CHAPTER IV

THEORETICAL DESCRIPTION OF INDUSTRIAL

DEVELOPMENT BANK OF INDIA (IDBI)

• Introduction & Brief History

• IDBI Bank is Board –Managed Organization
• Financial Highlights and key indicators of IDBI
• Role in Industrial Development
• Distribution Network
• Objective of IDBI
• Function of IDBI
• Subsidiaries & Joint Ventures of IDBI
• Product & Services
• Man Power
• Information and Technology System
• IDBI at a Glance During Financial Year 2005-2006 to 2009-10
• Services Rendered by IDBI
• Achievements & Awards
 CHAPTER IV

THEORETICAL DESCRIPTION OF INDUSTRIAL

DEVELOPMENT BANK OF INDIA (IDBI)

4.1 Introduction & Brief History

The industrial development Bank of India Limited, popularly known as IDBI Bank is one
of the leading public sector banks in India. IDBI bank is the fourth largest Indian Bank. It
is World’s 10th largest development bank. IDBI Categorized as “other public sector bank”
by Reserve Bank of India.

The Industrial Development Bank of India was, established on July 1, 1964 under an Act
of Parliament as a wholly owned subsidiary of the Reserve Bank of India. Industrial
Development bank of India (IDBI), was constituted under Industrial Development bank
of India Act, 1964 as a Development Financial Institution and came into being as on July
01, 1964 by a notification dated June 22, 1964.In February 1976, the ownership of IDBI,
was transferred to the Government of India and it was made the principal financial
institution for coordinating the activities of institutions engaged in financing, promoting
and developing industry in the country. It was regarded as a Public Financial Institution
in terms of the provisions of Section 4A of the Companies Act, 1956. It continued to
serve as a DFI for 40 years till the year 2004 when it was transformed into a Bank.

In response to the felt need and on commercial prudence, it was decided to transform
IDBI into a Bank. For the purpose, Industrial Development bank (transfer of undertaking
and Repeal) Act, 2003 [Repeal Act] was passed repealing the Industrial Development
Bank of India Act, 1964. In terms of the provisions of the Repeal Act, a new company
under the name of Industrial Development Bank of India Limited (IDBI Ltd.), was
incorporated as a Govt. Company under the Companies Act, 1956 on September 27,
2004. Thereafter, the undertaking of IDBI was transferred to and vested in IDBI Limited-
with effect from the effective date of October 01, 2004. Chart of brief history and
remarkable events of IDBI- given in this chapter.

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Brief History

1. Year 1964 A parliamentary act setup IDBI as a subsidiary of RBI.

IDBI has played a pioneering role, particularly in the pre-reform era(1964-91),in

catalyzing broad based industrial development in the country in keeping with its
Government-ordained 'development banking' charter. In pursuance of this
mandate, IDBI's activities transcended the confines of pure long-term lending to
industry and encompassed among others, balanced industrial growth through
development of backward areas, modernization of specific industries,
employment generation, entrepreneurship development along with support
services for creating a deep and vibrant domestic capital market, including
development of apposite institutional framework.
2. Year 1976 Ownership of IDBI transferred to the GOI from RBI.
3. Year 1992 IDBI accessed domestic retail debt market for the first time, with
innovative Deep Discount Bonds, and registered path –breaking success. The
following year, it set up IDBI CAPITAL Market Services Limited, as it wholly-
owned subsidiary to offer a broad range of financial services, including Bond
Trading, Equity Broking, Client Asset Management and Depository Services
4. Year 1994 The RBI Act is amended to permit40% private Ownership IDBI set up
IDBI BANK LIMITED in association ship with SIDBI
5. Year 1995 Public issue of the bank was taken out and GOI stake was reduced.
6. Year 2003 IDBI took over Tata Home Finance Limited, renamed IDBI HOME
FINANCE LIMITED, this diversifying its business domain and entering the arena
of retail finance s
7. Year 2004IDBI moves from its DFI status into a commercial bank along with a
mandate or development financing under the name of RBI.
8. Year 2005 IDBI's transformation into a commercial bank would provide a
gateway to low-cost deposits like Current and Savings Bank Deposits. This would
have a positive impact on the Bank's overall cost of funds and facilitate lending at
more competitive rates to its clients. The new entity would offer various retail
products, leveraging upon its existing relationship with retail investors under its

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 existing Suvidha Flexi-bond schemes. In the emerging scenario, the new IDBI
hopes to realize its mission of positioning itself as a one stop super-shop and most
preferred brand for providing total financial and banking solutions to corporate
and individuals, capitalizing on its intimate knowledge of the Indian industry and
client requirements and large retail base on the liability side.
9. Year 2005 Amalgamation of IDBI Bank Ltd. With IDBI LIMITED. Merger of
IDBI bank Ltd. with IDBI Ltd. towards achieving the faster inorganic growth of
the Bank, IDBI Bank Ltd., a wholly owned subsidiary of IDBI Ltd. was
amalgamated with IDBI Ltd. in terms of the provisions of Section 44A of the
Banking Regulation Act, 1949 providing for voluntary amalgamation of two
banking companies. The merger became effective from April 02, 2005.
10. Year 2006Acquired United Western Bank {which, at that time, had 230branches
Change of name of IDBI Ltd. to IDBI Bank Ltd. in order that the name of the
Bank truly reflects the functions it is carrying on, the name of the Bank was
changed to IDBI Bank Limited and the new name became effective from May 07,
2008 upon issue of the Fresh Certificate of Incorporation by Registrar of
Companies, Maharashtra. The Bank has been accordingly functioning in its
present name of IDBI Bank Limited. Branches spread over 47 districts, in 9 states.
11. Year 2010opens the first Overseas Branch at DIFC, Dubai.

4.2 IDBI Bank is Board Managed Organization

Board functions through itself as well as various Board Committees constituted to

provide focused governance in important functional areas of the Bank. During FY 2010
the Board had total eight Apex committees. The major Shareholding as at end-March
2010, were as per the following details:-

1) Government of India had 38, 17, 78,000 number of shares, 52.67% to total shares.
2) Institutions (Banks, FIIs, SFCs, FIs, Mutual Funds and OCBs) had 18.21 % to
total shares.
3) Public had 14.65% to total shares.

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4) Insurance companies had 8.24% to total shares. 5) Bodies corporate had 4.41 % to
total shares and remaining shares were with others.

4.3 Financial Highlights and key indicators of IDBI

Total Assets as at March 2010 of IDBI were Rs.2, 33,572crore and have declined by
20% when compared to previous FY. This is a serious matter and needs IDBI Bank’s
immediate remedial action. Total assets have highlighted for the financial year 2005-06
to 2009-10 in below Graph. Total Deposits were Rs1, 67,667crore with a growth of 49.
2% and Total Advances were Rupees 1, 38,202crore- recording a growth of 33.6%.over
the previous year.

Interest Income was Rs.15272.6crore and with the other income of Rs.2290.9Crore. Total
Gross income wasRs17563.5crore. PBT was Rs1044.7crore and PAT was Rs1031.1crore.
EPS stood at RS.14.2.Book value per share stood at Rs113and a Dividend of 30 %
recommended on fully paid up equity capital .Total CRAR 11.31% against RBI stipulated
norms of 9%. Core CRAR 6.24% against RBI stipulated norms of 6%.

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To highlight year wise positions for year 2005-10, Graphs on Total Assets & Capital
Adequacy Ratio are given below :-

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An Analytical Study of Development Financial Institutions in Capital Market of India
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4.4 Role in Industrial Development

IDBI have been playing a significant role in dynamic industrial development of country.
The Industrial Development Bank of India (IDBI) has had a pioneering role in fulfilling
its mission of promoting industrial growth in tune with national plans and priorities. Its
support was instrumental in establishing a well-developed, diversified and efficient
industrial structure in the country. Since inception, the bank besides meeting the
increasing and diverse financial requirements of industries, added a qualitative dimension
to the process of industrial development in the country.

Critical role played by IDBI in encouraging industrial development reflected in its flows
of assistance over the years. It has played an apex role in helping create the industrial &
infrastructural base in the country. Total investment generated – 4000 billion
(approx.)(over USD 80billions. Total credit exposure as on March 31, 2010 to Top 20
industry was Rs.206990crore in which Rs.137246.73crore well Fund base &
Rs.69743.27crore was non fund base.

IDBI was established in 1964 to meet the rapid pace of industrialization with wider
functions and much larger resources.

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The bill of IDBI passed in the Parliament by the finance Minister Mr. T.T. Krishnama
Chari on April 30, 1964. While introducing the bill he said, “whereas a long term view is
necessary and a certain amount of risk has to be taken, the existing institutions tend, by
reason of their Statutory- Obligations and traditions, to be conservative and cannot in any
way to be very helpful. We are envisaging the new Industrial Development Bank as a
Central co-coordinating agency, which ultimately will be concerned, directly or
indirectly, will all problems or questions relating to the long and medium term financing
of industry and be in position , if necessary to adopt and force a system of priorities, in
promoting future industrial growth”.

Total credit exposure as on March 31 2010 to Top 20 industry was Rs.206990crore in

which Rs.137246.73crore well Fund base & Rs.69743.27crore was non fund base.
Among the Top 20 industries, the first 5 are as follows 1) Retail Industry, 2) Power
Industry, 3) Iron and Steel Industry, 4) Construction Industry, 5) Telecom Services
Industry. The industry wise exposure of top 20 Industry showing total credit exposure has
been given in the table below. Top 20 Industry Wise Credit Exposure (March 2010)

Table 4.1 – Credit Exposer of Top 20 Industry as on 31st March 2010

S. No. Industry Fund based Non fund based Total exposure
1 Retail 29642.46 - 29642.46
2 Power 20468.22 8644.34 29112.56
3 Iron &Steel 12022.73 6085.23 18107.96
4 Construction 4556.89 11138.72 15695.60
5 Telecom 6850.71 7525.42 14376.13
6 Textiles 8077.94 1545.00 9622.94
7 Electrical 2353.97 6633.42 8987.39
8 NBFC 8037.69 417.00 8454.69
9 Food &Beverages 6042.75 2034.28 8077.04
10 Oil & Gas 3557.93 3855.28 7413.21
11 HFCs 6833.75 - 6833.75
12 Engineering 1753.84 4960.07 6713.91
13 Sugar 3993.43 2028.86 6022.29
14 Real estate 4884.29 809.29 5693.58
15 Petroleum product 2690.52 2896.18 5586.70
16 Roads bridges 3215.01 2321.89 5536.90
17 Fertilizers 2028.30 3367.20 5395.50
18 Trading 2876.49 2517.94 5394.42
19 Electronics 4121.24 1047.72 5168.96
20 Chemicals 3238.58 1915.43 9154.01
Total 137246.74 69743.27 206990.00

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IDBI is the principal financial organization for co-coordinating the working of
institutions engaged in financing, promoting or developing industry, assisting the
development of such institutions and providing credit and other facilities for the
development of industry. As an apex organization for development of industry, it
coordinates the working of the financial institutions engaged in industrialization of
country. It assists in the development of other financial institutions for the rapid growth
of industry. IDBI Provides direct credit to many Industries. IDBI vested with the
responsibility of coordinating the working of institutions engaged in financing, promoting
and developing industries. It has evolved an appropriate mechanism for this purpose.
IDBI also undertakes/supports wide-ranging promotional activities including
entrepreneurship development programs for new entrepreneurs, provision of consultancy
services for small and medium enterprises, up gradation of technology and program for
economic up liftmen of the underprivileged IDBI has been an institution builder too. It
developed financial institutions such as Export-Import Bank of India, SIBI Small
Industries Bank of India, North-Eastern Development Finance Corporation and Asset
Reconstruction Company (India) Ltd. All the above mentioned endeavors aimed faster
Industrialization and Industry growth.

It also played a role in developing many capital market related agencies; the Securities
and Exchange Board of India (SEBI), the National Stock Exchange of India, the Stock
Holding Corporation of India, the Credit Analysis and Research Ltd., the National
Securities Depository Ltd., the IDBI Trusteeship Services Ltd and the Clearing
Corporation of India.

"IDBI's activities were not confined merely to long-term project lending to industry;
instead these covered a host of services undertaken in pursuit of broader development
goals aligned to the Central Government's varied socio-economic objectives in the realm
of industry.''

Various assistance to be provided by the IDBI for the growth of industry are as follows:

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(1) Direct Financial Assistance:

The IDBI provides direct financial assistance to the industrial concerns in the form
of (a) granting loans and advances; and (b) subscribing to, purchasing or underwriting the
issues of stocks, bonds or debentures.

(2) Indirect Financial Assistance:

The IDBI provides indirect financial assistance to the small and medium industrial
concerns through other financial institution, such as, State Finance Corporations, State
Industrial Development Corporations, Cooperative banks, regional rural banks,
commercial banks. The Assistance to these institutions include: (a) refinancing of loans
given by the institutions; (b) subscribing to their shares and bonds; (c) rediscounting of
bills.

(3) Development Assistance:

The creation of the Development Assistance Fund is the special feature of the IDBI. The
Fund is used to provide assistance to those industries which are not able to obtain funds
in the normal course mainly because of heavy investment involved or low expected rate
of returns. The financial resources of the Fund mainly come from contributions made by
the government in the form of loans, gifts, donations, etc.; and from other sources.
Assistance from the Fund requires the prior approval by the government.

(4) Promotional Activities:

Besides providing financial assistance, the IDBI also undertakes various promotional
activities such as marketing and investment research, techno- economic surveys. It
provides technical and administrative advice for promotion, expansion and better
management of the industrial concerns.

Thus on the basis of the above mentioned information and the explanations we can
summaries the following points on its role in the Industrial development role and can
convincingly say:-

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“IDBI, the specialized Banking institution of our country are poised to play a vital and
dynamic role in the process of industrial development of our country.”

Purpose of establishment of IDBI was driving ahead Industry.

IDBI's role as a catalyst to industrial development encompasses a wide spectrum of

activities.

IDBI can finance all types of industrial concerns covered under the provisions of the
IDBI Act. With over three decades of service to the Indian industry,

IDBI has grown substantially in terms of size of operations and portfolio.

IDBI coordinates between various financial institutions who are highly involved in
provide financial assistance, promoting, and developing various industrial units.

IDBI is also engaged in a variety of promotional activities such as development programs

for the fresh entrepreneurs, planning of consultancy services for both the small-scale
enterprises and the medium sized industrial units.

IDBI works for the advancement of technology and other welfare schemes to ensure
economic development.

Industrial Development Bank of India acts as a catalyst in various industrial development

programs.

IDBI provides financial assistance to all kinds of industrial units which comes under the
provisions of the IDBI Act.

IDBI has served various industrial sectors in India and has grown leaps and bounds in its
size and operating units.

It manages various financial institutions working under IDBI bank.

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 Provides financial assistance to various industrial units in terms of developments.

It also offers refinancing options including term loans to the suitable financial
institutions.

It provides funding to the industrial units that are involved in manufacture or processing
of goods, mining, transport generation and distribution of power both in private and
public sectors.

It also provides finance to various projects, expansion of any project, diversifications, or

even developing the projects, which will exceed Rs. 30 million, and it provides funding
to those projects, which cost less than Rs. 30 million through indirect means as it offers
refinancing to the main financial institutions such as SFC/SIDC/Commercial Banks etc.

4.5 Distribution Network

For the business growth & delight of internal and external costumers IDBI have created a
vast and effective distribution network which includes 708 branches after opening 199
new branches during FY-2010 (Metro 210, Urban 281, Semi-urban 144, Rural 73), 1201
ATMs (567on site, 634 off-site). Presence in 613 Locations, Network of 66 Retail Asset
center, 31 City SME Centers, 21 Agri-processing center, 6 Regional Processing Units, 24
Central Clearing Units, 6 Currency Chest across the Country Internet Banking, 4
Regional & 1 Central Training Colleges ,Corporate Customers 3000 + & Retail Customer
base 5 Million . IDBI also have global expansion plans & have opened a branch in Dubai,
initiated the process of setting a branch offices at Singapore & representative at Shanghai.

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 Chart 4.5-Branches of IDBI During FY-2010
800

600
BRANCHS IN no:

400

200

0
SEMI-
TOTAL METRO URBAN RURAL
URBAN
BRANCHES OF IDBI DURING 708 210 281 144 73
FY-2010

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4.6 Objective of IDBI

• To establish and carry on business of banking in all forms within India and
outside India.
• To finance, promote or develop industry and assist in the development of
Industries.
• Co-ordination, regulation & supervision of the working of other financial
institutions
• Planning, promotion, development and growth of key industries.
• Devising & in forcing a system of industrial growth that conforms to national
priorities.
• Function to grant loans & advances to IFCI, SFC’s or any other financial
institutions by the way of referencing of loans granted by such institutions, which
are re-payable within 25year. To grants loans and advances to scheduled bank of
state co-operative banks by way of re financing of loans granted by such
institutions which are re-payable in 15 years.

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• To grant loans & advances to IFCI, SFC’s, other institutions, scheduled bank state
co-corporative banks by way of re-financing of loans granted by such institutions
to industrial concerns for exports.
• To underwrite or to subscribe to shares or debentures of industrial concerns to
subscribe to or purchase stock ,shares, bonds & debentures of financial
institutions
• To grant line of credit or loans & advances to other financial institutions such as
IFCI, SFC’s, etc.
• To grant loan to any industrial concerns
• To guarantee deferred payments due from any industrial concern.
• Role of specialized financial institutions to guarantee loans raised by industrial
concerns
• To provide consultancy & merchant banking services in or outside India.
• To provide technical, legal, marketing and administrative aid to promote
management or expansion of any industry.
• Planning, promoting & developing industries to fill the gap in industrial structure
in India.

4.7 Function of IDBI

IDBI vested with the responsibility of coordinating the working of institutions engaged in
financing, promoting and developing industries. It has evolved an appropriate mechanism
for this purpose. IDBI also undertakes/supports wide-ranging promotional activities
including-

• Entrepreneurship development programs for new entrepreneurs

• Provision of consultancy services for small and medium enterprises
• Up- gradation of technology and program for economic upliftment of the
underprivileged

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Major Functions are:

• Industrial Development Bank of India provides financial assistance for the

establishment of new projects as well as for expansion, diversification,
modernization and technology up gradation of existing industrial enterprises.
• IDBI coordinates between various financial institutions who are highly involved
in provide financial assistance, promoting, and developing various industrial
units.
• IDBI is also engaged in a variety of promotional activities such as development
programs for the fresh entrepreneurs, planning of consultancy services for both
the small-scale enterprises and the medium sized industrial units.
• IDBI works for the advancement of technology and other welfare schemes to
ensure economic development.
• Industrial Development Bank of India acts as a catalyst in various industrial
development programs.
• IDBI provides financial assistance to all kinds of industrial units which come
under the provisions of the IDBI Act.
• IDBI has served various industrial sectors in India for about three years and has
grown leaps and bounds in its size and operating units.
• IDBI coordinates between various financial
• Institutions who are highly involved in provide financial assistance, promoting,
and developing various industrial units.
• It manages various financial institutions working under IDBI bank
• IDBI provides financial assistance to various industrial units in terms of
developments.
• It also offers refinancing options including term loans to the suitable financial
institutions
• It provides funding to the industrial units that are involved in manufacture or
processing of goods, mining, transport generation and distribution of power in
both private and public sectors.
• It also provides finance to various projects, expansion of any project,
diversifications, or even developing the projects, which will exceed ` 30 million
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 and it also provides funding to those projects which cost less than ` 30 million
through indirect means as it offers refinancing to the main financial institutions
such as SFC/SIDC/Commercial Banks etc.
• The responsibility of co-coordinating the working of institutions engaged in
financing, promoting and developing industries was seen as major aspect of the
bank and it was vested with all the duties stated above.
• Suitable plan, procedure, mechanism was adopted to achieve the targets.
• Undertakes promotional activities
• Entrepreneurship development programmers, which can be seen in this bank
Consultancy services for small and medium enterprises are provided.
• Up gradation of technology is given importance and the technology is well used.
• Programmers for economic upliftment of the underprivileged people are taken as
the main aspect and all the necessary steps to achieve its aim were successfully
implemented.

4.8 Subsidiaries & Joint Ventures of IDBI

It has six wholly-owned subsidiaries:

1. IDBI Home finance Ltd.

2. IDBI Gilts Limited.

3. IDBI Intech Ltd.

4. IDBI Capital Market Services Ltd.

5. IDBI Asset Management Ltd. And

6. IDBI MF TURSTEE Company Ltd.

1. IDBI Home Finance Limited

¾ IDBI Home finance Limited (IDBI Home finance) commenced its business with
The acquisition of Tata Home finance Limited in September 2003.

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¾ The company, since its inception, has initiated series of measures to expand its
retail reach, strengthen its brand image, improve its asset quality and excel its
business growth.
¾ During the year, IDBI Home finance’s outstanding loan portfolio increased by
15% from Rs.3089crore to Rs.3537crore.

2. IDBI Gilts Limited (Deals in Primary Dealership business)

¾ IDBI Gilts Limited (IDBI Gilts) was set up as a wholly owned subsidiary of
¾ IDBI Bank to undertake Primary Dealer [PD] business with an authorized
capital of Rs.200crore.
¾ The company was incorporated in December 2006and obtained Certificate for
¾ Commencement of Business in February 2007.
¾ IDBI Bank Ltd. has subscribed to the equity capital of the Company to the extent
of Rs.180crore as on March 31, 2010.
¾ IDBI Gilts focuses on bond trading, underwriting in auctions of primary issuance
of government dated securities and treasury bills.

3. IDBI Intech Limited

¾ IDBI Intech Limited (IDBI Intech) was incorporated in March 2000, as a wholly
owned subsidiary of IDBI Bank to undertake the IT related activities of the Bank.
¾ IDBI Intech performs all IT related functions for the IDBI Bank.
¾ The major business activities of the Company are Information Technology
¾ Enabled Services, Value Added Products, Information Security Practice,
¾ Learning& Development Services, National Contact Centre ,Consultancy
¾ Services and Business Process Outsourcing
¾ For adhering to the excellent quality standards, IDBI Intech has obtained ISO
9001 certification for its operations and has facilitated IDBI Bank in maintaining
the ISO 27001certificate for the State-of-the-Art Data Centre.
¾ IDBI Intech has been empanelled by CERT-IN as Information Security Auditing

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 Organisation.
¾ IDBI Intech has increased its customer base into overseas and domestic market
and has secured orders for rendering IT, consultancy services.
¾ IDBI Intech has added two overseas banks, one foreign bank, four nationalized
banks
¾ Two co-operative banks and two private sector banks to its client list during
FY 2009-10.
¾ IDBI Intech has developed value added products covering various areas of
banking.
¾ These products marketed to existing as well as new customers.
¾ The Company has entered into an arrangement for providing end-to-end IT
services to IDBI Home finance Limited and IDBI Asset Management Limited on
similar model.
¾ IDBI Intech has received a mandate for a prestigious project of national
importance called e-BRC (Electronic Bank Realization Certificate) project, which
is part of PMO’s e-Trade Initiative.
¾ Indian Banks’ Association with the consent of all the banks and the Director
General of Foreign Trade (DGFT) has given the mandate to develop a portal.

4. IDBI Capital Market Services Limited

IDBI Capital Market Services Ltd.(ICMS) is a leading Fund Manager in the

country for Provident, Pension and Retirement Benefit Funds. The Company is a
SEBI registered Portfolio Manager and manage its Client’s assets under both
discretionary and non-discretionary mandates. These services are provided to
various public and private sector undertakings and their provident, pension,
retirement benefit and surplus funds. The Company’s client base includes leading
pension and provident funds in the country

¾ IDBI Capital Market Services Limited (IDBI Capital), a wholly owned subsidiary
of IDBI, started as a broking and distribution company in 1993.

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¾ Its businesses include Merchant Banking, Stock Broking, Distribution of
Financial Products, Corporate Advisory Services, Debt Arranging &
Underwriting, Portfolio Management of Pension/PF Funds and Research Services.
¾ Profit After Tax (PAT) of the Company has doubled from Rs.11.16Crore in the
previous year to Rs.22.30Crore.
¾ The Company has recorded its highest ever Service Income during FY 2009-10
amounting toRs.33.19Crore, registering a growth of 88% over the previous year.
The Company has proposed a dividend of 10% for the year ended March 31, 2010
as against 3% last year.
¾ The Investment Banking and Institutional Distribution Groups have been the
largest contributors to growth in top line. The gross revenue of Investment
Banking Group grew by155% in FY 2009-10. The Group also secured company’s
first GOI disinvestment mandate. The Institutional Distribution Group grew by
155%in gross revenue over the previous year.
¾ IDBI Capital maintains its position among the top five distributors of the country
as per CAMS statistics as of February 2010. In the last quarter of FY 2009-10,
IDBI Capital featured in the list of best local brokers in the country, published by
Asia Money polls 2009.
¾ IDBI Capital continues to remain a major player in the PF/Pension Fund
Management with assets under management of over Rs.9409crore
¾ The online broking platform www.idbipaisabuilder.in registered a growth of 63%
in revenue on a YoY basis.
¾ In order to meet the growing needs of retail client, an offline broking vertical has
¾ been put in place and product has been launched at eight of the existing branches
of the company. This segment has widened its network by opening 9 branches
during the year and now there are 42 branches functioning pan India offering a
wide range of investment products to meet retail customer’s investment needs.

5. IDBI Asset Management Limited-Manages Assets.

¾ IDBI Asset Management Limited incorporated in January 2010

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¾ The paid up capital of the company is Rs.12.50crore as on March 31, 2010 and
authorized capital is Rs.50crore.
¾ The company, after obtaining necessary approval from regulator launched
¾ ‘IDBI Nifty Index Fund’ as its maiden scheme.

6. MF Trustee Company Limited-Looks after Mutual Fund business

¾ IDBI MF Trustee Company Limited was incorporated in January 2010 with paid
up Capital of Rs.20 lakh and authorized capital of Rs.50 lakh.
¾ The company has received due approval from SEBI for starting mutual fund
operations.
¾ It has one joint venture company that is IDBI Fortis Life Insurance Company Ltd.

4.9 Product & Services

IDBI Bank offers a wide array of products and services to its customers. For different
customer groups and needs, there are different types of products and services including
Personal Banking, Corporate Banking, SME Finance and Agri Business etc. Personal
Banking has 44 products & services, Corporate Banking have 13 products & services and
SME Finance has 12 products & services.

Personal banking (Total 44 Product and Services) Which Can be sub divided as per
the following:-

• DEPOSITS (8 products and services)

1. Savings Account
2. Current Account
3. Fixed Deposit
4. Suvidha Tax Saving Fixed Deposit
5. Pension Accounts
6. Sabka Account
7. Super Shakti Account for Women
8. Jubilee Plus Account

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• Loans

o Home Loans
o Loans Against Property
o Education Loans
o Personal Loan
o Loan Against Securities
o Reverse Mortgage Loan
o Auto Loan

• Payments

o Tax Payments
o Stamp Duty payments
o Easy Fill
o Bill Payment
o Card to Card Money Transfer
o Online Payments
o Pay Mate

• Investments Advisory

o Smart Financial Planning

o Mutual Fund
o Insurance
o Fixed Income Securities

• Cards

o Gold Debit Card

o International Debit cum ATM Card
o Gift Card
o World Currency Card
o Cash Card

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o KIDS Debit Card
o Foundation Day Cash Back Scheme 2009
o Platinum Card

• Institutional Banking

o Institutional Savings Account

o Corporate Payroll Account

• 24 Hours Banking

o Phone Banking
o SMS Banking
o Account Alerts
o Internet Banking

• Other products

o Lockers
o India Post
o Preferred Banking
o NRI Services
o Capital Market
o IPO
o Demat

Following products and services are offered by IDBI Bank for the corporate:

• Project Finance
• Infrastructure Finance
• Syndication, Underwriting & Advisory Services
• Carbon Credits Business
• Working Capital
• Cash Management Services
• Trade Finance
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• Tax Payments
• Derivatives
• Technology Up gradation Fund Scheme (TUFS)
• Film Financing Scheme
• Direct Discounting Bills
• Rehabilitation Finance

SME Finance

Following SME Finance products are offered by the IDBI Bank:

• SulabhVyapar Loan
• Dealer Finance
• Funding under CGFMSE
• Direct Credit Scheme - SIDBI
• Preferred customer scheme - IDBI Bank / SIDBI
• Vendor financing (Pre - Sale)
• Vendor financing (Post - Sale)
• Lending Against the Security of Future Credit Card Receivables
• Working Capital Financing - Software Development Entities
• Finance to Medical Practitioners
• Loan to SRWTO
• SME Hosiery Special Current Account

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4.10 Man Power

IDBI Bank Ltd. employee base includes professionals from the fields of accountancy,
management, engineering, law, computer technology, banking and economics. It includes
officers 70%, clerical 12%, sub staff 10% and executives 8% as mentioned in the pie-
chart here below .

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4.11 Information and Technology System

IDBI is one of the leading banks in the country in operating its IT operations for the
satisfaction and delight to its customers. Its robust Technology platform is well
maintained. Infosys Pinnacle Software is used. IT Infrastructure & Management,
Advisory services & Call Center Services of IDBI are managed professionally by its
wholly owned subsidiary IDBI Intech Limited, Bank has upgraded core banking
hardware with latest server with view to support the current & future business growth and
to minimize the business disruption & provide flaw less costumer services in area like :

• Core Banking.
• ATM’S.
• Internet Banking
• Cash Management Services etc.

IDBI has implemented several technological up gradation implementations through its IT

platform in the areas of:-

• RTGS and NEFT.

• Risk Management

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• Wealth Management Services
• On line portals for State Governments
• Efficiency enhancement at branches through IT
• IT driven MIS tools to improve performance
• Won Special Jury Award for Technological Initiatives

RTGS and NEFT services are the need of present banking industry, these services
occupy prominent place towards customer and Inter-bank transactions. IDBI has
implemented a Payment Hub and Liquidity Manager in order to have a single payment
gateway and also to optimize liquidity management through features like forecasting,
scheduling, flexible authorization matrix. This has led to faster processing of
e-transactions and has improved the turnaround time.

Implementations in Risk Management - An Integrated Risk Management Solution,

capturing each element of risk associated with various types of assets. The solution is in
line with guidelines prescribed by RBI adhering to norms and conditions prescribed
under Basel II framework.

Implementations in Wealth Management Services- WMS include Portfolio Tracking

and Financial Planning Modules based on risk profiling and goals, asset allocation, net
worth and wealth statements. In order to provide enhanced security to card holders and
also to provide an additional mode of e-payment to customers, IDBI has implemented
‘Verified by VISA for VISA cardholders and Master Secure Code for MasterCard
cardholders”.

Implementations in Online Channel- IDBI has integrated the Bank’s Internet Banking
channel with on line portals of various State Governments (Maharashtra, Rajasthan and
Gujarat). Such facility enabled the customers to make online payments of various taxes
and levies viz., Sales Tax, VAT,CST, in a timely and simplified manner. Direct interface
with the systems of a leading Port Trust, has enabled IDBI to effect payments of duties
and levies through various branches and Internet Banking for its customers.

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Efficiency Enhancement Implementations at Branches through IT- Many process
enhancements has been made at branches by introducing technology driven utilities to
improve the efficiency of the employees, leading to enhancement in service delivery. In
the field of Cash Management, innovative products viz., Virtual Account, Host to Host
connectivity, etc., have been introduced, enabling IDBI, to provide, state of the art
technology driven services, to corporate customers.

Implementations as Prescribed by SEBI- IDBI are one of the first banks, to automate
totally the Application Supported by Blocked Amount (ASBA) , as prescribed by SEBI.
Given the inherent benefits of ASBA to the investors, issuers and the market per se, the
Bank has decided to expand the reach of ASBA to other investor categories including
High Net worth Individuals and Corporate investors.

Implementations of IT Driven MIS Tools to Improve Performance- With a view to

measure the performance of the Bank and measure earning and economic value impact
on account of interest rate ,exchange rate, liquidity risk, IDBI has put in place IT enabled
processes including budgeting and planning, forecast analysis across products, branches
and business verticals. Implementation of Oracle Transfer Pricing, Performance
Analyzer, Risk Manager for Asset Liability Management, planning for budgeting and
forecasting has led to creation of an integrated management accounting decision support
system. Now business/revenue/expense planning, budgets and managing risk and
performance review can be prepared across products, branches and business verticals.

IDBI Bank is the first bank in India having such robust and integrated system. The Bank
has upgraded the Core Banking System and IT infrastructure to enhance processing
efficiency .In order to ensure uninterrupted services to the customers IDBI carries out
planned Disaster Recovery (DR) exercises at regular intervals. As a part of DR drill, the
Core Banking and other critical applications including alternate channels like ATM,
Internet, Mobile and Phone Banking successfully operated from the disaster recovery
site.

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Implementations of Security Measures – IDBI has introduced many security features in
the Internet Banking used by customers to make the electronic funds transfer secure.
Security measures minimize and curb risks, in order to achieve this IDBI educate its
customers about online frauds, through various modes of communication channels like e-
mails, SMS and brochures which are sent along with the statement of accounts on
periodic basis utilizing its robust IT platform. In addition, customers can contact the
National contact center any time for any queries and clarifications.

IDBI won “Special Jury Award” for its Technological Incentive-The IBA Banking
Technology; Award 2009 given to IDBI-for launching innovative product

4.12 IDBI at a Glance during Financial Year 2005-2006 to 2009-10

Financial highlights 2005-06

¾ There was an increase of Rs.88,564.8 crore a growth of 8.9%.

¾ Aggregate deposits surged by Rs.72.2% to Rs.26000.9crore.
¾ Outstanding borrowing brought down by 5% to Rs.47, 530 .2crore.
¾ Advances reached the level of Rs.52, 73, 901crore representing a growth of 16.1 %,
thus enabling a growth of 30.01 % during 2005-o6.

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Financial Highlights 2006-07

1. Total assets of Bank surpassed the level of Rs.1, 00,000 crore and reached the
new height of Rs.1, 03,839. 3crore.
2. Aggregate deposits stood at Rs. 43,354 crore, clinching a healthy growth of
66.7% at the end of the fiscal 2007
3. Total advances stood at Rs. 62, 470.8 crore as on March 31, 2007 which is
showing a growth rate of 18.5%.
4. Total business (advances plus deposits) increased by 34.4%during 2006-07 to
reach a level of Rs.1, 05,824.8crore.

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Financial Highlights 2007-08

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Financial Highlights 2008-09

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Financial Highlights 2009-10

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4.13 Services Rendered by IDBI

Corporate Finance- Modified products and structure as per the diversified customer
needs and included improved services+ Established 12 specialized Branches + Improved
and facilitated short–term trade credit services to its customers of Rs 8,500 crore +
Upgraded Cash Management Services+ several advisory services and services through
internet for central and state government.

Infrastructure Finance- For the economic growth of the Nation expanded services in
road projects and taken initiatives in funding urban transit system+ several services per
needs of customers in the areas of power, telecom, airports seaports railways and logistics
as well as Special Economic zones.

Retail Finance-IDBI provides several customer friendly services through its network of
708 branches and expanding its services. Services improved by organizing nationwide
campaign to design and further improve services to better customer satisfaction level.
Exhibitions in13 Cities+ Tied up with Chevrolet, Toyota Kirloskar, Tata, Maruti and
provided services at Auto Mall + online trading services and many more services. IDBI is
working closely with World Research International Institute for encouraging energy
saving projects and services .Opened 13 Retail Asset Centers during FY 2110and now
having 66RAcs to serve retail customers. Added 301ATMs to reach 1201ATMs and
planned to reach 1600 by next year. IDBI tied up with 34 Asset Management Companies.
Services in insurance sector improved–made arrangement with Bajaj Allianz and so on.

Services to MSME-Established62 City Centers+ SME small business school, SME

forum, SME Business guide +Major awareness campaign+ Home loan. IDBI Provide
services by conducting awareness building initiatives in the important clusters of Pune
and Ludhiana. Participated in many fairs and to further improve services tied up with
Bharat Earth Movers Limited.

Agriculture and Microfinance-240 branches+ 16 clusters +170farmers clubs+1069Self

Help Groups + 14 Agri processing centers help groups+ SabkaBachat +Field visits to
farmers and vast services for serving farmers.

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Services through Financial Inclusion in Rural area-Started flag ship services “Sabka”
and “Mobile Cash Van”+ Appointing Business Correspondents and Business Facilitators
in rural areas for rendering services.

Services for Environmental Protection Schemes - Services in the area of Clean

Development Mechanism/Carbon Credits under Kyoto Protocol. Providing Advisory
Services-Completed 9 assignments and more than 12 are in progress

Ozone Depleting Substances Services- Services provided as Financial Agent

Services to India Chiller Energy Efficiency Projects-This service will help 370 small
sub–projects.

Services through Cross Border Branches- for raising foreign currency needs and
widening its clients base, a branch opened in Dubai and appropriate management unit and
office is under advance stage of implementation in Singapore and China.

Services in HR Training and Development-In order to provide excellent services to

customers, staff training is imparted on regular basis. Bank trained 11082 employees
through total 621 programs; of which443 were in-house training programs. 32 officers
were nominated for 165 external training programs within the country. 23 officers were
nominated for 13 international training programs/seminars/conferences abroad. For
training purpose, IDBI has 4 regional training colleges at Mumbai, Chennai, Kolkata and
Delhi. It also has JN IDBI College at Hyderabad.

Services in Risk Management- Besides internal control mechanism services to control

various risks, bank provides awareness programs for the employees and communicates on
various information security and precaution services through E-mails and mobile.

Information and Technology Services-Providing uninterrupted services to customers,

mobile banking, ATMs Services, Cash Management Services, Core banking and internet
banking services etc. - with twin objectives; Serve with state of art technology and
staying ahead in technology services.

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Several services to respond RTI Act, several services for progressive use in hindi, several
services in the capital market and stock exchanges,

Several Services through Joint Ventures Subsidiaries and M0Us- Tie ups and
arrangements with service providers are rendered by IDBI in order to grow well its
business and serve its customers in and outside India.

Implementations of Several other IDBI Services- Services through TV, Print, Radio,
and Exhibitions Seminars & Awareness Programs are rendered on regular basis for the
benefits of internal and external customers.

Services to Society- Bank is rendering services as corporate social responsibilities for the
benefits of society, with non-profit motives. Cooking

Equipment for under privileged schoolchildren sponsored. Bank is providing funds for
repair and maintenance for school building. Sponsoring event for the visually and hearing
impaired .Purchases machine for diagnostic center

4.14 Achievements & Awards

There have been many Achievement and Awards of IDBI some of which are as follows.
Best IT security practice Award of NASSCOM .ISO9001:2008 certificate of registration
in July 2009, ISO 9001:2008 is an international quality management standard, awarded to
those who work in accordance with ISO standards.

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