ICICI Bank, Ltd

We visited Mumbai at the tail end of the Monsoon season and were told not to be surprised when the rain started pouring suddenly. When we arrived at the 2 large towers of ICICI Bank Ltd, we were assured the pouring rain would stop by the time our visit was over.


ICICI Bank Ltd.

After entering tower one, we were guided to the elevators and instructed to go to the 10th floor where the boardroom was located. The windows from the large and stately room provided views of two kinds. The view from one side consisted of other financial institutions such as the State Bank of India, the largest Indian bank, with ICICI being the second. On the other side, smaller buildings were scattered below and in the not so far distance, the haze of one of the many slums in Mumbai, a common sight due to the lack of space and organized housing within the city limits.



Dr. Samiran Chakraborty, Chief Economist and GMG Treasury Research began the discussion by providing an overview of the Indian economy. Some items he discussed included the inflation rate, which in the ‘80s, doubled that of the growth rate, however today now corresponds the growth rate. Although the government has published that 13%-38% of India’s people are in poverty, Dr. Chakraborty explained that the definition of poverty varies. One definition is based on the people who wear shoes. Many in India don’t consider this a necessity; therefore, if one can afford shoes, they are not in poverty.

Dr. Chakraborty also reviewed some history of the monetary policy in India and the “India Shining” campaign, which he stated was a terrible disaster because only the people who saw the improvements could believe in the campaign. Unfortunately, most were not seeing the improvements in the roads and water supply and therefore wouldn’t vote for the campaign.

Ms. Prerana Langa, Chief Manager, continued the discussion around the mortgage situation in India. She stated that in the last 9 months, there has been a drastic reduction in mortgage loans as no one I selling their house and that the housing demand is concentrated in pockets due to infrastructure issues. She recognized the fact that India needs more cities, but that there is no plan to build more as India is still trying to maximize the use of the current cities, which are constantly being expanded.

The merger of ICICI Ltd and ICICI Bank evolved the company from being a development financial institution to now offering a wide variety of financial services including life insurance, corporate financial services, as well as other banking services. Ms. Langa explained that from 2001 53% of the Indian M&A financing deals have gone through ICICI Bank.

Another topic Ms. Langa discussed was that of how ICICI Bank is involved in micro-banking in the rural areas. To reach 600,000 villages, it would be too expensive to build thousands of branches. Therefore, ICICI created many partnerships with banks that were already established in the rural areas. ICICI bank has been involved in financing the poor through group loans and they have been able to reach out to over 3 million households.

ICICI promotes “inclusive growth” however, full participation is challenging. Ms Langa quoted that 600 million people don’t have access to finance and so ICICI is trying to build the next generation of customers by reaching out to those who formally did not have financial access.



Ms. Langa also explained that ICICI is involved in a philanthropic exchange with GiveIndia. This group connects with the rural areas with enterprise through handicraft sellers and vocational training for the people in these villages. ICICI Bank has been involved with the financial side of this group by providing the people involved access to basic financial services and is trying to bridge the missing market gap with the rest of India.

-Julie Baker