ICICI Bank 2006 Annual Report Download - page 35

34
Business Overview
Rural banking and agri-business
The rural economy represents a large latent demand for financial services including credit products, savings
products, investment products and risk mitigation products like insurance. However, the delivery of financial
services in rural areas presents a set of unique challenges. We have formulated a comprehensive strategy
for rural, micro-banking and agri-business, encompassing a range of products and channels, with the twin
objectives of meeting the needs of the rural economy while building a sustainable business model.
We have adopted an integrated approach to agricultural financing by addressing the entire value chain
from production to consumption with a deep sectoral focus. We are exploring all the business opportunities
in the integration of the value chain, including the creation of rural infrastructure like cold storage facilities
and warehouses. We offer a comprehensive suite of products for all customer segments operating in the
rural areas – corporates, small and medium enterprises, farmers and traders. Our six primary credit
products for the rural retail segment are – micro-finance loans, farmer financing, working capital financing
for agri-enterprises, farm equipment financing, commodity based financing and jewel loans. Other financial
services like savings, investment and insurance customised for the rural segment complete our offering.
During fiscal 2006, we introduced the “no-frill account”, a basic savings account with a very low quarterly
average balance requirement. During fiscal 2006, RBI also introduced guidelines for extension of banking
services through the use of banking facilitators and correspondents. These measures would enable us to
extend our banking services to rural customers.
Our channel strategy envisages multiple channels catering to all segments of the rural population. We
have developed a “no white spaces” strategy to comprehensively cover an identified rural geography.
This involves setting up a ICICI Bank touch point within 10 kilometres from any customer, using a
combination of branch and non-branch channels, aimed at fulfilling the financial needs of all rural customer
segments - farmers, agri traders, processors and non-agri customers. It involves establishing a hybrid
low-cost distribution network by partnering with corporates, micro-finance institutions, franchisees and
rural marketing agents, setting up branches at strategic locations and leveraging the distribution network
of other banks. The Bank is using technology to tie-in all the channels and products to reduce costs. The
total number of partner micro finance institutions/non-government organisations was scaled to over 100
at March 31, 2006 from 45 at March 31, 2005. The number of rural internet kiosks more than doubled to
about 4,300 at March 31, 2006 from about 2,000 at March 31, 2005.
International Banking
In 2001, we identified international banking as a key opportunity, aiming to cater to the cross-border
needs of clients and leverage our domestic banking strengths to offer products internationally. The Bank
has made significant progress in the international business since we set up our first overseas branch in
Singapore in 2003. ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada,
branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and
representative offices in the United States, United Arab Emirates, China, South Africa and Bangladesh.
Our UK subsidiary has established a branch in Belgium.
The Bank has established a strong franchise in the non-resident Indian (NRI) business and further
consolidated its position in fiscal 2006. The Bank has established strong customer relationships by offering
a comprehensive product suite, technology-enabled access for overseas customers, a wide distribution
network in India and alliances with local banks in various markets. The Bank has over 400,000 NRI customers
and has substantially increased its market share in inward remittances into India. The Bank has built
several alliances with banks in various countries that have enabled us to provide greater value to our NRI
customers by seamlessly catering to their local and India-related banking needs. The Bank has undertaken
significant brand-building initiatives in international markets and has emerged as a well recognised financial
services brand for NRIs. In Canada, the Bank has grown beyond the NRI segment and is emerging as a
recognised brand in the local financial services segment.
Our overseas subsidiaries and branches launched several products during the financial year. The branch
network of ICICI Bank Canada was expanded with the opening of branches in Toronto and Vancouver.