BUSINESS ECONOMICS AND PUBLIC POLICY / LAW, HISTORY AND COMMUNICATION

ICICI Bank Case Study Guide Questions

1. What is ICICI Bank's innovation?

The ICICI experience provides insights on how formal banking can convert the poor into customers, at the same time empowering the poor.

1. What is special about RBI's pilot project with NABARD in 1991?

RBI’s pilot project with NABARD in 1991 purveying micro-credit to the rural poor by linking Self-Help Groups with banks.

1. According to Mahajan, why are the transaction costs of savings in formal institutions as high as 10% for the rural poor?

According to Mahajan, the transaction costs of savings in formal institutions were as high as 10% for the rural poor. This was because of the small average size of transactions and distance of the branches from the villages.

1. What are some of the problems of MFIs in India?

The problems with MFI are due to the fact that their primary focus has been on access to credit. The key to sustainability becomes scale due to small loans.

1. What are the two innovative BOP models of the ICICI?

The direct access-bank-led-model and Indirect Channels-Partnership are the two innovative BOP models of the ICICI.

1. What is the connection between Grameen Bank and Bank of Madura?

Grameen Bank model started in Bangladesh providing loans to clients , executives at the bank of Madura feld the efforts in Bangladesh could be replicated in india.

1. Describe ICICI's three-tier system. Discuss why it is three-tiered.

1^st trier consist of commercial banks of which there are approximaltely 80. 2^nd tier are regional rural banks, which operate in approximately 200 rural command areas. Last tier consists of cooperative and special-purpose rural banks.

1. WhAT are the 3 essential steps in the SHG process? Comment on why each step is necessary.

Learn to save, is important in order to have a copy of your file.

Learn to lend what you saved, is to help other people in their knowledge.

Learn to borrow responsibly, is being responsible to people.

1. Discuss the NABARD checklist for SHG's. Comment on why each item on the checklist is necessary.

Is the group between 15 and 20 memebers – to assure the maximum level of members

Are all members considered poor – to know the status of members.

Was there a fixed amount of savings collected each month – to have a record of savings

Is there more than 20% literacy – to assure the level of literacy

Have they used their savings for internal lending purposes – to be able to check their record properly

Have the member kept a high level of attendance – to be able to  keep track of member attendance.

10.  What is the impact of microlending in a household according to a NABARD study?

The microlending has significant positive impact upon income levels and income-generating activities.

11.  Discuss the possible implementation of a smart-card based payment system? Would it work? Why?

Yes, it is to provide stable life for the poor.

12.  Discuss the quote: "Banking with the pooer has undergone a paradigm shift. It is no longer viewed as a mere social obligation. It is financially viable as well". Do you think this quote can be applied in the Philippines? Discuss.

Yes, the Philippines has problems with social obligation and financial viable to their society for there are many poor.