ICICI Bank 2008 Annual Report Download - page 37

Towards a better life
to 28.0% in fiscal 2007. Based on data published by RBI, at February 15, 2008, industry accounted for 39.6% of
non-food gross bank credit, retail credit for 24.5%, agriculture and allied activities for 11.7%, trade for 5.8%, real
estate for 2.6% and other sectors for the balance 15.8%. The credit-deposit ratio remained within the range of
69.0%-74.0% during fiscal 2008 and was about 73.0% in March 2008. The incremental credit-deposit ratio was
about 71.9% for fiscal 2008 compared to about 86.0% for fiscal 2007. Deposits of the banking system grew by
Rs. 6,029.54 billion, or 22.9%, in fiscal 2008 compared to 24.2% in fiscal 2007. In response to the increase in the
cash reserve ratio and the liquidity conditions, banks have increased their lending rates. The average yield on
10-year Government securities increased relatively moderately from 7.8% in fiscal 2007 to 7.9% in fiscal 2008,
given the continued demand for government securities on account of the mandated holding requirement for
banks and other financial intermediaries.
First year retail premium underwritten in the life insurance sector recorded a growth of 30.7% (on weighted received
premium basis) to reach Rs. 526.59 billion in fiscal 2008 with the private sector’s retail market share (on weighted
received premium basis) increasing from 35.5% in fiscal 2007 to 50.5% in fiscal 2008. The non-life insurance
industry was de-tariffed with effect from January 1, 2007, whereby insurance premiums were freed from price
controls, resulting in a reduction in premium rates and a negative impact on industry growth. Gross premium in
the non-life insurance sector (excluding specialised insurance institutions) grew by 12.6% to Rs. 281.31 billion
in fiscal 2008 as compared to 22.4% growth in fiscal 2007 with the private sector’s market share increasing from
34.9% in fiscal 2007 to 39.9% in fiscal 2008. Total assets under management (on average assets basis) of mutual
funds grew by 50.0% from Rs. 3,590.97 billion in March 2007 to Rs. 5,385.08 billion in March 2008.
Equity markets remained stable and buoyant during the first half of fiscal 2008, followed by a period of significant
decline in the BSE Sensex on account of developments in global financial markets. The Sensex continues to remain
volatile, due to global concerns as well as inflationary pressures and other downside risks to growth.
There were a number of key policy developments in the banking sector during fiscal 2008. Price stability,
management of inflation expectations and stability of financial markets remain the key monetary policy objectives
of RBI. In August 2007, RBI issued guidelines on external commercial borrowings. The guidelines permit external
commercial borrowings of more than US$ 20 million per company only for foreign currency expenditure.
For rupee expenditure, external commercial borrowings were permitted only up to US$ 20 million with the prior
approval of RBI. Subsequently in May 2008, RBI increased the limit on external commercial borrowings for rupee
expenditure to US$ 100 million for the infrastructure sector and US$ 50 million for other sectors. The Basel II capital
adequacy framework became applicable to certain banks including ICICI Bank from fiscal 2008. The guidelines
include an increase in the minimum Tier-1 CAR from 4.5% to 6.0% and the introduction of capital for operational
risk. In November 2007, RBI issued guidelines for banks engaging recovery agents asking them to put in place
a due diligence process for engagement of recovery agents. In February 2008, the Government of India in its
budget for fiscal 2009 has announced a debt waiver for small and marginal farmers. In respect of other farmers,
the scheme proposes a one-time settlement of all overdue loans at 75% of the loan amount.
The Indian financial sector has remained resilient to the adverse developments in global markets. Given the
long-term growth prospects of the Indian economy, the growth outlook of the financial sector in India continues
to be robust.
ORGANISATION STRUCTURE
Our organisation structure is designed to be flexible and customer-focused. At the same time, we seek to ensure
effective control and supervision and consistency in standards across the organisation. The organisation structure
is divided into the following principal groups:
l Corporate Centre, comprising financial reporting; planning and strategy; asset liability management; investor
relations; secretarial; corporate communications; risk management; compliance; internal audit; legal; financial
crime prevention and reputation risk management; and the Bank’s proprietary trading operations across
various markets.
l Retail Banking Group, comprising the retail liabilities, retail assets and small enterprises businesses.
l Rural, Micro-banking and Agri-business Group, comprising the rural and agricultural lending and other banking
businesses.
Annual Report 2007-2008 35
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