SUMMER TRAINING REPORT

ON

HDFC BANK LTD.

Submitted in partial fulfillment of the requirements
For the award of the degree of
Bachelor of Business Administration
(Computer aided management)
(BBA -CAM)
Affiliated To

Guru Gobind Singh Indraprastha University, Delhi

Guide:

Submitted by:

Ms. NEHA BHATIA

Student Name: VARUN MIGLANI

Enrollment No.: 00390301909

Institute of Innovation in Technology & Management

New Delhi 110018
Batch (2009-2012)

CERTIFICATE
I, Mr._______________________________, Enroll No. ________________ certify that
the Summer Training Report (Paper Code BBACAM-313) entitled Summer Training
Report on HDFC Bank is done by me and it is an authentic work carried out by me at
_______________________________. The matter embodied in this has not been
submitted earlier for the award of any degree or diploma to the best of my knowledge and
belief.

Signature of the Student:

Date:

Certified that the Summer Training Report (Paper Code-------) entitled

____________ done by Mr./Ms._______________________________, Roll
No. ___________, is completed under my guidance.

Signature of the Guide

Date:
Name of the Guide:
Designation:

Countersigned

Director

ACKNOWLEDGEMENT

The present work is an effort to throw some light on Summer Training Report on
HDFC Bank. The work would not have been possible to come to the present shape
without the able guidance, supervision and help to me by number of people.
With an overwhelming sense of gratitude, I acknowledge the valuable guidance and
consistent encouragement extended to me by our knowledgeable faculty members like
Ms. Neha Bhatia with whose guidance; I am able to accomplish this endeavor. Her
technical acumen and years of experience have provided me with crucial inputs at a
critical stage.
I also extend my heartfelt thanks to my family, friends and staff of HDFC Bank for their
support directly or indirectly provided to me.

VARUN MIGLANI
Enrollment no.:-00390301909

CONTENTS
S.No.
1
2
3
4
5
6
7
8
9
10
11
12

Topic
Certificate (s)
Acknowledgements
List of Tables
List of Figures
List of Symbols
List of Abbreviations
Chapter-1: Profile of the Firm/Company
Chapter-2: SWOT Analysis of the Company
Chapter-3: Analysis of Financial Reports of the Company
Chapter-4: Lessons Learnt
References/Bibliography

Page No.
-

LIST OF TABLES
Table No.
1
2
3
4

Title

Page No.

LIST OF FIGURES
Figure No.
1.
2.
3.
4.
5.
6.
7.
8.
9.

Title

LIST OF ABBREVIATIONS

S.No.
1
2
3

Abbreviated Name
CRM
EPS
CS

Full Name
Customer Relationship Management
Earnings Per Share
Customer Satisfaction

Page No.

4
5
6
7
8
9

Int
DA
R/B
MRK
TC
HDFC

Introduction
Data Analysis
Reference & Bibliography
Marketing
Table of Content
Housing Development Finance Corporation

CHAPTER -1
PROFILE OF THE COMPANY

INTRODUCTION

What is a bank?
Bank is defined as an institution for the keeping, landing and exchanging etc. of money.
Economists have also defined a bank highlighting its various functions. According to
Crowther, the banker business is to take the debt of other people to offer his own in
exchange and thereby create money. Thus a bank is an institution that accepts deposits
from the public in turn advances loans by creating credit.

It is different from other financial institutions in that they cannot create credit though they
may be accepting deposits and making advances.
TYPES OF BANKS:
Commercial banks: are those banks which perform all kinds of banking functional such
as accepting deposits, advancing loan, and recreation and agency functions. They are also
called joint stock banks as they are organized in the same manner as joint stock
companies. They usually advance short term loans to customers some of commercial
banks in India are Andhra Bank, Canara Bank, Indian Bank, PNB etc.
Exchange banks: are those banks, which deal in foreign exchange and specialize in
financing trade. They are called foreign exchange banks. In India these exchange banks
have their head offices located outside India. These banks also render other services such
as collecting and supplying information about the foreign customers providing remittance
facilities etc. such as chartered bank, Gridlays bank.
Industrial banks: are those banks, which provide medium term and long-term finance
for industries for the purchase of land, machinery, etc. They underwrite the debenture and
shares of industries and also subscribe to them such as industrial development bank of
India, industrial finance corporation of India etc.
Agricultural banks: are those banks, which provide cr. To farmers for short term,
medium term and long term needs. In India, commercial banks, regional rural banks and
agricultural co-operative banks provide short-term loans to farmers. Such as national
bank for agriculture and rural development, NABARD.

Cooperative banks: are those financial institutions, which are organized on the principle
of cooperation. They provide short term, medium term loans to their members. In rural
area there are agriculture cooperative banks, which are also cooperative banks, which
perform the function of ordinary commercial banks but give loan to their members only.
They also get funds from the RBI. There is a state cooperative bank in every state of
India with its branches at the district level known as the central cooperative banks.
Saving banks: help promote small saving and mobilize them. They have been very
successful in Japan and Germany. In India post office act as saving bank.
Central banks: is the apex bank, in a country, which controls its monetary, and banking
structure. It is owned by the govt. of the country and operates in national interest. It
regulates and issues currency, performs banking and a agency services for the state, keeps
cash reserves of commercial banks, keeps and manages international currency, act as the
lender of the last resort, acts as the clearing house and controls of credit. The RBI is the
central bank in India.
Banking system
The banking system is an integral sub-system of the financial system. It represents an
important channel of collecting small saving from the households and lending it to the
corporate sector.
The Indian banking system has the RBI as the apex body for all matters relating to the
banking system. It is the central bank of India. It is the bankers to all other banks.
Functions of RBI:

1. Currency issuing authority.

2. Banker to the government.
3. Banker to other banks.
4. Framing of monetary policy.
5. Exchange control.
6. Custodian to foreign exchange and gold reserves.
7. Development activities.
8. Research and development in the banking sector.

Type

Public
(BSE: 500180, NYSE: HDB)

Industry

Banking and Financial services

Founded

August 1994

Founder(s)

Deepak Parekh

Headquarters

Mumbai, India

Key people

Jagdish Kapoor (Chairman)

Aditya Puri (MD)

Products

Investment Banking
Commercial Banking
Retail Banking
Private Banking
Asset Management
Mortgages
Credit Cards

Revenue

20,266.99 crore (US$4.48 billion)

Operating income

4,419.01 crore (US$976.6 million)

Profit

3,032.92 crore (US$670.28 million)

Total assets

US$ 39.723 billion

Total equity

21,158.15 crore (US$4.68 billion)

Employees

51,888 (2010)

Website

HDFCBank.com

BACKGROUND:
HDFC Bank Ltd. is major Indian financial services company based in Mumbai,
incorporated in August 1994, after the Reserve Bank of India allowed establishing private
sector banks. The Bank was promoted by the Housing Development Finance
Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank
has 1,725 branches and over 4,232 ATMs, in 779 cities in India, and all branches of the
bank are linked on an online real-time basis.

The Bank started operations as a scheduled commercial bank in January 1995 under the
RBI's liberalization policies.
Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged
with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.
Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of
Times Bank.
In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more
than 1,000.

PROMOTER:
HDFC is Indias premier housing finance company and enjoys an impeccable track
record in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to remain
the clear market leader in mortgages and banking services in India. Its outstanding loan
portfolio covers over a million dwelling units. HDFC has developed significant expertise
in retail mortgage loans to different markets segments and also was a large corporate
HDFC Banks business philosophy is based on four core values: Operational Excellence,
Customer Focus, Product Leadership and People. The Bank signed a strategic business
collaboration agreement with Chase Manhattan Bank in February 1999.Plus /Cirrus and
American Express Credit / Charges cardholders. It is the only bank in India which
provides access to all the 3 major International Card Networks on its ATM network.

DISTRIBUTION NETWORK
HDFC Bank is headquartered in Mumbai. The Bank of present has an enviable network
of over 241 branches spread over 129 cities all across the country. All branches are linked
on an online real time basis. Customers in 39 locations are also serviced through
Telephone Banking. The Banks expansion plans take into account the need to have a
presence in all major industrial and commercial centers where its corporate customers are
located as well as the need to build a strong retail customer base. Being a
clearing/settlement bank to various leading stock exchanges, the Bank has branches in the
centers where the NSE/BSE has a strong and active member base.

The Bank also has a network of almost over 775 networked ATMs across these cities.
Moreover, HDFC Banks ATM network can be accessed by all domestic and international
Visa/Master Card, Visa Electron/Maestro,

CAPITAL STRUCTURE:
The authorized capital of HDFC Bank is Rs. 450 crores. The paid up capital is Rs. 281.2
crores. The HDFC Group holds 24.5% of the banks equity while about 13.3% of the
equity is held by the depository in respect often banks issue of American Depository
Shares (ADS/ADR Issue). The Indian Private Equity Fund, Mauritius (IPEF) and
Indocean Financial Holdings Ltd., Mauritius (IFHL) (both funds advised by JP Morgan
Partners, formerly Chase Capital Partners) together hold about 11.6% of the banks equity.
Roughly 18% of the equity is held by FIIs, NRIs/OCBs while the balance is widely held
by about 300,000 shareholders. The shares are listed on the The Stock Exchange,
Mumbai and the National Stock Exchange. The Banks American Depository Shares are
listed on the New York Stock Exchange under the symbol HDB.
In a milestone transaction in the Indian banking industry, times Bank Limited (another
new private sector bank promoted by Bennett, Coleman & Co. /Times Group) was
merged with HDFC Bank Ltd. effective February 26, 2000. as per the scheme of
amalgamation approved by the shareholders of both banks and the Reserve Bank of India,
share holders of

MISSION AND VISION:

HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team
determined to accomplish the vision of becoming a world-class Indian bank
benchmarking ourselves against international standards and best practices in terms of
product offerings, technology, service levels, risk management and build sound customer
franchises across distinct businesses so as to be a preferred provider of banking services
for target retail and wholesale customer segments and to achieve a healthy growth in
profitability, consistent with the Banks risk appetite.

Business strategy emphasizes the followings:

Increase our market share in Indias expanding banking and financial services
industry by following a disciplined growth strategy and delivering high quality
customer service;

Leverage our technology platform and open, scaleable systems to deliver more
products to more customers and to control operating cost;

Maintain our current high standards for asset quality through discipline credit risk
management;

Develop innovative products and services that attract our targeted customers and
address inefficiencies in the Indian financial sector;

Continue to develop products and services that reduce our cost of funds; and
Focus on high earnings growth with low volatility.

AWARDS AND ACCOLADES

HDFC Bank began operations in 1995 with a simple mission: to be a World Class Indian
Bank.

We realized that only a single minded focus on product quality and services excellence
would help us get there. Today, we are proud to say that we are well on our way towards
that goal.

It is extremely gratifying that our efforts towards providing customer convenience have
been recognized both nationally and internationally.
In the year 2000, leading financial magazine Forbes Global named us it list of The 300
Best Small Companies in the world and as one of the 20 for 2001 best small
companies in the world. There have been some other proud moments as well.

 London Based Euro money magazine gave us the award for Best Bank India
in 1999, Best Domestic Bank in India in 2000, and Best Bank in India in
2001 and 2002.
Hong Kong based Finance Asia Magazine rated us Best Domestic
Commercial Bank in India in 1999, 2000 and 2001 respectively and Best
Local Bank in India in 2002.
Asia money magazine has named us Best Commercial Bank in India 2002.
The Economic Times has conferred on us The Economic Times Awards for
Corporate Excellence as the Emerging Company of the Year 2000-01.
Leading Indian business magazines Business India named us Indias Best
Bank in 2000.
Another leading Indian business magazine Business Today in a survey rated us
Best Private Sector Bank in India in 1999.
For our use of information technology we have been recognized as a Computer
world Honors Laureate and awarded the 21st Century Achievement Award in
2002 for Finance, Insurance & Real Estate category by Computerworld, Inc.,
USA. Our technology initiative has been included as a case study in their online
global achieves.

NASSCOM and economic times.com has named us the Best IT User in Banking at the
IT Users Awards 2003.
We are aware that all these awards are mere milestones in the continuing, never ending
journey of providing excellent service tour customers. We are confident, however, that
with your feedback and support, we will be able to maintain and improve our services.

PRODUCT RANGE:
Savings, Fixed Deposits, Current and Demat Accounts Savings Accounts: Apart from the
usual facilities, you get a free ATM Card, Interbranch banking, Net Banking, Bill pay,
Phone Banking, Debit Card and Mobile Banking, among others.

HDFC BANK PREFERRED

A preferential Savings Account where you are assigned a dedicated Relationship
Manager, who is your one point contact. You also get privileges like fee waivers,
enhanced ATM withdrawal limit, priority locker allotment, free Demat Account and
lower interest rates on loans, to name a Sweep-In Account: A fixed deposit linked to your
Savings Account. So, even your Savings Account runs a bit short, you can issue a cheque
(or use your ATM Card). The money is automatically swept in from your fixed deposit
into your Savings Account.
SUPER SAVER ACCOUNT
Gives you an overdraft facility up to 75% of your Fixed Deposit. In an emergency, you
can access your funds while your Fixed Deposit continues to earn high interest.

PRODUCTS AND SERVICES AT A GLANCE

ACCOUNTS &
DEPOSITS

LOANS

INVESTMENTS &
INSURANCE

- Regular Savings Account

- Savings Plus Account
- Savings Max Account
- Senior Citizens Account
- No Frills Account
- Salary Account
- Kid's Advantage Account
- Pension Saving Bank
Account
- Family Savings Account
- Plus Current Account
- Trade Current Account
- Premium Current Account
- Regular Current Account
- Apex Current Account
- Max Current Account
- Merchant Current
Account
- Regular Fixed Deposit
-Recurring Deposits.
- Super Saver Account
- Sweep-in Account
- HDFC Bank
Imperia/Classic/Preferred
Banking

- Personal Loans
- Home Loans
- Two Wheeler Loans
- New Car Loans
- Used Car Loans
- Overdraft against Car
- Express Loans
- Loan against Securities
- Loan against Property
-Loan against Rental
Receivables
-Health care finance
-Tractor Loans
- Commercial Vehicle
Finance
- Working Capital Finance
- Construction Equipment
Finance

- Mutual Funds
- Tax Planning
- Insurance
- Bonds
- Financial Planning
- Knowledge Centre
- Equities & Derivatives
- Mudra Gold Bar
- Mudra silver Bar

FOREX SERVICES

PAYMENT SERVICES

ACCESS YOUR
ACCOUNT THROUGH

- Product & Services

- Trade services
- Forex service Branch
Locator
- Forex Limits
- Forex Plus Card
- RBI Guidelines

- Net Safe
- Prepaid Refill
- Bill Pay
- Direct Pay
- Visa Money Transfer
- E-Monies Electronic
Funds Transfer
- Excise & Service Tax
Payment

-Net Banking
-Credit card Online
-One View
-Insta Alert
-Mobile Banking
-ATM
-Phone Banking
-Email Statements

CARDS
- Credit cards
- Debit cards
- Prepaid cards

HDFC BANK PLUS

Apart from Regular and Premium Current accounts we also have HDFC Bank Plus, a
Current Account and then some more. You can transfer up to Rs. 50 lakh per month at no
extra charge, between the four metros. You can also avail of cheque clearing between the

four metros, get cash delivery/pickup upto Rs. 25,000/- home delivery opf Demand
Drafts, at par cheques, outstation cheque clearance facility, etc.

DEMAT ACCOUNT
Conduct hassle free transactions on your shares. You can also access your Demat Account
on the Internet.

PHONE BANKING
24 hour automated banking services with 39 Phone Banking numbers available.
ATM 24 hour banking: Apart from routine transactions, you can also pay your utility bills
and transfer funds, at any of our ATMs across the country all year round. Intercity/
Interbranch Banking: Access your account from any of our 241 branches in 129 cities.

NET BANKING
Access your bank account from anywhere in the world, at anytime, at your own
convenience. You can also view your Demat Account through Net Banking.

INTERNATIONAL DEBIT CARD

An ATM card you can shop with all over the country and in over 140 countries with. You
can spend in any currency, and pay in Rupees.

MOBILE BANKING
Access your account on your mobile phone screen at no airtime cost. Use SMS
technology to conduct your banking transactions from your cellphone.

BILL PAY
Pay your telephone, electricity and mobile phone bills through our ATM, Internet, Phone
or mobile phone. No more standing in long queues or writing cheques.

LOANS:

PERSONAL LOANS
Take a loan of up to Rs. 3 lakh for a wedding, education, purchase of a computer or an
exciting holiday.

NEW CAR LOANS AND USED CAR LOANS

Finance up to 90% of the cost of car, new or used! And the loans come to you with easy
documentation and speedy processing at attractive interest rates.

LOANS AGAINST SHARES

Get an overdraft up to Rs. 10 lakh at an attractive interest rate against physical shares, up
to 50% of the market value of your shares. In case of Demat Shares, you can get a Loans
against Shares of up to 65% of the market value of your shares, till Rs. 20 lakh.

TWO WHEELER & CONSUMER LOANS

To help you buy the best durables for your home. You are responsible for regularly
reviewing these terms ad conditions. Continued use of the site after any such changes
shall constitute your consent to such changes.

TRUSTS

HDFCs trust services provide you with the dual advantages of a secure depository and
efficient administration of your securities.

Its solutions help you maximize returns, meet fiduciary responsibilities, and improve
operational efficiency.
Knowing that its clients needs are complex and varies, it leverage its extensive expertise
and experience to provide you with a customized set of benefit and investment services
that work best in assisting its employee benefits program.
And whats more, since HDFC takes on custodian services for all types of securities, you
can protect your securities from loss, theft, damage or destruction. In addition to the
benefits of a securities account, you can also take advantage of its other services such as
professional investment advice as well as banking products.
You will receive important information concerning changes in RBI policy and auctions in
timely fashion. Based on your instructions, it will bid for your in RBI auctions, settle
your purchase or sale transactions, and convert your securities from physical to
dematerialized mode. All the work involved in handling securities transactions is taken
care of.
Incoming credits will be immediately deposited to your account and you receive regular
statement of interest, redemption and payments.
You can also request at a predefined interval a custody account or account statement
showing clearly the accounts current holdings. Its Phone Banking facility enables you to
stay informed about your account around the clock.

CHAPTER 2
SWOT ANALYSIS OF THE COMPANY

S.W.O.T ANALYSIS OF HDFC BANK

STRENGTHS: 1.

Right strategy for the right products.

2.

Superior customer service vs. competitors.

3.

Great Brand Image.

4.

Products have required accreditation.

5.

High degree of customer satisfaction.

6.

Good place to work

7.

Lower response time with efficient and effective service.

8.

Dedicated workforce aiming at making a long-term career in the field.

WEAKNESS:
1.

Some gaps in range for certain sectors.

2.

Customer service staff need training.

3.

Processes and systems, etc

4.

Management cover insufficient.

5.

Sectoral growth is constrained by low unemployment levels and competition for

staff

OPPORTUNITIES:
1.

Profit margins will be good.

2.

Could extend to overseas broadly.

3.

New specialist applications.

4.

Could seek better customer deals.

5.

Fast-track career development opportunities on an industry-wide basis.

6.

An applied research center to create opportunities for developing techniques to

provide added-value services.

THREATS: 1.

Legislation could impact.

2.

Great risk involved

3.

Very high competition prevailing in the industry.

4.

Vulnerable to reactive attack by major competitors.

5.

Lack of infrastructure in rural areas could constrain investment.

6.

High volume/low cost market is intensely competitive.

CHAPTER 3
ANALYSIS OF FINANCIAL REPORTS OF THE
COMPANY

TABLE 3.1 BALANCE SHEET OF HDFC BANK

Mar '11

Mar '10

Mar '09

Mar '08

Mar '07

12 mths

12 mths

12 mths

12 mths

12 mths

Total Share Capital

465.23

457.74

425.38

354.43

319.39

Equity Share Capital

465.23

457.74

425.38

354.43

319.39

Share Application Money

0.00

0.00

400.92

0.00

0.00

Preference Share Capital

0.00

0.00

0.00

0.00

0.00

24,914.04

21,064.75

14,226.43

11,142.80

6,113.76

Capital and Liabilities:

Reserves
Revaluation Reserves
Net Worth
Deposits

0.00

0.00

0.00

0.00

0.00

25,379.27

21,522.49

15,052.73

11,497.23

6,433.15

208,586.41

167,404.44

142,811.58

100,768.60

68,297.94

Borrowings

14,394.06

12,915.69

2,685.84

4,478.86

2,815.39

Total Debt

222,980.47

180,320.13

145,497.42

105,247.46

71,113.33

Other Liabilities & Provisions

Total Liabilities

28,992.86

20,615.94

22,720.62

16,431.91

13,689.13

277,352.60

222,458.56

183,270.77

133,176.60

91,235.61

Mar '11

Mar '10

Mar '09

Mar '08

Mar '07

12 mths

12 mths

12 mths

12 mths

12 mths

25,100.82

15,483.28

13,527.21

12,553.18

5,182.48

4,568.02

14,459.11

3,979.41

2,225.16

3,971.40

Assets
Cash & Balances with RBI
Balance with Banks, Money at Call
Advances

159,982.67

125,830.59

98,883.05

63,426.90

46,944.78

Investments

70,929.37

58,607.62

58,817.55

49,393.54

30,564.80

Gross Block

5,244.21

4,707.97

3,956.63

2,386.99

1,917.56

Accumulated Depreciation

3,073.56

2,585.16

2,249.90

1,211.86

950.89

Net Block

2,170.65

2,122.81

1,706.73

1,175.13

966.67

0.00

0.00

0.00

0.00

0.00

Capital Work In Progress

Other Assets

14,601.08

5,955.15

6,356.83

4,402.69

3,605.48

Total Assets

277,352.61

222,458.56

183,270.78

133,176.60

91,235.61

Contingent Liabilities

559,681.87

466,236.24

396,594.31

582,835.94

202,126.73

28,869.10

20,940.13

17,939.62

17,092.85

7,211.88

545.53

470.19

344.44

324.38

201.42

Bills for collection

Book Value (Rs)

TABLE 3.2

PROFIT AND LOSS A/C

12 mths

12 mths

12 mths

12 mths

12

19,928.21

16,172.90

16,332.26

10,115.00

6,88

Income
Interest Earned
Other Income

4,433.51

3,810.62

3,470.63

2,205.38

1,51

Total Income

24,361.72

19,983.52

19,802.89

12,320.38

8,39

Interest expended

9,385.08

7,786.30

8,911.10

4,887.12

3,17

Employee Cost

2,836.04

2,289.18

2,238.20

1,301.35

77

Selling and Admin Expenses

2,510.82

3,395.83

2,851.26

974.79

72

497.41

394.39

359.91

271.72

21

5,205.97

3,169.12

3,197.49

3,295.22

2,11

Expenditure

Depreciation
Miscellaneous Expenses
Preoperative Exp Capitalised

0.00

0.00

0.00

0.00

Operating Expenses

8,045.36

7,703.41

7,290.66

3,935.28

2,59

Provisions & Contingencies

3,004.88

1,545.11

1,356.20

1,907.80

1,24

20,435.32

17,034.82

17,557.96

10,730.20

7,01

Mar '11

Mar '10

Mar '09

Mar '08

Ma

12 mths

12 mths

12 mths

12 mths

12

3,926.40

2,948.70

2,244.94

1,590.18

1,38

Total Expenses

Net Profit for the Year

Extraordionary Items

-2.65

-0.93

-0.59

-0.06

Profit brought forward

4,532.79

3,455.57

2,574.63

1,932.03

1,45

Total

8,456.54

6,403.34

4,818.98

3,522.15

2,83

Preference Dividend

0.00

0.00

0.00

0.00

Equity Dividend

767.62

549.29

425.38

301.27

22

Corporate Dividend Tax

124.53

91.23

72.29

51.20

84.40

64.42

52.77

44.87

Equity Dividend (%)

165.00

120.00

100.00

85.00

Book Value (Rs)

545.53

470.19

344.44

324.38

20

Transfer to Statutory Reserves

997.52

935.15

641.25

436.05

28

Transfer to Other Reserves

392.64

294.87

224.50

159.02

11

Per share data (annualised)

Earning Per Share (Rs)

Appropriations

Proposed Dividend/Transfer to Govt

892.15

640.52

497.67

352.47

26

Balance c/f to Balance Sheet

6,174.24

4,532.79

3,455.57

2,574.61

1,93

Total

8,456.55

6,403.33

4,818.99

3,522.15

2,59

TABLE 3.3

CASH FLOW

Cash Flow of HDFC Bank

------------------- in Rs. Cr. ------------------Mar '11

Mar '10

Mar '09

Mar '08

Mar '07

12 mths

12 mths

12 mths

12 mths

12 mths

Net Profit Before Tax

5818.66

4289.14

3299.25

2280.63

1638.75

Net Cash From Operating Activities

-375.83

9389.89

-1736.14

3583.43

666.63

Net Cash (used in)/from

Investing Activities

-1122.74

-551.51

-663.78

-619.82

-311.40

Net Cash (used in)/from Financing Activities

1227.99

3598.91

2964.66

3628.34

1637.88

Net (decrease)/increase In Cash and Cash

Equivalents

-273.56

12435.78

564.74

6591.95

1993.11

Opening Cash & Cash Equivalents

29942.40

17506.62

14778.34

8074.54

6188.66

Closing Cash & Cash Equivalents

29668.83

29942.40

15343.08

14666.49

8181.77

CHAPTER-4
LESSONS LEARNT

ABOUT HDFC BANK

Board of Directors:

The Composition of the Board of Directors of the Bank is governed by the Companies
Act, 1956, the Banking Regulation Act, 1949 and the listing requirements of the Indian
Stock Exchanges where the securities issued by the Bank are listed. The Board has
strength of ten (10) Directors as on March 31, 2011. All Directors other than Mr. Aditya
Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-executive directors. The
Bank has six independent directors and four non-independent directors. The Board
consists of eminent persons with considerable professional expertise and experience in
banking, finance, agriculture, small scale industries and other related fields.

None of the Directors on the Board is a member of more than ten (10) Committees and
Chairman of more than five (5) Committees across all the companies in which he/she is a
Director. All the Directors have made necessary disclosures regarding Committee
positions occupied by them in other companies.

Mrs. Renu Karnad, Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar
are non-independent Directors on the Board.
Mr. C. M. Vasudev, Mr. Ashim Samanta, Dr. Pandit Palande, Mr. Partho Datta, Mr.
Bobby Parikh and Mr. A. N. Roy are independent directors on the Board.

Mrs. Renu Karnad represents HDFC Limited on the Board of the Bank.
The Bank has not entered into any materially significant transactions during the year,
which could have a potential conflict of interest between the Bank and its promoters,
directors, management and/or their relatives, etc. other than the transactions entered
into in the normal course of business. The members of the Senior Management team
have made disclosures to the Board confirming that there are no material, financial
and/or commercial transactions between them and the Bank which could have potential
conflict of interest with the Bank at large.
None of the directors are related to each other.

SOME BRANCHES IN DELHI with their IFSC code

Area
Address
ATM
Lockers
IFSC Code

Anand Vihar
A38 Anand Vihar New Delhi - 110092
YES
YES
HDFC0001668

Area
Address
ATM
Lockers
IFSC Code

Ashok Vihar
B - 3 / 2 Ashok Vihar Phase 2 New Delhi - 110052
YES
YES
HDFC0000287

Area
Address
ATM
Lockers
IFSC Code

Barakhamba Road
GF - 1, O & H, DCM Building New Delhi - 110001
YES
NA
HDFC0000708

Area
Address
ATM
Lockers
IFSC Code

Chandni Chowk
1907 Chandni Chowk opposite Sish Ganj Gurudwara,
Main Road New Delhi - 110006
YES
YES
HDFC0000553

Area
Address
ATM
Lockers
IFSC Code

Chattarpur
Khasra No. 619 / 21, Chattarpur, New Delhi - 110074
YES
YES
HDFC0001669

Area
Address
ATM
Lockers
IFSC Code

Chawri Bazaar
73 - 75, 60 / 1, Chawri Bazaar New Delhi - 110006
YES
YES
HDFC0001070

Area
Address
ATM
Lockers
IFSC Code

Chittranjan Park
B105 Chittranjan Park New Delhi - 110019
YES
YES
HDFC0000934

Area
Address
ATM
Lockers
IFSC Code

Connaught Circus, Delhi

N 47 Connaught Circus New Delhi - 110001
YES
NA
HDFC0001401

Area
Address
ATM
Lockers
IFSC Code

Connaught Place
H 69 Outer Circle Connaught Place New Delhi - 110001
YES
YES
HDFC0000313

Area
Address
ATM
Lockers
IFSC Code

Defence Colony
D - 23, Defence Colony New Delhi - 110024
YES
YES
HDFC0000134

Area
Address
ATM
Lockers
IFSC Code

Dwarka
Aggarwal Central Plaza, Plot No. 11, Sector 5, Dwarka,
DDA Market, New Delhi - 110075
YES
YES
HDFC0000249

Area
Address
ATM
Lockers
IFSC Code

Green Park
H - 7, Green Park Extension New Delhi - 110016
YES
YES
HDFC0000586

Area
Address
ATM
Lockers
IFSC Code

Kamla Nagar
D 147 Kamla Nagar New Delhi - 110007
YES
YES
HDFC0001439

Area
Address
ATM
Lockers
IFSC Code

Lajpat Nagar
A - 9, Ring Road Lajpat Nagar New Delhi - 110024
YES
YES
HDFC0000294

Area
Address

Lajpat Nagar 2
B 36 Near Samar Hyundai Lajpat Nagar - II
New Delhi - 110024
YES
YES
HDFC0001557

ATM
Lockers
IFSC Code

Area
Address
ATM
Lockers
IFSC Code

Pahar Ganj
Shop No. Ag - 1 to Ag - 8 & Ag - 20 & Ag - 21
R. G. Complex, Plot No. 2, Community Center
Motia Khan Pahar Ganj New Delhi 110055
YES
YES
HDFC0000457

BANKING SYSTEM
The Banking system is an integral Sub system of the financial system. It represents an
important channel of connecting small savings from the households and lending it to the
corporate sector.

The Indian Banking system has the Reserve Bank of India (RBI) as the apex body for all
matters relating to the banking system. It is the Central Bank of India. It is the banker to
all other banks.

CLASSIFICATION OF BANKS:
1.

Non scheduled Banks:

These are banks which are not included in the second schedule of the Banking Regulation
Act, 196. It means they do not satisfy the conditions laid down by that schedule. They are
further classified as follows:

Central Co-operative Banks & Primary Credit Societies.

Commercial Banks

2.

Scheduled Banks:

Scheduled Banks are banks which are included in the second schedule of the Banking
Regulation Act, 1965.According to this schedule a scheduled bank.
Must have paid up capital reserve of not less than Rs. 5, 00,000/Must also satisfy the RBI that its affairs are not conducted in a manner detrimental to the
interest of its depositors.
Scheduled banks are sub divided as:

1.

State co-operative Banks:

These are co-operative owned and managed by the state.

2.

Commercial banks.

These are business entities whose main business is accepting deposits and

extending

loans. Their main objective is profit maximization and adding shareholder value.

RBI Norms to be followed by Banks

1.

Capital Adequate Ratio (CAR)

2.

Cash Reserve Ratio (CRR)

3.

Statutory Liquidity Ratio (SCR)

4.

Bank Rate

5.

Exposure Norms

CAPITAL ADEQUACY RATIO (CAR)

In India banks are institutions where deposits place their hard earned savings on the
assumptions that the risk shall be borne by the bank. In such a scenario, the banks must
have enough capital to meet unforeseen continues so that the confidence of the deposits is
not shaken. To fulfill this need the RBI has laid down the norms of capital adequacy that
need to be fulfilled by banks. The banks have to maintain the capital Adequacy Ratio
(CAR) specified by RBI from time to time.
CASH RESERVE RATIO (CRR)
CRR is the minimum reserve deposits which banks have to compulsory keep with the
RBI. These are calculated as specific percentage to Resolvable liabilities arrived at in the
basis of net renewal and time liabilities (NDTL).
STATUTORY LIQUIDITY RATIO (SLR):
According to Sec. 24(2-A) of amended Banking Regulation Act, 1949 a scheduled bank
and every other banking company, shall, in addition to the cash reserves maintained by
them under Sec. 42 of RBI Act, maintain reserves in cash or gold named at price not
exceeding the current market price or in unencumbered approved securities valued at
price determined. The banks should maintain such reserves not exceeding 40% and not
less than 25% as the RBI may from time to time specify, of the total of its demand and
time liabilities (NDTL), as on last Friday of the second preceding fortnight.

BANK RATE:
The rate of which RBI lends to commercial banks by rediscounting bills or eligible paper
is called the bank rate. It is basically the refinancing rate. the banks decide the interest
rates based on the bank rate. It is also should be the RBI to control inflation. Following
chart shows the
EXPOSURE NORMS:

The RBI has stipulated certain ceiling relating to advances and interest rates which banks
have to adhere to which carrying out their lending operations. Some of them are as
follows:
a.

Exposure to a single borrower should not exceeds 15% of advances.

b.

Exposure to a business group should not exceeds 40%

c.

Exposure to stock market should not exceed 5% of total advances as at the

end of

previous year.

CLASSIFCATION OF BANK

Reserve Bank of
India

Scheduled Banks

State Co-opBank

SBI & its

Subordi

Sched
uled

Commercial
Ba
nk

Indian
Banks

Public sector

Non

Foreign
Banks

Private sector

Private sector Banks

Nationalized
Banks

BANKING STRUCTURE IN INDIA

Regional Rural
Banks

Scheduled Banks in India

(A) Scheduled Commercial Banks

Public sector
Banks

Private sector
Banks

Foreign Banks in
India

Regional Rural
Bank

(27)

(29)

(31)

(133)

Nationalized
Bank
Other Public
Sector Banks
(IDBI)
SBI and its
Associates

Old Private
Banks
New Private
Banks

(B) Scheduled Cooperative Banks

Scheduled Urban Cooperative

Banks (55)

Scheduled State Cooperative

Banks (31)

Major Banks in India

ABN-AMRO Bank

Indian Overseas Bank

Abu Dhabi Commercial Bank

IndusInd Bank

American Express Bank

ING Vysya Bank

Andhra Bank

Jammu & Kashmir Bank

Allahabad Bank

Karnataka Bank

Bank of Baroda

Karur Vysya Bank

Bank of India

Laxmi Vilas Bank

Bank of Maharashtra

Oriental Bank of Commerce

Bank of Punjab

Punjab National Bank

Bank of Rajasthan

Punjab & Sind Bank

Canara Bank

South Indian Bank

Central Bank of India

Standard Chartered Bank

Centurion Bank

State Bank of India (SBI)

China Trust Commercial Bank

State Bank of Bikaner & Jaipur

Citi Bank

State Bank of Hyderabad

Corporation Bank

State Bank of Indore

Dena Bank

State Bank of Mysore

Deutsche Bank

State Bank of Saurastra

Development Credit Bank

State Bank of Travancore

Dhanalakshmi Bank

Syndicate Bank

Federal Bank

UCO Bank

HDFC Bank

Union Bank of India

HSBC ICICI Bank

United Bank of India

IDBI Bank

United Bank Of India

Indian Bank

UTI Bank

FINDINGS:

 All the private and public sector banks are recognizing importance of the
relationship management in their growth and customer retention.
The officials try to make best relation with the customers.
Staff member gives regular updates to their customers and information of the
product and their services.
The registers and files are systematically maintained on a daily basis and in an
organized manner.
Officials employed find themselves in much burden as there are very less number
of sales executives.
Most of the respondents are having more than two accounts and holds more than
two products with HDFC Bank.
Bank has shown better utilization of cash balance of customer by cross selling
other products.
According to respondents feedback it is observed that bank is in need to increase
their branches in Bilaspur region as well as pay concern to increase their ATM
network.
With the help of research it has been found that most of them prefer brand name
and service facilities and some of them are influenced by existing customer
Greater retention of customers is being needed as they are offering various
products and services. This enables a great understanding of what customers may
expect from the bank and what to offer to them. This leads to defining where each
customer is in his relationship with the bank so that cross-selling can be done

FUNCTIONS OF A BANK
Functioning of a bank is among the mere complicated of corporate operations. Since
banking involves dealings directly with money, governments in most countries regulate
this sector rather stringently. In India, the regulation traditionally has been very strict and
in the opinion of certain quarters, responsible for the present condition of banks, where
NPA are of a very high order. The process of financial reforms, which started in 1991 has
cleared the somewhat but a lot remains to be done. The multiplicity of policy and
regulations that a bank has to work with makes its operations even more complicated,
sometimes bordering on illogical. This section, which is also intended for banking
professional, attempts to give an overview of the functions in as simple manner as
possible.
Banking Regulation Act of India, 1949, defines Banking as accepting, for the purpose of
lending or investment of deposits of money from the public, repayable on demand or
otherwise and withdrawal by cheques, draft order or otherwise. During from this
definition and view edsolely from the point of view of the customers. Banks essentially
perform the following functions.
Accepting deposits is one of the two major activities of the banks.
Banks are also called custodians of public money. Basically, the money is accepted as
deposit for safekeeping. But since the banks are this money to earn interest from people
who need money. Banks shall a part of this interest with the depositors. However,
accepting deposits and keeping track of money involves a lot of bookkeeping and other
operations.
LENDING MONEY TO THE PUBLIC
Lending money is one of the two major activities of any bank. In a way, the bank acts as
an intermediary between the people who have the need for money to carry out business
transactions. This activity places its own requirements on the resources of the Bank.

TRANSFER OF MONEY:
Apart from accepting deposits and lending money, banks also carry out, on behalf of their
customers the act of transfer of money both domestic and foreign from place to another.
This activity is known remittance business. Banks issue, demand drafts. Bankers
cheques, money orders etc. for transferring the money. Banks also have the facility of
quick transfer of money also know as telegraphic transfer or little cash orders.
TRUSTEE BUSINESS
Banks also act as trustees for various purposes e.g. whenever a company wishes to issue
secured debentures, it has to appoint a financial intermediary as trustee who takes charges
of the security for the debenture and looks after the interests of the debenture holders.
Such entity necessarily has to have expertise in financial matters and also be of sufficient
standing in the market/society to generate confidence in the minds of potential subscribes
to the debenture.
SAFE KEEPING
Bankers are in the business of providing security to the money and valuables of the
general public, while security of money is taken care of through offering various types of
deposit schemes, security of valuables is provided through maiming secured space
available to general public for keeping these valuables. These spaces are available in the
shape of lockers. The latter are small compartments with dual locking facility built into
strong cupboards. These are stored in the Banks strong room and are fully secure.
Lockers can neither be opened by the hirer or the bank individually. Both must come
together and use their respective keys to open the locker.

GOVERNMENT BUSINESS:
Earlier Government business used to be exclusively carried out by Government treasures
where all type of transactions took place. However, now banks act on behalf of the
Government to accept its tan and non tan receipts most of the Government disbursements
like pension payments and tax refunds also take place through banks. While the banks
carry out this business for a free to be paid by the Government, providing this service
requires a lot of effort and organization.
FRAME WORK FOR ANALYSIS OF BANKS
Banks can be broadly analyzed on the following parameters.
Size of a Bank
Usually the thumb rule is all other things remaining constant bigger than the size of a
bank, the better it is. This is judged by following.
Deposits
This includes the demand, time as well as savings deposits from all the sources within
and outside India.
Net profits
This is the final free profit available for appropriation. This can either be ploughed back
or distributed as dividend.
Operational Efficiency:
This refers to how efficiently a bank manages its business. An efficient bank will
managers its business. An efficient bank will manage the same asset size at a lower cost
than an efficient one.
Interest Income/Average working funds:
This refers to how much interest income, or operating income a bank can earn for every
rupee spent on the working funds. The higher the ratio is better. Average working funds,
are the total resources (total assets or liabilities) employed by a bank.

Non Interest Income/Average working fund:

This refers to how much other income or fee based income or income from non fund
based activities a bank can earn for each rupee spent on the working funds. The higher
the ratio the better. This also denotes a banks capability to work on low spreads.
Operating Expenses/Operating Income.
This ratio denotes how much a bank has to spend on operating expenses for every rupee
earned.
NATIONALISED BANKS
1.

Size

The total deposits mobilized by national banks are Rs. 2562.9 bn that is just around 29%
of the deposits mobilized by all the scheduled banks together. Also the growth in deposits
areas average at 16.87%. Thus inspire of their sheer number (19 banks) they have not
been able to mobilize enough deposits. However, they contribute to a third of the total
profits earned by all SCBs. However, the growth in net profits was just 36.28%. This
shows tiredness in their bottom line, as they have not been able to desire new ways to
earn income.
2.

Operational Efficiency:

Nationalized banks earn more interest income per rupee of assets than they other bank.
They earn 14.24paise of interest income and 1.67 of paisa non interest income for every
rupee of assets. Thus nationalized banks seem more efficient than other banks as far as
earnings on assets are concerned. However, they are among the least prudent banks next
only to the foreign banks, in spending money on operating expenses. They spend almost a
fourth (24.93%) of every rupee earned as operational income, which is increasing rapidly
at a rate highest in the sector. Also the cost of deposits is highest in the industry for them
at 13.84 that have been increasing at the rate of 12.49%. YOU inspire of the large
network of branches. Thus, though the income generated on assets is high, the spending is
also very high indicating future trouble, since only the efficient banks can survive the
imminent shakeout.

3.

Earnings Quality:

Nationalized banks have an interest margin higher than even the foreign banks. This
indicates that the growth in their assets, the income will increase more than that earned by
any other bank with a similar growth in assets. However one of the major concerns is the
low non interest income. Hence, the operating profit is only 1.90% of the assets next only
to the foreign banks. Thus even though the interest spread is highest, due to lower non
interest income, the operating profits get subdued.
The net profit is however only marginally higher at 0.72% than the industry average of
0.66%, which has grown at 1.28% YOU thus under performing the sector. This reflects
higher provisioning due to higher NPA (Non Performing Assets). Thus in their
aggressiveness to increase yield. Nationalized banks have put in their money into more
risky assets leading to higher NPA & lower net profits.
However from the point of view of owners, nationalized banks return the highest rate on
net worth at 15.70% highest in the industry.
This is due to very high capital gearing of Rs. 20.67 of debt for every rupee of equity,
once again highest in the industry,. However, a growth rate of 28.03% in this raises
doubts over the sustainability of such returns in future.
4.

Capital Adequacy:

The capital adequacy ratio of nationalized banks is 11.14%, higher than the statutory
requirement of 9%. However, it is lesser than that of all other groups. This indicates that
the scope of expansion for the bank in future is very low. Also the RBI has announced
that it would increase the CAR to 12% in a phased manner. In view of such regulations
these banks may have to raise capital either by a rights issue or through subordinated
debt. The debt equity ratio is also the highest in the industry at 20.67 times that makes
these banks most dangerous to lend funds to. Hence, in future these capital starved banks
have to raise their equity capital to warrant future growth. However, this bank group ahs a
diversified portfolio of assets. Advances comprises only 38.37% of the total assets and
investments another 36.10%. the advances are growing marginally faster than the assets
at 40.82% however this group is aggressively increasing investments deposits have gone
into investments.

CONCLUSION
The leadership process involves in influencing the individual and group behavior toward
achievement of HDFC bank goals. It is concerned with traits, philosophy and behavior of
the leaders the leader, the characteristics of subordinates and the superior.
It is obvious that HRD is a major component of the broad managerial function and has
roots and branches extending throughout and beyond HDFC bank. It is a major subsystem of organizations which are inter-related and inter-dependent. Every personnel
managers responsibilities include planning for people, organizing people, staffing with
people, directing people, gaining the commitment, internet and effect of people and
applying controls to people.
Internal sources are the most obvious sources. These include personnel already on the
pay-roll of HDFC Bank i.e. its present working force whenever any vacancy occurs.
Somebody from within the organization is upgraded, transferred promoted or sometimes
demoted. This source also include personnel who were once on the pay-roll of the
company but who plan to change in the quality of production, fluctuations in work
requirements, and changes in the organizational structure, the introduction of new lines or
reduction in the workforce due to a shortage or a surplus in same section so that lay offs
may be avoided, fillings in off the vacancies which may occur because of separations or
because of the need for suitable adjustments in business operations such transfers are
known as production transfers, flexibility transfers or organizational transfers. The
purpose of such transfers is the stabilize employment in an organizations. They are
generally controlled centrally through and by the personnel department.
It was found out during the study that the following causes hampered the growth of the
banking sector. These causes need to be addressed properly as that the remedial measures
adopted prone effective and actually succeed in improving the functioning of these banks.
Unrealistic assumptions have been behind plans and projections made in respect of
critical aspects of the banks operations such as seduction of NPAs, recovery, creation of

fresh NPAs, generation of non-interest income, etc. under most of these heads the
performance of the banks has been wide off the projections made.
in spite of their weak bank image, these banks are able to garner deposits obviously
because of government ownership, deposit insurance and the public perception that
government support would always be available. Investments are replacing advances,
particularly remunerative advances and income from non-fund based business is not
growing or is growing very marginally. The capability of these banks to do full range
banking already has been happenings.
It is obvious that HRD is a major component of the broad managerial.

RECOMMENDATION
Managers should recognize that a certain amount of conflict will almost always exist
between professional and hierarchical authority and control systems. The key is to
transform this conflict into motivation by structurally insulating these workers from
organization pressure, while simultaneously making them aware of the importance that
their work holds for the firms well being and its continued competitive advantages.
They should recognize that managing high-technology and professional employees is
significantly different from managing non-professionals have a different set of values and
characteristics, which have been gained through their socialization in the technical
specialty. Managers need to be cognizant of those values and characteristics if they are
not anticipate tension points and enhance the fit between the individual and the job.
They should attempt to develop HR practices and policies that have had some success in
attracting, motivating and retaining the high-tech work force.

That requires, at a minimum, knowledge of or systematic diagnosis of organizational

practices, and matching HR practices to the organizations culture.
It also requires that a cadre of competent HR manager manage the transition. The days of
ready-fire aim are over for high-technology firms seeking competitive advantages in
their markets.
They should study the change process and learn from their experiences from change
owing to internal and external factors, including departures from tradition, new leaders
with new visions, crisis or other starting events, key decisions on the part of senior
management, or tests, of their infrastructure ability to accommodate change. Firm also
change because of change. But professionals and other high-tech workers must clearly

see the need for change, otherwise, they may not support the change, or they may even
sabotage it, therefore communication must be reemphasized.
They should design jobs and work relationship to take advantage of technical specialties.
For example, rotating professionals through multiple role and job responsibilities can
sensitize them to new ides and opportunities.
They should establish career sensitive tracking systems so that career development
becomes an integrated part of their firm practices.
They should utilize a menu of salient relevant that are relevant for high tech and
professional workers. These reminders ideally should be linked to performance, but in
some culture they might be liked so effort, risk taking, or other relevant behaviors.

REFERENCES/BIBLIOGRAPHY

Banking : The Network is the bank, by Yogesh Sharma, Dataquest, January

31, 2006

Race will end in survival of the fittest, The Financial Express, November 29,
2006.

The Times of India, 26 July, 2007.

The future is in e-banking by Mr. K.V. Kamath (Managing Director, ICICI),

April 14, 2002, Business Line.

RBI road map for banking, The Indian Express, July 21, 2007.

Banking in India, by Dr A. K. Mishra (Professor & Chairman of Finance

Group at IIM Lucknow).

www.hdfcbank.com

www.hdfc.com

https://netbanking.hdfcbank.com