banking, many consumers still prefer the personal touch of their neighborhood
branch bank. Technology has made it possible to deliver services throughout the branch bank
network, providing instant updates to checking accounts and rapid movement of money for stock
transfers. However, this dependency on the network has brought IT department’s additional
responsibilities and challenges in managing, maintaining and optimizing the performance of retail
banking networks. Illustratively, ensuring that all bank products and services are available, at all
times, and across the entire organization is essential for today’s retails banks to generate
revenues and remain competitive. Besides, there are network management challenges, whereby
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keeping these complex, distributed networks and applications operating properly in support of
business objectives becomes essential. Specific challenges include ensuring that account
transaction applications run efficiently between the branch offices and data centers.
Fourth, KYC Issues and money laundering risks in retail banking is yet another important issue.
Retail lending is often regarded as a low risk area for money laundering because of the
perception of the sums involved. However, competition for clients may also lead to KYC
procedures being waived in the bid for new business. Banks must also consider seriously the
type of identification documents they will accept and other processes to be completed. The
Reserve Bank has issued details guidelines on application of KYC norms in November 2004.

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ICICI, India
ICICI Bank Ltd is India’s largest private sector bank. ICICI Bank has capitalized on the emerging
retail opportunity in India with innovative products, parity pricing, customer convenience, wide
distribution, strong processes, prudent risk management, and customer focus. Keeping with its
pioneering initiatives continued to create milestones in the areas of technology, retail market
leadership and customer service.
Armed with a network spread over 563 branches across the country and over nine countries in
the world. ICICI Bank is the largest consumer credit provider in the country with over 13 million
customer accounts ICICI bank has emerged on an incremental basis as a market leader in retail
credit across a spectrum of financial products, including retail loans, credit across a spectrum of
financial products, including retail loams, credit cards, debit cards, saving accounts, point of sale
terminals, direct sales of third party mutual funds, government bonds, depositary share accounts
etc.. A critical aspect of the retail strategy is cross selling the entire range of credit and investment
products and banking services to retail customers.
The competitive advantages for ICICI bank are an established brand, size(second largest bank in
India) and enhanced capital base, comprehensive suite of products and services, extensive
corporate and retail customer relationships, technology- enabled distribution architecture, growing
international footprints, focus on innovation and vast talent pool. ICICI bank as successfully
continued the process of diversifying its asset base and building a de-risked portfolio.
ICICI Bank has demonstrated its capabilities across products, customer segments and markets
and continues to leverage this platform to achieve market leadership, while delivering value to its
stakeholders
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Retail Banking in ICICI
Various Retail banking products by ICICI Bank
a) Deposits
• Savings Account,
• Private Banking,
• Salary Account,
• Women's Account,
• Fixed Deposits
b) Investments
• ICICI Bank Bonds,
• Mutual Funds,
• Pure Gold
c)Insurance
d)Anywhere Banking
e) Online Services
• Bill Pay,
• Shopping,
• Ticketing,
• Charity
f) Loans
• Home Loans,
• Car Loans,
• Personal Loans,
• Loans against Securities,
• Two-Wheeler Loans
g) Cards
• Credit Cards,
• Debit Cards,
• Travel Card
l) Demat
m) Mobile Banking
n) NRI Services
• NRI Home,
• Banking Products,
• Money 2 India,
• IMD Holders

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Key focus areas which need to be examined
1. Deposits
2. Cards
3. Wealth Management
4. Mortgages and Lending
1) Deposits
ICICI Bank offers wide variety of Deposit Products to suit your requirements. Coupled with
convenience of networked branches/ ATMs and facility of E-channels like Internet and Mobile
Banking, ICICI Bank brings banking at your doorstep. Select any of our deposit products and
provide your details online and our representative will contact you for Account Opening.
Savings Account
ICICI Bank offers you a power packed Savings Account with a host of convenient features and
banking channels to transact through. So now you can bank at y convenience, without the stress
of waiting in queues.
Senior Citizen Services
People at the age of retirement have various concerns like -
• whether your hard earned money is safe and secure
• whether your investments give you the kind of returns that you need
For these concerns, ICICI have an ideal Banking Service for those who are 60 years and above.
The Senior Citizen Services from ICICI Bank has several advantages that are tailored to bring
more convenience and enjoyment in your life.
Young Stars
To help children learn the value of finances and money management at an early age. Banking is
a serious business, but to make banking a pleasure and at the same time children learn how to
manage their personal finances, ICICI have introduced Young Stars Deposit A/c.
Recurring Deposits
When expenses are high, you may not have adequate funds to make big investments. But simply
going ahead without saving for the future is not an option for you. Through ICICI Bank Recurring
Deposit you can invest small amounts of money every month that ends up with a large saving on
maturity. So you enjoy twin advantages - affordability and higher earnings.
EEFC Account
Indian exports have surged over the last decade owing to an unprecedented boom in sectors like
software, biotechnology, gems, jewellery, textiles etc. As a result of this, the volume of inward
remittances has also increased significantly. To shield the firms engaged in regular export and
import from the exchange rate fluctuations RBI has allowed parking of foreign currency by
exporters in an account designated as Exchange Earners Foreign Currency Account (EEFC).
EEFC accounts are Current Accounts held in foreign currency with authorized dealers of foreign
exchange in the country.

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Resident Foreign Currency (Domestic) Account (RFCD)
Resident Indians are permitted to open, hold and maintain Resident Foreign Currency (Domestic)
Account out of foreign exchange acquired in the form of currency notes, bank notes, travelers
cheques and out of, foreign exchange earned and/or gifts received from close relatives (as
defined in the Companies Act) and repatriated to India through normal banking channels by
resident individuals. Foreign exchange earnings could be through export of goods and/or
services, royalty, honorarium, etc.
Privilege Banking
At ICICI Bank, we value the trust which you have reposed in us, as your preferred banking
partner. It is our great privilege to select valued customers like you and offer a host of exclusive
benefits across multiple products and services, specially designed for you.
• Gold Privilege Account – As good as Gold
• Silver Privilege Account – Solid Silver
Salary Account
ICICI Bank Salary Account is a benefit-rich payroll account for Employers and Employees. As an
organization, you can opt for our Salary Accounts to enable easy disbursements of salaries and
enjoy numerous other benefits too.
2) Cards
Credit Cards
ICICI Bank Credit Cards give you the facility of cash, convenience and a range of benefits,
anywhere in the world. These benefits range from life time free cards, Insurance benefits, global
emergency assistance service, discounts, utility payments, travel discounts and much more.
Debit Cards
The ICICI Bank Debit Card is a revolutionary form of cash that allows customers to access their
bank account around the clock, around the world. The ICICI Bank Debit Card can be used for
shopping at more than 100,000 merchants in India and 13 million merchants worldwide.
Travel Card
Presenting ICICI Bank Travel Card. The Hassle Free way to Travel the world. Traveling with US
Dollar, Euro, Pound Sterling or Swiss Francs; Looking for security and convenience; take ICICI
Bank Travel Card. Issued in duplicate. Offers the Pin based security. Has the convenience of
usage of Credit or Debit card.
3) Wealth Management
a) Investments
ICICI Bank Bonds
All ICICI Bank Bonds have been rated "AAA" by CARE and "LAAA" by ICRA indicating the
highest degree of safety for your money
Investment in ICICI Bank Bonds are eligible for tax rebate under Sec 88 to the full extent
possible
Bonds are listed on BSE, NSE

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Mutual Funds
We will help you determine which types of funds you need to meet your investment goals.
This may include the following types of funds:
• Debt : Liquid schemes, Income schemes, G-sec schemes, Monthly Income Schemes etc.
• Equity : Diversified Equity Schemes, Sector Schemes, Index Schemes etc.
• Hybrid Funds : Balanced Schemes, Special Schemes - Pension Schemes, Child
education Schemes etc.
Pure Gold
Gold has been traditionally the most favored form of investment for Indians. In fact, India, even
today is amongst the highest consumers of Gold in the world. However, the Gold market remains
largely unorganized with reliability and convenience remaining the key issues for gold buyers in
the country.
ICICI Bank with its ‘Pure Gold’ offer attempts to bridge the gap between the need of the
customers for buying gold and availability of an organized avenue to satisfy that need, by taking
care of the two key components – Reliability and Convenience.
b) Insurance
Convenience has always been synonymous with ICICI Bank and keeping in line with this, we now
offer you, the facility of buying Insurance policies online.
i. Life Insurance from ICICI Prudential Life Insurance
• LifeTime Pension II policy with No Life Cover
ii. General Insurance from ICICI Lombard General Insurance
• 10K Tax Saver Health Insurance
• Health Insurance “Secure yourself and your family”
- Family Protect Policy
• Home Insurance "Secure valuables in your house"
- Structure
- Contents
• Motor Insurance- Mandatory - "Secure your Vehicle"
- 4 Wheeler
- 2 Wheeler
• Travel Insurance - "Secure yourself during your travel"
- Overseas Travel Insurance
- Student Travel Insurance
Insurance market in India:
The size of Indian insurance market was Rs.187 bn. The state owned LIC (Life Insurance Corporation)
continues to be the largest player in the country. Apart from LIC, there are a total of twelve private players in
the Indian insurance market. In this there are six bank owned insurers and six independent insurers.
4) Mortgages and Lending
Home
The No. 1 Home Loans Provider in the country, ICICI Bank Home Loans offers some unbeatable
benefits to its customers - Doorstep Service, Simplified Documentation and Guidance throughout
the Process.

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Personal
• Loans for salaried & self employed individuals.
• Loans are available from Rs. 20,000 to Rs. 15 Lakhs.
• Repayment tenures from 12 - 60 months.
• No Security, Collateral or Guarantors required.
• Loans can be used for any purpose with no questions asked regarding the end use of the
loan.
• A balance transfer facility available for those who want to retire any higher debt.
• All loan repayments are done via equated monthly installments (EMI).
Car
The NO 1 financier for car loans in the country. Network of more than 1500 channel partners in
over 780 locations. Tie-ups with all leading automobile manufacturers to ensure the best deals.
Flexible schemes & quick processing. Hassle-free application process on the click of a mouse.
Two-Wheeler Loans
Avail attractive schemes at competitive interest rates from the No 1 Financier for Two Wheeler
Loans in the country . Finance facility up to 90% of the On Road Cost of the vehicle, repayable in
convenient repayment options and comfortable tenors from 6 months to 36 months . Ride home
on your Dream Two Wheeler with our hassle free finance
Commercial Vehicle
Range of services on existing loans & extended products like funding of new vehicles, refinance
on used vehicles, balance transfer on high cost loans, top up on existing loans, Xtend product,
working capital loans & other banking products.
Loans against Securities
Loans against Securities enables you to obtain loans against your securities. So you get instant
liquidity without having to sell your securities. All you have to do is pledge your securities in favor
of ICICI Bank We will then grant you an overdraft facility up to a value determined on the basis of
the securities pledged by you. A current account will be opened and you can withdraw money as
and when you require. Interest will be charged only on the am ount withdrawn and for the time
span utilized.
Loans are offered against:
• Demat Shares
• RBI Relief Bonds

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• Mutual Funds Units
• India Millennium Deposits (IMDs)
• ICICI Bank Bonds
• Life Insurance Policies (Single Premium)
Farm Equipment
Preferred financier for almost all leading tractor manufacturers in the country. Flexible repayment
options in tandem with the farmer's seasonal liquidity. Monthly, Quarterly and Half-yearly
repayment patterns to choose from. Comfortable repayment tenures from 1 year to 9 years.
Construction Equipment
• Having funded infrastructure for over 4 decades, we understand the need of the customers
better.
• ICICI Bank offers attractive financial packages through our excellent distribution network.
• Our products are customized for new entrepreneur to large business houses.
• We have tie-up with leading construction equipment manufacturers for wide range of
products.
• We take over existing high cost loans at competitive terms resulting in huge savings.
• Quick processing due to easy formalities and one time sanction of loans for disbursement
over a period of time.
Office Equipment
1. Minimum documentation required.
2. Our Key features are:
• Doorstep Service.
• Minimum documentation.
• Competitive Interest rates.
• Flexible repayment structure.
• Hassle-free application process with the click of a mouse.
• Details on your application status online.
Medical Equipment Loans against Securities
As a top-notch professional, you are aware of the distinct advantages that the latest medical
equipment can give your patients. ICICI Bank Medical Equipment Loans will support you in your
effort to give the best to your patients. It's our humble way of being involved in a noble profession.
We offer loans for:
• Purchase of New equipments.
• Takeover of Existing loans.
Our Key features are:
• Doorstep Service.
• Funding in more than 150 locations across the country.
• Competitive interest rates.
• Flexible repayment structure.

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ICICI Bank’s Mega Issue
The year 2004 till now has been the year of the public issues . The market is flooded with the
IPOs, many are already in the market and many are waiting to hit the market. Of all the issues
floated, ICICI Bank’s issue is the second largest issue (only after ONGC) and the largest by any
private The board of directors of ICICI Bank has approved the issuance of equity shares of the
Bank in the domestic markets. The size of the public issue is between Rs 3,000 -3,500 crore (Rs
30-35 billion), and is scheduled to open in April. It will be a domestic book built issue, and will
dilute equity by about 15-17% and is likely to be priced at 2-2.5 times its book value.
Reasons for Raising the Issue
ICICI Bank wants to come up with the issue in order to fund its future growth. The Bank cites a lot
of growth opportunities in the Indian economy which is growing at 7-8%. Consumer credit in India
is growing at a very fast pace, and ICICI Bank is in the Indian economy which is growing at 7-8%.
Consumer credit in India one of the leading providers. In fact, it is the leading provider of retail
services in the country today and as the leading bank it doesn’t want to forego the growth
opportunities, and the capital that the Bank would like to commit to its international operations.
The money from the issue would help fuel growth plans of the Bank for the next four years. Retail,
infrastructure loans and insurance are areas where demand for funds is seen to grow rapidly in
the coming months. The demand for credit from retail front is expected to increase with continued
economic growth, rising household incomes and lower interest rates. The clamor for credit from
manufacturing is also expected to increase after looking into the governments plans to invest in
the infrastructure. Bankers feel infrastructure funding will pick up in 2004-05 as various projects,
led by power, are likely to attain financial closure. State Bank alone expects a core sector-driven
jump of 16 per cent in loan disbursals.

20. Retail Banking Sector
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Technology led initiatives

21. Retail Banking Sector
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Wells Fargo, USA
Wells Fargo & Company is a diversified financial services company with $397 billion in assets,
providing banking, insurance, investments, mortgage and consumer finance from more than
5,900 stores and the Internet (wellsfargo.com) across North America and elsewhere
internationally. The Wholesale Banking group at Wells Fargo serves middle-market and large
corporate businesses with traditional and asset -based lending, treasury management, equipment
leasing, institutional investment, insurance brokerage, risk management, and real estate services.
Retail banking strategies
Late 1989, its Business Banking group formed in retail bank to focus on small business
customers. Business lending division created to lead to firms with less than $10 MM in sales.
In 1994, cost studies showed that standard lending processes (distribution, underwriting,
servicing) were uneconomic for smallest loans.
Business direct formed in 1994 to focus on streamlined lending of up to $100,000 primarily to
businesses with sales less than $2 Million.
Wells Fargo has embraced automation for under-$100,000 loans to small businesses. Wells
delivers these loans nationally through centralized processing and servicing operations. Products
are standardized, and potential customers are solicited on a pre -approved basis. Approval
decisions rely heavily on credit scores. These scores are assigned using privately developed
software that exploits Wells’ small business database. Wells Fargo uses its branches to market
small business loans over $100,000. For these loans, Wells does not use credit scores, but
instead compares the small businesses’ financial position against a benchmark of businesses in
similar industries. The process not only assigns a risk rating for the small business, but also
suggests banking products appropriate to the business.
Small business lending at Wells Fargo
95 % of small businesses are best thought of as a specialized segment of the consumer market
and not as commercial customers. Exhibit shows the count of small business by its annual sales.
6

22. Retail Banking Sector
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Providing small loans to these small companies is a big and growing business in
U.S.
Exhibit shows the spending through credit cards for payment in transaction by
small business companies.

23. Retail Banking Sector
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Wells Fargo’s Business direct was established for building a lending operation
focused on various small businesses.
Even the small business is segmented into various categories as show below.
The average lending profitability of these small business segments

24. Retail Banking Sector
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Comparison between traditional Loan lending process and the process followed
at Wells Fargo’s Business Direct.
Marketing and New account Acquisition for attracting low risk small
business borrowers
• Making good, solid borrowers want to apply and use credit is critically
important to the credit quality and profitability of the portfolio
• Adverse Selection
- Long, involved application
- Uninterested Offer: Very small credit limit; Very high interest rates
- Internet
• Positive Selection
- Short, easy application
- Low rates
- Easy for branches to sell the product
• Offers
• Creative / Direct Mail Piece Design
• Telemarketing Scripts

25. Retail Banking Sector
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• Channels – Store, Direct Mails, Telemarketing, Internet
• Disciplined analysis of test results required to succeed. What kind go
customers are we attracted? What’s working? What’s not working
The business direct loan decision process

26. Retail Banking Sector
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Techcom Bank, Vietnam
A leading urban commercial bank in Vietnam providing full scale of diversified and highly
competitive financial service to corporate and individual customers aiming at customer
satisfaction, shareholders value creation, employees benefit and development and contribution to
Society development.
Major core values
• Customer driven organization
• Mutual benefit among customers, shareholders and employees
• Learning organization
• Company culture : Trust and commitment, Professionalism, transparency and innovation.
Critical success factors
• Technology based product development
• A well defined strategy of targeted customers, products and operation area
• Well capitalized
• A comprehensive human resources strategy
• Support from consulting organizations
• Utilizing resources effectively. Good combination of internal and external resources.
Targeted clients
1. Small and medium enterprises
• Import-Export enterprises
• Manufacturing enterprises
• Construction, Pharmaceutical, Transport equipment
• Commercial services enterprises
• Enterprises operating in the real estate fields
2. Consumers banking & household business
• Medium and high end consumer clients in the cities
• New generation aged from 20 – 35 years old
• Private household business
3. Major Accounts
• Import-Export Sector
• High consumption good manufacturing
• Construction, Pharmaceutical, transport equipment
• Car manufacturing
• Retail estate developers and operators
7

27. Retail Banking Sector
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4. Financial institutions
• Medium and small financial institutions
• Insurance Companies
Retail banking Strategy
• Technology based product focusing on account related consumer banking development
• Mortgage lending and care financing
• Bank card business with focus on domestic market
• High density of Techcon bank sales outlets combined with ATM/POS network in Hanoi,
Saigon, Danang, Haiphong and industrial areas
• Cross selling strategy with insurance and asset management product and services in line
with Marketing alliance with great consumption sectors for added value service to
individual clients
• Selling points : Superior – Standard – Advanced products, quality, easy access and in
fashion

28. Retail Banking Sector
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The Excellence in Retail Financial
Services
Evaluation criteria ICICI
Wells
Fargo
Techcom
Bank
Annual financial performance of the retail bank 4 5 3
Sustainability (based on % core recurrent business) 4 4 3
Transparency in strategy 3 3 3
Sales capability 5 3 2
Processes and technology 4 5 3
Penetration and efficiency of distribution channels 5 5 3
Product Strategy 5 4 4
Overall Rating 4.16 4.16 2.83
8

29. Retail Banking Sector
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Top 5 Imperatives for Banks (Infosys
Banking Domain Competency
Group)
9

30. Retail Banking Sector
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31. Retail Banking Sector
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32. Retail Banking Sector
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33. Retail Banking Sector
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34. Retail Banking Sector
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Conclusions & Recommendations
In this report we have tried to put the role of product innovation into perspective for banks. Banks
face an increasingly competitive environment over the next several years and therefore need a
clear strategy in order to be successful and prosper. For almost all institutions, customer centricity
will be the bedrock of that strategy. Today many banks are focusing management energy and
investment of their distribution networks, where significant revenue gains can be achieved by
improving services and cross selling efficiency at the point of customer contact.
We recognize that each bank is unique and faces different challenges based on its local markets,
historical business approach, strategies, organization, processes and investments.
The retail banks may need to refocus their strategy on customers and customer value
management rather than solely on products and product management. By doing so, they
can start to create and use strategies that increase profitability and result in a stronger
customer franchise.
Customers are the scarcest resource in business today - even scarcer than capital. A sound
customer strategy helps banks to focus on not just any customers, but the right customers - those
who offer the highest value today and tomorrow.
Most of the banks use customer value metrics to help measure the effectiveness of sales
campaigns some use them in measuring the overall success of the organization.
CRM is gradually breaking through its bottleneck and achieving end-to-end marketing.
Following factors give rise to better customer relationship management:
Significant advances in cheaply and quickly drawing customer information out of tradition system.
This used to be cumbersome and expensive and sometimes placed undesirable strain on the
tradition system.
'Print streams' for statements, bills, order confirmations, customer letters and so on, can now be
manipulated to include marketing messages tailored to the individual recipient, taking advantage
of all the sophisticated analysis and segmentation that takes place at the database level.
Incremental cost for the marketer is minimal.
The straight cost of investing in CRM has fallen, making it more acceptable to careful CFOs at
larger organizations and financially more feasible. A range of CRM package options have arrived,
10

35. Retail Banking Sector
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including the hosted, charged on a service rental basis, low-cost de-featured start-up packages,
and even charging pe r transaction.
Private Banksthat invest in segmentation are likely to be the ones that increase customer
satisfaction and referrals and, therefore, market share.
From the diverse client base of any bank there are a number of fundamental needs and
sentiments that HNW individuals have in common, and it is these needs that should be translated
into a range of very different product and service requirements through segmentation. Featuring
high on the HNW 'wish list' is that providers should break away from the 'one size fits all' mentality
and take into account each client's individual circumstances when tailoring their services.
"Segmentation based upon level of wealth does not adequately address the issue of individual
needs, just as one individual with a million dollars is as different from another as any two drivers
of a similar car.

36. Retail Banking Sector
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Appendix
Wells Fargo - Balance sheet

37. Retail Banking Sector
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Techcom – Balance Sheet

38. Retail Banking Sector
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ICICI – Balance sheet

39. Retail Banking Sector
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