1. ICICI Bank
Established in 1994, ICICI Bank is today the second largest bank in India and among the top 150 in
the world. In less than a decade, the bank has become a universal bank offering a well diversified
portfolio of financial services. It currently has assets of over US$ 79 billion and a market
capitalization of US$ 9 billion and services over 14 million customers through a network of about 950
branches, 3300 ATM's and a 3200 seat call center (as of 2007). The hallmark of this exponential
growth is ICICI Bank’s unwavering focus on technology.
Key Business Drivers
ICICI Bank was set up when the process of deregulation and liberalization had just begun in India and
the Reserve Bank of India (India’s central bank) had paved the way for private players in the banking
sector, which at that time was dominated by state-owned and foreign banks. Serving the majority of
the country’s populace, state owned banks had a large branch network, with minimal or no automation
and little focus on service. Foreign banks, on the other hand, deployed high-end technology, had
innovative product offerings, but had a very small branch network that serviced only corporate and
individuals with high net-worth. Sensing an untapped opportunity, ICICI Bank decided to target
India’s burgeoning middle class and corporate's by offering a high level of customer service and
efficiency that rivaled the foreign banks, on a much larger scale, at a lower cost. A crucial aspect of
this strategy was the emphasis on technology. ICICI Bank positioned itself as technology-savvy
customer friendly bank

2. CASE STUDY
COST SAVING PROPOSAL
Swastik Limited manufacturers of special purpose machine tools have two divisions which are
periodically assisted by teams of visiting consultants. The management is worried about the study
increase of expenses in this regard over the years. An analysis of the last year expenses reveals the
following:
Consultants Remuneration Rs. 250000
Travel and Conveyance Rs. 150000
Accommodation expenses Rs. 600000
Boarding Charges Rs. 200000
Special Allowances Rs. 50000
The management estimates accommodation expenses to increase by Rs. 200000 annually.
As part of cost reduction drive Swastik Limited is proposing to construct a consultancy centre to take
care of the accommodation requirements of the consultants. This centre will additionally save the
company Rs. 50000 in boarding charges and Rs. 200000 cost of executive training program hitherto
conducted outside the company premises every year.
The following details are available regarding the construction and maintenance of the new centre.
a) Land at a cost of Rs. 800000 already owned by the company will be used.
b) Construction Rs. 1500000 including special furnishing.
c) Cost of annual maintenance Rs. 150000
d) Construction cost will be written off (at a uniform rate) over five years being the useful life.
Assuming that the write off of the construction cost as aforesaid will be accepted for tax purposes, that
the rate of tax will be 35% and that the desired rate of return is 15%. You are required to analyze the
feasibility of the proposal and make recommendations.

3. Case Study
Shane, an employee at a top investment bank, was sipping coffee at his desk when the phone rang. On
the call was his client, John, the CEO of ABC Steel.
Shane, Investment Banker John, CEO of ABC Steel
Shane: Hey John, how are you?
John: I‘m fine, thank you. How are you?
Shane: I‘m doing good. I hear things are going great for ABC Steel.
John: Oh yeah, things are great – the economy is booming and there‘s a lot of demand for our
products.
Shane: Wow! That‘s nice to hear. I also hear you bagged a big contract.
John: Yeah, and we need to build a new production facility soon. But we have a problem…
Shane: Tell me about it.
John: Well, we need $200 million dollars to fund this new project…
Shane: And you want to know how you can raise this money, right?
John: Right. We spoke to the bank, but man those interest rates are ridiculous!
Shane: I know. But there are other options you know.
John: That‘s why I called. I was wondering if you could help us.
Shane: Sure, John. Let me do some homework and get back to you. I‘ll call you tomorrow morning?
John: Sounds perfect. Thanks Shane!
Shane’s Options
Shane thought about John‘s funding requirements. He made a list of all funding options for John‘s
company and filtered the list down to three.

4. Taking a Loan
ABC Steel has a good credit rating. So getting a loan from any bank would be easy. But the rates of
interest are quite high. Also, the new plant will generate revenue only after a few years. This would
make immediate repayment difficult, adding to the debt burden. But after few year growth would be
35% to 40%.
Saving Money
ABC could save a percentage of the profits and build a plant after few years. However, John couldn‘t
wait that long because this would make it difficult for ABC Steel to meet the demand for steel in the
near future.
Stock selling
John could raise capital by offering company stocks to the public. Since the steel market is booming, a
lot of investors would buy ABC‘s shares. But the challenge is to manage the risks and complications
involved in the IPO process, government regulations and market uncertainties.
If you were in Shane‘s shoes, what option would you consider and why?