Page 146 - DCOM208_BANKING_THEORY_AND_PRACTICE

Unit 8: Banking Systems

Notes
Service Delivery through Multi-channel Distribution Network
With the foundation of a strong multi-channel distribution network, it has successfully
developed a robust model for distribution of third party products like mutual funds,
Reserve Bank of India (RBI) relief bonds, and insurance products, with market leadership
in these areas. This model also allows it to meet all customer needs by offering the
customer the complete basket of financial products, while leveraging its distribution
capability to earn fee income from third parties.
Online Trading
ICICI direct (www.icicidirect.com) is the market leader in Internet based share trading,
with complete end-to-end integration for seamless electronic trading on stock exchanges.
ICICI direct has a rating of “TXA1” from CRISIL, indicating highest ability to service
broking transactions. During the year, ICICI direct launched online trading in the
derivatives segment of the NSE.
Question

1. What problem Mr. Bhargava Dasgupta is facing in this case?
2. What recommendations will you make to Mr. Bhargava Dasgupta? Should he go
global? Give your reasons.

Source: www.icicibank.com/

8.5 Summary

Corporate banking represents a wide range of banking and financial services provided to
domestic and international operations of large local corporates and local operations of
multinational corporations.
Price is a mechanism to cover the costs of operations which comprises of production costs,
distribution costs, promotion costs, and other operational expenses.
The transition from sellers market to buyers market has compelled the bankers to
understand the pulse and needs of the customers. With interest deregulation in the sector
of deposits with the sole exception of Savings Bank Account, where the apex monetary
authority continues to decide the rate of interest, rest of the fields are open for competition.

Monitoring of the account is easier in retail lending segment as compared to the
conventional advances, for the reason that installments and repayment schedule have to
be monitored in respect of retail lending.
The contribution brought in by the borrower is termed as margin. Margin requirements
differ from one type of finance to others and they differ from one bank to the other.
Merchant Banking is a combination of banking and consultancy services that banks provide
to its customers.

The concept of venture financing became more popular during the sixties and seventies,
when several private enterprises undertook the financing of high-risk and high reward
projects.

Merchant bankers provide advice on acquisition propositions after careful examination of
all aspects.

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