MCS Project on

ICICI BANK

Final Report Submitted to: Prof. Anto Joseph

Submitted by: Sandhya Sharma (12BSPHH010902) Saurabh Veer (12BSPHH010919) Shalini Keshote (12BSPHH010936) Shashwat Saini (12BSPHH010955) Shinu Chandran (12BSPHH010966)

INTRODUCTION:
ICICI Bank, which introduced internet banking in India, is an Indian multinational bank and financial services company. Its headquarter is in Mumbai. According to the 2013 latest information, it is the second largest bank in India by assets, and third largest by market capitalization. The Industrial Credit and Investment Corporation of India Limited (ICICI) was established as a wholly owned subsidiary in 1955, as a joint-venture of the World Bank, Indias public-sector banks and public-sector insurance companies. Its objective was to create a development financial institution that could provide medium-term and long-term project financing to the Indian businesses. In the year 1994, ICICI established Banking Corporation as a Banking Subsidiary which was later renamed as ICICI Bank Limited.

VISION AND MISSION STATEMENT:

VISION: To be the leading provider of financial services in India and a major global bank. MISSION: We will leverage our people, technology, speed and financial capital.

Be the banker of first choice for our customers by delivering high quality, world-class products and services. Expand the frontiers of our business globally. Play a proactive role in the full realization of Indias potential. Maintain a healthy financial profile and diversify our earnings across businessman and geographies. Maintain high standards of governance and ethics. Contribute positively to the various countries and markets in which we operate. Create value for our stakeholders.

SUBSIDIARIES (Domestic):

ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited

ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited ICICI Securities Limited ICICI Securities Primary Dealership Limited ICICI Venture Funds Management Company Limited ICICI Home Finance Company Limited ICICI Investment Management Company Limited ICICI Trusteeship Services Limited ICICI Prudential Pension Funds Management Company Limited

TEN YEAR ANALYSIS OF ICICI BANK:

In the last 10 years, ICICI Bank, on a stand-alone basis has increased its net interest income by 29.17%. From Rs. 2185 Cr. in FY 2004 to Rs. 13866 Cr. in FY 2013. Its net interest income was Rs. 16599.18 Cr. in FY13, on a consolidated basis. Its current and saving account (CASA) ratio was below 30% till FY2009; but in the last two financial years, it boosted its CASA ratio was 43.5% at March 31, 2012. It also earned net interest margins of 3.11% in FY13. Its book value per share grew only by 10.71% in FY12. The book value of the bank increased from Rs. 125.28 in FY04 to Rs. 578 in FY13. ICICI Bank acquired Bank of Rajasthan in 2010. ICICI Bank also attained ROE (Return on Equity) of 13.62% in FY12. Also, the net nonperforming assets to net advances ratio of the bank have been continuously above 1% in the last five years. This shows its asset quality is not up to the mark. Also, if we look at this trend, it is showing decreasing net non-performing assets to net advances ratio in the last two years, from 1.11% in FY2011 to 0.73% in FY2012. This shows it is continuously improving its asset quality.

At the end of FY2013, its capital adequacy ratio was at 18.74%; much higher than the RBI guideline of 9%, which will help the bank grow its operation comfortably.

ORGANISATIONAL STRUCTURE
What is it? An organisational structure is a hierarchical arrangement of line of authority, communication, rights and duties of an organisation. It is a pattern of arrangement of jobs or group of jobs within an organisation. Why is it used? It determines how roles, power and responsibilities are assigned, controlled and coordinated and how information flows from different levels of management. It is important for decision making at different levels in the organisation.

ICICI ORGANISATIONAL STRUCTURE

The ICICI Banks organisational structure is divided into three layers of management. The decentralised organisational structure includes the Board of Directors, Chairman, CEO, CFO and Managing Director at the top level management. The top level management perform the prime function of planning the banks policies and roadmap of the banks future operations. The next level of management which is the middle level includes Zonal Heads and Senior General Manager (SGM). These are the operational heads which monitor and supervise the performance work of each bank under their profile. The low level of management includes Branch Managers who are responsible for the working of their respective branch. The employees of each branch are also included in the low level of management which perform the duties as per their job position.

Top Level Management

B.O.D. , Chairman CEO, CFO & MD Business Head, Zonal Head Senior General Manager
Branch Manager

Middle Level Management

Low Level Management

In the year 1998, four years hence the commencement, ICICI Bank restructured its organisational structure by setting up strategic business units for Retail banking, Corporate banking and Forex & Treasury operations, as independent profit centres. The current organisational structure of ICICI Bank has been divided into five verticals: 1) Retail Banking 2) Wholesale Banking 3) Project Finance and Special Assets Management 4) International Business 5) Corporate Centre Each vertical is under the Business head who reports to the top level management. Work at the lowest level of management is also decentralised into three levels. The basis for the division of work is the job profile.

Apex Level

Branch Manager, Bank Manager Technical Expert, Data Analyst Cashier, Data Entry Operator

Functional Level

Operational Level

The Board Members: 1) Mr. K.V. Kamath, Chairman 2) Ms. Chandha Kochhar, MD & CEO 3) Mr. N.S. Kannan, CFO & Executive Director 4) Mr. K. Ramkumar, Executive Director 5) Mr. Rajiv Sabharwal 6) Dr. Swati Piralmal 7) Mr. Homi R. Khusrokhan 8) Mr. Dileep Choksi 9) Mr. Arvind Kumar 10) Mr. M. S. Ramchandran 11) Dr. Tushaar Shah 12) Mr. V. Sridar

Organisation culture
Shared values and beliefs that enable the employees/members of organisation to understand their roles in an organisation so as to live upto the mission and vision of the organisation. The shared values include Some observed regularities in behaviour like common language, terminology and rituals. Norms of the organisation are the rules/regulations like amount of time and work to be spent. Some strong values of the organisation has and just expects the employees to share the same. Some examples would be high product and service quality, low absentism etc. A philosophy that is set forth in the organisations beliefs about how employees and thereby customers should be treated. Very basic and dominant rules that dictate the dos and donts of employee behavior w.r.t areas such as efficiency, productivity, customer relations, etc. Organizational climate, or the overall atmosphere of the enterprise as reflected by the way that participants interact with each other, conduct themselves with customers, and feel about the way they are treated by higher-level management. Organisational goal should support and provide shade to the individual goal of employee. Dont hit your employees to attain your goal.

ICICI BANK We believe in defining clear performance for employees and empowering them to achieve their goals says ICICI Bank executive director Kalpana Moraria. This has helped to create a culture of high performance across the organization.

We do put people under stress by raising the bar constantly. That is the only way to ensure that performers lead the change process.
Indias second largest bank exudes a performance-oriented culture. Its organizational practices place a premium on training, career development, goal setting, and pay-forperformance, all with the intent of maximizing employee performance and customer service. ICICI believes in a technocratic and entrepreneurial culture. Favourable organisational climate with very high Team Effectiveness.

How ICICI banks culture makes it different from other banks?

Teams are more effective Collaborative environment among team members and concept of shared leadership. Discussions are open and frequent. Heads arrange informal meetings. Various other factors which fosters to effective team work and leadership

What ICICI bank believes in?

The environment should be employee friendly. It caters to the rapid changes in needs of employees Rapidly change as per requirements of customers and provide satisfaction to customer which is ultimate goal of this organisation. New idea, opinions and views are always encouraged. Shared leadership is something they believe in. Employees take self initiative for conducting various activities. They believe in taking active interest in welfare of employees. The motivational spirits are always high among the team members Cooperation, warmth, trust and collaboration towards work also exist. Sometimes, there are staff improvement programs as well.

The dual factors that are considered are organisational structure and reward system.

What is critical for an organisation like ICICI bank?

Building a learning place for employees, for being extra competitive in products and services and thus meeting customer expectations. Strong capabilities in training and development to build competencies. Special customised training on products and operations is implemented through web-based training modules. Dedicated programmes on functional training and leadership development which will help build knowledge as well as management capability.

At ICICI bank, the performance management system is based on firm defined performance parameters and employee empowerment for achievement of goals, which reinforces the Banks achievement-oriented culture. ICICI Bank also has a very well structured process of identifying and developing leadership potential. ICICI Banks constant aim is to implement innovative HR practices and this has resulted in the creation of an exceptional pool of talent and a performance-oriented organizational culture which has imparted agility and flexibility to the organization.

Designing MCS

HR Practices of ICICI

Employee Retention: Recently in an article it was shown why even when no bonus and no promotion still leads to good employee retention for ICICI. One logic could be as stated there was no hike in previous company reduces your chance to get a better salary in other company if ever you think of changing your job. Major reasons for employee retention in ICICI are: 1. Career Development Opportunities: Most of the Top level management is recruited from inside the organization. This states a good growth prospect for the employees. More than ten CEOs have been recruited from inside the organization. Not only this, the company facilitates the employee to grow horizontally. Horizontal growth in a career means to gather knowledge and competencies continuously in a job.

Source: www.hasikumar.com ICICI has been continuously involved in various industry academia practices helping the employees to grow horizontally. The bank has launched two programs in the lights of ICICI Business Leadership Program. It has also partnered with NIIT University providing various training program and also one with National Institute of Securities Market (NISM). These kind of initiatives aim to create a talent pool for specialized functions like wholesale banking, risk management and treasury in turn benefiting the employee to grow horizontally.

2. Supervisor Support: ICICI bank believes all employees have the right to share their concern with the senior management. It believes a happy employee can handle clients better and achieve higher targets than an unhappy employee. ICICI provides internal platform to the employees to engage with the senior management. Over 400 sessions were conducted during the year 2012 to understand and resolve the employee grievances. Not only this, ICICI also rewards its long serving employee by taking special initiative. For example in 2013 the bank has offered personalized letter signed by the Managing Director to honor the long serving employees. 3. Work Environment: ICICI embraces any change in technology to make a more enabling work place. For example in the year 2013 ICICI introduced mobile phone based performance support tool for the relationship manager. This helped the relationship manager to make easy customer profiling. It is a non-hierarchical work environment where every employee has the freedom and flexibility in his/her decision making. This helps the employee to grow by learning. 4. Rewards: The bank provides ESOPs to attract the workforce. ESOP aka Employee Stock Ownership Plan provides shares of a company to the employees which gives the employee a belief of owning the company in turn attaching them emotionally with the company. 5. Work-life Policies: Some of the work life policies and benefits are Family health insurance, 24x7 distress helpline number for safety of women and other salary benefits.

Attrition Rate: In spite of having so many facilities the attrition rate in ICICI is pretty high. Attrition Rate is number of employees leaving the organization in a certain time period. Currently its around 20% in all segments of ICICI. One of the major reason of which is ICICI pays 9% below the market standard where as other banks pay almost 8% above the market standard.

Recruitment and Selection Process: ICICI understand that the employees are its biggest Asset. Hence it chooses employees with the right capability to perform the job. Recruitment months are around May-June and OctoberNovember. ICICI follows two types of recruitment: 1. External Recruitment: Some External Recruitments will be from the campus interviews and walk-in interviews. ICICI has also tied up with some job portal to post their job requirements. 2. Internal Recruitment: Some of the Internal Recruitment are referral forum in the company website, ATLAS managerial role etc. ATLAS traces out the performance of the existing employees and helps in simpler selection process.

Sources of Recruitment
7% 1% 8% 13% 28%

17% 26%

Campus Recruitment

Online Application

Recruiter

Employee Referal

Other

In Person

Staff Agency

Selection process comprises of the following: 1. Aptitude Test 2. Case Study GD 3. Psychometric Assessment 4. Personal Interview

However this sequences is not always followed for example for an experienced person only 2 rounds of personal Interview are taken. One being the technical interview with the immediate boss and second being the HR interview. Performance Appraisal: A performance appraisal is a systematic evaluation of the performance of employees to understand his/her abilities for further growth opportunity. Performance Appraisal is done for the following purpose: 1. To give promotion to the employee. 2. To set compensation for the employees. 3. To scrutinize employees work for his/her development. 4. For selecting a validate candidate for an award. 5. To motivate the employee.

Performance appraisal in ICICI emphasizes on individual objective like what task the individual is expected to do?, How well the task has been done well? and His reward for doing well, on bank objectives like manpower information, Improve efficiency and work as a mechanism of control and provide relevant compensation, also on mutual objective. There are three models of performance appraisal in ICICI. These are as follows: 1. Rank and Yank Strategy: In this strategy best-to-worst ranking is done to identify the worst performer. Then the identified poor performer are given time to improve. If the employee fails to improve then he is asked to leave the organization with a severance package. Any resistance from the employee leads to termination of job contract without any compensation. Advantage of this kind of performance appraisal is that it continually motivates employees to perform better. However this also creates a cut-throat competition and team spirit is lost.

2. Management by Objective (MBO): In this kind of performance appraisal the subordinate works with the supervisor chalks out short term objectives and assign necessary steps to these objectives. These objectives are action oriented, specific,

measurable, achievable, reviewable, time bound and aligned to the goals of the organization. The actions taken are jointly reviewed by both the supervisor and the subordinate. Depending upon the performance of the subordinate the goals are modified. Some of the advantages of this kind of performance appraisal are: a. Self-evaluation by the sub ordinate b. Promotes better communication and information sharing c. Motivates the employee d. Facilitates a guidance from the supervisor 3. There is a third model of performance appraisal in which a performance appraisal form is designed. This form is filled by the supervisor and employees. He takes a 360 degree feedback from the peers of the employee to understand the validity of the appraisal. Then a performance appraisal interview is conducted by the supervisor with the employee to understand his performance and provide any corrective measure if any. With various HR practices ICICI follows, its main aim is to employ the right set of people for the right set of job. An area of improvement would be the attrition rate it is facing specially in the area of sales.

REFERENCES:

www.studymode.com/.../organizational-culture-of-icici-bank

www.icicibank.com

http://en.wikipedia.org/wiki/ICICI_Bank http://www.moneycontrol.com/annual-report/icicibank