Idbi Bank Comp Pro

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IDBI Bank

Industrail Development Bank of India Ltd.

Chp:-1.1Introduction

Type :- Public Sector Bank

Founded :- 1964

Headquarters :- Indai

Key People :- Yogesh Agarwal,chairman

Industry:- Finance

Product:- Financail Services

Employees:- 8989

The Industrial Development Bank of India (IDBI) was established on 1 July 1964 under an Act

of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16 February 1976,

the ownership of IDBI was transferred to the Government of India and it was made the principal

financial institution for coordinating the activities of institutions engaged in financing, promoting

and developing industry in the country. Although Government shareholding in the Bank came

down below 100% following IDBIs public issue in July 1995, the former continues to be the

major shareholder (current shareholding: 75%). IDBI provides financial assistance, both in rupee

and foreign currencies, for green-field projects as also for expansion, modernisation and

diversification purposes. In the wake of financial sector reforms unveiled by the government

since 1992, IDBI also provides indirect financial assistance by way of refinancing of loans

extended by State-level financial institutions and banks and by way of rediscounting of bills of

exchange arising out of sale of indigenous machinery on deferred payment terms.


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IDBI has played a pioneering role, particularly in the pre-reform era (196491),in catalyzing

broad based industrial development in the country in keeping with its Government-ordained

development banking charter.

Narasimam committee recommends that IDBI should give up its direct financing functions andconcentrate only in promotional and refinancing role. But this recommendation was rejected by

the government. Later RBI constituted a committee under the chairmanship of S.H.Khan to

examine the concept of development financing in the changed global challenges. This committee

is the first to recommend the concept of universal banking. The committee wanted the

development financial institution to diversify its activity. It recommended to harmonise the role

of development financing and banking activities by getting away from the conventional

distinction between commercial banking and developmental banking.

1.2Estiblishement

The IDBI Commonly known by its Acronym IDBI. It is one of indais Leading public swctor

bank and 4th

largest bank in overall rating. RBI categorized on july 1, 1964 by an act of

parliament. The main aim behind setting of IDBI was to provide credit and other facilties for the

indain industry, which was still in the intial stages of growth and development. The industrailDevelopment Bank Of Inf\dia (IDBI) was established under an Act of parliament as awholly

owned subsidiary of the Reserve Bank Of india. The total revenue of bank is 500M.

It is currently the tenth largest development bank in the world in terms of reach with:-1140

ATMs, 689 Branches metro-206, urban-273, semi-urban-138, rural, 72, and 458 Centers.

Some of the institution built by IDBI are the national stock exchange of india (NSE), the national

stock exchange of india (NSE), the national Securities Depository services LTD (NSDL) TheStock holding xorpation of india (SHCIL), and IDBI BANK, which today is owned by the Indian

government, Thought for a brief period it was a private scheduled bank.


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Marketing Strategy:-

The bank has two ways of marketing namely:-

1. Though Branch2. Through Sales Department

1. Though BranchIn this method they talk directly to the existing customers about the various new schemes

and other important information. According to the bank people this method is effective

but the information does not go to large number of people. Because of this method the

people are not aware of various schemes and important announcements about our bank so

they cannot open account with us.

2. Through Sales DepartmentIn this method the sales department employees take the whole responsibility of giving

the common people the information about the new schemes and facilities. The employees

take the help of pamphlets, advertisement in television, etc. Go door-to-door for

distributing pamphlet, give advertisement on internet on various websites most visited by

people, etc. This method has positive impact that the people come to know about the

various new schemes and facilities. This method is approved by the employees.


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1.3 Role:

From the time of existence, IDBI has been very good not only in establishing a well-developed and efficient industrial and institutional structure but also adding a qualitative

dimension to the process of industrial development

It has played a pioneering role in fulfilling its mission of promoting industrial growththought financing of medium and long-term projects.

It has done good, particularly in the pre-reform era (1964-91), in catalyzing broad basedindustrial development in the country in keeping with its government- ordained

development banking Charter.

Its activities confines of long-term lending to industry, balanced industrial growththought development of backward area, modernization of specific industries, employment

generation, entrepreneurship development.

Support service for creating a vibrant domestic capital market.

1.3Functions:-

The IDBI has been established to perform the following functions-

(1) To grant loans and advances to IFCI, SFCs or any other financial institution by way of refinancing of

loans granted by such institutions which are repayable within 25 year.

(2) To grant loans and advances to scheduled banks or state co-operative banks by way of refinancing of loans granted by

such institutions which are repayable in 15 years.

(3) To grant loans and advances to IFCI, SFCs, other institutions, scheduled banks, state co-operative banks by way of

refinancing of loans granted by such institution to industrial concerns for exports.

(4) To discount or rediscount bills of industrial concerns.

(5) To underwrite or to subscribe to shares or debentures of industrial concerns.


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(6) To subscribe to or purchase stock, shares, bonds and debentures of other financial institutions.

(7) To grant line of credit or loans and advances to other financial institutions such as IFCI, SFCs, etc.

(8) To grant loans to any industrial concern.

(9) To guarantee deferred payment due from any industrial concern.

(10) To guarantee loans raised by industrial concerns in the market or from institutions.

(11) To provide consultancy and merchant banking services in or outside India

IDBI has enlarged its basket of products and services, converting almost the entirespectrum of industrial activities, including manufacturing and service.

IDBI provides financial assistance, both in rupee and foreign currencies, for green-fieldprojects as also for expansion, modernization and diversification purposes.

During financial sector IDBI evolved an array of fund and fee-based services with a viewfor providing an integrated solution to meet the entire demand of financial and corporate

advisory requirements of its clients.

It also provides indirect financial by way of refinancing of loans, extended by state-levelfinancial institution and bank and by way of rediscounting of bills of exchange arising out

of sale of indigenous machinery on deferred payment terms.


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1.5 Products and Service offered by Bank

Personal Banking

Deposits Saving Account (basically for salary persons) Current Account (for businessmen ) Fixed Deposits (for Everyone) Suvidha Tax Saving Fixed Deposit Pension Account Sabka Account Super Shakti Account for Women Jubilee plus Account

Loans Home Loans Loans Against Property Education Loans Personal Loans Loan Against Securities Reserve Mortgage Loan Auto Loan

Payment Tax Payment Stamp Duty Payment Easy Fill Bill payment Card to Card Money Transfer Online Payment Pay Mate


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Investments Advisory Smart Financial Planning Mutual Fund Insurance Fixed Income Securities

Cards Gold Debit Card International Debit Cum ATM Card Gift Card World Currency Card Cash Card KIDS Debit Card Foundation Day Cash Back Scheme 2009. Platinum Card

Institutional Banking Institutional Saving Account

Corporate Payroll Account

24 Hours Banking Phone Banking SMS Banking Account Alerts Internet Banking

Other Product Locker India Post


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Preferred Banking Capital Market IPO Demat

Corporate Banking:-Following Products and services are offered by IDBI Bank for the corporate.

o Project Financeo Infrastructure financeo Syndication, Underwriting, & Advisory Serviceso Carbon Credits Businesso Working Capitalo Cash Management Serviceso Trade Financeo Tax Paymento Derivativeso Technology Up gradation Fund Scheme (TUFS)o Film Financing Schemeo Direct Discounting Billso Rehabilitation Finance

SME FinanceFollowing SME Finance product are offered by the IDBI Bank;

o Sulabh Vyapar Loano Dealer Financeo Funding Under CGFMSEo Direct Credit SchemeSIDBIo Preferred Customer SchemeIDBI Bank/SIDBIo Vendor Finance (Pre-Sale)o Vendor Financing (Post-sale)


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o Lending Against the security of Future Credit Card Receivableso Working Capital FinancingSoftware Development Entitieso Finance to Medical Practitionerso Loan to SRWTOo SME Hosiery Special Current Account

Othero Agri-Business Products

1.6 History

Merger of IDBI Bank Ltd. with IDBI Ltd.

Towards achieving the faster inorganic growth of the Bank, IDBI Bank Ltd., a wholly owned

subsidiary of IDBI Ltd. was amalgamated with IDBI Ltd. in terms of the provisions of Section

44A of the Banking Regulation Act, 1949 providing for voluntary amalgamation of two banking

companies. The merger became effective from April 02, 2005.

Merger of United Western bank with IDBI Ltd.

The United Western bank Ltd. (UWB), a Satara based private sector bank was placed under

moratorium by RBI. Upon IDBI Ltd. showing interest to take over the said bank towards its

urther inorganic growth, RBI and Govt. of India amalgamated UWB with IDBI Ltd. in terms of

the provisions of Section 45 of the Banking Regulation Act, 1949. The merger came into effectonOctober03,2006.


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Change of name of IDBI Ltd. to IDBI Bank Ltd.

In order that the name of the Bank truly reflects the functions it is carrying on, the name of the

Bank was changed to IDBI Bank Limited and the new name became effective from May 07,

2008 upon issue of the Fresh Certificate of Incorporation by Registrar of Companies,

Maharashtra. The Bank has been accordingly functioning in its present name of IDBI Bank

Limited.

In the year 1931, Travancore Federal Bank was inaugurated at Pattamukkil Varattisseril at

Nedumpuram, near Thiruvalla, Kerala. The 14 founders included Sri.Pattamukkil Varattisseril

Oommen Varghese, his brothers Oommen Chacko, Oommen Kurian, Oommen George and also

another person from Thiruvalla, Kavumbhagam Mundapallil Lukose, and others. Oommen

Varghese was the Chairman and Oommen Chacko the Manager. After it had functioned for

nearly 10 years, the bank's day to day transaction had to be stopped due to the ill-health of the

Manager.

Understanding this situation, a lawyer from Perumbavoor named Sri K.P.Hormis and his

acquaintances joined together, bought the bank and took over the management. In 1945, they

moved the bank's registered office to Aluva and Hormis became the Managing Director. In 1947,

the bank's name was shortened from Travancore Federal Bank to Federal Bank

In 1970, the bank became a Scheduled Commercial Bank. Recently, it opened a representative

office in Dubai

1964

The Company was incorporated on 1st July, at Mumbai. The Bank was established as a wholly

owned subsidiary of the Reserve Bank of India on 1st July, under a special statute, viz.,

Industrial Development Bank of India Act.
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1965

- With effect from 1st April, the Bank introduced a scheme for rediscounting usance

bills/promissory notes arising out of sale of indigenous machinery on deferred payment basis.

- The Bank decided to supplement its refinance operations with a measure of risk-sharing with

other institutions on a systematic basis and introduced a participation scheme for this purpose,

with effect from 1st April, 1966.

- The Development Assistance Fund was established on 27th March, in terms of Notification

dated 16th March, issued by the Government of India

1973- North Eastern Industrial and Technical Consultancy Organisation, Ltd. (NEITCO), was

sponsored by the IDBI in May. Another technical consultancy organisation, viz., Bihar

Industrial and Technical Consultancy Organisation, Ltd. (BITCO), was set up.

- Refinance facilities are provided to eligible banks, which are authorised dealers in foreign

exchange, against medium-term export credits granted to exporters in the private sector, who are

manufacturers, recognised export houses or other exporters of standing.

- The Bank as a apex institution, has also been vested with the responsibility of strengthening

the resources position of the term financing institutions with a view to enabling them to expand

and diversify their activities.

1977- IDBI introduced in January, at the instance of the Government of India, a scheme for providing

rupee assistance, to industrial units receiving import licences, under the TDF.

- IDBI, apart from giving resource support for setting up of IFCI, UTI and SFCs, helped in

establishing Shipping Credit and Investment


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Corporation of India, Ltd., Stock Holding Corporation of India Ltd.,Securities and Exchange

Board of India, Discount and Finance House of India, Ltd., Tourism Finance Corporation of

India Ltd., Over The Counter (OTC) Exchange of India, Biotech Consortium India Ltd., and

Indian Investment Management Company Ltd.

1985- A new scheme known as Equipment Refinance Scheme was introduced with effect from

July 1st.

- The Bank introduced a new scheme called the Foreign Currency Refinance scheme. Under

this Scheme, the Bank would extend foreign currency refinance facility to SIDCs/SIICs under

the Bank's Normal Refinance Scheme.

- A special scheme of assistance for installing in-house quality testing facilities was introduced

under SIDF. Presently, this scheme is being operated by SIDBI.

1987- The National Equity Fund Scheme was introduced in August for providing equity type support

to new tiny and small scale industrial units which are engaged in manufacturing activities and

also for rehabilitation of potentially viable sick SSI units.

1991- With effect from 1st April, DAF was merged with the General Fund.

- The Bank's resources can be augmented through issue of bonds and debentures with or without

Government guarantee.

- IDBI introduced 3-year 9% capital for sale to the public in the domestic market.


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1992- The Bank issued unsecured bonds for a minimum aggregate amount of Rs 300 crores as

follows: Deep Discount Bond had a face value of Rs 1,00,000 was issued at a deeply discounted

price of Rs 2,700 with a maturity period of 25 years from the date of allotment, Double Option

Bond had a face value of Rs 5,000 bears an interest of 15% payable at the end of 10th year on

redemption with a premium of Rs 250 per bond. Part A of Rs 5,000 and Part B of Rs 16,500 are

tradable separately on Stock Exchanges at Ahmedabad Mumbai, Bangalore, Calcutta, Delhi and

Mumbai and Regular Return Bond had a face value of Rs 5,000 where interest on principal sum

is payable half-yearly. These bonds are redeemable at a premium of 5% at the end of 10 years

from the date of allotment.

- The bank entered the area of merchant banking to provide professional advice and services to

industry for raising resources from capital market, acquisition of assets on lease and

mergers/take-overs of existing units.

- The Bank set up a foreign exchange dealing room to deal with all foreign exchange

transactions. The bank had set up Investor Services of India Ltd. with a view to providing

registrar and transfer services based on high technology system.

- In order to provide wider range of direct finance to meet the specific requirements of clients,

the bank introduced new products such as Asset Credit and Equipment Finance. Also introduce

equipment leasing to meet the increasing demand for such services.

1994- The Bank obtained the membership of National Stock Exchange. IDBI Bank Ltd. promoted

and incorporated in September as a commercial bank with an authorised capital of Rs 500.

- The Bank had set up a Mutual Fund as a trust with a view to offering innovative investmentproducts to investors backed by high quality servicing.

1997- IDBI, became the first financial institution to apply NSDL as DP.


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- IDBI has signed an agreement with National Securities Depository Ltd (NSDL) to get its

equity shares admitted for dematerialisation.

- IDBI has signed a -million bilateral seven-year loan facility arranged by Asahi Finance Ltd

with Asahi Bank Ltd, Hong Kong as the lender.

- The Reserve Bank of India has shot down the IDBI's proposal to privately place equity shares

of its subsidiary, IDBI Bank, with the shareholders of the financial institution.

- The largest financial institution of the country IDBI has merged its foreign exchange and

domestic treasury operations following rapid deregulation of the money and foreign exchange

markets in the country.

- The IDBI has signed a 0 million line of credit with the Export-Import Bank of Japan (EXIM-

J) at Tokyo.

- IDBI is set to become the first all-India financial institution to float capital gains bonds.

1998- The IDBI has tied up a 0 million line of credit with the Export Import Bank of Japan for

financing Indo-Japanese joint venture projects in India.

- The IDBI is set to enter the capital market with a mega Rs 1,000-1,500 crore debt issue

(Flexibond 4). This will be IDBI's maiden retail issue in the current fiscal.

- American Express Bank, the travel related and financial services company, has entered into a

strategic alliance for financial services with IDBI Bank.

- IDBI Bank has entered into a strategic alliance with leading travel and financial service

company American Express Bank.

1999- American Express Bank (Amex) has entered into a strategic alliance with IDBI Bank for its

personal financial services (PFS) division to jointly explore the development of products such as


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smart card and debit card, and market complementary products and services to customers of both

the banks.

- The Board for Industrial and Financial Reconstruction (BIFR) has declared ATV Projects a

sick company and appointed IDBI as operating agency (OA) for preparing the rehabilitation

package for the company.

2000- The Bank has been made the nodal agency for disbursing the Montreal Protocol-approved

million compensation package to four Indian companies, including SRF Ltd., and Gujarat

Flurocarbonds.

- Industrial Development Bank of India and the Export-Import bank of the United States have

signed an memorandum of understanding for financing in the amount of 0 million to support

import of US-sourced goods for Indian borrowers.

- IDBI has appointed I-Flex Solutions Ltd, the information technology arm of itibank, to

implement an integrated banking solutions package in a phased manner over 12-18 months.

- Industrial Development Bank of India has set up two internal task forces, one to explore

opportunities to enter the insurance sector, while the other to lead IDBI Intech, a newly form IT

subsidiary.

- The Company proposes to exercise the call option and redeem Easy Exit Bond and Regular

Income Bond at face value plus interest accrued and outstanding at the end of 5 years from the

date of allotment, i.e. March 18, 2001.

2001

- India Post and Industrial Development Bank of India (IDBI) Principal Asset Management

Company have entered into a joint partnership to make available current and future investment

opportunities through post offices across India.


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- The Government has re-appointed Mr S.K. Chakraborty as the acting Chairman and Managing

Director of Industrial Development Bank of India (IDBI). Mr Chakraborty has been given an

extension of three months beginning May 1 or till a regular CMD is appointed.

-Credit Rating and Information Services of India Ltd (Crisil) has downgraded the outstanding

bond issues and the certificate of deposit programme of the ndustrial Development Bank of

India.

-The Finance Ministry did a last-minute volte face on July 30, asking Mr S.K. Kapur to

temporarily head the Industrial Development Bank of India (IDBI). This is the fourth time that

the Ministry has hesitated from appointing a full-time Chairman for the top term-lender.

2004-IDBI rejigs debt borrowing program

-IDBI gets a bonanza out of IFCI-PNB amalgamation

-Standard & Poor's (S&P) Ratings Services on February 19 assigned Industrial Development

Bank of India's (IDBI) proposed 0 million senior unsecured notes a 'BB' rating. An obligation

rated BB is less vulnerable to non-payments and other peculative issues. However, it faces major

ongoing uncertainties or exposures to adverse usiness, financial or economic conditions, which

could lead to obligour's inadequate capacity to meet its financial commitments on the obligation.

2006-IDBI - Tripartite MOU with Federal Bank & Forties Insurance International

-IDBI bags Asiamoney's Best India Deal of the Year Award 2005.

-IDBI Launches No Frills 'Sabka' Savings Bank Account.

2010- IDBI Bank has opened its first overseas branch at the Dubai International Financial Centre.


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Chapter:- 2 Recent Changes and different to other

2.1 Recent Developments

The name of Mr. M. S. Raghavan was recently cleared by Government of India to become CMD

of IDBI Bank, taking over from outgoing CMD Mr. R.M. Malla. Mr. Raghavan, who was

executive director in Bank of India, assumed the charge on July 5, 2013.To meet emerging

challenges and to keep up with reforms in financial sector, IDBI has taken steps to reshape its

role from a development finance institution to a commercial institution. With theIndustrial

Development Bank (Transfer of Undertaking and Repeal) Act, 2003, IDBI attained the status of a

limited company viz. Industrial Development Bank of India Limited (IDBIL). Subsequently, the

Reserve Bank of India (RBI) issued the requisite notification on 30 September 2004

incorporating IDBI as a 'scheduled bank' under theRBI Act, 1934. Consequently, IDBI, formally

entered the portals of banking business as IDBIL from 1 October 2004. The commercial banking

arm, IDBI BANK, was merged into.

2.2 Overview of development banking in India

The concept of development banking rose only afterSecond World War, after the Great

Depression in 1930s. The demand for reconstruction funds for the affected nations compelled in

setting up a worldwide institution for reconstruction. As a result the IBRD was set up in 1945 as

a worldwide institution for development and reconstruction. This concept has been widened all

over the world and resulted in setting up of large number of banks around the world which

coordinating the developmental activities of different nations with different objectives among the

world. The Narashimam committee had recommended to give up its direct financing functions

and to perform only the promotional and refinancing role. However, the S.H.Khan committee,

appointed by the RBI, recommended its transformation into a universal bank.

The course of development of financial institutions and markets during the post-Independence

period was largely guided by the process of planned development pursued in India with emphasis

on mobilisation of savings and channeling investment to meet Plan priorities. At the time of
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Independence in 1947, India had a fairly well developed banking system. The adoption of bank

dominated financial development strategy was aimed at meeting the sectoral credit needs,

particularly of agriculture and industry. Towards this end, the Reserve Bankconcentrated on

regulating and developing mechanisms for institution building. The commercial banking network

was expanded to cater to the requirements of general banking and for meeting the short-term

working capital requirements of industry and agriculture. Specialised development financial

institutions (DFIs) such as the IDBI, NABARD, NHB and SIDBI, etc., with majority ownership

of the Reserve Bank were set up to meet the long-term financing requirements of industry and

agriculture. To facilitate the growth of these institutions, a mechanism to provide concessional

finance to these institutions was also put in place by the Reserve Bank.

The first development bank In India incorporated immediately after independence in 1948 under the

Industrial Finance Corporation Act as a statutory corporation to pioneer institutional credit to medium and

large-scale. Then after in regular intervals the government started new and different development

financial institutions to attain the different objectives and helpful to five-year plans

2.3 Change of Ownership

In 16 feb 1976, the ownership of IDBI Bank was transferred to the Government of India and it

was made the principal financial institution for coordinating the activities of institution engaged

in financing, promoting and developing industry in the country. Although government

shareholding in the bank came down below 100% following IDBIs public issue in July 1995,the

former continues to be the major shareholder(current shareholding. 52.3%)

2.3.1 Recommendation by Narasiman Committee;-

Narisiman committee recommends that IDBI should give up its direct financing function and

concentrate only in promotional and refinancing role. But this recommendation was rejected by

the government. Later RBI constituted a committee under the chairmanship of S.H. khan to

examine the concept of developing financing in the changes global challenges. This committee is

the first to recommend the concept of universal banking. The committee wanted to them
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develops financing and banking activities by getting away from the conventional distinction

between commercial banking and developmental banking.

2.4 Diversification of IDBI Bank

In sep 2003, IDBI acquired the entire shareholding of Tata finance limited in Tata home finance

ltd. Since then the fully owned housing subsidiary known as IDBI Home finance limited

Government of indai had decided to transform IDBI into a commercial bank so as to have low-

cost current, saving bank deposits, which would help overcome most of the limitation of the

current business of development finance only to diversify its client base. This would have apositive impact on the banks overall cost of funds and facilitates lending at more comperition

rates to its clients. It would offer various retail products, continuing the existing relationship with

retail investors. Futher, the new IDBI hpes to own one stop super-shop and become most

preferred brand for providing total financial and banking solution to corporate and individuals,

capitalizing the Indian industry and client requirements and large retail base.

Next year, on July 29, 2004 the board of directors of IDBI and IBDI bank approved the merger

of IDBI Bank with the industrial Development bank of India ltd. The merger was completed in

the financial year ending of 2005. IDBI Bank also acquired united western bank in 2006. IDBI

would continuous to products and services even after converting in to a banking company. In

addition, they would provide wholesale and retail banking products, designed to suit the specific

needs cash flow requirement to corporate and individuals. IDBI would keep the storing corporate

relationship built up over the years to offer customized and total financial solutions for all

corporate business needs, term loans and working capital finance, strategic advisory etc.


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2.5 Financial planning services

New Delhi: In an attempt to diversify its business, IDBI Bank will start offering a host of

financial services from home buying to retirement solutions among others under a new initiative.

A customer seeking to avail the services from IDBI Bank will be required to maintain a deposit

to the tune of 10 lakh with the bank. "There are many aspects of financial planning, which are

very complex. We want to step into this space and help our customers. We are going to start our

financial planning services business by the end of December," IDBI Bank Chairman and

Managing Director, Yogesh Agarwal told Financial Chronicle.

In the proposed planning scheme, the bank will also advise customers on the products they can

look at for investment depending on the age, income and time horizon. Elaborating on the plans,

C.S. Jain, Head of Personal Banking Group at IDBI Bank, said, "We will be catering to both

long-term as well as short-term goals of our customers."

According to Jain, the short-term goals could be to manage finances in such a way that facilitates

decisions such as buying of a car, house and finances for marriage, while long-term goals may

include retirement planning and succession planning among others. Jain also said that the bank

would seek to aggressively increase its retail business, including home loans and car loans

2.6A dual rate home loan scheme

A recent press report said that IDBI Bank has introduced a dual rate scheme according to which

a home loan borrower will enjoy fixed rate of interest for the first two years and later switch

over to floating rate.

The bank has also reduced the floating home loan rates by 2550 basis points and has also

waived the processing fee for loan amount up to Rs. 25 lakh.


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The bank has also offered special rates onhome loansduring the festival season. As per its

festival offer, all new borrowers are given an option of taking up either a fully floating rate loan

or a combination of fixed and floating rates.

According to the revised rate, loans up to Rs 25 lakh will have 10.75% rate of interest for the

first year and 11.0% interest during the second year. For loans above Rs 25 lakh and up to Rs. 30

lakhs the interest rate for the first year is 11%, 11.25 % for the second year and the floating rate

will be 11.00% (BBR+0.25%).

Similarly forloans above Rs. 30 lakh & less than Rs. 75 lakh the interest rate will be 11.25% and

11.50% for the first and second year respectively. The floating rate of interest will be 11.25%

(BBR+0.50%).

2.7 Difference from Other Banks:-

IDBI Bank is different from other because other bank deal in banking business but this bank first

deals in financing the various industries for development in the country and the does the banking

business. Even now this bank provides finance to various industries for the development. It also

finances to various industries for the development. It also finances to film business. Beforediversification of IDBI to bank it used to deal in financing business to various industries and

firms.

2.8 Services to employees working with IDBI Bank;-

The Bank provides various services to the people working in each and every branch of IDBI

Bank. They provide their employees with various services and also motivate them towards

work,.

Serviceo Salary/increment
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o For full attendance in every week they give their employees bonus along with salaryo Provident Fundo Pensiono God working condition with health security & other thingo Breaks for R\refreshment & canteen for employees.o Holding Packageso Residential Helpo Tripso Various Loans:- Educational, Housing, Personal, etc.o Different Employee Schemes, etc.

These are the various service provided by bank to help the employees to work honestly.

Motivation Of Employees:-They motivation employees by various ways, they are:-

Employee of Week (every Week ) Employee of Month (every month ) Employee of year (every year.) Motivating Trips Bonuses & Increment in salary Seminars Training Various Activities, etc.

These are the various ways of motivating used by the bank management to inculcate working

habit in the employees.


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Recruitment Method:-There are two Method of recruiting employees they are as follows.

1. Internal Method2. External Method

Internal Method

In this method the bank people give promotions to their existing and do the transfer of the

people from branches. They also talk their customers for some employees who require

jobs.

External Method

In this Method the recruiting departments of the bank prepares and plan for pamphlets

and advertisement in newspaper and distribute pamphlets to people in the public places.

They also take help of banner and put them up in public places and wherever necessary.


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Chapter:-3 Case Studies

3.1Bank Profile

Industrial Development Bank of India (IDBI), a leading development and financial institution of

India, promoted IDBI Bank to mark the formal foray of IDBI into commercial Banking. This

initiative has blossomed into a success story with IDBI Bank achieving a front ranking position

in the Indian Banking Industry. IDBI Bank has been rated as the fastest growing company in the

country by Business World, India. The bank which began with an equity capital base of Rs.1000

million (20 M USD) in November 1995, today has 155 branches and over 350 ATM's spread

across 95 cities.

Today, IDBI Bank is counted amongst leading public sector banks of India, apart from claiming

the distinction of being the 4th

largest development bank in the world, mainly in terms of reach.

This is because of its wide network of 1140 ATMS, 689 Branches- -> Metro -206, urban-273,

Semi-urban -138, rural-72 and 458 Centre. Apart from being involved in banking services, IDBI

has set up institution like National Stock Exchange of India (NSE), The National SecuritiesDepository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).

IDBI Bank Ltd. is today one of India's largest commercial Banks. For over 40 years, IDBI Bank

has essayed a key nation-building role, first as the apex Development Financial Institution (DFI)

(July 1, 1964 to September 30, 2004) in the realm of industry and thereafter as a full-service

commercial Bank (October 1, 2004 onwards). As a DFI, the erstwhile IDBI stretched its canvas

beyond mere project financing to cover an array of services that contributed towards balanced

geographical spread of industries, development of identified backward areas, emergence of a

new spirit of enterprise and evolution of a deep and vibrant capital market. On October 1, 2004,

the erstwhile IDBI Bank converted into a Banking company (as Industrial Development Bank of

India Limited) to undertake the entire gamut of Banking activities while continuing to play its


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secular DFI role. Post the mergers of the erstwhile IDBI Bank with its parent company (IDBI

Ltd.) on April 2, 2005 (appointed date: October 1, 2004) and the subsequent merger of the

erstwhile United Western Bank Ltd. with IDBI Bank on October 3, 2006, the tech-savvy, new

generation Bank with majority Government shareholding today touches the lives of millions of

Indians through an array of corporate, retail, SME and Agri products and services

Headquartered in Mumbai, IDBI Bank today rides on the back of a robust business strategy, a

highly competent and dedicated workforce and a state-of-the-art information technology

platform, to structure and deliver personalised and innovative Banking services and customised

financial solutions to its clients across various delivery channels

As on March 31, 2013 IDBI Bank has a balance sheet of Rs. 3,22,769 crore and business size

(deposits plus advances) of Rs 4,23,423 crore. As an Universal Bank, IDBI Bank, besides its

core banking and project finance domain, has an established presence in associated financial

sector businesses like Capital Market, Investment Banking and Mutual Fund Business. Going

forward, IDBI Bank is strongly committed to work towards emerging as the 'Bank of choice' and

'the most valued financial conglomerate', besides generating wealth and value to all its

stakeholders

3.2Key Business Drivers

In January 2001, following a change in the top management of the bank, the strategy of the bank

was redrawn. The bank felt a strong need to upgrade the technology platform, which would

enable the bank to transform itself to meet the challenges of the future.

Realizing that entrepreneurship development is the key to industrial development, IDBI played a

prime role in setting up of the Entrepreneurship Development Institute of India for fostering

entrepreneurship in the country. It has also established similar institutes in Bihar, Orissa, Madhya

Pradesh and Uttar Pradesh. IDBI also extends financial support to various organisations in

conducting studies or surveys of relevance to industrial development.


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3.3Renewed thrust on Retail Banking Initiatives

IDBI Bank had started operations as a bank catering primarily to corporate clientele. This

strategy was redrawn in early 2001 to focus on the exciting arena of Retail Banking. Seen in this

light, 53 branches and 79 ATM's (Automated Teller Machines) nationwide just didn't seem

enough. The need of the hour was to have a technology platform that would seamlessly scale up

and at the same time enable IDBI Bank to reach out to its customers through multiple delivery

channels. Scalability was important because of the expected explosion in transaction volumes,

customer accounts, etc. that accompany consumer banking business and seamless offering of

delivery channels was important because customers need and demand not just access but also

unified view of their interactions with the bank through multiple delivery channels. In short the

need was to have a completely integrated solution, which would cater to consumer banking

requirements while providing comprehensive business banking functionalities to cater to the

bank's corporate customers.

3.4 Legacy systems

IDBI Bank was earlier using a centralized system from Kindle. However, to meet its new

strategic initiatives and specific thrust on retail banking, this core banking system needed to be

replaced.

With a view to making available at a reasonable cost, consultancy and advisory services to

entrepreneurs, particularly to new and small entrepreneurs, IDBI, in collaboration with other All-

India Financial Institutions, has set up a network of Technical Consultancy Organisations

(TCOs) covering the entire country. TCOs offer diversified services to small and medium

enterprises in the selection, formulation and appraisal of projects, their implementation and

review


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Chapter 4: Services of IDBI BANK

Services rendered by IDBI Bank under Corporate Banking cover Project Appraisal, debt syndication and

specialized advisory services to the corporate in the infrastructure and allied sectors. The scope of our

specialized services include Debt/Equity Syndication, Financial/Merchant Appraisal, Corporate/Financial

Advisory Services, Securitization and structured products, IPO monitoring and Carbon Credit Advisory

Services . While providing these services, the major focus is on developing tailor made solutions to meet

The specific needs of clients.

4.1 Free Services on Savings Accounts

From 1st

September 2010 IDBI Bank has waived off charges on different services for its current

and savings account holders. Most of these are frequently used services by bank customers for

which other public sector and private sector banks are charging their customers. As per the bank

website the list of services for which IDBI Bank has waived off charges for Super Savings

Account is as follows:

1. Account Opening Amount: A new account can be opened with IDBI Bank with anyamount ranging from Rs 0 (zero) to less than Rs 50,000. Normally for new regular

savings account banks ask the customer for an account opening deposit of anywhere

between Rs 1000 to Rs 10000.

2. The annual fee for the international Debit cum ATM Card is NIL.3. The bank will also issue an additional card per account (in case of joint account) free of

cost.

4. Services like replacement of damaged / stolen / lost card / re-generation of pin are free ofcost.

5. Domestic / International ATM transactions are free. The bank doesnt charge for otherbanks ATM usage. Also there is no cap / limit on the number of free ATM transactions of

other Bank ATMs.


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6. Cheque book facility is free. The bank will provide local / multicity (At-Par) cheque bookwith the account

7. The bank will provide quarterly statement for existing customers free of cost. For newcustomers passbook will be issued free of cost.

8. The bank will provide monthly statement by email free of cost9. The customer can request for a duplicate statement at the branch free of cost. For this

other banks normally charge in the range of Rs 25 to Rs 100 for duplicate statement at the

branch.

10.Duplicate passbook will be issued free of cost.11.The customer can also request for duplicate statement through Phone Banking or ATM

free of cost

12.The account can be closed by the customer free of cost. Some banks charge for accountclosure if the account is closed within a specified time period of opening of the account.

For example some banks charge if the account is closed within 6 months or 1 year.

13.The standing instruction facility is free of cost14.The customer can ask for a Balance Certificate or Interest Certificate or Signature

Verification certificate free of cost

15.The foreign inwards remittance certificate is free of charge16.The bank will issue Demand Drafts or Pay Orders free of cost. For this service upto a

certain amount banks charge a fixed amount. Above a certain amount banks charge on a

per thousand rupees basis.

17.The bank will issue foreign currency demand drafts / international money orders free ofcost.

18.If a customer wants to cancel a pay order or demand draft (domestic or international);there will be no charges for it


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19.RTGS (Real Time Gross Settlement) facility and NEFT (National Electronic FundTransfer) Facility will be offered free of cost

20.Any Branch Banking: Any branch cheque deposits and account to account transfers willbe free of cost

21.Any Branch Banking: Cash deposits will be without any service charges22.Any Branch Banking: Cash withdrawal (done by self) will be free of cost23.If a customer wants to give instructions for stop payment of a cheque, there will be no

charges for it.

24.If a customer wants to request old records / copies of paid cheques; he can do so withoutany charges

25.Banking through alternate channels like Internet / Mobile / Phone and ATM Banking isfree of cost.

So that was the long list of services for which IDBI Bank has waived off service charges for its

CASA Customers. These services are normally charged for by other private sector and public

sector banks. The charges collected from these services form an important source of fee income

of a bank. One of the important charges that IDBI bank has kept out of the free service is the

return of a cheque or ECS (Electronic Clearing System) for financial reason. If a cheque bounces

/ dishonored the customer will be charged for it. Similarly if a ECS is returned for financial

reason the customer will be charged for it.

Banking experts believe that the ratio of CASA (Current Account Saving Account) deposits to

overall deposits for IDBI Bank is very small compared to other banks like SBI, ICICI Bank and

HDFC Bank. For a bank CASA Deposit come at a lower cost compared to time / term deposits.

So in order to increase its share of CASA deposits IDBI Bank has done away with these service

charges. IDBI Bank is the first bank to do away with most of the service charges.

Its free, its the first in the banking sector and its for everybody. This will apply to our savings

and current account services, starting today (1st

September 2010). No account holder will have to


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worry about keeping a minimum balance in his or her account, said RM Malla, the current

chairman

4.2 (A)Project Appraisal:

IDBI Bank has cutting edge capabilities in the appraisal of large projects and

has over the years earned reputation in appraisal of these projects, which

are well accepted in the banking industry. Project Appraisal Department

(PAD) has a dedicated team of qualified and experienced professionals with

domain knowledge in the infrastructure and other major industry sectors,

including technical, financial, legal and financial disciplines, to carry out

appraisal of large infrastructure and non-infrastructure projects.

IDBI Banks appraisals have been used by the corporate, besides availing

loan facilities for implementing projects, to finalize their decisions in bidding

for new projects, assets acquisition, business plans or disinvestments

decisions. PAD has offered these services to PSU majors like Indian Oil,

SAIL, ONGC, HPCL, NALCO, NTPC, NHPC and leading Industrial Groups such

as GMR Group, Tata Group, Aditya Birla Group and Videocon Group etc for

their various projects.

4.3(B) Syndication:

i) Introduction

ii) Products and Services

iii) Syndication Process

IV) Advantage IDBI

v) Industry Expertise


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i) Introduction

IDBI Bank Limited (IDBI Bank) is one of Indias largest banks. It has essayed a

leading role in the countrys industrial and economic progress for over 40 years first

as a development financial institution and now as a full service commercial bank.

IDBI has assisted a large number of companies in India, both in infrastructure as well

as in non-infrastructure space. IDBI has made a significant contribution to the growth

of several companies in Power/Energy, Roads, Ports, Airports, Urban Infrastructure,

Chemicals, Fertilizers, Pharmaceuticals, Steel, Paper, Cement, Textiles, Sugar and

other.

Besides offering various banking services, IDBI Bank Limited (IDBI Bank) has a

full-fledged Syndication, Structuring and Advisory Department (SSAD) through

which it offers a wide range of financial services for its clients. The Bank has been

offering its debt syndication services since 2006 to various corporate by arranging

financial assistance (both term loan and Working Capital) to their projects and

operations. The hallmark ofIDBI Banks Syndication process is that IDBI Bank takes

the role of lead bank for debts arranged by it, by financing major share of debt in the

debt program me. As IDBI Bank takes on the role of lead Bank, it always has a

positive impact on syndication process. The Bank also syndicates FC loans for ECB

Requirement of corporate clients.

SSAD has a good complement of qualified and experienced team of professionals

who are taking care of the clients needs. The team has been dealing transparently and

takes a balanced view on the risk perceptions of the project. Reckoning clients

special needs, tailor made solutions are being provided promptly.

IDBI Bank is rated among top three INR debt arrangers for the half year ended

September 30 2012 with market share of 14.1 %.


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Since its inception, the syndication team has concluded more than 100 deals with

aggregate debt amount over Rs.2 lakh crore. Major Industrial houses such as

Reliance, Aditya Birla, ESSAR, Vedanta, TATA, Adani, Bharati, Jaypee, Videocon

and Hindalco have reposed their faith in IDBI Banks capability to arrange debt for

their projects.

IDBI Bank has emerged as a leading player in debt syndication field and has excellent

business relationship with all the public & private banks and Financial Institutions.

The project related Information Memorandums (IM) prepared by the SSAD team are

well received by the participating bankers and FIs. Over the years, the Bank has

developed a good rapport with almost all banks and FIs in convincing them about the

strengths of the projects syndicated by it. Team SSAD has officers who have

specialized in the documentation requirements of the clients, who ensure that terms of

assistance and covenants of all lenders are aligned.

ii) Product and Services Rupee Debt Syndication (Term Loan and Working Capital)

Underwriting of debt

Arranging ECB, FCCB, ECA and other types of FC funding

Equity Syndication/Placement of Private Equity

Arranging M&A Funding

Private Placement of Bonds/Debentures/Preference Shares

Appraising and structuring of financial packages

iii) Process

The Process of Syndication is completed in the following stages:


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Understanding the requirements of clients and preparing suitable financing

structure

Appraisal and detailed due diligence

Preparation and Circulation of Information Memorandum (IM)

Coordinating with lenders/investors to ensure timely sanction of facilities

Harmonizing the terms and conditions among all lenders/investors

Documentation

iv) Advantage IDBI

Internationally Trusted Bank

Banking company with unique combination of strong development banking and

modern commercial banking

Expertise in funding medium and large scale projects for over 4 decades

One stop to meet all corporate needs

Domain expertise in financing all infrastructure and Industrial projects.

Provides Complete Solution from Due diligence to Financial closure

Strong appraisal capabilities

Credibility and acceptability among lenders/investors.

All the project requirements viz. fund based, non-fund based and the services viz.

TRA account, Trusteeship etc. are offered under one umbrella.

Strong Balance Sheet to take up substantial exposure

Well entrenched relationships with banking community for syndication

Capability to harmonize needs of participants and close transaction quickly

Transparent process with experience in handling large value syndications.

v) Industry Expertise

Since its inception IDBI has been working closely with almost all the industries. The


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long association with various industries has enabled us to develop core competencies

across industry domains. A list of industries where IDBI has carried out syndication is

given under.

Telecom

Port

Airport

Roads

Power

Aviation

Oil Refinery

Shipbuilding

Retail Chain

Textiles

Steel

Cement

Aluminum

Consumer Goods Manufacturing

EPC Contracting

Hospitality

4.4 Corporate Advisory Services

the strong domain knowledge in infrastructure and allied sectors has provided IDBI Bank a niche

in offering the advisory services for the corporate in the infrastructure sector. The range of

advisory services offered by IDBI Bank include merchant appraisal of projects, acquisition / sale

of assets, business valuation and pre bid advisory for PPP projects in Road sector.

IDBI has been permitted by the SEBI to act as the agent for the IPO monitoring of corporate

which come out with public issue of equity shares of issue size higher than Rs.500 crore. Our

advisory services


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Project Appraisal/Merchant Appraisal

Project Advisory services (Pre and Post bid stages)

i. Scrutiny of the bid documents and comments there onii. Scrutiny of the financial model and comments there on

iii. Preparation of financial model, if requirediv. Suggesting suitable financial structurev. Evaluation of risks and suggesting mitigates

vi. Assisting in finalizing the bidvii. Arranging the funds for the project IPO Monitoring

Securitization

Merger & Acquisition Advisory

i. Identifying targets for buying and sellingii. Due diligence

iii. Business/Share valuationiv.

Structuring of the transaction

v. Arranging funds Share/Business Valuation

Corporate/Business/Financial Restructuring

Advisory for Carbon Credit Services

Advisory for Overseas acquisition

Other Advisory Services


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4.5 Environmental Services:

IDBI Bank has undertaken the pioneering role in the Indian banking sector in the area of

environmental banking and has been active in this field for over 20 years.

IDBI Bank has created an exclusive group working on climate change and more specifically on

carbon credits advisory services to the clients to deal with Clean Development Mechanism

(CDM) / Carbon Credits of Kyoto Protocol and Voluntary Emission Reductions (VERs)

authorities.

This group has devised a structured product for providing upfront finance against the carbon

credit receivables. The product is well accepted by the Indian project developers. Click herefor

the details of services offered in CDM and renewable energy sector.

IDBI Bank is presently implementing Ozone Depleting Substances (ODS) phase-out projects and

the India Chiller Energy Efficiency Project (ICEEP) in association with World Bank and Govt.

of India. The carbon credit group is closely associated with the World Bank in providing an

EndToEnd solution for the chiller users of India in switching over from a high carbon chiller

to energy efficient low carbon chiller.Click herefor the details of ICEEP.

IDBI Bank also publishes a monthly newsletter called"IDBI Carbon Developments". The

magazine covers the analysis of the pricing of Certified Emission Reductions (CERs) on spot and

futures, status of CDM project registration and various other developments happening in the

carbon market, Renewable Energy Certificate (REC) trading and Perform Achieve and Trade

(PAT) mechanism launched by the Govt. of India.
http://www.idbi.co.in/ccb.asphttp://www.idbi.co.in/ccb.asphttp://www.idbi.co.in/ccb.asphttp://www.idbi.co.in/IEEE.asphttp://www.idbi.co.in/IEEE.asphttp://www.idbi.co.in/IEEE.asphttp://www.idbi.co.in/pdf/Carbon-Magazines/IDBI-Carbon-Development-Oct-2012.pdfhttp://www.idbi.co.in/pdf/Carbon-Magazines/IDBI-Carbon-Development-Oct-2012.pdfhttp://www.idbi.co.in/pdf/Carbon-Magazines/IDBI-Carbon-Development-Oct-2012.pdfhttp://www.idbi.co.in/pdf/Carbon-Magazines/IDBI-Carbon-Development-Oct-2012.pdfhttp://www.idbi.co.in/IEEE.asphttp://www.idbi.co.in/ccb.asp


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Conclusion

IDBI Bank has taken the initiative. It remains to be seen how other public and private sector

banks react to this move by IDBI Bank. If other banks also retaliate and waive off service

charges for their existing and new CASA Customers, then in this fight for market share among

the banks, the customer will be the ultimate winner. He will get to enjoy banking services free of

cost for which he has been paying since so many years

CONCLUSION IDBI is a pioneer Institute in Nation building To provide to its ever expanding

needs, IDBI formed subsidiaries & joint ventures across diverse areas of Banking & Financial

System. IDBI Bank Ltd. is a Universal Bank. The Bank offers personalized banking and

financial solutions to its clients in the retail and corporate banking arena through its large

network of Branches and ATMs, spread across length and breadth of India IDBI has played a

pioneering role in fulfilling its mission of promoting industrial growth through financing of

medium and long-term projects

Documents

Idbi Bank Comp Pro