Industrial Credit & Investment Corporation of India (ICICI) has decided to consolidate its functions _ and those of its subsidiaries _ under three strategic groups.
ICICI will put a matrix structure _ cutting across group companies_ into place. This plan was announced to the ICICI brass in Mumbai yesterday.
ICICI's businesses will now be divided into three groups _ the major client group, growth client group and the personal financial services group. Each group will be headed by a chief general manager and will draw on all the products and services of the ICICI group for the benefit of its clients. This is a step towards becoming a universal bank.
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Lalita Gupte, deputy managing director, ICICI told Business Standard, "The reason for the restructuring is to refocus our business for better client coverage and also synergise ICICI group's strengths." The restructuring is an on-going exercise which is being conceptualised and implemented jointly by ICICI and consultancy firm McKinsey.
The major clients group, headed by ICICI chief general manager S Mukherjee, will handle the business of the 150 largest clients. This group will have 10-12 client coverage bankers who will be the relationship managers for ICICI and its subsidiaries. This group will draw on ICICI, ICICI Bank and I-Sec for cross-selling all group products.
Client coverage bankers are nodal points in the new ICICI structure and will also be utilised for the growth clients group. Gupte said the client coverage bankers would be the face of the group and would "proactively market ICICI."
For instance, if a company needs a long-term loan from
ICICI, a working capital loan from ICICI Bank, and I-Sec's merchant banking services, it will not have to go to these institutions individually. The client coverage banker will be its single contact point.
The growth clients group will be headed by chief general manager M J Subbaiah. This group will have a zonal focus and will depend on ICICI Bank as most of its business is expected to be generated there. The role of this group will also be to identify high-growth companies, some of which might be financed by TDICI, ICICI's venture capital subsidiary.
Backing the client coverage bankers will be the risk and structured products group. The group's risk functions will be handled by ICICI and overseen by the CEO, K V Kamath. However, the risk functions at ICICI Bank will be handled by the bank itself. Structured product services will be available to all clients through the client coverage bankers. "With this restructuring, ICICI will provide total solutions to all its clients", said Gupte.
The most important part of the restructuring is the creation of the personal financial services group, which will create retail assets to eventually constitute 50 per cent of ICICI group's asset portfolio. This group will focus on auto loans, credit cards, consumer loans, housing loans and insurance. It will also help sell retail products.
The personal financial services group will be headed by Shikha Sharma, chief general manager, ICICI and will generate both retail and wholesale assets. However, the ownership of the assets will depend on the appetite of any of the group companies at that point of time, Gupte said. This group will use the ICICI Bank and I credit channel for distribution of products and is also in the process of developing a distribution strategy.
For functioning of the new structure, ICICI is putting in place a matrix organisation which will cut accross regional hierarchy and also company boundries. But this structure does not diminsh the role of the CEOs of the group companies. For instance, while ICICI Bank credit officers will continue to report to its managing director, they will also have line of reporting to the one of the heads of the three recently constituted groups.
The matrix structure will be required much more as the zonal client coverage bankers commence functioning under the heads of one of the three groups.