Projects: FUNCTIONING OF IDBI BANK

ACKNOWLEDGMENT

It is my great privilege to thanks to __________(Co-ordinator of BBI) and _________ (Principal) for giving this opportunity to complete this project and support us.

I also sincerely thank to my guide Prof. ___________without whose support and guidance it wouldn’t be possible to complete the project.

I also thanks to my non teaching staff , parents, friend’s and colleagues for their encouragement and support.

DECLARATION

I MR.SACHIN S KHETAL the student of DR.AMBEDKAR COLLEGE OF COMMERCE & ECONOMICS, studying in T.Y.B.Com – BANKING & INSURANCE (5^thSemester), hereby declare that I have completed the project report on “FUNCTIONING OF IDBI BANK” in the academic year 2011 – 2012.

The information submitted is genuine and practical to the best of my knowledge.

Date:

SACHIN S KHETAL

(Roll No. –14)

Place:

EXECUTIVE SUMMARY

Alternate revenue sources form a vital part of income for banks and banks aretherefore looking forward towards increasing their profitability through these

sources. Some sources of fee income have been available to institutions for many years, but have recently taken on a more dominant position in the overallfinancial management strategies of banks. These include deposit servicecharges, credit card fees, fees associated with electronic funds transfer, dematetc. Although banks have made significant headway in generating traditionalfee income, for banks to remain competitive with other financial institutions,they need to expand their product breadth and to improve sales, relationships,servicing, and investment know-how.

New types of activities that generate fee income include securities brokerage,

film financing, equity participation in business, real estate brokerage services,

real estate development, real estate equity participation, and insurance

brokerage activities. Banks also receive fee income from a number of offbalance

sheet items including loan commitments, note issuance facilities, letters

of credit, foreign exchange services, and derivative activities (contracts for

futures, forwards, interest rate swaps, and other derivative contracts)

The essential function of a bank is to provide services related to the storing of

value and the extending credit because bank is a financial institution that

provides banking and other financial services

Banks can differ markedly in their sources of income. Some focus on business

lending, some on household lending, and some on fee-earning activities.

Increasingly, however, most banks are diversifying into fee-earning activities.

Traditionally fee income has been very stable; but, also traditionally, it has been

a small part of the earnings stream of most banks.

Although the type of services offered by a bank depends upon the type of bank

and the country, services provided usually include:

· Directly take deposits from the general public and issue Savings

accounts and Current accounts.

· Earning specials like the fixed deposits, recurring deposits.

· Lend out money to companies and individuals.

· Issue credit cards, ATM, and debit cards.

· Online banking and Internet banking.

· Storage of valuables, particularly in a safe deposit box.

· Granting loans.

But in the current scenario with immense competition the banks have to look

far beyond the traditional practice. Customers look for one stop financial

solution so the only solution left with the banks is to diversify. The interest

rates are decreasing so banks have to look for alternate sources to generate

revenue. Also the lending & borrowing rates are reducing day after day.

Therefore the banks are going in for investment and advisory services, portfolio

management depository services, debit/ credit cards etc. The alternate revenue

generating sources of IDBI Bank, which will be dealt in detail, are

1.Banc assurance

2.Mutual funds

3.Locker Facility

3.RBI Bonds

4.Forex

5.Demand Drafts/Bankers Cheque

6.Demat Services.

	CONTENT	PAGE NO.
1	INTRODUCTION OF IDBI BANK	1-3
2	OBJECTIVE AND FUNCTION OF IDBI BANK	4-9
3	OVERVIW OF DEVLOPMENT BANKING IN INDIA	10--17
4	IMPORTANT FUNCTIONS OF IDBI BANK	18-63
5.	DEVLOPMENT AND PROGRESS OF IDBI BANK	64-66
6.	STUDY OF IDBI BANK	67-73
7.	LITERATURE REVIEW	74-76
8.	RECOMMENDATION	77-78
9.	CONCLUSION	79-80
10.	BIBLOGRAPHY	81-82
11.	APPENDIX	83-86

CHAPTER 1.

Introduction of IDBI Bank

The Industrial Development Bank of India Limited, now more popularly known as IDBI Bank, was established as a wholly-owned subsidiary of Reserve Bank of India. The foundation of the bank was laid down under an Act of Parliament, in July 1964. The main aim behind the setting up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial stages of growth and development. In February 1976, the ownership of IDBI was transferred to Government of India. After the transfer of its ownership, IDBI became the main institution, through which the institutes engaged in financing, promoting and developing industry were to be coordinated. In January 1992, IDBI accessed domestic retail debt market for the first time, with innovative Deep Discount Bonds, and registered path-breaking success.

The following year, it set up the IDBI Capital Market Services Ltd., as its wholly-owned , to offer a broad range of financial services, including Bond Trading, Equity Broking, Client Asset Management and Depository Services.

In September 1994, in response to RBI's policy of opening up domestic banking sector to private participation, IDBI set up IDBI Bank Ltd., in association with SIDBI. In July 1995, public issue of the bank was taken out, after which the Government's shareholding came down (though it still retains majority of the shareholding in the bank). In September 2003, IDBI took over Tata Home Finance Ltd, renamed ‘IDBI Home finance Limited’, thus diversifying its business domain and entering the arena of retail finance sector

The year 2005 witnessed the merger of IDBI Bank with the Industrial Development Bank of India Ltd. The new entity continued to its development finance role, while providing an array of wholesale and retail banking products (and does so till date). The following year, IDBI Bank acquired United Western Bank (which, at that time, had 230 branches spread over 47 districts, in 9 states). In the financial year of 2008, IDBI Bank had a net income of Rs 9415.9 crores and total assets of Rs 120,601 crores.

The Present Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming the distinction of being the 4th largest bank, in overall ratings. It is presently regarded as the tenth largest development bank in the world, mainly in terms of reach. This is because of its wide network of 509 branches, 900 ATMs and 319 centers. Apart from being involved in banking services, IDBI has set up institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).

VISION OF IDBI BANK

Our vision for the Bank is for it to be the trusted partner in progress, by leveraging quality human capital and setting global standards of excellence, to build the most valued financial conglomerate. Our experience of financial markets helps us to effectively cope with challenges and capitalize on the emerging opportunities by participating effectively in our country’s growth process

CHAPTER 2

OBJECTIVES AND FUNCTION OF IDBI BANK

OBJECTIVES

The main objectives of IDBI is to serve as the apex institution for term finance for industry in India. Its objectives include

1) Co-ordination, regulation and supervision of the working of other financial institutions such as IFCI , ICICI, UTI, LIC, Commercial Banks and SFCs.

(2) Supplementing the resources of other financial institutions and thereby widening the scope of their assistance.

(3) Planning, promotion and development of key industries and diversifications of industrial growth.

(4) Devising and enforcing a system of industrial growth that conforms to national priorities.

FUNCTION

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.

(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.

(12) To provide technical, legal, marketing and administrative assistance to any industrial concern or person for promotion, management or expansion of any industry.

(13) Planning, promoting and developing industries to fill up gaps in the industrial structure in India.

(14) To act as trustee for the holders of debentures or other securities.Subsidiaries

The following are the subsidiaries of IDBI.

(1) Small Industries Development Bank of India (SIDBI)

(2) IDBI Bank Ltd.

(3) IDBI Capital Market Services Ltd.

(4) IDBI Investment Management Company

Capital Structure and Operations As on September 30,1996, the authorised Capital of IDBI was Rs.2000 crores. Issued, subscribed and paid up share capital was Rs.828.76crores.

IDBI Bank (Industrial Development Bank of India Ltd.)

Type Public (BSE: 500116‎)

Industry Banking

Financial services

Founded July 1964

Headquarters Mumbai, India

Key people Shri neelabh krishna , CMD Products Finance and insurance Revenue 20,684.47 crore (US$4.61 billion) (2011) [1]Operating income 4,157.85 crore (US$927.2 million) (2011)Net income 1,650.32 crore (US$368.02 million) (2011)Employees 14,000.The Industrial Development Bank of India Limited (IDBI) (BSE: 500116‎) is one of India's leading public sector banks and 4th largest Bank in overall ratings. RBI categorised IDBI as an "other public sector bank". It was established in 1964 by an Act of Parliament to provide credit and other facilities for the development of the fledgling Indian industry.[2] It is currently 10th largest development bank in the world in terms of reach with 1455 ATMs, 883 branches including one overseas branch at DIFC, Dubai and 598 centers including two overseas centres at Singapore & Beijing.[3] Some of the institutions built by IDBI are the National Stock Exchange of India (NSE), the National Securities Depository Services Ltd (NSDL), the Stock Holding Corporation of India (SHCIL), the Credit Analysis & Research Ltd, the Export-Import Bank of India(Exim Bank), the Small Industries Development Bank of India(SIDBI), the Entrepreneurship Development Institute of India, and IDBI BANK, which is owned by the Indian Government.IDBI Bank is on a par with nationalized banks and the SBI Group as far as government ownership is concerned.It is one among the 26 commercial banks owned by the Government of India.The Bank has an aggregate balance sheet size of Rs. 2,53,378 crore as on March 31, 2011. IDBI Bank's operations during the financial year ended March 31

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 the Industrial 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 the RBI 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 IDBI.In March 2008, IDBI Bank entered into a joint venture with Federal Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009.The name of IDBI Fortis Life Insurance is now changed to IDBI Federal Life Insurance Co Ltd.

CHAPTER 3.

OVERVIEW OF DEVELOPMENT BANKING IN INDIA

The concept of development banking rose only after Second 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.[5]

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 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 Bank concentrated 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.

The early history of Indian banking and finance was marked by strong governmental regulation and control. The roots of the national system were in the State Bank of India Act of 1955, which nationalized the former Imperial Bank of India and its seven associate banks. In the early days, this national system operated alongside of a large private banking system. Banks were limited in their operational flexibility by the government’s desire to maintain employment in the banking system and were often drawn into troublesome loans in order to further the government’s social goals.

The financial institutions in India were set up under the strong control of both central and state Governments, and the Government utilized these institutions for the achievements in planning and development of the nation as a whole. Thus India financial institutions can be classified under five heads according to their economic importance:

· All-India Development Banks

· Specialized Financial Institutions

· Investment Institutions

· State-level institutions

· Other institutions..

IDBI Bank, with which the parent IDBI was merged, was a new generation Bank. The Pvt Bank was the fastest growing banking company in India. The bank was pioneer in adapting to policy of first mover in tier 2 cities. The Bank also had the least NPA and the highest productivity per employee in the banking industry.[citation needed]

On 29 July 2004, the Board of Directors of IDBI and IDBI Bank accorded in principle approval to the merger of IDBI Bank with the Industrial Development Bank of India Ltd. to be formed incorporated under the Companies Act, 1956 pursuant to the IDB (Transfer of Undertaking and Repeal) Act, 2003 (53 of 2003), subject to the approval of shareholders and other regulatory and statutory approvals. A mutually gainful proposition with positive implications for all stakeholders and clients, the merger process is expected to be completed during the current financial year ending 31 March 2005.

The immediate fall out of the merger of IDBI and IDBI Bank was the exit of employees of IDBI bank. The cultures in the two organizations have taken its toll. The IDBI Bank now is in a growing fold. With its retail banking arm expanding further after the merger of United western Bank.

IDBI would continue to provide the extant products and services as part of its development finance role even after its conversion into a banking company. In addition, the new entity would also provide an array of wholesale and retail banking products, designed to suit the specific needs cash flow requirements of corporates and individuals. In particular, IDBI would leverage the strong corporate relationships built up over the years to offer customised and total financial solutions for all corporate business needs, single-window appraisal for term loans and working capital finance, strategic advisory and “hand-holding” support at the implementation phase of projects, among others.[citation needed]

IDBI’s transformation into a commercial bank would provide a gateway to low-cost deposits like Current and Savings Bank Deposits. This would have a positive impact on the Bank’s overall cost of funds and facilitate lending at more competitive rates to its clients. The new entity would offer various retail products, leveraging upon its existing relationship with retail investors under its existing Suvidha Flexi-bond schemes.

The industrial investment bank of India is one of oldest banks in India.The Industrial Reconstruction Corporation of India Ltd., set up in 1971 for rehabilitation of sick industrial companies, was reconstituted as Industrial Reconstruction Bank of India in 1985 under the IRBI Act, 1984. With a view to converting the institution into a full-fledged development financial institution, IRBI was incorporated under the Companies Act, 1956, as Industrial Investment Bank of India Ltd. (IIBI) in March 1997. IIBI offers a wide range of products and services, including term loan assistance for project finance, short duration non-project asset-backed financing, working capital/ other short-term loans to companies, equity subscription, asset credit, equipment finance as also investments in capital market and money market instruments.

In view of certain structural and financial problems adversely impacting its long-term viability, IIBI submitted a financial restructuring proposal to the Government of India on 25 July 2003. IIBI has since received certain directives from the Government of India, which, inter alias, include restricting fresh lending to existing clients approved cases rated corporates, restrictions on fresh borrowings, an action plan to reduce the overhead expenditure, disposal of fixed assets and a time-bound plan for asset recovery/reconstruction.

SERVICES

Services rendered by IDBI Bank under Infrastructure financing cover debt syndication and specialized advisory services to the corporate in the infrastructure and allied sectors. The Bank offers Project Appraisal, Debt Syndication, Corporate advisory services and Securitisation & Structured products as specialized services.

(A) Appraisal:
IDBI Bank has a cutting edge in the appraisal of large infra sector projects and has over the years earned reputation in appraisal of these projects, which are well accepted in the banking industry. Project Appraisal Department has a dedicated team of qualified and experienced professionals with domain knowledge in the infrastructure sector, including technical, financial, legal and financial disciplines, to carry out appraisal of large infrastructure projects.
IDBI Bank’s appraisals have been used by the corporates, besides availing loan facilities for implementing projects, to finalise 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 and leading infrastructure project developers such as GMR industries, Tata Group and Aditya Birla Group for their various projects.

(B) Debt Syndication:
Over the last three years, the Bank has been offering its loan syndication services to corporates by arranging financial assistance (both term loan and Working Capital) to their projects and operations. The hallmark of IDBI Bank’s Syndication process is that IDBI Bank takes the role of lead bank for debts arranged by it, by providing major share of debt in the debt programme. Such a decision always has a positive impact in arranging of loans.
The Syndication, Structuring and Advisory Department, (SSAD) has qualified professionals who are proactive to the client needs. The team is earned a reputation for its transparent dealings, with a balanced view on the risk perceptions of the project and for its capability to provide tailor made solutions reckoning clients’ special needs.
In the League table released by reputed journals and magazines, IDBI Bank is rated among top three INR debt arranger.
During last three years, the syndication team has concluded 40 deals for an aggregate debt of Rs. 47,067 crore. The deals concluded by the team range from Rs.200 crore to Rs.6000 crore. Major Industrial houses such as Reliance, (Both Mukesh and Anil Group), Aditya Birla, ESSAR, Vedanta Group, TATA Group have reposed their faith in IDBI Bank’s capability to arrange debt for their projects
SSAD enjoys good reputation with almost all other banks, which adopt the Information Memorandum prepared by the SSAD team, as benchmark for according their approvals for the project. Over the years, the Bank has developed a good rapport with almost all banks in convincing them about the strengths of the projects syndicated by it.

(C) Advisory Services:
Corporate Advisory: 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.
(D) 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 area for over 17 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

CHAPTER 4.

FUNCTION OF IDBI BANK

The major participants of the Indian financial system are the commercial banks, the financial institutions (FIs), encompassing term-lending institutions, investment institutions, specialized financial institutions and the state-level development banks, Non-Bank Financial Companies (NBFCs) and other market intermediaries such as the stock brokers and money-lenders. The commercial banks and certain variants of NBFCs are among the oldest of the market participants. The FIs, on the other hand, are relatively new entities in the financial market place.

Indian banking and financial systems in the new millennium is facing a series of new challenges. Indian banking systems have several outstanding achievements on the basis of its different functions. Indian banking is no longer confined to metropolitan cities and large towns, in facts; Indian banks are now spread out in the remote areas of our nation. This project facilitate us to know about the functioning of banks i.e. different types of a/c’s in banks, different systems of banks, types of banks, etc. and also it includes millennium changes in banking system such as internet banking, credit cards, etc.

Banks are among the main participants of the financial system in India. Banking offers several facilities & Opportunities. This section provides comprehensive and updated information, guidance and assistance on all areas of banking in India.

Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in India on modern lines started with the establishment of three presidency banks under Presidency Bank's act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras. In 1921, all presidency banks were amalgamated to form the Imperial bank of india .The commercial banking structure in India consists of: Scheduled Commercial Banks & Unscheduled Banks. Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawals by cheques, draft, order or otherwise."

The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain customer base. In addition, Banks are allowed to perform certain activities, which are ancillary to this business of accepting deposits and lending. A bank's relationship with the public, therefore, revolves around accepting deposits and lending money. Another activity that is assuming increasing importance is transfer of money - both domestic and foreign - from one place to another. This activity is generally known as "remittance business" in banking parlance. The so-called forex (foreign exchange) business is largely a part of remittance albeit it involves buying and selling of foreign currencies.

The law governing Banking Activities in India is called "Negotiable Instruments Act 1881".

Functions of banks:

The traditional banking activities can be classified as:

F Accepting Deposits from public/others (Deposits).

F Lending money to public (Loans).

F Transferring money from one place to another (Remittances).

F Acting as trustees.

F Acting as intermediaries.

F Keeping valuables in safe custody.

F Collection business.

F Government business.

1. Accepting deposits is one of the two major activities of the Banks:Banks are also called custodians of public money. Basically, the money is accepted as deposit for safekeeping. But since the Banks use this money to earn interest from people who need money, Banks share a part of this interest with the depositors. However, accepting deposits and keeping track of the money involves a lot of book-keeping and other operations.

The deposits can be of different types:

i. Saving deposits – Saving accounts are opened for the purpose of mobilizing savings. This account may be single or joint. But, the rate of interest is low i.e 4-5% p.a. withdrawals are subject to certain restrictions. It is suitable for salary and wage earners.

ii. Fixed deposits – Fixed deposits are deposits at one time for a fixed period specified in advance. The rate of interest is high which varies with the period of deposits. No withdrawal is allowed during the period. The depositor get a fixed deposit receipt which is non-transferable. Those who have a surplus fund open fixed deposit account.

iii. Current deposits – Businessmen open current account to operate any number of times during a working day. It is also called demand deposit account because bank has to return the deposit on demand. Withdrawals are freely allowed. No interest is paid. Infact, there are services charges. Overdraft facilities are given in case of current accounts only. Businessmen operate it.

iv. Recurring deposits – In recurring deposit account a certain sum of money is periodically deposited into the banks. Salaried persons and petty traders operate such type of account. Withdrawals are permitted only after the expiry of certain period. A high rate of interest is paid.

2. Lending money to the public: Lending money is one of the two major activities of any Bank. In a way, the Bank acts as an intermediary between the people who have the money to lend and those who have the need for money to carry out business transactions.This activity places its own requirements on the resources of the Bank. For effective functioning of this, a bank must possess:

i. Sufficient deposits.

ii. Skills to appraise the potential borrowers and the activity.

iii. Legal skills for documentation.

iv. Legal skills for recovery of its dues through the courts.

v. Skills to follow up and monitor the end-use of money lent by it.

vi. An effective credit delivery system.

vii.Review of credit portfolio.

3. TRANSFERRING MONEY FROM ONE PLACE TO ANOTHER: Apart from accepting deposits and lending money, Banks also carry out, on behalf of their customers the act of transfer of money - both domestic and foreign. - From one place to another. This activity is known as "remittance business”. Banks issue Demand Drafts, Banker's Cheques, Money Orders etc. for transferring the money. Banks also have the facility of quick transfer of money also know as Telegraphic Transfer or Tele Cash Orders.

To deliver this service, a Bank must have:

i.An effective branch network or correspondent relationships.

ii.A system of Inter branch reconciliation

iii.A system of reconciliation with the correspondents

iv.Availability of funds at all the centers

4. Trustee Business: Banks also act as trustees for various purposes. For example, whenever a company wishes to issue secured debentures, it has to appoint a financial intermediary as trustee who takes charge of the security for the debenture and looks after the interests of the debenture holders. Such entity necessarily have to have expertise in financial matters and also be of sufficient standing in the market/society to generate confidence in the minds of potential subscribers to the debenture. While Banks are the natural choice for the customers, Banks must possess the following to be effective and retain that:

i.A track record of sufficient length.

ii.Facilities for safekeeping.

iii.Legal skills to take necessary steps for the trusteeship.

5. KEEPING VALUABLES IN SAFE CUSTODY: Bankers are in the business of providing security to the money and valuables of the general public. While security of money is taken care of through offering various type of deposit schemes, security of valuables is provided through making secured space available to general public for keeping these valuables. These spaces are available in the shape of LOCKERS. The latter are small compartments with dual locking facility built into strong cupboards. These are stored in the Bank's Strong Room and are fully secure. The hirer or the Bank can neither open lockers individually. Both must come together and use their respective keys to open the locker. To make this facility available to its customers, the Bank must provide:

i.Physical structures to house the lockers

ii.Locker cabinets

iii.Security arrangements

6. GOVERNMENT BUSINESS: Earlier Government business used to be exclusively carried out by Government Treasuries where all type of transactions took place. However, now Banks act on behalf of the Government to accept its tax and non tax receipts. Most of the Government disbursements like pension payments and tax refunds also take place through banks. While the Banks carry out this business for a fee to be paid by the Government, providing this service requires a lot of effort and organisation. The Banks must provide:

i.Interface with the public.

ii.Liaison with local government departments and government treasury.

iii.Arrangement for reconciliation with the Government Accounts Department.

iv.Necessary infrastructure, stationery etc. to cater to the numbers.

MODERN BANKING ACTIVITIES

The modern banking activities can be classified as:

1. Merchant banking:

Merchant banking may be defined as, "an institution, which covers a wide range of activities such as management of customer services, portfolio management, credit syndication, acceptance credit, counselling, insurance, etc.

The notification of the Ministry of Finance defines a merchant banker as, "any person who is engaged in the business of issue management either by making arrangements regarding selling, buying or subscribing to the securities as managers, consultant, adviser or rendering corporate, advisory service in relation to such issue management."

Services of Merchant Banks:

i. Project Counselling

ii. Issue Management

iii. Marketing

iv. Pricing of Issues

v. Post-issue Management

vi. Underwriting of Public Issue

vii. Managers, Consultants or Advisers to the Issue

viii. Portfolio Management

ix. Advisory Service Relating to Mergers and Takeovers

x. Off Shore Finance

xi. Non-resident investment

xii. Loan Syndication

xiii. Corporate Counselling

2.Consumer loans:

Banks has personal loan scheme under which consumer durable items can be purchased. Loans are given to salaried employees and professional for periods ranging from 12 to 48 months. No guarantee is insisted upon for consumer credit. Many other banks have different versions of consumer finance schemes. The general features of these schemes are more or less the same with minor variations in the rate of interest or repayment period or insistence on a third party guarantee. Consumer finance has many advantages for banks. Credit expansion is fast, substantial and diversified. Consumer credit is only for short and medium periods, thereby facilitating smooth asset liability management.

2. Venture capital: -

Venture capital is long-term risk capital to finance high technology projects, which involve risk, but at the same time has strong potential for growth. Venture capitalist pool their .resources including managerial abilities to assist new entrepreneurs in the early yean of the project.A venture capital company is defined as "a financing institution, which joins an entrepreneur as a co-promoter in a project and shares the risks and rewards of the enterprise".

3. Banking Mutual Funds:-

The Securities and Exchange of Board of India Regulations, 1993 defines a mutual fund as "a fund established in the form of a trust by a sponsor, to raise monies by the trustees, through the sale of units to the public, under one or more schemes, for investing in securities in accordance with these regulations".

According to Weston J. Fred and Brigham, Eugene F., Unit Trusts are "corporations which accept dollars from savers and then use these dollars to buy stocks, long term bonds, short term debt instruments issued by business or government units; these corporations pool funds and thus reduce risk by diversification.

CORPORATE FUNCTIONS

(Interest rates terms and conditions are decided after analysing company’s profile)

F Project Finance Scheme:

Under the Project Finance scheme IDBI Bank provides finance to the corporates for projects. The Bank provides project finance in both rupee and foreign currencies for Greenfield projects as also for expansion, diversification and modernization. IDBI Bank follows the Global Best Practices in project appraisal and monitoring and has a well-diversified industry portfolio. IDBI Bank has signed a Memorandum of Understanding (MoU) with LIC in December 2006 for undertaking joint and take-out financing of long-gestation projects, including infrastructure projects.

F Infrastructure Finance:

IDBI Bank has been actively participating in structuring and financing of infrastructure projects in the areas of power, telecom, roads, seaports, railways and logistics as well as Special Economic Zones. The Bank has also taken initiatives in funding modernization of airports, besides part-financing development of international airports and seaports under the Public-Private Partnership route. The Bank is also a member of the Core Committee of the Government set up for finalisation of the Ultra Mega Power Projects. IDBI Bank interacts with Government and other stakeholders and market participants, on policy and operational issues, facilitating smooth flow of funds to infrastructure sector.

F Working Capital finance:

Working Capital facility is provided to the industry to finance day-to-day production & sales. For production, funds are generally required for purchase of raw materials, stores, fuel, for payment of labour, power charges, for storing finished goods till they are sold out & for financing the sales by way of sundry debtors / receivables. Cash Credit facility is granted to the customers to bridge working capital gap. The Bank also provides short term loan facility for a period of up to 1 year for the purpose of bridging temporary cash flow mismatches arising due to various reasons like non-realization of receivables in time, routine capex etc.

F Cash Management Services:

IDBI Bank is a technology-led & service driven, financial services company managed with intellectual integrity. IDBI Bank Cash Management Services (CMS) has achieved the ISO 9000 certification for its strong product and technology background. Cash Management Service offers three products – Collections, Payments & Cashweb – the online product offering.

The key product features of IDBI Bank CMS are :-

Confirmed arrangements
Outsourced logistics
Enhanced clearing network
Pooling / Single Payout Account
Customised Reporting
Detailed information capturing

The technology advantage helps us in consistently delivering superior products, convenient access channels and efficient service to customers.Cash Management is the process of optimizing receivable and payables while ensuring predictability in the cash flows. Efficient Cash Management is about getting funds in time, quick transfers, quick realization of local and outstation cheques, easy disbursements, account reconciliation, controlled processes and customized MIS. Thus Cash Management Services (CMS) eliminates the inherent delays of a funds transfer mechanism, thus enhancing liquidity and ensuring optimum planning and utilization of funds.

IDBI Bank Cash Management Services include the following basic components:

1. Collection or Receivables Management

2. Payment or Payables Management

Benefits of Cash Management Services:

i. Financial Benefits

Collection & Disbursement products enable to reduce the interest cost on the borrowings by getting access to the funds faster there-by reducing the borrowings. Additionally, it helps to improve the liquidity position by realizing cheques earlier, there-by improving the Balance Sheet and Financial Ratios.

ii. Operational Benefit

Banking and Treasury functions can be managed with far less number of people as most of the funds and liquidity management functions get outsourced to the Bank and in addition will require lesser manpower for performing various payment related activities.

iii. Control Benefits

IDBI Bank CMS products allows to maintain better control over the various Banking and Treasury related activities, improve speed and ease of reconciliation and reduces the risk of fraud.

F Trade Finance

IDBI Bank has set up dedicated trade sales teams for product offerings at key locations to have a focused and specialized approach to trade services. IDBI Bank carries out Trade Finance operations through designated branches, which provide Trade Finance Products viz., Letters of Credit, Bank Guarantees, Collections, Remittances, Forward Contracts, Packing Credit, Post Shipment Finance, Maturity Factoring, Invoice Discounting and Trade Advisory Services. It is noteworthy that IDBI Bank was among the select banks under the auspices of Indian Banks' Association (IBA) to test, pilot and implement Structured Financial Messaging System (SFMS) for domestic trade transactions. IDBI Bank also entered into a tie-up with Export Credit Guarantee Corporation (ECGC) for financing the export receivables under the full-fledged factoring facility of ECGC.

F Tax Payments

IDBI Bank offers an wide array of services under the umbrella of Central and State Government agency business (both direct and indirect taxes). IDBI Bank is the first bank to offer payment facility of direct taxes through Internet and is also the first bank to offer online payment of Central Excise Duty and Service Tax through the Internet. IDBI Bank has the mandate to collect direct taxes at several branches and extension counters across the country and also to collect Excise Duty and Service Tax at select branches. Additionally, IDBI Bank has the mandate to collect sales tax and stamp duty for certain State Governments and import/export license fees over the Internet.

F Direct Discounting of Bills

For financially sound machinery / equipment manufacturer, who wish to promote sales, IDBI Bank provides deferred credit facility for sale / purchase of indigenous machinery / equipment under its easy to operate direct discounting scheme. Assistance would be 100% of the total value (including insurance, taxes & freight). Interest rate / discount rate would be as prevalent at the time of discounting of bills, depending on monthly / quarterly / half-yearly/ yearly payments and according to temporal profile of bills.

SME Finance

IDBI Bank has been actively engaged in providing a major thrust to financing of SMEs. With a view to improving the credit delivery mechanism and shorten the Turn Around Time (TAT), IDBI Bank has developed a special business model to serve the SMEs in India. The Bank has set up 24 City SME Centres (CSCs) across India in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Pune to name a few. These CSCs are the Bank's hubs while dedicated SME desks have been set up in several branches across these cities. These branches serve as front offices for sales delivery and customer service.

IDBI Bank has a wide variety of products and services catering to the needs of different segments within small business. Long years of experience in being the trusted partner of large and mid corporate has translated into deeper understanding of needs of business and industries. The Bank has parameterised products for transporters, dealers, traders, and vendors. In addition, it has a separate Transaction Banking Group that has expertise in products like cash management services, letter of credit, bank guarantees and treasury products”

F Sulabh Vyapar Loan

Eligible Segments	Traders and Service Sector
Facility	Fund Based :Overdraft, Cash Credit, Term loan, Bills Discounting Non Fund Based: Bank Guarantee and Letter of credit
Loan Amount	Minimum: Rs.5 lacs and Maximum: Rs 500 lacs.
Tenor	TL: upto to 5 years.
Pricing	Max: BPLR Min: 1.25% below BPLR
Security	 Hypothecation of stock & Book debts and asset financed by bank.  Personal Guarantee of the borrower.  Collateral security upto 110% of the loan amount

PERSONAL BANKING

F Savings account

The SuperSavings Account is a complete financial package that provides with easy access to a person’s money and complete banking convenience too. It offers a whole range of options for optimal management of your money. Which means, with SuperSavings Account, one not only save his money but also make it grow.

So apart from the basic benefits of a savings account, bank offer various options for faster transfer of funds, options to pay bills or tax online and options to grow money at attractive interest rates in the savings account. All these features are offered for a minimum balance of Rs 5,000.

· Instant Banking

· International Debit Card

· Family Account

· Quick Money Transfer

· Easy Payments

· Bank on the Move

· Profit from your Account

· Value Added Services

· Travel and Gift Solutions

F Power kidz

With the growing focus on the Kids segment and its requirements, IDBI Bank realized the importance of introducing a product specifically catering to this market. Now-a-days, parents start saving money for their children right from the day they are born. So, to support this thought IDBI has designed this POWER KIDZ A/C

It is a piggy bank for the Kids that will not just keep their money safe but provide an interest on the same, allow them to take out money when required, make smart purchases by way of exclusive debit card, teach them to operate their account in a better and convenient way and also advise them from time to time about better investment options.

Kids at a young age can start saving the amount received from parents/guardian into these account which will not just inculcate the habit of saving but also act as an instrument in guiding them into financial sector. Coupled with various training programs and with insight to various other products children can make better investment decisions in future. They can even have the benefit by availing education loan from IDBI bank at a competitive interest rate for funding their higher education in India and Overseas.

· OTHER SAVING ACCOUNT

· 1 SABKA SAVING ACCOUNT (NO FRILL ACCOUNT )

· 2 SUPER SHAKTI SAVING ACCOUNT

· 3JUBILEE PLUS SAVING ACCOUNT (SENIOR CITIZEN)

F Current account services

· Roaming Current Account

A Current account for every business

No two businesses are the same, which is why IDBI Bank offers five Roaming Current Accounts – Basic, Special, Bronze, Silver and Gold to suit the business needs. Based on the balance, one choose to maintain in the account, he can then choose his specific Roaming Current Account accordingly. IDBI Bank Current Accounts not only gives the flexibility of banking anytime, anywhere, but also allows to save more money while doing business across the country. Roaming Current Account from IDBI Bank comes packed with a host of services and facilities that makes banking convenient and hassle-free. With services such as multi-city and multi-branch banking, electronic funds transfers, national clearing in selected cities, 24x7 cash withdrawals from ATMs, Internet Banking, Phone Banking and SMS Banking, a person is assured of faster remittances and collection of funds at competitive rates. What’s more, extended IDBI Banking hours and Sunday Banking, all this to simplify banking for customer!

Features

Þ Make payments to vendors in different cities without any costs

Þ Receive payments from customers without any charge deducted from the amount

Þ Do all the banking right from wherever a person travel

Þ Most importantly, maintain better relations with the vendors and customers.

One can open a Current Account (Basic Roaming Current Account) with only Rs 10,000. He has to maintain an average quarterly balance of Rs 10,000. But this is nothing compared to a host of services and facilities that will make your current account work more effectively and efficiently.

Other Services

Here is a list of other services that are offered on current account:

F Free Services:

IDBI Bank’s Roaming Current Accounts offers a variety of free services that one can avail of.

F Multi-city and multi-branch banking:

The vast networks of bank allows customer to access his account, deposit cash and cheques and withdraw cash from any of their branches across cities.

F Electronic funds transfers:

At IDBI Bank, superior technology speaks for itself. Bank’s electronic funds transfer allows one to transfer funds electronically instantly.

F National clearing:
Bank’s national clearing avails a person faster and efficient cheque collection over 15 cities.

F ATM Card
One can use the ATM card for cash deposits, withdrawals and more. The cash withdrawal limit per day is Rs 25,000. This service is available only for individual and sole-proprietorship current accounts.

Other current A/C’S

· 1 core current account

· 2 premium

· 3 premium special

· 4 merchant estblishment

· Special current a/c

· Bronze current a/c

· Silver current a/c

· Universal current a/c

F FIXED DEPOSIT SERVICES

· Suvidha Fixed Deposits

IDBI Bank Suvidha Fixed Deposits have always stood for safety, credibility and attractive rates of interest. What’s more,the interest rates are among the highest in the industry so that one get the benefit of high rates of return on savings. These deposits have been further packed with the following features :

Anytime access of deposits
Deposits across tenures of 15 days to 10 years
Various Options to suit the needs.

F Monthly Quarterly Income Plans

For those who seek regular incomes

A great option for people who require interest income at regular intervals. The interest income will be credited automatically into savings account at the interval (Monthly/Quarterly) specified by the person. The deposit is automatically renewed on maturity so that the person doesn’t lose interest for a single day. What's more one can book Fixed Deposit with only Rs. 10,000.

F Quarterly Compounding Fixed Deposit

Ideal for those how want a higher rate of return combined with a low risk Fixed Deposit
This option re-invests the interest earned on the deposit, every quarter resulting in a higher rate of return. For example, the interest rate for a 2 years + 1 day deposit is 5.80% p.a. but the effective yield is higher at 6.11% p.a. on account of re-investment of the interest earned. Also, there is automatic renewal of FDs on maturity hence you don't lose interest for a single day. What's more one can book your Fixed Deposit with only Rs. 10,000

F Recurring Deposit

Ideal for those who want to save a fixed sum every month

This type of deposit helps add to the savings at complete convenience. one can start saving any amount from Rs. 100 to Rs. 1 lakh every month. The amount as decided by the person, will be deducted every month from savings account. Further, there is no Tax deducted at source on these deposits and also no charges for executing the standing instructions.

F Sweep in Savings

Earn fixed deposit rate on your savings account

This option offers with the flexibility of a savings account combined with the safety and higher rate of interest of an FD. Open a zero balance savings account and link multiple FDs to the savings account (minimum FD relationship required is Rs. 50,000). If there are no funds in the savings account the same can be broken (in multiples of Rs. 1,000) from the FD through a debit card or a cheque. Moreover, the FD booked last will be broken first so that one lose the least amount of interest.

F Overdraft against Fixed Deposit

Tide over your urgent cash requirements without breaking your Fixed Deposit
This option allows one to continue earning the higher rate of interest on an FD and at the same time, one can meet his monetary requirements. An overdraft of upto 90% of the FD/Multiple FDs held with the bank, will be setup in your zero balance savings account. The overdraft can be availed against an FD amount of Rs. 50,000 or higher at very competitive rates. Moreover, the overdraft is first given on the FD earning least interest so that interest payout is minimized.

F Senior Citizens Fixed Deposits

· Earn higher rate

Senior citizen, have the advantage of earning higher interest on the regular income plans and reinvestment plans. The interest rates for senior citizens are higher by 0.50% pa. One can choose from tenure ranging from 46 days to 10 years for minimum deposits starting from Rs 10,000.

· Suvidha Tax Saving Fixed Deposit

At IDBI Bank it's been the constant endeavour is to provide with world-class products and services that help to improve the standard of living and plan ahead for the future.

With the same spirit in mind, we bring to the 'IDBI Suvidha Tax-Saving Fixed Deposit' which gives dual benefits of tax exemption u/s 80c of the Income Tax Act and higher returns on the investments with interest rates at 8.5%* p.a. for regular deposits and 9%* p.a. for Senior Citizens.

F Other benefits:

· Zero Balance Savings Account

· Free local Cheque Book

· International ATM-cum-Debit Card

· Free Internet Banking facility

IDBI ‘Super Shakti’ Account for Women

Understanding the specific requirements of the customers, we at IDBI Bank have introduced a special Savings Account for Women, which we have coined ‘Super Shakti’. Not only this, along with this account it offer one Zero Balance Savings Account absolutely free for her child below the age of eighteen years. The Account offers a host of features, which include:

Free Transactions at other Bank ATMs.
An account opening balance of just Rs.1000
An AQB requirement of Rs. 5000.
A Zero balance account for your child below the age of 18 years.
Debit Card Free for the first year.
A free Personalised /Customised PAP Cheque Book.
Quarterly Account Statement
Free Demand Draft at Home Branch
Free Payorder for payment of School/colleges fees and remitting funds to their parents.
Phone Banking
Mobile Banking
Free Statement by e-mail
Demat Account at just Rs.200.
Locker services at a concessional rate
Investment advisory services.
Free local personalized Cheque Book

LOANS AND ADVANCES

F HOME LOANS

· Home, sweet home, built out of one dreams. A place where one return after a hard day's work and relax, a place where one share precious moments with your family. A place that gives one a sense of belonging. IDBI Bank helps one to realize your long cherished dream of owning one’s home through hassle free and customer friendly home loans.

· Presenting IDBI Bank's ultra flexible home loan you have been looking for. We realize what owning your home means to you and your family.

· One can avail of the Home Loans for constructing a home, purchasing a ready built house/flat, residential plot and even for re-financing existing loans one may have availed from other banks or housing finance companies.

F Advantages

· Maximum Funding

· Flexibility of choosing between Floating or Fixed interest rate

· Attractive rate of interest

· EMI on daily reducing balance

· Personalised doorstep service

· Simple documentation

· Legal and technical assistance

· Balance transfer facility

F Features

1. Tenor of a home loan can be up to 25 years for a resident individual whereas for NRIs the maximum tenure is 15 years subject to maximum age of 60 years at maturity.

2. Loan can be applied for a maximum of 90% of the property value subject to credit discretion.

3. Security for the loan is a first mortgage of the property to be financed, normally by way of deposit of the title deeds or such collateral security as may be necessary.

4. Title to the property should be clear and free from encumbrance, i.e., without any pending legal litigation adversely affecting the ownership of the property.

5. Other parameters considered include an account of your age, income, number of dependents, financial stability and co-applicant’s income

F Tax benefits

As per the current finance bill one can get:

· A maximum deduction of Rs. 1,50,000 on your income towards interest paid on your home loans u/s 24

· A maximum deduction of Rs. 1,00,000 on the principal repaid u/s 80 CCE

The above benefits are available subject to fulfilling certain conditions, for which one should refer the IT Act 1961.

F Repayment

We normally repay the loan through Equated Monthly Installments (EMIs) comprising both principal and interest. If the final disbursement is however still pending, pay interest on the portion of the loan disbursed before the EMI commences.

We could also structure our loan repayment to suit your convenience. For instance, the installments could be lower in the initial years and could gradually increase over a period or vice versa. The maximum possible tenure for a Resident Indian is 25 years if employed and 15 years if self employed. While the same for an NRI is 15 years.

F Eligibility

Following are eligible to apply for an IDBI Home Loan:

Salaried individuals
Self employed professionals/businessmen
NRIs

One can include spouse/parents/children as co-applicant if he requires higher eligibility subject to maximum of three applicants.

F Rate of interest

Loan Tenure	ROI
1-25 years (Up to 20 lacs)	(BPLR-3.75)	9.00 %
1-25 years (Above 20 lacs)	(BPLR-3.25)	9.50 %

Home Loans (Fixed )
Options	ROI
Fixed for 3 years	11.00 %
Fixed for 5 years	11.25 %

F LOAN AGAINST PROPERTY

IDBI realise how important it is to raise money in the face of exigencies. The bank through these difficult situations through the customer friendly Loans against property (Residential & Commercial) product. Loans could be used for:

· Education

· Marriage

· Business

· Purchase or improvement of property

· Medical treatment or any other personal need

Maximum amount possible is Rs 500, 00,000 subject to repayment capacity and value of property.

F ADVANTAGES

· Tenor up to 15 years

· Attractive Rate of Interest

· Maximum Funding

· Interest rate on daily reducing balance

· Fixed and floating interest rate options

· Simple documentations

F EDUCATION LOANS

Education loans from IDBI Bank aim at providing financial support to deserving/ meritorious students for pursuing higher education in India and abroad. With an array of courses to choose from and easy repayment options, IDBI Bank makes sure one get complete financial backing.

F COURSES OFFERED

a. Studies in India:

· Graduation courses : BA, B.Com., B.Sc., etc

· Post Graduation courses : Masters & Phd

· Professional courses : Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc

· Computer certificate courses of reputed institutes accredited to Dept. of Electronics or institutes affiliated to university

· Courses like ICWA, CA, CFA etc

· Courses conducted by IIM, IIT, IISc, XLRI. NIFT etc

· Courses offered in India by reputed foreign universities

· Evening courses of approved institutes

· Other courses leading to diploma/ degree etc. conducted by colleges/ universities approved by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc

b. Studies abroad:

· Graduation: For job oriented professional/ technical courses offered by reputed universities. Post graduation: MCA, MBA, MS, etc. Courses conducted by CIMA- London, CPA in USA etc.

c. Special Courses

· Regular Degree/Diploma courses like Aeronautical, pilot training, shipping etc., approved by Director General of Civil Aviation/Shipping. In case the course is pursued abroad, the Institute should be recognized by the competent local aviation/shipping authority.

F REPAYMENT TERMS

The repayment of loan to begin after the course period + 1 year or 6 months after getting a job, whichever is earlier. The loan to be repaid within 5-7 years (maximum tenor 84 months) after commencement of repayment.

F RATE OF INTEREST

Up to Rs. 4 lakhs	11.75 % (BPLR - 1%)
Above Rs. 4 lakhs	12.75 (BPLR )

F EXPENSE COVERED

Fee payable to college/ school/ hostel
Examination/ Library/ Laboratory fee
Purchase of books/ equipments/ instruments/ uniforms
Caution deposit/ building fund/ refundable deposit supported by Institution bills/ receipts
Travel expenses/ passage money for studies abroad
Purchase of computers - essential for completion of the course
Any other expense required to complete the course - like study tours, project work, thesis, etc.

PERSONAL LOANS

Personal Loans from IDBI comes with an insurance cover. This means when times are tough, one have an insurance cover to take care of the EMI's.

In case of death or disability due to an accident, the principle outstandings will be paid by the insurance company.
In case of loss of job, the insurance company will pay the EMIs for up to 3 months

Also one can transfer your existing loan to IDBI and save up to Rs 50,000

F ELIGIBILITY

Following are eligible to apply for an IDBI Personal Loan:

Salaried individuals
Doctors / dentist
Professionals
Proprietors and partners

F REPAYMENT

The terms vary as for salaried people its 12-60 months and for proprietors or professionals its 12-36 months.

NRI SERVICES

TYPES OF ACCOUNT

1) Non Resident External Account (NRE)

F Minimum balance required

1.CurrentAccount :Rs 10,000
2.SavingsAccount :Rs 5,000
3. Term Deposits : Rs 10,000

F Accounts can be opened through the following modes:

· Remittances in any convertible currencies from abroad, which will be converted at ruling exchange rates into Indian rupees

· Transfers from existing NRE/FCNR accounts / deposits or

· Foreign exchange brought into India during visits to India

Non Resident External (NRE) Deposits rates stand revised as under w.e.f. August 1, 2009

Maturity SLAB	Upto Rs.15 lacs	Deposits abv Rs. 15 Lacs upto Rs.1 Crore	Over Rs.1 Crore to less than Rs.2 Crores
1yr to less than 2yrs	3.25%	3.25%	3.25%
2yrs to less than 3yrs	3.31%	3.31%	3.31%
3yrs only	3.92%	3.92%	3.92%

2) Non Resident Ordinary Account (NRO)

F Account to be maintained in local currency

· NRIs that have local income or expenses in India can open NRO Account. The Account can be Savings, Current or Fixed Deposit Account

· Local incomes like rent, dividend, or interest can be credited to this account

· Interest earned on this account is not exempt from Income Tax under the provisions of Income Tax Act

· Interest earned is repatriable subject to RBI guidelines

· Joint Account with Resident / Non Resident can be opened

Minimum balance required

1.CurrentAccount:Rs 10,000
2.SavingsAccount:Rs 5,000
3. Term Deposits: Rs 10,000

Maturity SLAB	Upto Rs.15 lacs	Deposits abv Rs. 15 Lacs Upto Rs.1 Crore
15-45 days	3.25%	3.25 %
46-90 days	4.25%	4.25%
91 days - 6 months	5.50%	5.50%
> 6 months - <1 year	6.50%	6.75%

Non Resident Non Repatriable Deposit Scheme (NRNR)

No new deposits, whether by way of renewal of existing deposit or otherwise, shall be accepted. Existing deposits may be continued only up to the date of maturity
On maturity of the existing deposit, the maturity proceeds can be credited directly to the account holder’s Non Resident (External) Account (NRE) or he can open a fresh NRE Term Deposit Account.
At the request of the account holder, the maturity proceeds can be credited to his NRO account also
The proceeds can be credited directly only to NRE account only on maturity but not to FCNR (B) Account
In case of premature withdrawal the proceeds shall be credited only to Non Resident – Ordinary (NRO) Account.

F 24 HOURS BANKING

F PHONE SERVICES

ACCOUNT RELATED SERVICES

Updated balance enquiry (including balance in clearing)
Balance as on date
Last five transactions
Statement of account by fax, e-mail or post
Request for cheque book
Hotlisting of ATM or Debit Cards
Status of cheque issued or deposited
Funds in clearing
Bill payment details
Funds transfer - between your own accounts and to your registered NEFT payee’s account.

Also services related to demat a/c information, or loan a/c details, or product details are given

F SMS SERVICE

Business is on the move and so are the people who conduct it. For one to enjoy banking convenience while on the move, IDBI is here with its SMS Banking facility. The SMS banking initiatives permit to access the Bank account and carry out various banking transactions and inquires. No need of visiting the bank again.

DETAILS REGARDING

Balance enquiry
Last three transaction
Cheque payment status
Cheque book
Statement request
Demat - free balance holding
Demat - last two transactions
Bill payment

F INTERNET BANKING

Once the person logs into Internet Banking on www.idbibank.com, he can view the account information and carry out transactions over the Internet. Mentioned below are the products and services that are available on Internet Banking.

Details regarding accounts demat accounts, customer services like mail messages, or request or orders including cheque book, stop payment can be done using online service.

Online payment services including Online Shopping Malls, Online Share Trading Agency and online bills payment services are also provided.

F INSURANCE

F Family care

IDBI have always brought the best of banking products and services. Now, there is yet another unique product ‘FamilyCare’ in association with Bajaj Allianz General Insurance, one of the leading private general insurance companies.

The FamilyCare Policy is a complete health insurance plan that covers the person, his spouse and two dependant children up to the age of 25 years. It enables the person to access the best medical treatment in case of a sudden illness, accidents or an emergency surgery, without any hassles.

The FamilyCare policy covers the hospitalisation expenses as a result of any illness and accident. Unlike any other regular policy, wherein a family has to take individual policies for each member, this unique family floater policy gives the flexibility of taking one policy that covers the entire family under a single sum insured.

F Wealthsurance

Wealthsurance is a first of its kind combination of comprehensive investment choices, protected by powerful insurance options, all presented with a reasonable charge structure, making it a one stop solution to a customer’s wealth building plans. Wealthsuranceoffers investment choices such as Guaranteed Return Fund, Equity Funds, Debt Funds etc. ensuring that the customer would find all his investment requirements satisfied with this one powerful product. The powerful insurance benefits of Wealthsuranceensure that a customer’s wealth plan is not affected by unforeseen events that may strike them.

The guiding philosophy behind this product is that wealth will grow better with a protective cover. So, while one’s wealth stays invested, the insurance benefits ensure that life’s uncertainties such as death, terminal illness, 17 major diseases, sickness requiring hospitalisation or serious accidental injuries, do not disturb its growth. Wealthsurance is thus designed to also give living benefits to ensure one’s well-being in their lifetime. Customers can opt for a ready plan or build their own plan by choosing their own sum assured investment plan, affordable premium, policy term and the type of insurance cover.

F Capital Market

F Demat A/c:

Paper securities are passé. Enter the world of dematerialized shares, bonds and other securities. Convert your securities to dematerialized form with IDBI Bank Demat Account. It's as simple as opening a Savings Account.

Ø Why Demat with IDBI Bank?

Lowest fees
Statement by emails
Demat access through Internet, cell and phone
Portfolio valuation on the account statements
Online execution of transactions at branches
Special rates for stock market intermediaries and sub brokers
Transactions update from back-office four times a day

Ø Benefits of Demat A/c

Demat A/c services	IDBI Bank	Other bank
Portfolio Value on account statement	Yes	No
Demat Services over phone	In 48 locations	No
Statement on e-mail	Yes	No
On-line execution of instructions	Yes	No
Service at all locations	Yes	No
View of Statement on the net	Yes	No

Ø Demat Accounts for NRIs

If you are a Non-Resident Indian (NRI) who has invested in shares, bonds, debentures of Indian companies or would like to do so now, open a Demat Account with us either under NRI Repatriable or NRI Non-Repatriable category. Through our Internet Banking, you can view your Demat Account balances and print statement of transactions and holdings from anywhere in the world.

F ASBA

Applications Supported by Blocked Amount’ (ASBA) is an application for subscribing to an issue, containing an authorization from the bank customer (who invests in a particular IPO through ASBA) to block the application money in his bank account.

Ø Eligibility

An Investor shall be eligible to apply through ASBA process, if he/she:

i. Is a "Resident Retail Individual Investor",

ii. Is bidding at cut-off price, with single option as to the number of shares bid for,

iii. Is applying through blocking of funds in a bank account with the SCSB,

iv. Has agreed not to revise his/her bid;

v. Is not bidding under any of the reserved categories.

F Process of ASBA

An ASBA investor shall submit the filled-in ASBA application form physically to the SCSB with whom he/she maintains the Bank account. THE SCSB shall then block the application money in the bank account as specified in the ASBA, on the basis of an authorization to this effect given by the account holder in the ASBA.

The application money shall remain blocked in the bank account specified in the ASBA, on the basis of an authorization to this effect given by the account holder in the ASBA form till finalization of the basis of allotment in the issue or till withdrawal/failure of the issue or till withdrawal/rejection of the application, as the case may be. The application data shall thereafter be uploaded by the SCSB in the electronic bidding system through a web enabled interface provided by the Stock Exchanges (either NSE/BSE). Once the basis of allotment is finalized, the Registrar to the Issue shall send an appropriate request to the relevant bank accounts for transferring the requisite amount to the issuer's account. In case of withdrawal/failure of the issue, the amount shall be unblocked by the SCSB on the receipt of information from the pre-issue merchant bankers.

Other Functions.

Ø Tax payment services

Pay your taxes through IDBI and enjoy peace of mind

IDBI present a simple tax payment service, wherein one could pay the taxes sitting from the comfort of home or office. pay the taxes any of the following ways:

F Pay your Direct Taxes Online

F Pay your Central Excise Duty and Service Tax Online

F Pay your taxes at our branches

o Direct tax

o Indirect tax

o State tax

Ø Stamp duty payment

Now,get rid of shortage of stamp paper, counterfeit stamp paper, long queues and all other hassles while paying the stamp duty.

The Government of Maharashtra and the Government of Gujarat has authorized IDBI to collect stamp duty. Except on the below mentioned instruments, one can pay stamp duty on all financial instruments.

Bill of Exchange
Bill of Lading
Brokers Note
Debenture
Foreign Bills
Hundi
Insurance
Promissory Note
Proxy
Revenue Stamp
Share Transfer Form

Ø Bills payment service

No more queues at phone and power company offices. No more headaches due to late payment fees. No more worries of having your phone or electricity line cut-off because one forgot to drop off a cheque. The Electronic Bill Payment facility from IDBI cuts out the hassles one go through each month for paying the bills.

This bill payment service gives the flexibility of viewing and paying the bills online. The need to do is enter the as billing details on the Intern Billet Banking, and then, start paying the utility bills, insurance premiums, etc, month on month, absolutely hassle-free.

The Electronic Bill Payment contains:

Electronic Bill Presentment and Payment: This feature allows you to view and pay off all your bills online.

· Electronic Bill Payment:This feature allows you to pay off all those bills appearing physically.

Ø IDBI bank Gold Debit cum ATM card

IDBI Bank presents revolutionary card product ~ The Gold Debit-cum-ATM Card. Not only can one withdraw cash and make purchases through the card, but also avail of a host of services and facilities that make banking simple and enjoyable.

F Features

· ATM and Merchant Establishment usage:- The card can be used to transact at IDBI Bank ATMs. Visa cardholder can also withdraw cash at over 36,000 Visa/ Plus ATMs in India & over a million Visa/Plus ATMs worldwide and MasterCard holder can withdraw cash at over 18,000 MasterCard ATMs in India & over a million MasterCard ATMs worldwide. The VISA debit card can also be used to make purchases at over 4.70 lakh merchant establishment in India and 14 million merchant establishments worldwide. The MasterCard Debit Card can be used at 2.5 lakh merchant establishments in India and 26 million merchant establishments worldwide.

· International validity:- The Gold Debit-cum-ATM Card can also be used abroad to make purchases at merchant locations and withdraw local currency at 10 lakh Visa/Plus ATMs and over 10 lakh MasterCard ATMs.

Ø International debit cum ATM card

Imagine being able to access the bank account not just in India, but also anywhere in the world! Introducing the new way to access the account – the IDBI Bank International Debit-cum-ATM Card. This card enables to access IDBI Bank account from anywhere in the world, anytime of the day or night. It not only l facilitates withdraw money from any of the ATMs (Automated Teller Machines) and the associated bank’s ATMs, but also empowers to shop, dine and travel without the worry of carrying cash all the time.

F Benefits

1. Loyalty points with great rewards

2. Enhanced access to over 10 lakh VISA & MasterCard ATMs worldwide and 14 million VISA merchant establishment & 26 million MasterCard merchant establishment worldwide.

3. Promotional programmes with exciting prizes

4. Zero lost card liability insurance

CHAPTER 5.

DEVLOPMENT OF IDBI BANK

In March 2008, IDBI Bank entered into a joint venture with Federal Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which IDBI Bank owns 48 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009.The name of IDBI Fortis Life Insurance is now changed to IDBI Federal Life Insurance Co Ltd.

Government of India now owns 65% stake in IDBI Bank. Hence IDBI Bank is also referred as 'The New Age Government owned Bank'

IDBI Bank has recently inaugurated its branch no. 897 at Guna, the gateway of Malwa and Chambal, Madhya Pradesh. It has now a network of 897 branches, 615 centres and 1492 ATMs as on August 30, 2011.

IDBI Bank has bought 10% stake in upcoming commodity bourse Universal Commo-dity Exchange (UCX) for Rs 10 crore, the bank's top official said. The deal was completed recently. RM Malla, chairman and MD of IDBI Bank, confirmed that the bank had picked up 10% in what will become the country's sixth commodity futures exchange.

"The idea behind acquiring equity is to push agriculture loans through this venture," said Malla. "The other advantage is IDBI will be the only bank among the promoters and therefore all transactions of the exchange will be routed through IDBI."

RECENT PROGRESS OF IDBI BANK

As on March 31, 2011, the Bank had a network of 816 Branches and 1372 ATMs. The Bank's total business, during Fy 2010-11, reached Rs. 3,37,584 Crore, Balance sheet reached Rs. 2,53,377 Crore while it earned a net profit of Rs. 1650 Crore (up by 60 %).

STUDY OF IDBI BANK.

Plot No. 1& 2, Kohinoor Bhavan, near Dadar Rly. Station,

Opp. Swami Narayan Mandir,Dadar(E), Mumbai- 400014.

Date:22/9/2011

Kalpesh Rathod.

Relationship manager.

I sachin s khetal, visited idbi bank on,23of September,2011,on friday,and the following information was collected.

IDBI Bank is truly India’s first financial services supermarket. Because it is India’s first bank where customers can get the following savings products under one roof.

1. Saving Account

2. Demat Account

3. Mutual Funds

4. Insurance

5. Bond

6. Current account

Further, customers can also get the following loan products under the same roof.

1. Home loan

2. Mortgage Loan

3. Auto Loans

4. Education Loans

5. Personal Loan

6. Loans for Renovation

7. Loan against

8. Loans against bonds

idbi bank is a full service bank , were your customer can access there accounts across multiple touchpoints . over 800 atm’s , 500+ branches in over 300 centers , via telephon , vai internet , mobile phone (sms and wap). if you take the telephone and internet alone , it means there are over 30 millions places across india from where a customer can access his account.

several police’s provided by idbi bank

· Model deposit policy

· Comensation policy

· Cheque collection policy

· Collection of dues policy

VARIOUS CARD PROVIDED BY IDBI BANK.

· Online payment through Debit cards

· Platinum Debit Card

· Women Debit Card

· Gift Card

· World Currency Card

· Cash Card

· Gold Debit Card

FACILITIES BY ATMS

· Setting up of offsite ATMs

· Cash replenishment process for offsite ATMs

· ATM Escalation Matrix

· IDBI Bank Newsletter May 2005

· MF Basics

· I-Principal Rpt. Format

· Retail Products

· MF Basics

CHAPTER 7.

LITERATURE REVIEW

EXANGE RATE CRISES IN DEVLOPING COUNTRIES

(THE POLITICAL ROLE OF BANKING SECTOR)

MICHAEL G. HALL

ASHGATE PUBLISHING LTD.

The 1990’s saw a number of exchange rate crises in developing countries ,ranging from mexico to east asia to brazil , to russia . The puzzling aspect of so many of the crises was that they struk developing stats that were growing rapidly or had , significantly refored their economies.

THE ROLE OF BANKING IN MONITORING FIRM

BY ROUTLEDGE

ELISHABATA PAULET

This book examines how univarsal bank could help relax the credit constraints of firm ,improve the supervison of manager and stabilise share prices. Economist seem to agree on the monitoring power of bank as regards their clients.

FINANCIAL INNOVATION IN THE BANKING INDUSTRY

( THE CASE OF ASSET SECRUTIZATION )

BY LAMIA OBAY

GARLANG PUBLISHING LTD.

Financial innovation refers to sevral phenomena . It includes new financial instrument which are the object of transaction, new financial market which are the field and transaction and new media to effect transfer . While financial innovation is by no means a recent phenomena.

CHAPTER 8

RECOMMENDATIONS

1. Management of IDBI is centralised i.e. it follows the long procedure for approvals of loans,due to which this should be decentralised.

2. The branches are located only in metropolitan cities , so they should increase the number of branches i.e. 575 branches all over the country are not enough.

3. Bank should enchance its business by providing funds to financial institutions those engaged in venture capital, hire purchase, leasing, etc.

4. Number of working hours of IDBI bank is 7 hours, it should be increased to 12 hours.

5. Also bank should come up with new schemes specially for the development of Small and Medium enterprises.

6. Centres providing SMEs products are very less i.e. SMEs products are available just at 27 centres. And hence for the development of SMEs number should be raised.

7. There should be facilities such as online acceptance of the form for opening a bank account.

8. Not only that, bank should also come up with some different instant banking options like TV banking

CHAPTER 9

CONCLUSION

India is well positioned to become the fourth largest economy in the world by 2025.GDP growth rates of 7-8% in a year will be sustainable if key enabling factors have been put in place. One of the robust economic growths is a banking sector that is adequately sufficient to meets the needs of growing economy. The shape of banking in 2010 will be the result of interplay between the decisions taken by policy makers and actions of bank management.

As the market conditions remained under pressure and volatile, growth of the economy is expected to remain above 5.5% during FY 2009-10. Such growth momentum and the revival plan would bestow sufficient platform to commercial banks in order to enlarge their business level. IDBI Bank is currently well poised in terms of its infrastructure and policy directions, to play a larger role in the growth story of the economy and optimise its performance indicators.

IDBI Bank provides complete solution catering to financial requirements of corporate. It is one among the leaders in project finance. The Bank also offers a wide array of corporate banking products. Bank has achieved impressive growth of more than 80% in Trade Finance business covering Letter of Credit and Bank Guarantee products. The Bank has also improved export credit disbursement by 17%. It continues to remain a prominent player in infrastructure financing.

CHAPTER 10 BIBLIOGRAPHY.

o www.idbibank.com

o http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500116

o "List of Top 5 India's Public Sector Banks". Articlesbase.com. Retrieved 2010-07-26.

o "IDBI Bank". Business.mapsofindia.com. Retrieved 2010-07-26.

o "IDBI bank buys 10% in UCX for Rs 10 crore". economictimes.indiatimes.com. Retrieved 2011-07-06.

o "IDBI bags best bank award". Indiavision news. Sep 06, 2011.

o "Narasimham panel moots IDBI corporatisation". Expressindia.com. 1998-05-05. Retrieved 2010-07-26.

o Our Banking Bureau / Mumbai 26 October 2004 (2004-10-26). "IDBI aims at Rs 1 lakh cr assets by year-end". Business-standard.com. Retrieved 2010-07-26.

o Keith, Kelley. "Banks in India – Web Listings". Business.com. Retrieved 2010-07-26.

o "Mega Merger Of IDBI, IFCI And IIBI Under Consideration". Financialexpress.com. 2003-04-05. Retrieved 2010-07-26.

o Press Trust Of India / New Delhi 17 December 2005 (2005-12-17). "IDBI rules out IFCI, IIBI acquisition". Business-standard.com. Retrieved 2010-07-26.

o "IDBI chairman to the rescue". Rediff.com. Retrieved 2010-07-26.

CHAPTER 11

APPENDIX

BUSINESS STANDARD

DATE: 6/8/2011

DAY: SATURDAY

COMMENT:

The above article state that IDBI launched IDBI magic card which can be obtained only by its salary account holder.

IDBI Oct-Dec net up 58 pct, NIM at 2.28 pct

January 25, 2011

MUMBAI: Public-sector lender IDBI Bank said on Tuesday it posted a 58 percent rise in interest rates could weigh on margins going forward. On Tuesday, India's central bank raised interest rates by a quarter of a percentage point to clamp down on resurgent inflation while concerns loomed at large about more hikes, going forward. For related story click on IDBI's deposits grew 5 percent to 1.5 trillion rupees while advances grew 21 percent to 1.34 trillion rupees as at end-December, it added.

Our zero-balance a/cs have added significant customer nos: CFO, IDBI Bank

January 4, 2011 | ET Now

IDBI Bank has raised its lending & deposit rates by 50-100 bps. ET Now talks to P Sitaram, CFO, IDBI Bank understand how the hike would affect the bank's margins as well as its outlook. You have recently raised deposit and lending rates, the outlook on your low-cost deposit, what you call CASA and your net interest margin's growth from hereon? P Sitaram : From the CASA part, we expect it to have a stable position as of now with a moderate growth by March.

IDBI Bank hikes retail term deposit rates by up to 75 bps

January 4, 2011 | PTI

MUMBAI: Public sector lender IDBI Bank today announced an increase in the interest rate on certain retail term deposit schemes by up to 75 basis points, in line with similar steps by its peers. The interest rates were hiked for deposits of both less than Rs 15 lakh as well as those of between Rs 15 lakh and up to Rs 1 crore and will come into effect from today. In an additional offering to woo customers in the current stage when interest rates are on an upswing, IDBI Bank has decided to do away with penalties on premature withdrawals of fixed deposits.

NEWS

IDBI Bank ups dep rates by 0.75 pc, abolishes withdrawal penalty

January 4, 2011 | PTI

MUMBAI: Public sector IDBI Bank today hiked interest rates on retail deposits by up to 0.75 per cent varying according to maturities , in line with peers. However, in an additional offering to woo customers in the current rising interest rates scenario, bank has decided to do away with penalties on premature withdrawals of fixed deposits. The Mumbai-headquartered bank levies a premature withdrawal penalty of one per cent presently, its Executive Director Sushil Muhnot said.

NEWS

Positive on IDBI Bank, Jindal Steel for day trade: Technical Trends

December 30, 2010 | ET Now

Your trading ideas for day traders? Sudarshan Sukhani : I am looking at IDBI Bank . It has been in a very narrow range yesterday and given the reasonable momentum in banks, I am looking to buy that. The second is Jindal Steel, it after days of underperformance is now coming up and it is also ready to challenge its earlier highs at 740, which is a target for it, so among the steel stocks, Jindal Steel is now the favourite currently. The third is Wyeth, it is more of a dark horse.

Thank you

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VIBRATION ANALYSIS OF CYLINDRICAL THIN SHELL

Friday, 7 October 2011

FUNCTIONING OF IDBI BANK

CHAPTER 10

BIBLIOGRAPHY.

BIBLIOGRAPHY.

11 comments: