CHAPTER-1

INTRODUCTION
1.1 Indian Banking Industry

The Indian banking market is growing at an astonishing rate, with

Assets expected to reach US$1 trillion by 2010. An expanding
economy, middle class, and technological innovations are all
contributing to this growth.
The countrys middle class accounts for over 320 million
people.
In correlation with the growth of the economy, rising income
levels,
increased standard of living, and affordability of banking
products
are promising factors for continued expansion.

The Indian banking Industry is in the middle of an IT

revolution, Focusing on the expansion of retail and rural
banking.
Players are becoming increasingly customer - centric in
their
approach, which has resulted in innovative methods of offering
new banking products and services.

Banks are now

realizing the importance of being a big player and are

beginning to focus their attention on mergers

and acquisitions

to take advantage of economies of scale and/or comply

with Basel II

regulation. Indian banking industry assets are

expected to reach US$1 trillion by 2010 and are poised to

receive a greater infusion of foreign capital, says Prathima
Rajan, analyst in Celent's banking group and author of the report.
The banking industry should focus on having a small number
of large players that can compete globally rather than having a
large number of fragmented players."
2

1.2

Banking Structure in India

Scheduled Banks in India

(A) Scheduled Commercial Banks

Public sector
Banks

Private sector
Banks

Foreign
Banks in
India

Regional Rural
Bank

(28)

(27)

(29)

(102)

Nationalized Old Private

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

(B) Scheduled Cooperative Banks

Scheduled Urban
Cooperative

Scheduled State Cooperative

Banks (31)

Banks (55)

Here we more concerned about private sector banks and competition among
them. Today, there are 27 private sector banks in the banking sector: 19 old
3

private sector banks and 8 new private sector banks. These new banks have
brought in state-of-the-art technology and Aggressively marketed their
products. The Public sector banks are Facing a stiff competition from the
new private sector banks.
The banks which have been setup in the 1990s under the guidelines of the
Narasimham Committee are referred to as NEW PRIVATE

SECTOR BANKS.
New Private Sector Banks

Superior Financial Services

Designed Innovative Products

Tapped new markets

Accessed Low cost NRI funds

Greater efficiency

1.3 Upcoming Foreign Banks in India

By 2009 few more names is going to be added in the list
of foreign banks in India. This is as an aftermath of the sudden
interest shown by

Reserve Bank of India paving roadmap for

foreign banks in India greater freedom in India. Among them is the

world's best private bank by EuroMoney magazine,
Switzerland's UBS.

The following are the list of foreign banks going to set up business in India :

Royal Bank of Scotland

Switzerland's UBS

US-based GE Capital

Credit Suisse Group

Industrial and Commercial Bank of China

1.4 General Introduction:The project was carried out for understanding the customer preference
& attributes towards saving Account of HDFC Bank

and its market

potential.HDFC Bank was established in the year 1994, they are old
player in banking sector, The bank has two principle client segments
customer and asset management. The bank follows values such as
Integrity, teamwork, respect, professionalism, & Mission. The segment
of bank we are considering here is- Corporate banking. The product out
of which have chosen for research is Saving Accounts. This research
helps us in finding out the customers view regarding the product and
Services offered by the HDFC bank and awareness by promotion and
also identifying the

market potential of the product offered by the

HDFC bank.

1.5 Industry Profile:a.) Origin and development of the industry:Banking in India originated in the first decade of 18th century. The first banks
were The General Bank of India, which started in 1786, and Bank of
Hindustan, both of which are now defunct. The oldest bank in existence in
India is the State Bank of India, which originated in the "The Bank of Bengal"
in Calcutta in June 1806. This was one of the three presidency banks, the
other two being the Bank of Bombay and the Bank of Madras. The
presidency banks were established under charters from the British East India
Company. They merged in 1925 to form the Imperial Bank of India, which,
upon India's independence, became the State Bank of India. For many years
the Presidency banks acted as quasi-central banks, as did their successors.
The Reserve Bank of India formally took on the responsibility of regulating
the Indian banking sector from 1935. After India's independence in 1947, the
Reserve Bank was nationalized and given broader powers.
A couple of decades later, foreign banks such as Credit Lyonnais started
their Calcutta operations in the 1850s. At that point of time, Calcutta was the
most active trading port, mainly due to the trade of the British Empire, and
due to which banking activity took roots there and prospered.
First of all we must note the fact that these institutions have changed very
much in character since their origin, and consequently nowadays perform
many functions unknown to those of former times. The first banks seem to
have arisen in connection with the business of exchanging money. In ancient
times and especially in the Middle Ages the varieties of coins were greater
even than at the present day, and they were much less perfectly and
honestly minted. Specialists were, therefore, required to determine their
exact value and equivalence and to exchange coins of one mintage for those
6

of another, and their BANK were in great demand at fairs and other places
where merchants of different nations met forpurposes of trade. Inasmuch as
they kept their boxes or chests of coins on benches or "banken," the name
bankers came to be applied to them. On account of their technical
knowledge and the fact that they were obliged constantly to keep on hand
considerable quantities of the precious metals, this business in the early
Middle Ages was usually carried on by goldsmiths, but later it was
sometimes assumed by the governments of large commercial cities, as, for
example, by Amsterdam in 1609, by Hamburg in 1619, and by Nurnberg in
1621. Of these latter the Bank of Amsterdam was the most important and
may be regarded as typical of these early institutions.
From the earliest times also, bankers have been the chief agents through
which foreign exchanges have been conducted. As dealers in coin and
bullion they had international connections and a knowledge of international
affairs not possessed by other merchants, and were, therefore, in a position
to undertake the settlement of international accounts by means of orders
drawn on bankers in other countries or other cities with whom they had
regular business transactions. As keepers of other people's money they also
promoted saving, and banks thus became in time the chief savings
institutions of the country.

b. Growth and present status of the industry:Currently (2009), banking in India is generally fairly mature in terms of
supply, product range and reach-even though reach in rural India still
remains a challenge for the private sector and foreign banks. In terms of
quality of assets and capital adequacy, Indian banks are considered to have
clean, strong and transparent balance sheets relative to other banks in
comparable economies in its region. The Reserve Bank of India is an
7

autonomous body, with minimal pressure from the government. The stated
policy of the Bank on the Indian Rupee is to manage volatility but without any
fixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some
time-especially in its services sector-the demand for banking services,
especially retail banking, mortgages and investment services are expected to
be strong. One may also expect M&As, takeovers, and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to
increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%.
This is the first time an investor has been allowed to hold more than 5% in a
private sector bank since the RBI announced norms in 2005 that any stake
exceeding 5% in the private sector banks would need to be vetted by them.
Currently, India has 88 scheduled commercial banks (SCBs) - 27 public
sector banks (that is with the Government of India holding a stake)after
merger of New Bank of India in Punjab National Bank in 1993, 29 private
banks (these do not have government stake; they may be publicly listed and
traded on stock exchanges) and 31 foreign banks. They have a combined
network of over 53,000 branches and 17,000 ATMs. According to a report by
ICRA Limited, a rating agency, the public sector banks hold over 75 percent
of total assets of the banking industry, with the private and foreign banks
holding 18.2% and 6.5% respectively
Introduction of many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a
committee was set up by his name which worked for the liberalization of
banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are
being put to give a satisfactory service to customers. Phone banking and net
8

banking is introduced. The entire system became more convenient and swift.
Time is given more importance than money.
In 1995, the Brookings Institution published a paper entitled The
Transformation of the U.S. Banking Industry: What a Long, Strange Trip Its
Been. Using a breathtaking array of facts and figures, the paper described
in great detail the dramatic changes that had occurred in the U.S.
commercial banking industry over the 15 years from 1979 to 1994. The
banking industry was transformed during that period, according to the paper
(p. 127), by the massive reduction in the number of banking organizations;
the significant increase in the number of failures; the dramatic rise in offbalance sheet activities; the major expansion in lending to U.S. corporations
by foreign banks; the widespread adoption of ATMs; . . . and the opening up
of interstate banking markets. The paper went on to explain that most of
these major changes in banking could be traced to two developments: (1)
the extraordinary number of major regulatory changes during the period,
from deposit deregulation in the early 1980s to the relaxation of branching
restrictions later in the decade; and (2) clearly identifiable innovations in
technology and applied finance, including improvements in information
processing and telecommunication technologies, the securitization and sale
of bank loans, and the development of derivatives markets. Other research
would later confirm the papers assessments and its explanation of the
course of events in the banking industry over the period 19791994.

Over the two decades 19842003, the structure of the U.S. banking industry
indeed underwent an almost unprecedented transformationone marked by
a substantial decline in the number of commercial banks and savings
institutions and by a growing concentration of industry assets among a few
dozen extremely large financial institutions. This is not news. As mentioned
above, the decline in the number of banking organizations has been ongoing
for more than two decades and has been well documented in the literature. 3
Nevertheless, a brief overview will serve to clarify both the scope of the
decline and the increasing concentration of assets among the nations
largest banking organizations

At year-end 1984, there were 15,084 banking and thrift organizations

(defined as commercial bank and thrift holding companies, independent
banks, and independent thrifts). By year-end 2003, that number had fallen to
10

7,842a decline of almost 48 percent (figure 1). Distributed by size, nearly

all the decline occurred in the community bank sector (organizations with
less than $1 billion in assets in 2002 dollars), and especially among the
smallest size group (less than $100 million in assets in 2002 dollars). Yet the
community banking sector still accounts for 94 percent of banking
organizations

c. Future of the industry:The burden of reporting and other regulatory requirements will fall heavily
and disproportionately on small banks unless remedial action is taken.
Further advances in information technology will permit the development of
new products, BANK, and risk-management techniques but may also pose
important competitive and supervisory issues. Nonbank entities will continue
to offer bank-like products in competition with banks, raising anew the
question of whether banks are still special and, more fundamentally
,whether banks are sufficiently different from nonblank firms to justify the
maintenance of a safety net for banks. It is useful, therefore, to try to chart
the course of the banking industry in the next five to ten years and to
consider what policy issues the industry and regulators will face. The authors
of this study do not pretend to be clairvoyant. They are mindful of the many
financial predictions that were once offered with confidence but turned out to
be wrong or premature. This study is perhaps best described as an exercise
in strategic thinking. Its approach is to analyze what has happened in the
recent past, consider in detail reasons for expecting recent trends to
continue or to change, and draw the consequences for bank and regulatory
policies. As always, uncertainties abound, and events that may now appear
fairly improbable may in fact shape the future. This paper closeswith a
11

discussion of a number of such possible events. The future-of-banking study

addresses three broad questions:

1. What changes in the environment facing banking can be expected in the

next five to ten years?
2. What are the prospects for different sectors of the banking industry in this
anticipated environment? Because the banking industry is not monolithic and
different segments of the industry have, to some degree, different
opportunities and vulnerabilities, the study considers separately the
prospects for large, complex banking organizations; regional and other
midsize banks; community banks; and limited-purpose banks.
3. What policy issues are the industry and regulators likely to face in the
years ahead?

CHAPTER-2

REVIEW OF LITERATURE AND

PROBLEM STATEMENT
2.1 Origin of the Organization:-

12

Housing Development Finance Corporation Limited, more popularly known

as HDFC Bank Ltd, was established in the year 1994,
as a part of the liberalization of the Indian Banking Industry by
Reserve Bank of India (RBI). It was one of the first banks to receive an 'in
principle' approval from RBI,
for setting up a bank in the private sector. The bank was incorporated with
the name 'HDFC Bank Limited', with its registered office in Mumbai. The
following year, it started its operations as a Scheduled Commercial Bank.
HDFC Bank Limited. The Group's principal activities are to provide banking
and other financial BANK. The Group operates through four segments:
Treasury, Retail Banking, Wholesale Banking and Other Banking Business.
The Treasury BANK segment consists of net interest earnings on
investments portfolio of the bank and gains or losses on investment
operations. The Retail Banking segment serves retail customers through a
branch network and other delivery channels. This segment raises deposits
from customers and makes loans and provides advisory BANK to customers.
The Wholesale Banking segment provides loans and transaction BANK to
corporate and institutional customers. The Other Banking Operations
segment provides BANK relating to credit cards, debit cards, third party
product distribution and primary dealership business and other associated
costs. The Bank was Incorporated on 30th August 1994. A new private
sector Bank promoted by housing Development Corporation Ltd. (HDFC), a
premier housing finance company. The bank is the first of its kind to receive
an in-principle approval from the RBI for establishment of a bank in the
private sector. Certificate of Commencement of Business wasreceived on
10th October 1994 from RBI. The Bank transacts both traditional commercial

13

banking as well as investment banking. HDFC, the promoter of the bank has
entered into an
agreement with National Westminister Bank Pc. and its subsidiaries (Nat
west Group) for subscribing 20% of the banks issued capital and providing
technical assistance in relation to the banks proposed banking business.

2.2 Growth and Development of the Organization: 1994.

On 16.1.1995, 90,79,930 No. of equity shares were allotted to Jarrington Pte.
Ltd. Another 400,00,000 equity shares were allotted on private placement
basis to Natwest Group on 9.5.1995. 500,00,000 shares were allotted to the
public on 9.5.95 The Bank opened its first branch in Ramon House at
Churchgate, Mumbai on January 16th.
The Bank has created an efficient operating system using well tested stateof-the-art software.

1995
70 No. of equity shares issued to subscribers to the Memorandum &Articles
of Association on 30th August 1994. On the same date 500,00,000 equity
shares were allotted to HDFC promoters. 509,20,000 shares were allotted to
HDFC Employees Welfare Trust and HDFC Bank Employees Welfare Trust
on 22nd December,

1996
HDFC Bank has entered the banking consortia of over 50 corporates,
including some leading multinational companies, flagship companies of local
business houses and strong public sector companies.
14

HDFC Bank has set up a state-of-the-art dealing room to handle all

transactions possible in Indian financial markets.
The Certificates of Deposits were awarded a PP1+ rating which is the
highest rating for short term instruments indicating superior capacity for
repayment.

2001
The Bank has opened its first branch in Aurangabad. HDFC Standard Life
Insurance has entered into a memorandum of understanding with the
Chennai-based Indian Bank. The Bank has launched the international
Maestro debit card inassociation with Master Card. HDFC Bank will launch
its

credit

card

in

June

through

link-ups

with

MasterCard

and

Visa.LTtrade.com has entered into a strategic tie-up with HDFC Bank to

provide Net banking BANK to online investors. Standard Chartered Bank,
HDFC Bank and Bharat Petroleum Corporation have joined the eCash
Forum which has been set up by the Smart Card Forum of India. HDFC Bank
has launched a new campaign for its eage savings account. HDFC Bank
entered into a strategic tie-up with Tally Solutions Pvt. Ltd. to offer online real
time accounting BANK to small and Medium enterprises.
Today HDFC Bank has 1,412 branches and over 3,295 ATMs, in 528
cities in India, and all branches of the bank are linked on an online real-time
basis. ] As of September 30, 2008 the bank had total assets of INR 1006.82
billion. For the fiscal year 2008-09, the bank has reported net profit of
Rs.2,244.9 crore, up 41% from the previous fiscal. Total annual earnings of
the bank increased by 58% reaching at Rs.19,622.8 crore in 2008-09.

2.3 Present Status of the Organization:15

March 2007

March 2008

March 2009

Citied

228

316

452

Branches

535

684

1412

ATMs

1323

1605

3275

Housing Development Finance Corporation Limited, more popularly known

as HDFC Bank Ltd, was established in the year 1994, as a part of the
liberalization of the Indian Banking Industry by Reserve Bank of India (RBI).
It was one of the first banks to receive an 'in principle' approval from RBI, for
setting up a bank in the private sector. The bank was incorporated with the
name 'HDFC Bank Limited', with its registered office in Mumbai. The
following year, it started its operations as a Scheduled Commercial Bank.
Today, the bank boasts of as many as 1412 branches and over 3275 ATMs
across

India. Amalgamation

In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a
private sector bank promoted by Bennett, Coleman & Co. / Times Group).
With this, HDFC and Times became the first two private banks in the New
Generation Private Sector Banks to have gone through a merger. In 2008,
RBI approved the amalgamation of Centurion Bank of Punjab with HDFC
Bank. With this, the Deposits of the merged entity became Rs. 1,22,000
crore, while the Advances were Rs. 89,000 crore and Balance Sheet size
was Rs. 1,63,000 crore.

Head Office
HDFC Bank
Ramon House, 169, Backbay Reclamation,
H T Parekh Marg, Churchgate
Mumbai - 400020
16

Phone: +91 (22) 66316000, 66636000, 66316060

Fax: +91 (22) 22048834
Website: www.hdfc.com

Tech-Savvy
HDFC Bank has always prided itself on a highly automated environment, be
it in terms of information technology or communication systems. All the
braches of the bank boast of online connectivity with the other, ensuring
speedy funds transfer for the clients. At the same time, the bank's branch
network and Automated Teller Machines (ATMs) allow multi-branch access
to retail clients. The bank makes use of its up-to-date technology, along with
market position and expertise, to create a competitive advantage and build
market

share.

Capital Structure
At present, HDFC Bank boasts of an authorized capital of Rs 550 crore
(Rs5.5 billion), of this the paid-up amount is Rs 424.6 crore (Rs.4.2 billion).
In terms of equity share, the HDFC Group holds 19.4%. Foreign Institutional
Investors (FIIs) have around 28% of the equity and about 17.6% is held by
the ADS Depository (in respect of the bank's American Depository Shares
(ADS) Issue). The bank has about 570,000 shareholders. Its shares find a
listing on the Stock Exchange, Mumbai and National Stock Exchange, while
its American Depository Shares are listed on the New York Stock Exchange
(NYSE), under the symbol 'HDB'

2.4 Functional Departments of the Organisation:-

17

The functional departments of the organization consists of the HR

department, the administrative department and the executive department.
The HR department of the organization consists of the people who employ
the Persons who they think would be able to do justice with the job
handled.The administrative department of the organization consists of the
director and the manager of the organization. They preside the organization
and control all the operations of the organization such that the organization
could run in a smooth and effective manner. The executive department of the
organization consists of the various employees Who execute the job
undertaken by them. The employees consists of the team leaders, the
Corporate financial consultants,. the telecallers, various staffs and junior
staffs who are the main structural framework of the organization. The
organization thus runs with the effective coordination of the HR department,
the administrative department and the executive department such that the
supervisors of the organization preside over the subordinate employees to
give them directions about fulfilling their works most efficiently and
effectively. Technical Consultancy Department: The Technical Consultancy
Department is responsible for technical appraisal of industrial projects. The
mission of the division is aimed towards the verification of the technical
viability of industrial projects and assisting the Funds management in taking
the decisions that require technical expertise. Moreover, it is responsible for
conducting technical studies and rendering technical consultancy BANK to
certain industrial sectors for the purposes of investigating modern
technologies and productivity levels for local manufacturing plants.

H R Department:

18

HDFC Human Resources department plans and direct for the employee
population as well as they are having the following functions as:

Hiring
Promotions
Reassignments
Position classification and grading
Salary determination
Performance appraisal review and processing
Personnel data entry and records maintenance
Policy development
Work permitting immigration visa program
Workers compensation

Finance Department:
The Finance Manager is responsible for all aspects of the accounting and
financial administration of the HDFC, the supervision of the implementation
of the HDFC financial policies, directives and procedures and the initiation of
the financial plans within the guidelines of HDFC The department contains
several distinct sections, each of which is responsible for a proportion of the
activities taking place within the finance department.

Marketing Consultancy Department:

The Marketing Consultancy Department plays and important role within the
Fund as it studies and analyzes marketing information in order to build solid
base for management decisions. The division also assists projects sponsors
in formulating solid marketing strategies to improve their industries and
strengthen their position in the local and international markets.

Research Department:
19

The Research Department is having the capacity to act through four

composing units i.e., the market research unit, economic studies unit, and
statistical studies unit. It is the mission of the division to provide support
BANK for information and consultancy to the senior management and
division in the areas of economic, statistical and marketing information and
consultancy through data analysis, processing of economic and statistical
data, market research studies and publishing related periodical reports.
2.5 Organization Structure and Organization Chart:The organization structure of the company HDFC is such that it comprises of
the departments and the employees in the hierarchical order so that they are
able to perform their functions and duties smoothly and effectively doing their
job in a manner in which it should be done. The organization is headed by
the administrative department which coordinates and controls the executive
department. The executive department is a link from the top and the bottom
comprising of the lower level employees such that they work together to fulfill
the common objective of getting business from the persons who get in touch
with them and see to it that they are provided with the best of the BANK
which constitute giving financial advise to providing Account to the
customers. The lower level employees and the corporate financial
consultants work together to see to it that the database for providing financial
BANK to sufficient number of people is made .They work together to see to it
that this database is followed and worked upon such that more and more
number of people get themselves avail the financial BANK of the
organization. Team leaders who form the part of the administrative
department of the Organization make sure that the clients that turn up for the
financial BANK are dealt with most efficiently and effectively.

20

The organizational structure is well planned out and it follows a simple format
which is follows:
Organization Chart:-

Each team lead has a team comprising only of both senior as well as junior
market research analyst who aid the team lead in the entire market research
process as it has been discussed previously. This is the basic organizational
structure followed by HDFC BANK.
21

2.6 Product and service profile of the organization:HDFC Bank offers a bunch of products and services to meet the every need
of the people. The company cares for both, individuals as well as corporate
and small and medium enterprises. For individuals, the company has a
range accounts, investment, and pension scheme, different types of loans
and cards that assist the customers. The customers can choose the suitable
one from a range of products which will suit their life-stage and needs. For
organizations the company has a host of customized solutions that range
from Funded services, Non-funded services, Value addition services, Mutual
fund etc. These affordable plans apart from providing long term value to the
employees help in enhancing
Goodwill of the company. The products of the company are categorized into
various sections which are as follows:

22

In todays world many companies have emerged who have taken a serious
note on the importance of market research and he advantages of using it for
the better growth and development of the company. Hence, our competitors
are those companys who are in the market research and development field
as well as the consultancies, since they also make use of market research
and business developers.

The products and BANK of our competitors are as follows:

A. Customer Satisfaction Analysis:

Customer analysis involves gathering data about the customers and their
characteristics. They also conduct tailored customer satisfaction surveys to
gauze customer satisfaction.

B. Risk
These BANK are used by the competitors in order to gather external
information and research the possible effect on the competitiveness of
company.

C. Product Research BANK:

23

The conduction of extensive product research by this service helps the

competitors to find out the marketability of a product or service. The research
can be utilized to leverage the major decisions of a company on the
marketing of its products.

D. Advertising Research BANK:

Advertising research strives to gain valuable information about the effects
and reach of advertising the products in different forms of media.

Given below are the steps we follow for every assignment we take up:
1. The timetable for the search is indicated and the search process
commences.
2. Target companies are examined, using any prior information provided by
business development executives in conjunction with sources of information
and prospective companies already known to us, augmented with original
study by our search team.
3. We maintain a regular channel of communication with the client to keep
them apprised of the results emerging.

2.7 Market profile of the organization:HDFC Bank Limited provides various financial products and services. It
operates in three segments: Retail Banking, Wholesale Banking, and
Treasury. The Retail Banking segment provides various deposit products,
including savings accounts, current accounts, fixed deposits, and demat
24

accounts. It also offers auto, personal, commercial vehicle, home, gold, and
educational loans; loans against securities, property, and rental receivables;
and health care finance working capital finance, construction equipment
finance, and warehouse receipt loans, as well as credit cards, debit cards,
depository, investment advisory, bill payments, and transactional services. In
addition, this segment sells third party financial products, such as mutual
funds and insurance, as well as distributes life and general insurance
products through its tie-ups with insurance companies and mutual fund
houses. The wholesale banking segment provides loans, non-fund facilities,
and transaction services to large corporate, emerging corporate, small and
medium enterprise, supply chain, public sector undertaking, central and state
government departments, and institutional customers. It offers deposit and
transaction banking products, supply chain financing, working capital and
term finance, agricultural loans, and funded, non-funded treasury, and
foreign exchange products. These segments services include trade services,
cash management, money market, custodial, tax collection, and electronic
banking. In addition, it provides correspondent bank services to co-operative
banks, private banks, foreign banks, and regional rural banks; and wealth
management products for non-resident Indians. The Treasury Services
segment operates primarily in areas, such as foreign exchange, money
market, interest rate trading, and equities. As of March 31, 2009, HDFC Bank
had a network of 1,412 branches and 3,295 automated teller machines in
528 cities in India. The company was founded in 1994 and is based in
Mumbai, India.
In todays growing world everyone needs to diversify their business so as to
keep in touch with the rapid development. By analyzing the growing
concerns of the market, HDFC has clients varying from investment banking
25

sector, retail, web designing companies, etc. Due to this rapid development
HDFC Group has many teams working for the above mentioned sectors.
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 service excellence would help us get there. Today, we
are proud to say that we are well on our way towards that goal.

2.8 About Us
The Housing Development Finance Corporation Limited (HDFC) was
amongst the first to receive an 'in principle' approval from the Reserve Bank
of India (RBI) to set up a bank in the private sector, as part of the RBI's
liberalisation of the Indian Banking Industry in 1994. The bank was
incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.

2.9 Promoter
HDFC is India's 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 market leader in mortgages. Its outstanding loan
portfolio covers well over a million dwelling units. HDFC has developed
significant expertise in retail mortgage loans to different market segments
and also has a large corporate client base for its housing related credit
facilities. With its experience in the financial markets, a strong market
reputation, large shareholder base and unique consumer franchise, HDFC
26

was ideally positioned to promote a bank in the Indian environment.

2.10 Business Focus

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to
build sound customer franchises across distinct businesses so as to be the
preferred provider of banking services for target retail and wholesale
customer segments, and to achieve healthy growth in profitability, consistent
with the bank's risk appetite. The bank is committed to maintain the highest
level of ethical standards, professional integrity, corporate governance and
regulatory compliance. HDFC Bank's business philosophy is based on four
core values - Operational Excellence, Customer Focus, Product Leadership
and People.

2.11 Capital Structure

As on 30th June, 2010 the authorized share capital of the Bank is Rs. 550
crore. The paid-up capital as on said date is Rs. 459,69,07,030/(45,96,90,703 equity shares of Rs. 10/- each). The HDFC Group holds 23.63
% of the Bank's equity and about 17.05 % of the equity is held by the ADS
Depository (in respect of the bank's American Depository Shares (ADS)
Issue). 27.45% of the equity is held by Foreign Institutional Investors (FIIs)
and the Bank has about 4,33,078 shareholders.

The shares are listed on the Bombay Stock Exchange Limited and The
National Stock Exchange of India Limited. The Bank's American Depository
Shares (ADS) are listed on the New York Stock Exchange (NYSE) under the

27

symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed
on Luxembourg Stock Exchange under ISIN No US40415F2002.

2.12 Distribution Network

HDFC Bank is headquartered in Mumbai. The Bank at present has an
enviable network of 1,725 branches spread in 780 cities across India.All
branches are linked on an online real-time basis. Customers in over 500
locations are also serviced through Telephone Banking. The Bank's
expansion plans take into account the need to have a presence in all major
industrial and commercial centres where its corporate customers are located
as well as the need to build a strong retail customer base for both deposits
and loan products. Being a clearing/settlement bank to various leading stock
exchanges, the Bank has branches in the centres where the NSE/BSE have
a strong and active member base.

The Bank also has 4,393 networked ATMs across these cities. Moreover,
HDFC Bank's ATM network can be accessed by all domestic and
international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and
American Express Credit/Charge cardholders.

2.13 Management
Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with
effect from 6th July 2010 subject to the approval of the Reserve Bank of India
and the shareholders. Mr. Vasudev has been a Director of the Bank since
October 2006. A retired IAS officer, Mr. Vasudev has had an illustrious career
in the civil services and has held several key positions in India and overseas,
28

including Finance Secretary, Government of India, Executive Director, World

Bank and Government nominee on the Boards of many companies in the
financial sector.
The Managing Director, Mr. Aditya Puri, has been a professional banker for
over 25 years, and before joining HDFC Bank in 1994 was heading
Citibank's operations in Malaysia.
The Bank's Board of Directors is composed of eminent individuals with a
wealth of experience in public policy, administration, industry and commercial
banking. Senior executives representing HDFC are also on the Board.
Senior banking professionals with substantial experience in India and abroad
head various businesses and functions and report to the Managing Director.
Given the professional expertise of the management team and the overall
focus on recruiting and retaining the best talent in the industry, the bank
believes that its people are a significant competitive strength.

2.14 Technology
HDFC Bank operates in a highly automated environment in terms of
information technology and communication systems. All the bank's branches
have online connectivity, which enables the bank to offer speedy funds
transfer facilities to its customers. Multi-branch access is also provided to
retail customers through the branch network and Automated Teller Machines
(ATMs).
The Bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world
class bank. The Bank's business is supported by scalable and robust
29

systems which ensure that our clients always get the finest services we offer.

The Bank has prioritised its engagement in technology and the internet as
one of its key goals and has already made significant progress in webenabling its core businesses. In each of its businesses, the Bank has
succeeded in leveraging its market position, expertise and technology to
create a competitive advantage and build market share.

2.15 Businesses
HDFC Bank offers a wide range of commercial and transactional banking
services and treasury products to wholesale and retail customers. The bank
has three key business segments:

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing
companies in the Indian corporate to small & mid-sized corporates and
agri-based businesses. For these customers, the Bank provides a wide
range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured
solutions, which combine cash management services with vendor and
distributor finance for facilitating superior supply chain management for
its corporate customers. Based on its superior product delivery / service
levels and strong customer orientation, the Bank has made significant
inroads into the banking consortia of a number of leading Indian
corporates including multinationals, companies from the domestic
30

business houses and prime public sector companies. It is recognised as

a leading provider of cash management and transactional banking
solutions to corporate customers, mutual funds, stock exchange
members and banks.

Retail Banking Services

The objective of the Retail Bank is to provide its target market customers
a full range of financial products and banking services, giving the
customer a one-stop window for all his/her banking requirements. The
products are backed by world-class service and delivered to customers
through the growing branch network, as well as through alternative
delivery channels like ATMs, Phone Banking, NetBanking and Mobile
Banking.
The HDFC Bank Preferred program for high net worth individuals, the
HDFC Bank Plus and the Investment Advisory Services programs have
been designed keeping in mind needs of customers who seek distinct
financial solutions, information and advice on various investment
avenues. The Bank also has a wide array of retail loan products including
Auto Loans, Loans against marketable securities, Personal Loans and
Loans for Two-wheelers. It is also a leading provider of Depository
Participant (DP) services for retail customers, providing customers the
facility to hold their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit
Card in association with VISA (VISA Electron) and issues the Mastercard
Maestro debit card as well. The Bank launched its credit card business in
late 2001. By March 2010, the bank had a total card base (debit and
credit cards) of over 14 million. The Bank is also one of the leading

31

players in the merchant acquiring business with over 90,000 Point-ofsale (POS) terminals for debit / credit cards acceptance at merchant
establishments. The Bank is well positioned as a leader in various net
based B2C opportunities including a wide range of internet banking
services for Fixed Deposits, Loans, Bill Payments, etc.
Treasury
Within this business, the bank has three main product areas - Foreign
Exchange and Derivatives, Local Currency Money Market & Debt
Securities, and Equities. With the liberalisation of the financial markets in
India, corporates need more sophisticated risk management information,
advice and product structures. These and fine pricing on various treasury
products are provided through the bank's Treasury team. To comply with
statutory reserve requirements, the bank is required to hold 25% of its
deposits in government securities. The Treasury business is responsible
for managing the returns and market risk on this investment portfolio.
2.16 Ratings
Credit Rating
The Bank has its deposit programs rated by two rating agencies - Credit
Analysis & Research Limited (CARE) and Fitch Ratings India Private Limited.
The Bank's Fixed Deposit programme has been rated 'CARE AAA (FD)'
[Triple A] by CARE, which represents instruments considered to be "of the
best quality, carrying negligible investment risk". CARE has also rated the
bank's Certificate of Deposit (CD) programme "PR 1+" which represents
"superior capacity for repayment of short term promissory obligations". Fitch
Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "AAA
( ind )" rating to the Bank's deposit programme, with the outlook on the rating
as "stable". This rating indicates "highest credit quality" where "protection
factors are very high"
32

The Bank also has its long term unsecured, subordinated (Tier II) Bonds
rated by CARE and Fitch Ratings India Private Limited and its Tier I
perpetual Bonds and Upper Tier II Bonds rated by CARE and CRISIL Ltd.
CARE has assigned the rating of "CARE AAA" for the subordinated Tier II
Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)"
with the outlook on the rating as "stable". CARE has also assigned "CARE
AAA [Triple A]" for the Banks Perpetual bond and Upper Tier II bond issues.
CRISIL has assigned the rating "AAA / Stable" for the Bank's Perpetual Debt
programme and Upper Tier II Bond issue. In each of the cases referred to
above, the ratings awarded were the highest assigned by the rating agency
for those instruments.
Corporate Governance Rating
The bank was one of the first four companies, which subjected itself to a
Corporate Governance and Value Creation (GVC) rating by the rating
agency, The Credit Rating Information Services of India Limited (CRISIL).
The rating provides an independent assessment of an entity's current
performance and an expectation on its "balanced value creation and
corporate governance practices" in future. The bank has been assigned a
'CRISIL GVC Level 1' rating which indicates that the bank's capability with
respect to wealth creation for all its stakeholders while adopting sound
corporate governance practices is the highest.

2.17

Awards

HDFC Bank began operations in 1995 with a simple mission: to be a "Worldclass Indian Bank". We realised that only a single-minded focus on product
quality and service excellence would help us get there. Today, we are proud
33

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 appreciated both nationally and internationally.
2010

Best Private Sector Bank

NDTV Business
Leadership
Awards 2010
MIS Asia IT

BEST BOTTOM-LINE I.T. Category

Excellence Award
2010
Dun & Bradstreet

Overall Best Bank

Banking Awards

Best Private Sector Bank

2010

Best Private Sector Bank in SME Financing

Institutional

HDFC Bank MD, Mr. Aditya Puri among "Asian

Investor Magazine Captains of Finance 2010"

Poll
IDRBT

Winner - 1) IT Infrastructure 2) Use of IT within

Technology 2009

the Bank

Awards

Runners-up - IT Governance (Large Banks)

ACI Excellence

Highly Commended - Asia Pacific HDFC Bank

Awards 2010
FE-EVI Green

Best performer in the Banking category

Business
Leadership Award
Celent's 2010

Model Bank Award

Banking
Innovation Award
Avaya Global

Customer Responsiveness Award - Banking &

Connect 2010

Financial Services category

34

Forbes Top 2000

Our Bank at 632nd position and among 130

Companies

Global High Performers

Financial Express Best New Private Sector Bank

- Ernst & Young

Best in Growth

Survey 2009-10

Best in strength

Asian Banker

Best Retail Bank in India

Excellence

Excellence in Automobile Lending

Awards 2009

Bank M&A Integration

Technology Implementation

The Asset Triple A Best Cash Management Bank in India

Awards
Euromoney

1) Best Local Bank in India (second year in a

Private Banking

row) 2) Best Private Banking Services overall

and Wealth

(moved up from No. 2 last year)

Management Poll
2010
Financial Insights

Innovation in Branch Operations - Server

Innovation Awards Consolidation Project

2010
Global Finance

Best Trade Finance Provider in India for 2010

Award
2 Banking

1) Best Risk Management Initiative and 2) Best

Technology

Use of Business Intelligence.

Awards 2009
SPJIMR

2nd Prize

Marketing Impact
Awards (SMIA)
2010
Business Today

Listed in top 10 Best Employers in the country

35

Best Employer
Survey

We are aware that all these awards are mere milestones in the continuing,
never-ending journey of providing excellent service to our customers. We are
confident, however, that with your feedback and support, we will be able to
maintain and improve our services.

2.18

Corporate Governance

HDFC Bank recognizes the importance of good corporate governance, which

is generally accepted as a key factor in attaining fairness for all stakeholders
and achieving organizational efficiency. This Corporate Governance Policy,
therefore, is established to provide a direction and framework for managing
and monitoring the bank in accordance with the principles of good corporate
governance.
Code of Corporate Governance

Nomination Form ( shareholder/s

Corporate Governance Rating

holding shares in Physical form )

Composition of the Board

Mandate Form ( shareholder/s

Profiles of Directors

holding shares in Physical form )

Board Committees

Grievance Redressal

Ownership Rights

Dividend Policy

Promoters Rights( HDFC LTD.)

Memorandum of Association

Key Shareholders Rights

Articles of Association
Board Meetings

Listing

Quarterly Updates

Registrars and transfer agents

Fair Practice Code for Lending

Code of Ethics / Conduct
36

2.19 Details of Sanjauli Branch of HDFC Bank

Note:If you think there are any discrepancies in this information please let us
know(info@easywaytech.com)
we will verify the information and make necessary changes. Please include
all the details of the bank when contacting us.
Bank Name:
Branch Name:

HDFC Bank
SANJAULI-SHIMLA - HIMACHAL PRADESH
MANTA BUILDING,OPP BUS

Address:
City:
District:
State:
Phone:
Email:
Micr Code
IFSC Code:
Website:

STAND,SANJAULISHIMLAHIMACHAL PRADESH171006
SANJAULI-SHIMLA - HIMACHAL PRADESH
SIMLA
Himachal Pradesh
1800 22 1819 / 1800 22 1006
support@hdfcbank.com
171240003
HDFC0000346
http://www.hdfcbank.com

2.20 HDFC BANK

March 2006
228
535
1323

Citied
Branches
ATMs

As of March 31, 2008,

March 2007
316
684
1605

March 2008
327
761
1977

the Banks distribution network was at

761

Branches and 1977 ATMs in 327 cities as against 684 branches and
1,605 ATMs in 320 cities as of March 31, 2007. Against the regulatory
approvals

for

new

branches in hand,

the Bank expects to further

expand the branch network by around 150 branches by June 30, 2008.
During the year, the Bank stepped up retail customer acquisition with
37

deposit accounts increasing from 6.2 million to 8.7 million and total
cards issued (debit and credit cards) increasing from 7 million to 9.2
million.

Whilst credit growth in the banking system slowed down to about 22%
for the year ended 2007-08, the Banks net advances grew by 35.1%
with retail advances growing

by

38.6% and

wholesale

advances

growing by 30%, implying a higher market share in both segments.

The transactional banking business also registered healthy growth With

cash

management

volumes increased by around 80% and

trade

services volumes by around 40% over the previous year.

Portfolio quality as of March 31, 2008 remained healthy with gross

nonperforming assets at 1.3% and net non-performing assets at 0.4%
of total customer assets. The Banks provisioning policies for specific
loan loss provisions remained higher than regulatory requirements.

2.21 TECHNOLOGY USED IN HDFC BANK

In the era of globalization each and every sector faced the stiff
competition from their rivals. And world also converted into the flat from the
globe. After the policy of liberalization and RBI initiatives to take the step for
the private sector banks, more and more changes are taking the part into
it. And there are create competition between
38

the private sector banks and public sector bank.

Private sector banks are today used the latest technology for the different
transaction of day to day banking life. As we know that Information
Technology plays the vital role in the each and every industries and gives
the optimum return from the limited resources.
Banks are service industries and today IT gives the innovative
Technology application to Banking industries. HDFC BANK is the leader in
the industries and today IT and HDFC BANK together combined they
reached the sky. New technology changed the mind of the customers and
changed the queue concept from the history banking transaction. Today
there are different channels are available for the banking transactions.

We can see that the how technology gives the best results in the below
diagram. There are drastically changes seen in the use of Internet banking,
in a year 2001 (2%) and in the year 2008 ( 25%). These type of technology
gives the freedom to retail customers.

Centralized Processing Units

Derived Economies of Scale

Electronic

Reduced Transaction Cost

Straight

Through

Processing
Data Warehousing , CRM

Improve cost efficiency, Cross

Innovative Technology Application

sell
Provide
products

39

new

or

superior

HDFC BANK is the very consistent player in the New private sector banks.
New private sector banks to withstand the competition from public sector banks
came up with innovative products and superior service.

2001

2005

( % customer initiated Transaction by Channel )

2.22 HDFC BANK PRODUCT AND CUSTOMER SEGMENTS

PERSONAL BANKING
40

Loan Product

Deposit Product

Investment &
Insurance

41

Auto Loan

Saving a/c

Mutual Fund

Loan

Current a/c

Bonds

Fixed deposit

Knowledge Centre

Demat a/c

Insurance

Safe

General and Health

Against

Security

Loan

Against

Property

Personal loan

Credit card

2-wheeler loan

Commercial

Lockers

Home loans

Retail business

banking

Tractor loan

Working Capital
Finance
Construction
Equipment
Finance
Health

Care

Finance

Education Loan

Gold Loan

Equity
Derivatives

finance

Insurance

vehicles

Deposit

42

Mudra Gold Bar

and

Cards

Payment

Access To Bank

Services

Credit Card

NetSafe

NetBanking

Debit Card

Merchant

OneView

Prepaid Card

Prepaid Refill

InstaAlert

Billpay

MobileBanking

Visa Billpay

ATM

InstaPay

Phone Banking

DirectPay

Email Statements

VisaMoney

Branch Network

------------------------------Forex Services

Transfer

-----------------------------

Electronic

Product &

Funds Transfer

Services

eMonies

Trade Services

Online Payment
of Direct Tax

Forex service
Branch Locater

RBI Guidelines

WHOLESALE BANKING
Corporate

Funded
Services
Non
Funded
Services

Small and Medium

Enterprises

Funded Services
Non Funded Services
Specialized Services
Value added services
43

Financial Institutions and

Trusts

BANKS
Clearing
SubMembership
RTGS submembership

Value Added
Services
Internet
Banking

Fund Transfer
ATM Tie-ups
Corporate Salary a/c
Tax Collection
Financial Institutions

Internet Banking

Mutual Funds
Stock Brokers
Insurance Companies
Commodities Business
Trusts

BUSINESS MIX

Total Deposits
Net Revenue

Retail

Gross Advances

Wholesale

HDFC Bank is a consistent player in the private sector bank

and have a well balanced product and business mix in the Indian as
well as overseas markets.

Customer segments (retail & wholesale) account for 84% of

Net revenues ( FY 2008)

Higher retail revenues partly offset by higher operating and

credit costs.

Equally well positioned to grow both segments.

NRI SERVICES
Accounts & Deposits

Remittances
44

Rupee Saving a/c

Rupee Current a/c
Rupee Fixed Deposits
Foreign Currency Deposits
Accounts for Returning Indians

North America
UK
Europe
South East Asia
Middle East
Africa
Others

Quick remit
IndiaLink
Cheque LockBox
Telegraphic/ Wire Transfer
Funds Transfer Cheques/DDs/TCs
Investment & Insurances

Loans

Mutual Funds
Insurance
Private Banking
Portfolio Investment Scheme

Home Loans
Loans Against Securities
Loans Against Deposits
Gold Credit Card

Payment Services

Access To Bank

NetSafe
BillPay
InstaPay
DirectPay
Visa Money
Online Donation

NetBanking
OneView
InstaAlert
ATM
PhoneBanking
Email Statements
Branch Network

2.23 Business Strategy

HDFC BANK mission is to be

"a World Class Indian Bank",

benchmarking themselves against international standards and best

practices in terms of product offerings, technology, service levels, risk
management and audit & compliance. The objective is to 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 Bank's risk appetite. Bank is committed to do this while ensuring the
highest levels of ethical standards, professional integrity, corporate
governance and regulatory compliance. Continue to develop new product

45

and technology is the main business strategy of the bank. Maintain good
relation with the customers is the main and prime objective of the bank.

HDFC BANK business strategy emphasizes the following :

Increase market share in Indias expanding banking

and

financial services industry by following a disciplined growth strategy

focusing on quality and not on quantity 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

costs.

Maintain current high standards for asset quality through

disciplined credit risk management.

Develop innovative products and services that attract the targeted

customers and address inefficiencies in the Indian financial sector.

Continue to develop products and services that reduce banks cost of

funds.

Focus on high earnings growth with low volatility.

2.24 Inside HDFC Bank

FIVE S , PART OF KAIZEN
WORK PLACE TRANSFORMATION
Focus on effective work place organization
Believe in
46

 Small changes lead to large improvement

Every successful organization have their own strategy to win the race in the
competitive market. They use some technique and methodology for smooth
running of business. HDFC BANK also aquired the Japanese technique for
smooth running of work and effective work place organization.
Five S Part of Kaizen is the technique which is used in the bank For easy
and systematic work place and eliminating unnecessary things from the
work place.

BENEFIT OF FIVE S

It can be started immediately.

Every one has to participate.

Five S is an entirely people driven initiatives.

Brings in concept of ownership.

All wastage are made visible.

FIVE S Means :S-1

S-2
S-3
S-4
S-5

SORT
SYSTEMATIZE
SPIC-N-SPAN
STANDARDIZE
SUSTAIN

SEIRI
SEITON
SEIRO
SEIKETSU
SHITSUKE

(1) SORT :It focus on eliminating unnecessary items from the work place.
It is excellent way to free up valuable floor space.
It segregate items as per require and wanted.
47

Frequently
Required

Wanted but
not
Required

Less
Frequently
Remove
everything
from
workplace

Required

Junk

(2) SYSTEMATIZE :Systematize is focus on efficient and effective Storage method. That
means it identify, organize and arrange retrieval. It largely focus on good
labeling and identification practices.

Objective :- A place for everything and everything in its place.

(3) SPIC- n - SPAN :Spic-n-Span focuses on regular clearing and self inspection. It brings in
the sense of ownership.

(4) STANDERDIZE :It focus on simplification and standardization. It involve standard rules
and policies. It establish checklist to facilitates autonomous maintenance of
workplace. It assign responsibility for doing various jobs and decide on Five
S frequency.

(5) SUSTAIN:It focuses on defining a new status and standard of organized work
place. Sustain means regular training to maintain standards developed under
48

S-4. It brings in self- discipline and commitment towards workplace

organization.
In the HDFC BANK each department has their different color coding apply
on the different file. Due to this everyone aware about their particular color
file which is coding on it and they save their valuable time. It is a part of
Kaizen and also included in the system of the Five S. Logic behind it that ,
the color coding are always differentiate the things from the similar one.

HUMAN RESOURCES
The

Banks staffing

needs continued

to increase

during

the year

particularly in the retail banking businesses in line with the business growth.
Total number of employees increased from 14878 as of March31,2006
to 21477 as of March 31, 2007. The Bank continues to focus on training its
employees on a continuing basis, both on the job and through training
programs conducted by internal and external
faculty.

The Bank has consistently believed that broader employee ownership of its
shares has a positive impact on its performance and employee motivation.
The Banks employee stock option scheme so far covers

around 9000

employees.

RUPEE EARNED = RUPEE SPEND

It is more important for every organization to know about from where and
where to spent money. And balanced between these two things rupee
earned and rupee spent are required for smooth running of business and
49

financial soundness. This type of watch can control and eliminate the
unnecessary spending of business. In this diagram it include both things
from where Bank earned Rupee and where to spent.

HDFC BANK earned from the Interest from Advances 51.14 % , Interest
from Investment 27.12 %, bank earned commission exchange and
brokerage of 15.25 %. These are the major earning sources of the bank.
Bank also earned from the Forex and Derivatives and some other Interest
Income. Bank spent 39.75 % on Interest Expense, 30.27 % on Operating
Expense and 14.58 % on Provision. Bank also spent Dividend and Tax on
dividend, Loss on Investment , Tax. As we discuss above that balancing is
must between these two for every organization especially in the era of
globalization where there are stiff competition among various market players.

2.25 Recent Developments

The Reserve Bank of India has approved the scheme of amalgamation

of Centurion Bank of Punjab Ltd. With HDFC Bank Ltd. With effect from
50

May 23, 2008. All the branches of Centurion

Bank of Punjab will

function as branches of HDFC Bank with effect from May 23, 2008. With
RBIs approval, all requisite statutory and regulatory approvals for the
merger have been obtained.

The combined entity would have a nationwide network of 1167

branches; a strong deposit base of around Rs.1,22,000 crores and net
advances of around Rs.89,000 crores. The balance sheet size of the
combined entity would be over Rs.1,63,000 crores.

Merger with Centurion Bank of Punjab Limited

On March 27, 2008, the shareholders of the Bank accorded their consent
to a scheme of amalgamation of Centurion Bank of Punjab Limited with
HDFC Bank Limited. The shareholders of the Bank approved the issuance
of one equity share of Rs.10/- each of HDFC Bank Limited for every 29
equity shares of Re. 1/- each held in Centurion Bank of Punjab Limited.
This is subject to receipt of Approvals from the Reserve Bank of India,
stock

exchanges and Other requisite statutory and regulatory authorities.

The shareholders Also accorded their consent to issue equity shares

51

and/or warrants convertible into equity shares at the rate of Rs.1,530.13

each to HDFC Limited and/or other promoter group companies on
preferential basis, subject to final regulatory approvals in this regard.
The Shareholders of the Bank have also approved an increase in the
authorized capital from Rs.450 crores to Rs.550 crores.

Promoted

in 1995 by Housing

Development

Finance

Corporation

(HDFC), Indias leading housing finance company, HDFC Bank is one of

Indias premier banks providing a wide range of financial products and
services to its over 11 million customers across hundreds of Indian cities
using multiple distribution channels including a pan-India network of
branches, ATMs, phone banking, net banking and mobile banking. Within a
relatively short span of time, the bank has emerged as a leading player in
retail banking, wholesale banking, and treasury operations, its three principal
business segments.
The banks competitive strength clearly lies in the use of technology and the
ability to deliver world-class service with rapid response time.Over the last
13 years, the bank has successfully gained market share in its

target

customer franchises while maintaining healthy profitability and asset

quality.
As on March 31, 2008, the Bank had a network of 761 branches and 1,977
ATMs

in

327 cities.

For the year ended

reported a net profit of INR 15.90 billion

over the corresponding year ended

52

March 31, 2008, the Bank

(Rs.1590.2crore), up 39.3%,

March 31, 2007.

As

of

March 31, 2008 total deposits were INR 1007.69 billion

(Rs.100,769 crore) up 47.5% over the corresponding year ended March

31, 2007. Total balance sheet size too grew by 46.0% to INR 1,331.77 billion
(133177 crore).

Leading Indian and

international Publications

have

recognized the bank for its performance and

quality.

Centurion Bank of Punjab is one of the leading new generation private

sector banks in India. The bank serves individual consumers, small and
medium businesses and large corporations with a full range of financial
products and

services for investing, lending

and

planning. The bank offers its customers an array of

products such as mutual funds, life

advice on financial
wealth management

and general insurance and has

established a leadership position. The bank is also a strong player in

foreign

exchange

services, personal loans, mortgages and agricultural

loans.
Additionally

the

bank

offers a full suite of

NRI banking

products to

Overseas Indians. On 29th August 2007, Centurion Bank of Punjab merged

with Lord Krishna Bank (LKB), post obtaining all requisite statutory
regulatory

approvals.

This merger has

further

and

strengthened the

geographical reach of the Bank in major towns and cities across the country,
especially in the State of Kerala, in addition to its existing dominance in
the northern part of the country. Centurion Bank of Punjab now
operates on a strong nationwide franchise of 404 branches and 452 ATMs
in 190 locations across the country, supported by employee base of over
53

7,500 employees.In addition to being listed on the major Indian stock

exchanges,
the

Banks

shares are also listed on the

Luxembourg

Stock

Exchange.

2.26 ACHIEVEMENTS
Business
Monitor
survey

TodayGroup
One of India's "Most Innovative
Companies"

Financial ExpressErnst & Young

Best Bank Award in the Private Sector
Award
category

Global
Excellence
Awards
Pacific
Congress:

HR 'Employer Brand of the Year 2007

-2008' Award - First Runner up, & many more
Asia
HRM

Business Today

'Best Bank' Award

Dun & Bradstreet

American
Express Corporate
'Corporate Best Bank' Award
Best Bank Award
2007
The
Bombay
Stock
Exchange
and
Nasscom
'Best Corporate Social Responsibility
Foundation's
Business
for Practice' Award
Social
Responsibility
Awards 2007
Outlook Money & Best Bank Award in the Private sector category.
NDTV Profit
54

The Asian Banker Best Retail Bank in India

Excellence
in
Retail
Financial
Services Awards
Asian Banker

HDFC BANK Managing Director Aditya Puri wins

the Leadership Achievement Award

for India

CHAPTER- 3
55

OBJECTIVE OF THE PROPOSED

STUDY
To find out the customer preferences while opening

Savings A/c.

To study brand image of the bank.

To increase the business of the bank.

To know about product & services offered at HDFC

Bank.

To financial sector is one off the booming & increasing

sector in India.

56

CHAPTER- 4
RESEARCH METHODOLOGY
4.1 Statement of research problem:PROBLEM DEFINATION:
Sales Executives were with good background human being and through
rigorous process of recruitment but still not able to perform up to the
expectation level of company, HR is not able to sort out the problem why the
performance is not coming even after giving the full marketing support. The
communication technique and dealing with the customers is also a problem
to the sales
executives.

4-2 OBJECTIVES OF RESEARCH PROJECT:

RESEARCH OBJECTIVES:

To find out the customer preferences while opening Savings A/c.

To study brand image of the bank.

To increase the business of the bank.

To know about product & services offered at HDFC Bank.

To financial sector is one off the booming & increasing sector in India.

57

4.3 Research Design and Methodology

Primary data source: All the people from different profession were
personally visited and interviewed. They were the main source of Primary
data. The method of collection of primary data was direct personal interview
through a structured questionnaire.
Secondary Data Source: It was collected from internal sources. The
secondary data was collected on the basis of organizational file, official
records,

news

papers,

magazines,

management

books,

preserved

information in the companys database and website of the company.

SAMPLING PLAN:
Since it is not possible to study whole universe, it becomes necessary to
take sample from the universe to know about its characteristics.
Sampling Units: Customers
Sample Technique: Random Sampling.
Research Instrument: Structured Questionnaire.
Contact Method: Personal Interview.

SAMPLE SIZE:
My sample size for this project was 100 respondents. Since it was not
possible to cover the whole universe in the available time period, it was
necessary for me to take a sample size of 100 respondents.

RESEARCH LIMITATIONS:

58

It was not possible to understand thoroughly about the different marketing

aspects of the Financial Consultant within 60 days. As stipend, money was
not given it was difficult to continue the project work. All the work was limited
in some limited areas of Delhi so the findings should not be generalized. The
area of research was Delhi and it was too vast an area to cover within 60
days.

All the findings and conclusions obtained are based on the survey done in
the working area within the time limit. I tried to select the sample
representative of the whole group during my job training. I have collected
data from people linked with different profession at Bangalore.

4.4 Data Analysis

Q 1:What is your Monthly Transaction in your account ?
Monthly transactions

No. of respondents

% (percentage)

5-20 lakhs

28

28%

20-40 lakhs

59

59%

40 lakhs and above

13

13%

Total

100

100%

70%
60%

Chart 1:

50%

05L- 20L

40%

20L - 40L
40L - Above

30%
20%

59

10%
0%
05L- 20L

20L - 40L

40L - Above

Analysis:

59% respondents gave their answer in 20-40 lakhs transactions.

28% respondents gave their answer in 0-20 lakhs transactions.

13% respondents gave their answer in 40 lakhs and above

transactions.

Question 2

Do you have a Saving Account?

Response
Yes
No

No. of respondents
97
3

%
97%
3%

Chart 2:

Analysis: 97% respondents have the saving accounts and only 3% do not
have saving account.
Question 3
In Which Bank?
Bank
Kotak mahindra
HDFC
Co-operative

No. of respondents
3
33
48
60

%
3%
33%
48%

ICICI
Nationalized

5
31

5%
31%

Chart 3

Analysis: 48% have saving account in co-operative, 3% in kotak mahindra,

33% in HDFC, 5% in ICICI, and 31% in nationalized bank .

Question 4

Which Factors do you consider for opening a Savings Account?

Accessibility
Minimum balance
DD/pay order
Free cheque
Debit card
Cash deposit
Cheque pick up
Net banking
Mobile banking
At per cheque
NEFT
RTGS
Total

No. of respondents
10
20
13
10
8
7
2
16
7
3
2
2
100
61

%
10
20
13
10
8
7
2
16
7
3
2
2
100

Chart 4

Analysis:
62

Respondents gave their answer

10% respondents gave their answer in accessibility, 20% Minimum balance,
13 % DD/pay order,10% Free cheque, 8% Debit card, 7% Cash deposit, 2%
Cheque pick up, 16% Net banking, 7% Mobile banking, 3% At per cheque,
2% NEFT, 2% RTGS.

Question 5

Which mode of transaction do you avail of frequently?

Response
Pay order
DD
Cheque
Total

No. of response
12
22
76
100

%
12
22
76
100

Chart 5

Analysis:
12% Response in pay order, 32% like DD, and 76 % costumer want from
cheque mode.

63

Question 6
Which types of transaction do you make ?
Response

No. of respondents

Intercity

33

33

Outside city

15

15

Both

52

52

Total

100

100

Chart 6

Inter city
, 33%
Both, 52%
, 15%

City

Outsid
e

Analysis:
33% account holder transaction intercity, 52 % Both, and 15% outside city.

64

Question 7
Does your bank assist you in case of any problem?
Response

No. of respondents

Yes

90

90

No

10

10

Total

100

100

Chart 7

Analysis:
90% say yes bank will assist you in case of any problem, only 10% say no.

4.5 Summary of Findings

65

The final draft of the questionnaire was prepared on the basis of the
observations from the pilot study. These were then finally filled by 100
customer, for the conclusive study.
Finally the data collected was fed into the data analysis to be analyzed
using statistical techniques.
Types of Primary Data collected:
Socioeconomic Characteristics:
characteristics are sometimes called states of being in that they
represent the type of people. The factors on which we are working are
occupation. Monthly transaction is also an important parameter but it is
difficult to verify. Although the amount of money that business unit earns
in a month is an absolute, not a relative quantity but it is a sensitive topic
in our society and it is difficult to determine.
Attitudes/Opinions:
Through the questionnaire we have tried to get hold of business
preference, inclination and requirement. Attitude is an important notion in
the marketing literature, since it is generally thought that the attitudes are
related to the behavior of businessmen.
Motivation:
Through the questionnaire we have tried to find the hidden need or want of
businessmen and have tried to find if these people can be tapped as the
potential customer for HDFC Bank.
Behavior:
Behavior concerns what subjects have done or are doing. Through the
questionnaire we have tried to find out the behavior of the individuals
regarding the product and their responses. If the responses are favorable
then the person can be said to be our potential customer. The primary data
66

serves as an important tool to measure the behavioral trend of the customer.

It helps in answering some of the vital Questions.
Obtaining the Primary Data:
The

data

collection

was

primarily

done

through

communication.

Communication involves questioning respondents to secure the desired

information, using a data collection instrument called questionnaire. The
questions were in writing and so were the responses.
Versatility:
It is the ability of a technique to collect the information on the many types of
primary data of interest to marketers. It has also been found that some of the
people do not answer truthfully to all the questions especially in the case of
the personal details

CHAPTER- 5
QUESTIONNNAIRE
67

Name of Respondent
_________________________________

Contact No.
_______________________

1. Monthly Transaction?
________________________________________________

2. Do you have saving Account?

(a) Yes

(b)

No

3. If Yes Which bankso ICICI

o HDFC
o Kotak Mahindra Bank
o Nationalized
o Other Banks _________________
o Co-Operative Banks___________________

4. Which Factors do you consider for opening a saving Account

o Accessibility
o Minimum Balance
o DD/ Pay Order
68

o Free Cheque
o Debit Card
o Cash Deposit

5.

Which mode of transaction do you avail frequently?

(a) Cheque

6.

(c) Pay Order

Which type of transaction do you made

(a) Inter city

7.

( b) DD

(b) Intra city

(c) Both

Does your bank assist you in case of any problem

(a) Yes

(b) No

8.. What are the additional Benefits do you expect from a Saving
Account?
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
________________

69

Date___________________
Place__________________

Signature

70

CHAPTER- 6
SCOPE, RELEVANCE AND
LIMITATIONS OF THE PROPOSED
STUDY
6.1 Scope
1.

The time bound period is the major limitation in research

projects.

2.

Due to the financial and time constraints a cluster analysis

of the population so as to get better results was not feasible.

3.

The research conduct in Bangalore city only.

4.

It was difficult to break the ice with the common people

initially. It was a daunting task to convince them to fill in the
personal details of the questionnaire where they have to
mention the monthly income, occupation etc.

5.

To convince the people for a proper interviewing process is

also difficult.
71

6.2 LIMITATIONS
Some of the limitations of the project are listed as below:
1. The time bound period is the major limitation in research projects.
2. Due to the financial and time constraints a cluster analysis of the
population so as to get better results was not feasible.
3. The research conduct in Shimla city only.
4. It was difficult to break the ice with the common people initially. It was
a daunting task to convince them to fill in the personal details of the
questionnaire where they have to mention the monthly income,
occupation etc.
5. To convince the people for a proper interviewing process is also
difficult.
6. Compilation of data on competitor analysis was difficult due to nonavailability of correct information.
7. The figures have been taken as approximations.

72

CHAPTER- 7
SUMMARY AND CONCLUSIONS

7.1Summary of Learning Experience

Almost all the Banks offer similar features and facilities with their Savings
accounts. There are certain reasons for existing customers of Saving
Account of any Bank to shift to another Bank.
The level of service in terms of delivering whatever is promised, fast
response in case of problems, is the most important benefit that the
customers seek, from the Bank they have a Saving Account with.
1. Network reach and visibility of a Bank is a very important criterion for
the customer while opening a Saving Account. We can also conclude
from our analysis that network reach in terms of Branches and ATMs
is directly proportional to the market share in case of Private Players.
2. In case of a new customer, if a bank approaches it first for opening a
Saving Account with them, then there is a good chance for the bank of
getting many future businesses and cross sales from the deal.

73

3. Aggressive Marketing is the key to increasing the market share in this

area, since the market has a lot of potential both in terms of untapped
market .

7.2 Conclusions and Recommendations

1. Contract Sales Executive (CSE) should be trained to explain the

product features and its value added services to make customers
product selection convenient.
2. Contract Sales Executive (CSE) should recommend right product to
the right customer so as to ensure a high degree of satisfaction
among the customer.
3. The bank needs to make people aware about there products and the
basic benefits they can derive out of it. And also the differential
features of its savings account as compared to other banks.70% of
the people did not even know about the concept, benefits and
features of its saving accounts.
4. The bank should also target small business unit for whom
maintenance of the AQB is not a problem as this segment is not much
penetrated.
5. Though the bank offers free doorstep banking once a day this fact is
also not known to many customers or they still do not trust this
service what ever the reason the bank can popularize this service to
gain an edge over nationalized banks and Co-operative Banks.
6. Quality of service has been rated highly important by all demofigureic
factors as a reason for banking with a particular bank, Standard
Chartered needs to improve the services provided to its existing
74

customers before attracting more in the future and use word of mouth
as a promotional tool to increase the sales potential of its savings
account.

75

CHAPTER- 8
REFERENCES
BOOKS:Research Methodology

Evolving Practices in Financial

C.R Kothari
Allen I. Kraut

Management: Responses to a
Changing World of Work
Essentials of Financial Management

Shaun Tyson

MAGZINES
Out Look Money

May 2005

Business World

February 2006

In Touch With Life

February 2006

(in house newsletter by HDFC-SLIC)

WEBSITES
www.hdfcbank.com
www.google.com

76