Situation Analysis Of Banking Sector In India

MARKETING MANAGEMENT

PRESENTED BY-

KUMAR RAMA SHANKARHRD-09-6134

TOPIC OF PRESENTATION

Situational analysis Of

“Banking sector’’In India.

RESERVE BANK OF INDIA

• Reserve bank of India is the central bank of India and it is constituted under the act Reserve Bank of India,1934.

• It started functioning on 1st April of 1935. OBJECTIVES1. Promoting growth and maintaining price stability.2. Maintaining monetary stability.3. Ensuring the sound health of financial institutions (BANKS).4. Ensure orderly conditions are maintained in the foreign exchange

market .

FUNCTIONS TOOLS

a) Issuing notes .b) Maintaining price

stabilityc) banker’s bank .d) Exchange control .e) Development of

financial system .

a) Cash reserve ratio.b) Repo rate.c) Reverse repo rate.d) Statutory liquidity

ratio.e) Open market.

Difference between nationalized bank and private bank.

1)Nationalized banks are supported or guided by the local government.

2)Very stable and a very slow grow, very low risk.

3)Less paid.

1)Private bank is owned by many investors, locally or internationally.

2)Strong growing bank and competitive. Takes in general more risks

3)Better paid job.

ICICI BANK• ICICI Bank is India's #2 bank (after State Bank of India) and

its largest private bank, with some 1,400 branches and 4,700 ATMs nationwide.

• ICICI's retail banking group offers lending and deposit services to small businesses and individuals.

• In a span of just four years, ICICI Bank has emerged as a consumer banking behemoth. With a retail book of over Rs 560 billion and a market share that is the envy of competition - it has a share of over 30 per cent - ICICI Bank today has reached a commanding position.

SERVICES PROVIDED BY ICICI BANK

ICICI bank provides services like:

1.Retail banking2.Corporate banking3.Structured finance

State bank of India1)State Bank of India, the country’s largest commercial Bank in terms of profits, deposits, branches and employees. 2) With 11,448 branches and a further 6500+ associate bank branches. State Bank of India has electronically networked.3) The bank has one of the largest ATM networks in the region. More than 8500 ATMs across India.4) It is the only Indian bank to feature in the top 100 world banks in the FORTUNE GLOBAL 500 rating.

SWOT ANALYSIS

• Strengths:• BRAND NAME: SBI Bank has earned a reputation in the market over

the period of time.• Market Leader : SBI is ranked at 380 in 2008 Fortune Global 500 list,

and ranked 219 in 2008 Forbes Global 2000. • Government Owned: Government owns 60% stake in SBI. This gives

SBI an edge over private banks in terms of customer security.• Low Transition Costs -SBI offers very low transition costs which

attracts small customers

Weaknesses:

• The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change.

• Though SBI cards are the 2nd largest player in the credit card industry, it has the highest non performing assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec 2007).

• Modernization : SBI lags with respect to private players in terms of modernization of its processes, infrastructure, centralization, etc.

Opportunities:

• Merger of associate banks with SBI: Merger of all the associate banks into SBI will create a mega bank which streamlines operations and unlocks value.

• Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further increase its reach.

• Increasing trade and business relations and a large number of expatriate populations offers a great opportunity to expand on foreign soil.

Threats

• Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of SBI bank.

• Consumer expectations have increased many folds in last few years and the bank has not been responsive enough to meet them on time.

• Private banks have started venturing into the rural and semi-urban sector, which used to be the bastion of the State Bank and other PSU banks

• Employee Strike: There was an employee strike in the year 2006 which disrupted SBI’s activities. This can be repeated in the future.

Current scenario and requirements

• the interest rates are low due to the efforts of the government to tame the current economic crisis.

• To meet these challenges and sustain the growth in the banking sector, several measures will have to be undertaken by policy makers - The Reserve Bank of India, the Finance Ministry and other regulatory bodies.

• Banks should be encouraged to use technology and other innovative measures to tap the lower income and rural markets.

THANKSSSSSS