Analysis of the Indian banking sector

Ace p.

Order the writing of a tailor-made Finance Thesis

Free quote online

Dissertation Format .doc

Analysis of the Indian banking sector

Download

Read an extract

Reader
Abstract
Contents
Extract

Abstract

This project focuses on the recent scenario of the Indian banking sector. To analyze the industry's growth and position, we have divided it into three sections. In the first section we have studied the Indian economy; second section is on banking industry in India; and the third section is the analysis of ICICI BANK. The first section gives a larger view of direction of the Indian economy vis-a-vis global scenario, the various policies and events that are prevailing in the economy. And a special emphasis has been made on how these events, such as inflation, policies of RBI, etc on commercial banks. The next section lists the different categories of banks in India, the development of banking industry, the present scenario of various banks and the industry in general. Lastly, we have given a microscopic view of ICICI bank in order to understand commercial banks and their functioning. While the global economy is expected to grow at 4.9 percent, Indian economy is expected to grow at a slightly lower rate of nine per cent during this fiscal 2007-08(lower as compared to last quarter of 2006-07) even as inflation rate will moderate to four per cent (after a hike until almost 6percent). India's gross domestic product (GDP) had expanded by a robust 9.4 per cent in 2006-07. Prime Minister's Economic Advisory Council projected an export figure of $147 billion, against the government's target of $160 billion for the financial year 2007-08.

Introduction
An overview of Indian banking industry
Economic analysis
Current problems of Indian economy
1. Inflation
2. Surplus liquidity
3. Appreciating Rupee
Government bonds and securities
The importance of foreign exchange market
1. Reserve Bank of India's take on foreign exchange market
2. The current scenario of foreign exchange market
External Commercial Borrowings (ECB) Policy 2007
1. Impact on Indian market
A review of Indian banking industry
Global effect on Indian banking sector
Banks investment in Bollywood
Banks investment in Agriculture
Company analysis
Ratio analysis
Trend analysis
Conclusion
Bibliography

Get this table of contents for free after login.

Extract

[...] In the recent past, the Indian Finance Ministry has been discussing with central bank, the RBI, ways of using part of its FOREX for funding infrastructure projects. There have been moves like: Establishing wholly-owned overseas subsidiaries of the government-owned India Infrastructure Finance Company (IIFCL) and Central Bank to lend a small part of its reserves to Indian companies implementing infrastructure projects to meet part of their capital expenditure abroad such as import of equipment etc. But this thought process had invited its own criticism as under: The reserves though look sufficient, may be required in case of any financial crises, import cover for a reasonable period or in case of a war. [...]

[...] ICICI, the country's second-biggest lender, is going to raise $ 1.5 billion of yen-denominated loan the biggest offshore loan for an Indian financial sector borrower. The loan will be raised in three different maturity types - one year, three- year and five-year loans - of equal sizes with the five-year portion being the longest maturing loan to be issued by ICICI. ICICI Bank jointly with IBM Corp and World Bank's private lending arm IFC will offer small and medium-enterprises in the country with an innovative online resource center - SME Toolkit - to help them start up, finance and grow their business. [...]

[...] In absolute terms, the banking sector lent Rs 2.03 trillion in fiscal year 2006-07, against a target of Rs 1.75 trillion. In 2005-06, the industry had exceeded the target by an even wider margin: when it lent Rs 1.8 trillion against a target of Rs 1.41 trillion. Commercial banks in that year had exceeded the target by close to 44% by lending more than Rs 1.25 trillion to this sector, while cooperative banks had exceeded their target by and regional rural banks just managed to fulfill their target. [...]

[...] Emergence of internet Banking, Mobile banking, credit & debit cards has led to faster services and hence boom in banking sector CONCLUSION Indian economy is one of the leading economies of under-developed economies. The government has adapted to a more liberalized structure and is slowly drifting from a socialist economy to a market economy, to become a mixed economy in its true sense. Introduction of SEZ, FDI, FII, foreign banks etc has given a new direction to the economy and developed existing industries and new ones as well. [...]

[...] The Indian banking system, with one of the largest banking networks in the world, has witnessed a series of reforms over the past few years like the deregulation of interest rates, dilution of the government stake in public sector banks (PSBs), and the increased participation of private sector banks. At the same time, Indian banking stands at the threshold of a mega change in the next five years. The growth of the retail financial services sector has been a key development on the market front. [...]

doc