SUBJECT :BANKING MANAGEMENT

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Case Study Project

Total Marks: 80

SUBJECT :BANKING MANAGEMENT

N. B.: 1)Attempt any Four Questions

2)All questions carries equal marks.

Case 1

ICICI Centralizes Applications

(10 Marks)

ICICI centralizes applications for 'anywhere' banking

Question.1. What was the strategy adopted by the ICICI Bank for Development of Banking ? How automation helps the Banking Services?

Answer:ICICI Bank is India’s largest private sector bank with total assets of Rs. 6,461.29 billion (US$ 103 billion) at March 31, 2015 and profit after tax Rs. 111.75 billion (US$ 1,788 million) for the year ended March 31, 2015. ICICI Bank currently has a network of 4,070 Branches and 13,269 ATM’s across India.

ICICI Bank’s Business Objectives For Digital Space –

ICICI Bank—an institution has projected itself as a first-mover on many fronts—the changing banking landscape, where digital delivery of services is becoming more the norm than a nice thing to do, and has always maintained an aggressive digital strategy realizing the potential. It’s business objectives for digital marketing can be summarized as below –

Question. 2. Cost factor has become important in banking services.

Answer:The 21st century will bring about an all-embracing convergence of computing, communications, information and knowledge. This will radically change the way we live, work, and think. The growth of high speed networks, coupled with the falling cost of computing power, is making possible applications undreamed of in the past. Voice, data, images, and video may now be transferred around the world in micro-seconds. This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers. All over the world, banks are still struggling to find a technological

Question. 3. Give your comments. Lessons learned from the above case study.

Answer:ICICI Bank provides banking products and financial services to corporate and retail customers in areas of investment banking, life and non-life insurance, venture capital, asset management and information technology.

The need - Being a financial company with countrywide operations, it felt the need to centralize its applications to reach all its partners and customers. It needed to connect various ICICI offices, banks, branches and over 1,000 ATMs to make its services available across the country.

The solution - After a detailed study of

Case 2

e-Age Banking in Baharain

(10 Marks)

Question. 1. What were the requirements of bank?

Answer:The reserve requirement (or cash reserve ratio) is a central bank regulation employed by most, but not all, of the world's central banks, that sets the minimum fraction of customer deposits and notes that each commercial bank must hold as reserves (rather than lend out). These required reserves are normally in the form of deposits made with a central bank, or cash stored physically in the bank vault (vault cash).

The required reserve ratio is sometimes used as a tool in monetary policy, influencing the country's borrowing and interest rates by changing the amount of funds available for banks to make loans with. Western central banks rarely alter the

Question.2. What is the message from the above case study?

Answer:When a leading bank in Bahrain went shopping for a comprehensive banking solution, it chose CMC’s TC/4.

Using CMC’s state-of-the-art total banking solution, a leading bank in Bahrain is providing its customers the full range of e-age value-added banking services via the internet, mobile phones and ATMs. TC/4 has given the bank a technological edge over the competition and streamlined its operations across all branches.

Client: A leading bank in Bahrain providing retail and commercial banking services. It has several branches and ATMs in Bahrain and operates an

Question. 3. How customers can attracted by improving services of the bank?

Answer:While Banks are getting more and more pressure from customer’s increasing demand, highly competitive market and strict regulations – in the current environment, understanding customer behavior, attitudes and requirements is more vital than ever for banks’ strategic thinking, operational planning and day-to-day customer treatment, according to Ernst & Young.

What Banks can do?

Case 3

Financial Risk Management at Union Bank of Switzerland

(10 Marks)

Question. 1. What do you understand by Financial Risk ?

Answer:Financial risk is an umbrella term for multiple types of risk associated with financing, including financial transactions that include company loans in risk of default.Risk is a term often used to imply downside risk, meaning the uncertainty of a return and the potential for financial loss.

A science has evolved around managing market and financial risk under the general title of modern portfolio theory initiated by Dr. Harry Markowitz in 1952 with his article, "Portfolio Selection". In modern portfolio theory, the variance (or standard deviation) of a portfolio is used as the definition of risk.

Question. 2. How banks can tackle the risk in their business?

Answer:Accepting the risk is a business decision that is reflective on the level of “acceptable risk level,” or the willingness for organization to assume the risk. This does not mean that an organization that does not know their risks can accept an unknown. Thus as noted above, we have already determined the level of risk and we are now determining the best course of action.

Many times I have briefed the CIO and executive

Question. 3. Is real estate management a risky sector in banking?

Answer:Real estate markets in most countries are not as organized or efficient as markets for other, more liquid investment instruments. Individual properties are unique to themselves and not directly interchangeable, which presents a major challenge to an investor seeking to evaluate prices and investment opportunities. For this reason, locating properties in which to invest can involve substantial work and competition among investors

Question. 4. What is the message of the above case study?

Answer:UBS continued to grow by acquisitions in the 1950s. By 1962, it had 81 branches. In 1967 it opened a full-service office in London. During the 1970s, UBS established several securities underwriting subsidiaries abroad. But the firm’s UK brokerage business was hit hard by the 1987 US stock market crash. Over the next two years, losses continued, prompting an overhaul of the London operations. Then the bank’s US operations were badly affected by the collapse of the junk bond market in 1990. Notwithstanding these setbacks, UBS set up offices in Paris, Singapore, and Hong Kong and took over Chase Manhattan’s (now J.P. Morgan Chase) New York money management unit in 1991. The firm also continued to expand

Case 4

END TO END RETAIL BANKING SOLUTIONS FOR A JAPANESE BANK

(10 Marks)

Question. 1. What was the plan of Japanese Bank for Customers

Answer:Customer Centric Front-end: The entire front-end has been made customer-centric. The retail customer, irrespective of transaction or channel now has just one identifier, which enables access to all delivery channels. The browser based front-shows the customer’s entire relationship with the bank in a summary screen. This shows the customer’s total holdings at the moment in the bank, including DDA, TDA, loans, mutual funds etc., at a level consolidated by the above account types. This can be drilled down multiple levels for a detailed view of the customer relationship.

·         Support for the entire spectrum of delivery channels

·         Complete support for all delivery channels

Question. 2. How customers were with the solution?

Answer:Customer relationship management (CRM) is an approach to managing a company's interaction with current and future customers. The CRM approach tries to analyze data about customers' history with a company, in order to better improve business relationships with customers, specifically focusing on retaining customers, in order to drive sales growth. One important aspect of the CRM approach is the systems of CRM that compile information from a range of different channels, including a company's website, telephone, email, live chat, marketing materials, social media, and more. Through the CRM approach and the systems used to facilitate CRM, businesses learn more about their target

Question. 3. Was there any cost impact?

Answer:Market impact cost is a measure of market liquidity that reflects the cost faced by a trader of an index or security. The market impact cost is measured in the chosen numeraire of the market, and is how much additionally a trader must pay over the initial price due to market slippage, i.e. the cost incurred because the transaction itself changed the price of the asset. Market impact costs are a type of transaction costs.

Example:For a stock to qualify for possible inclusion into the Nifty, it has to have a market impact cost of below 0.75% when doing Nifty trades of half a crore rupees. The market impact cost on a trade of Rs 0.3 million of the full Nifty is about 0.05%. This

Question. 4. Important lessons from the above case study?

Answer:The retail banking transformation is a new challenge in achieving high business performance. In this dynamic environment, banks are at risk of being unable to meet future business needs due to the complexity driven by outdated technology platforms, inappropriate procedures and duplicate business processes.

Complex Network Interfaces: Interfaces with Zengin (interbank remittance network internal to Japan), RTGS systems, Bank of Japan Net (BoJNet

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