A PROJECT REPORT

ON
COMPARISON ANALYSIS OF SBI & ICICI BANK

V/S
SUBMITTED BY
MR.HARDIK RAJENDRA KADU
M.COM SEMESTER- I

CHINCHANI TARAPUR EDU. SOCITY'S

P.L. SHROFF COLLEGE OF ARTS & COMMERCE
2013-2014

SUBMITTED TO
UNIVERSITY OF MUMBAI
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE AWARD OF MASTER DEGREE OF COMMERCE
PROJECT GUIDE
PROF. 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 that

Name

Hardik Rajendra Kadu

Class & semester

M.com, SIM - I

Roll No.

22

Month & year

Oct 2013-2014

Subject

Advance Finance Account

Topic

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

Examiner

Signature of the M.Com co-ordinator

Signature of the External

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.

INDEX
SR. NO

PARTICULARS

INTRODUCTION

HISTORY

GROWTH

CURRENT SCENARIO

PRODUCTS AND SERVICES

CUSTOMER SATISFACTION

INTERNATIONAL BANKING

ADVANTAGES

COMPARISON

10

ANALYSIS AND INTERPRETATION

OF SERVICES

11

ANALYSIS OF PERFORMANCE

12

SBI 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 statesponsored 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 INDUSTRIAL
CREDIT & 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 statesponsored 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 ATMcum- 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 BANK

ICICI 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
market with a share of nearly 20 percent.

$20-Billion annual remittance

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

Mumbai
Operations 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
Cash Withdrawal
Mobile Recharge
Fund Transfers
(All)
Mini Statement
card bills
Balance Enquiry
Prudential Insurance premium
Donate to temple trusts
book
Donate to relief funds
Pay Utility Bills (MTNL and Bescom only)
Pay SBI Credit Card Bills
Pay SBI Life Insurance premium
Pay fees of certain colleges

ICICI
Cash Withdrawal
Mobile Recharge
Pay Utility Bills
Pay ICICI credit
Pay ICICI
Request cheque
Fund Transfers
Mini Statement
Balance Enquiry

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 Q42011 (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 Q42012.
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 reprice 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.