A

TRANING REPORT

ON
“DIGITALIZATION OF HDFC BANK”
Submitted To

Kurukshetra University, Kurukshetra

In partial fulfillment of the requirement
For the award of degree
Of
BACHELOR OF BUSINESS ADMINISTRATION
SESSION (2017-2020)

Supervised By: Submitted By:

Mr. Ankur Mittal Jasleen Kaur
Manager Univ Roll No-

GURU NANAK INSTITUTE OF MANAGEMENT

MULLANA, AMBALA HARYANA
(Approved by AICTE, Affiliated to Kurukshetra University, Kurukshetra)

1
 ACKNOWLEDGEMENT

I would like to express my deepest appreciation to all those who provided me the possibility
to complete this report. A special gratitude I give to third year project mentor
Ms. Vijaya Nagpal (Faculty of Guru Nanak Institute of Management& Technology), whose
contribution in stimulating suggestions and encourage me and helped me to coordinate my
project especially in writing this report. Furthermore I would also like to acknowledge with
much appreciation the crucial role of Mr. Ankur Mittal Manager of HDFC, who gave the
permission to use all required equipment and the necessary materials to complete the task.

Jasleen Kaur

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 DECLARATION

I, Jasleen Kaur, Roll No-17216, BBA (5th Sem) of the Guru Nanak Institute Mullana,
Ambala hereby declare that the Summer Training report on “Digitalization of HDFC Bank”
is an original work and data provided in the study is authentic to the best of my knowledge.

This report has not been submitted to any other institute for the award of any other degree or
diploma.

(Jasleen Kaur)

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 PREFACE

In compiling this report I have intended to provide a synthesis of theoretical approaches and
methods of implementing them in the world of business. I have tried to discover the
relationship between theoretical and practical type of knowledge. I have tried to bridge the
gap between theoretical assumptions and practical necessities. During the entire course of our
academic study we remain engaged in theoretical learning where the primary objective is
academic success. A concise knowledge of the modern business arena can only be attained
through the pragmatic implementation of hypothetical ideas, which we learn from our
academic activities.

With these objectives, I have made all possible efforts and the necessary investigations to
submit this paper in an enlightened form. The project was a good experience and helped me in
widening my knowledge and sharpening management skill. I have tried my level best to
eliminate errors from the paper. If by any chance errors are there your suggestions & opinions
will be welcomed with open mind & due respect to reader.

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 CONTENTS

Sr no. Title Page No.

Company Certificate

Declaration

Acknowledgment

Preface

1. Introduction 1-20
1.1. Industry profile
1.2. Company profile
1.3. About the Topic
2. Literature review 21-24

3. Objectives of the Study 25-26

4. Research Methodology 27-33

5. Data Analysis and Interpretation 34-47

6. Result & Finding 48-49

7. Suggestion 50-51

8. Limitations 52-53

9. Conclusion 54-55

Bibliography 56-57

Annexure 58-60

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INDUSTRY PROFILE

BANKING INDUSTRY

6
Introduction
Banking in India in the modern sense originated in the last decades of the 18th century.
Among the first banks were the Bank of Hindustan, which was established in 1770 and
liquidated in 1829-32; and the General Bank of India, established in 1786 but failed in 1791.

The largest bank, and the oldest still in existence, is the State Bank of India (S.B.I). It
originated as the Bank of Calcutta in June 1806. In 1809, it was renamed as the Bank of
Bengal. This was one of the three banks funded by a presidency government, the other two
were the Bank of Bombay and the Bank of Madras. The three banks were merged in 1921 to
form the Imperial Bank of India, which upon India's independence, became the State Bank of
India in 1955. For many years the presidency banks had acted as quasi-central banks, as did
their successors, until the Reserve Bank of India was established in 1935, under the Reserve
Bank of India Act, 1934.

In 1960, the State Banks of India was given control of eight state-associated banks under the
State Bank of India (Subsidiary Banks) Act, 1959. These are now called its associate banks.
In 1969 the Indian government nationalised 14 major private banks. In 1980, 6 more private
banks were nationalised. These nationalised banks are the majority of lenders in the Indian
economy. They dominate the banking sector because of their large size and widespread
networks.

7
The Indian banking sector is broadly classified into scheduled banks and non-scheduled
banks. The scheduled banks are those which are included under the 2nd Schedule of the
Reserve Bank of India Act, 1934. The scheduled banks are further classified into:
nationalised banks; State Bank of India and its associates; Regional Rural Banks (RRBs);
foreign banks; and other Indian private sector banks. The term commercial banks refers to
both scheduled and non-scheduled commercial banks which are regulated under the Banking
Regulation Act, 1949.

Generally banking in India is fairly mature in terms of supply, product range and reach-even
though reach in rural India and to the poor still remains a challenge. The government has
developed initiatives to address this through the State Bank of India expanding its branch
network and through the National Bank for Agriculture and Rural Development with
facilities like microfinance.

History

 Ancient India

The Vedas (2000-1400 BCE) are earliest Indian texts to mention the concept of usury. The
word kusidin is translated as usurer. The Sutras (700-100 BCE) and the Jatakas (600-400
BCE) also mention usury. Also, during this period, texts began to condemn usury. Vasishtha
forbade Brahmin and Kshatriya varnas from participating in usury. By the 2nd century CE,
usury seems to have become more acceptable. The Manusmriti considers usury an acceptable
means of acquiring wealth or leading a livelihood. It also considers money lending above a
certain rate, different ceiling rates for different caste, a grave sin.

The Jatakas also mention the existence of loan deeds. These were called rnapatra or rnapanna.
The Dharmashastras also supported the use of loan deeds. Kautilya has also mentioned the
usage of loan deeds. Loans deeds were also called rnalekhaya.

Later during the Mauryan period (321-185 BCE), an instrument called adesha was in use,
which was an order on a banker directing him to pay the sum on the note to a third person,
which corresponds to the definition of a modern bill of exchange. The considerable use of
these instruments have been recorded. In large towns, merchants also gave letters of credit to
one another.

 Medieval era

8
The use of loan deeds continued into the Mughal era and were called dastawez. Two types of
loans deeds have been recorded. The dastawez-e-indultalab was payable on demand and
dastawez-e-miadi was payable after a stipulated time. The use of payment orders by royal
treasuries, called barattes, have been also recorded. There are also records of Indian bankers
using issuing bills of exchange on foreign countries. The evolution of hundis, a type of credit
instrument, also occurred during this period and they continue to be in use today.

 Colonial era

During the period of British rule merchants established the Union Bank of Calcutta in 1869,
first as a private joint stock association, then partnership. Its proprietors were the owners of
the earlier Commercial Bank and the Calcutta Bank, who by mutual consent created Union
Bank to replace these two banks. In 1840 it established an agency at Singapore, and closed
the one at Mirzapore that it had opened in the previous year. Also in 1840 the Bank revealed
that it had been the subject of a fraud by the bank's accountant. Union Bank was incorporated
in 1845 but failed in 1848, having been insolvent for some time and having used new money
from depositors to pay its dividends.

The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock
bank in India, it was not the first though. That honour belongs to the Bank of Upper India,
which was established in 1863, and which survived until 1913, when it failed, with some of
its assets and liabilities being transferred to the Alliance Bank of Simla.

Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The
Comptoird'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in
1862; branches in Madras and Pondicherry, then a French possession, followed. HSBC
established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly
due to the trade of the British Empire, and so became a banking centre.

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in
1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in
Lahore in 1894, which has survived to the present and is now one of the largest banks in
India.

Around the turn of the 20th Century, the Indian economy was passing through a relative
period of stability. Around five decades had elapsed since the Indian rebellion, and the social,

9
industrial and other infrastructure had improved. Indians had established small banks, most of
which served particular ethnic and religious communities.

The presidency banks dominated banking in India but there were also some exchange banks
and a number of Indian joint stock banks. All these banks operated in different segments of
the economy. The exchange banks, mostly owned by Europeans, concentrated on financing
foreign trade. Indian joint stock banks were generally under capitalised and lacked the
experience and maturity to compete with the presidency and exchange banks. This
segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the
times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into
separate and cumbersome compartments."

The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi
movement. The Swadeshi movement inspired local businessmen and political figures to
found banks of and for the Indian community. A number of banks established then have
survived to the present such as The South Indian Bank, Bank of India, Corporation Bank,
Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.

The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South Canara
( South Kanara ) district. Four nationalised banks started in this district and also a leading
private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of
Indian Banking".

During the First World War (1914–1918) through the end of the Second World War (1939–
1945), and two years thereafter until the independence of India were challenging for Indian
banking. The years of the First World War were turbulent, and it took its toll with banks
simply collapsing despite the Indian economy gaining indirect boost due to war-related
economic activities.

Current Period

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The Indian banking sector is broadly classified into scheduled banks and non-scheduled
banks.All banks which are included in the Second Schedule to the Reserve Bank of India Act,
1934 are Scheduled Banks. These banks comprise Scheduled Commercial Banks and
Scheduled Co-operative Banks. Scheduled Co-operative Banks consist of Scheduled State
Co-operative Banks and Scheduled Urban Cooperative Banks.Scheduled Commercial Banks
in India are categorised into five different groups according to their ownership and/or nature
of operation:

 State Bank of India and its Associates

 Nationalised Banks
 Private Sector Banks
 Foreign Banks
 Regional Rural Banks.

In the bank group-wise classification, IDBI Bank Ltd. is included in Nationalised Banks

Adoption of Banking Technology

The IT[clarification needed] revolution has had a great impact on the Indian banking system.
The use of computers has led to the introduction of online banking in India. The use of
computers in the banking sector in India has increased many fold after the economic
liberalisation of 1991 as the country's banking sector has been exposed to the world's market.
Indian banks were finding it difficult to compete with the international banks in terms of
customer service, without the use of information technology.

The RBI set up a number of committees to define and co-ordinate banking technology. These
have included:

 In 1984 was formed the Committee on Mechanisation in the Banking Industry (1984)
whose chairman was Dr. C Rangarajan, Deputy Governor, Reserve Bank of India.
The major recommendations of this committee were introducing MICR technology in
all the banks in the metropolises in India. This provided for the use of standardized
cheque forms and encoders.
 In 1988, the RBI set up the Committee on Computerisation in Banks (1988) headed
by Dr. C Rangarajan. It emphasised that settlement operation must be computerised in

11
 the clearing houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna and
Thiruvananthapuram. It further stated that there should be National Clearing of inter-
city cheques at Kolkata, Mumbai, Delhi, Chennai and MICR should be made
operational. It also focused on computerisation of branches and increasing
connectivity among branches through computers. It also suggested modalities for
implementing on-line banking. The committee submitted its reports in 1989 and
computerisation began from 1993 with the settlement between IBA and bank
employees' associations.
 In 1994, the Committee on Technology Issues relating to Payment systems, Cheque
Clearing and Securities Settlement in the Banking Industry (1994) was set up under
Chairman W S Saraf. It emphasised Electronic Funds Transfer (EFT) system, with the
BANKNET communications network as its carrier. It also said that MICR clearing
should be set up in all branches of all those banks with more than 100 branches.
 In 1995, the Committee for proposing Legislation on Electronic Funds Transfer and
other Electronic Payments (1995) again emphasised EFT system.

Market Share

The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43
foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural
cooperative banks, in addition to cooperative credit institutions. The Indian banking sector’s
assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it
being accounted by the public sector.

Total lending and deposits increased at a compound annual growth rate (CAGR) of 20.7 per
cent and 19.7 per cent, respectively, during FY07-14 and are further poised for growth,
backed by demand for housing and personal finance. Total asset size of banking sector assets
is expected to increase to US$ 28.5 trillion by FY25. Deposits have grown at a CAGR of 13.6
per cent during FY05–15 to an estimated US$ 1.48 trillion in FY15. Deposit growth has been
mainly driven by strong growth in savings amid rising disposable income levels.

Indian banks are increasingly focusing on adopting integrated approach to risk management.
Banks have already embraced the international banking supervision accord of Basel II.
According to RBI, majority of the banks already meet capital requirements of Basel III,

12
which has a deadline of March 31, 2019. Most of the banks have put in place the framework
for asset-liability match, credit and derivatives risk management

Rising incomes are expected to enhance the need for banking services in rural areas and
therefore drive the growth of the sector; programmes like MNREGA have helped in
increasing rural income aided by the recent Jan DhanYojana. The Reserve Bank of India
(RBI) has relaxed its branch licensing policy, thereby allowing banks (which meet certain
financial parameters) to set-up new branches in tier-2 to tier-6 centers, without prior approval
from RBI. It has emphasised the need to focus on spreading the reach of banking services to
the un-banked population of India.

SWOT Analysis of Banking Industry

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 Different Products and Services Offered by Banks

The different products in a bank can be broadly classified into:

14
 Retail Banking.
 Trade Finance.
 Treasury Operations.

Retail Bankingoperations are conducted at the branch level while the wholesale banking
operations, which cover treasury operations, are at the head office or a designated branch.

 Deposits

 Loans, Cash Credit and Overdraft

 Negotiating for Loans and advances

 Remittances

 Book-Keeping (maintaining all accounting records)

 Receiving all kinds of bonds valuable for safe keeping

Trade Finance
 Issuing and confirming of letter of credit.
 Drawing, accepting, discounting, buying, selling, collecting of bills of exchange,
promissory notes, drafts, bill of lading and other securities.

Treasury Operations

 Buying and selling of bullion, Foreign exchange.

 Acquiring, holding, underwriting and dealing in shares, debentures, etc.
 Purchasing and selling of bonds and securities on behalf of constituents.

The banks can also act as an agent of the Government or local authority. They insure,
guarantee, underwrite, participate in managing and carrying out issue of shares, debentures,
etc.

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Apart from the above-mentioned functions of the bank, the bank provides a whole lot of other
services like investment counselling for individuals, short-term funds management and
portfolio management for individuals and companies. It undertakes the inward and outward
remittances with reference to foreign exchange and collection of varied types for the
Government.

Common Banking Terms

 SELF HELP GROUP

Self help group is a small volunteer association of poor people preferably from the same
socio Economic background. They come together for the purpose of solving their common
problems through self help and mutual help. The self help group promotes small saving
among the members. The savings are kept with the Bank. This common fund is in the name
of SHG. Usually the number of members in one SHG doesn’t exceed 20. The NABARD and
NGOs the promoters of this group.

 KISAN CREDIT CARD

Provision timely and adequate credit has one of the major challenges for Banks in India in
dispension of agriculture and rural credit to the farmers in order to achieve the AIM. KCC are
now a new concept in the field of agriculture banking in India. The KCC scheme was started
by the GOI in conciliation with the RBI and NABARD in 1998-99. The eligibility criteria for
KCC is the borrower must be with a good track record of the 2 years would be the prime
customer and a farmer who has the operational land holding certificate from the PATWARI.
The maximum amount of KCC is up to Rs. 10000 and each withdrawal to be paid within 12
months and KCC is valid for 3 years subject to annual renewal. All branches engaged in
agriculture banking could issue KCC. In very special conditions Bank can provide up to Rs.
25000 loan and the interest rate on KCC is 11%.

 KISAN GOLD CARD

This is hassle free term loan card that enable to avail loan for agricultural implements, land
development, repair of farm machinery and consumption need farmers have the choice in
regard to amount, time and purpose. The amount of loan is 5 times the annual form income
with the maximum limit of Rs. 5 Lakhs. For the consumption purpose is should not exceed
20% of the limit.

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  MICROCREDIT OR MICROFINANCE
Micro credit is the extension of very small loans to the unemployed to poor Endeavour and to
others living in poverty who are not considered bankable. These individuals lack collateral
steady employment and variable credit history and therefore cannot meet even the most
minimal qualification to gain excess to traditional credit.
Microcredit is a part of microfinance which is the provision of the wider range of the
financial services to the very poor. Microcredit is the financial innovation which originated in
Bangladesh where it has successfully enabled to extremely impoverish people to engage itself
employment project. The founder of this microcredit is Prof. Mohammad Yunus in mid
1970s. He is also the founder of grami8n bank of Bangladesh with which Mr.Yunus has
received the Noble Peace Price 2006 and to pay respect towards microcredit the united nation
organization has declared year 2005 “The International Year of Microcredit.”

 MUTUAL FUND
A Mutual Fund is the professionally manage firm of collective investments that pools money
from many investors in stock market, bonds, short term, money market instruments and in
other securities. In mutual fund is a fund manager who is also called Portfolio manager trades
the fund underlined Securities. The value of the share of mutual fund is called the net asset
value which is calculated daily wage on a total value divided be a number of shares, issued
and outstanding.

 BULLION MARKET
A market where the trading of precious metals held like: Gold, Silver, Diamond, Platinum
and Crystal.

 STOCK MARKET
A stock market is a private or public market for trading of company, stock and derivatives of
company stock at an agreed price. Both of these are securities listed on stock exchange as
well as those only traded privately.

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  BULL
Bull is an investor who thinks the market a specific security or an industry will raise. Bulls
are the optimistic investors presently predicting good things of the market and bullish is a
habit to purchase that share which is in profit they are responsible to Rose in stock
exchanges.

 BEAR
It is an investor who believes that a particular security or market is headed downward. Bears
attempt to profit from a decline in prices. A Bear is generally pessimistic about the state of
the given market.

 STAG
A Stag is an investor or speculator who subscribes to a new issue with the intention of selling
them soon after allotment to realize for quick profit.

 ADR (AMERICAN DEPOSITORY RECEIPTS)

An ADR represents an ownership in the share on Owner Company trading in US trading in
US financial market. ADR enable US investors to buy share in foreign companies without
undertaking cross border transaction. ADR’s carry prices in US Dollars and can be traded as
share of US based company.

 GDR (GLOBAL DEPOSITORY RECEIPT)

GDR is a bank certificate issued in more than one country for shares in a foreign company.
These shares are held by a foreign branch of an International bank. These shares are trades as
domestic shares but are offered for sale globally through the various bank branches. A GDR
is a very similar to an American Depository Receipt.

 SDR (SPECIAL DRAWING RIGHTS)

This is the depth instrument credit be IMF in 1969 to provide the assistance and loan to their
member countries. The value of the SDR was initially defined as equivalent to 0.8888671
gram of fine gold which was at that time equivalent to 1 US$.

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  MONEY MARKET
Money Market is the global financial market for short term borrowings and lendings. It
provides short term liquid funding for global financial system. In Money Market short term
obligations such as treasury bills, commercial papers and Banker’s acceptance are bought and
sold. The Money Market instruments are bank drafts, time deposits, time deposits, short term
loans, promissory notes, ADR, GDR, Municipal notes, treasury bills and mutual funds.

 CAPITAL MARKET
The Capital Market is the market for securities where companies and government can raise
long term fund. The Capital Market includes the stock market and the Bond Market.

 CALL MONEY
Cal Money Market is the market in which broker and dealers borrow money to satisfy their
credit needs either to finance their own inventory or to cover their customer margin
Accounts.

 ICOR (INCREMENTAL CAPITAL OUTPUT RATIO)

ICOR is the Ratio of investment to growth which equals to one, divided by the marginal
product of Capital. The higher the ICOR indicates lower the productivity of capital and lower
the ICOR reflects high productivity of Capital. ICOR is the topic or instrument by which the
Economic growth rate of company decided.

 DEBIT CARD
Debit Card is also known as gift card. It is a type of plastic money which provides an
alternative payment method for cash withdrawals through automated tailor machine and this
is a prepaid ATM card.

 CREDIT CARD
A Credit Card allows you to borrow money when you purchases. It doesn’t directly debit
from your bank account at the time of purchase instead you are sent a bill every month for the
sum of total of your purchase. In other words this Post Paid Money Card.

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  SMART CARD
A Smart Card or chip card or integrated circuit card is defined as a pocket sized card with
embedded integrated circuit which can process information. This is a card with all personal
information of any individual in financial and Money Market.

 MASTER CARD
Master Card international is a multinational corporation based in purchase throughout the
world. Its principal business is to process payment between bank of merchants and the bank
of purchase that used its master card I.E. Master Card is a service provider company Master
Card international incorporated has been a publicity traded company since 2006 with the
brand name Master Card. All financial institutions in banks are the member of this Master
Card international for service providing except bank of America. Bank of America has its
own service proving company named as VISA international.

 VISA CARD
Visa Card is a type of debit card on Visa network. It has VISA logo and can be accepted to
pay for the things and the money is drawn directly from your account. These are the debit
cards, which are subject to a daily limit, and/or a maximum limit equal to the
current/checking account balance from which it draws funds.

 KYC (KNOW YOUR CUSTOMERS)

KYC is a term commonly used for customer identification process or these are the guidelines
issued by the RBI and SEBI for financial institutions. The intention behind the KYC is to
check the money laundering. For the mutual funds MIN (Mutual Fund Identification
Number) is the tool of KYC. For Demat Account Pan Card is essential and for band account-
 Residential Proof
 Identity Proof
 Referee/Introducer
 Signature Attestation

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  CBS
Core or centralized banking solution is a heart of banking system. This is a process by which
a bank has interconnect their maximum branches through wide area network and only this
system provide a facility of any branch or any time banking.

 FINANCIAL INCLUSION
It is a delivery of banking services at an affordable cost to the vast section of disadvantage or
low income group or this is a facility provided by the banking sector to connect each and
every individual to the financial network and the main component of this financial inclusion
is no-full account and simplification of know your customers.

 BOND
Bond is a debt security in which the authorized issuer owes the holders a debt and s oblique
to repaid the principal with interest at the later date and termed maturity.

 DEBENTURES
It is a long term debit instrument issued by government and large companies to obtained
funds. It is very similar to bonds except the securisation condition is different.

21
COMPANY PROFILE

22
 HDFC BANK

Introduction

HDFC Bank Limited (Housing Development Finance Corporation) is an Indian banking and
financial services company headquartered in Mumbai, Maharashtra. It has about 76,286
employees including 12,680 women and has a presence in Bahrain, Hong Kong and Dubai.
HDFC Bank is the second largest private bank in India as measured by assets. It is the largest
bank in India by market capitalization as of February 2016. It was ranked 58th among
India’s most trusted brands according to Brand Trust Report, 2015.

Total balance sheet size as of December 31, 2015 was Rs. 687,892 crores as against Rs.
534,855 crores as of December 31, 2014. The Bank’s total income for the quarter ended
December 31, 2015 was Rs.18,283.3crores, up from Rs.14,930.7 crores for the quarter ended
December 31, 2014. Net revenues (net interest income plus other income) increased by
20.7% to Rs. 9,940.7 crores for the quarter ended December 31, 2015 as against Rs. 8,234.8
crores for the corresponding quarter of the previous year.

History

In 1994, HDFC Bank Limited was incorporated, with its registered office in Mumbai, India.
Its first corporate office and a full service branch at Sandoz House, Worli was inaugurated by
the then Union Finance Minister, Dr.Manmohan Singh.

It operates in 2,505 cities in India with 4,281 branches which are linked on an online real-
time basis. The Bank has a network of 11,843 ATMs across India.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 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.

23
Capital Structure

As on 31st March, 2015 the authorized share capital of the Bank is Rs. 550 crore. The paid-
up share capital of the Bank as on the said date is Rs501,29,90,634/- ( 2506495317 ) equity
shares of Rs. 2/- each). The HDFC Group holds 21.67 % of the Bank's equity and about 18.87
% of the equity is held by the ADS / GDR Depositories (in respect of the bank's American
Depository Shares (ADS) and Global Depository Receipts (GDR) Issues). 32.57 % of the
equity is held by Foreign Institutional Investors (FIIs) and the Bank has 4,41,457
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 symbol 'HDB' and the Bank's Global
Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No
US40415F2002.

AMALGAMATION OF TIMES BANK & CENTURION BANK OF

PUNJAB WITH HDFC BANK

On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was
formally approved by Reserve Bank of India to complete the statutory and regulatory
approval process. As per the scheme of amalgamation, shareholders of CBoP received 1
share of HDFC Bank for every 29 shares of CBoP.

The amalgamation added significant value to HDFC Bank in terms of increased branch
network, geographic reach, and customer base, and a bigger pool of skilled manpower.

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. This was the first merger of two private banks
in the New Generation Private Sector Banks. As per the scheme of amalgamation approved
by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank
received 1 share of HDFC Bank for every 5.75 shares of Times Bank.

24
 Distribution Network

HDFC Bank is headquartered in Mumbai. As of March 31, 2015, the Bank’s distribution
network was at 4,014 branches in 2,464 cities.All branches are linked on an online real-time
basis. Customers across India are also serviced through multiple delivery channels such as
Phone Banking, Net Banking, Mobile Banking and SMS based 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 centres where the NSE /
BSE have a strong and active member base.

The Bank also has a network of 11,766 ATMs across India. 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.

Products & Services offered

 Debit Cards

Their debit cards may be used with more than 428,000 merchant point-of-sale machines and
over 36,000 ATMs in India and more than 26 million merchant outlets and 1.0 million ATMs
worldwide. They were the first in India to issue international Visa Electron debit cards on a
nationwide basis and currently issue both Visa and MasterCard debit cards.

 Individual Depositary Accounts

They provide depositary accounts to individual retail customers for holding debt and equity
instruments. Securities traded on the Indian exchanges are generally not held through a
broker’s account or in street name. Instead, an individual has his own account with a
depositary participant for the particular exchange. Depositary participants, including us,
provide services through the major depositaries established by the two major stock
exchanges. Depositary participants record ownership details and effectuate transfers in book-
entry form on behalf of the buyers and sellers of securities. It also provide a complete
package of services, including account opening, registration of transfers and other
transactions and information reporting.

25
  Mutual Fund Sales

They offer their retail customers units in most of the large and reputable mutual funds in
India. In some cases they earn front-end commissions for new sales and additional fees in
subsequent years. HDFC distribute mutual fund products primarily through our branches and
their private banking advisors.

 Insurance

As of March 31, 2009, they had arrangements with HDFC Standard Life Insurance Company
and Bajaj Allianz General to distribute their life insurance products and general insurance
products to our customers. Itearn upfront commissions on new premiums collected as well as
some trailing income in subsequent years while the policy is still in force. In fiscal 2010 their
arrangement with Bajaj Allianz General to distribute their general insurance products has
been terminated. They have replaced this with an arrangement with HDFC ERGO General
Insurance Company Limited.

 Precious Metal

They import gold bars for sale to their retail customers through their branch network.

 Investment Advice

They offer their customers a broad range of investment advice, including advice regarding the
purchase of Indian debt, equity shares, and mutual funds. HDFC provide our high net worth
private banking customers with a personal investment advisor who can consult with them on
their individual investment needs.

 Bill Payment Services

They offer their customers utility bill payment services for leading utility companies,
including electricity, telephone, mobile telephone and Internet service providers. Customers
can also review and access their bill details through our direct banking channels. They
believe this is a valuable convenience that we offer our customers. It also offer these services
to customers through multiple distribution channels—ATMs, telephone banking, Internet
banking and mobile telephone banking.

26
  Corporate Salary Accounts

Itoffers Corporate Salary Accounts, which allow employers to make salary payments to a
group of employees with a single transfer. They then transfer the funds into the employees’
individual accounts and offer them preferred services, such as preferential loan rates, and in
some cases lower minimum balance requirements. As of March 31, 2009, these accounts
constituted approximately 45% of our total retail savings accounts by number and
approximately 34% of our retail savings deposits by value.

27
 Listings & shareholdings

Shareholders (as of 31 December-2015) Shareholding

Promoter Group (HDFC) 21.57%

Foreign Institutional Investors (FII) 32.40%

Individual shareholders 8.5%

Bodies Corporate 07.50%

Insurance companies 05.38%

Mutual Funds/UTI 8.65%

NRI/OCB/Others 00.29%

Financial Institutions/Banks 2.75%

ADS/GDRs 18.78%

SWOT Analysis

28
 Strengths
 HDFC bank is the second largest private banking sector in India having 2,201
branches and 7,110 ATM’s
 HDFC bank is located in 1,174 cities in India and has more than 800 locations to
serve customers through Telephone banking
 The bank’s ATM card is compatible with all domestic and international Visa/Master
card, Visa Electron/ Maestro, Plus and American Express. This is one reason for HDFC cards
to be the most preferred card for shopping and online transactions
 HDFC bank has the high degree of customer satisfaction when compared to other
private banks
 The attrition rate in HDFC is low and it is one of the best places to work in private
banking sector
 HDFC has lots of awards and recognition, it has received ‘Best Bank’ award from
various financial rating institutions like Dun and Bradstreet, Financial express, Euromoney
awards for excellence, Finance Asia country awards etc
 HDFC has good financial advisors in terms of guiding customers towards right
investments 

Weakness

 HDFC bank doesn’t have strong presence in Rural areas, where as ICICI bank its
direct competitor is expanding in rural market
 HDFC cannot enjoy first mover advantage in rural areas. Rural people are hard core
loyals in terms of banking services.
 HDFC lacks in aggressive marketing strategies like ICICI

 The bank focuses mostly on high end clients

 Some of the bank’s product categories lack in performance and doesn’t have reach in
the market
 The share prices of HDFC are often fluctuating causing uncertainty for the investors

Opportunities

29
 HDFC bank has better asset quality parameters over government banks, hence the
profit growth is likely to increase
 The companies in large and SME are growing at very fast pace. HDFC has good
reputation in terms of maintaining corporate salary accounts
 HDFC bank has improved it’s bad debts and the recovery of bad debts are high when
compared to government banks
 HDFC has very good opportunities in abroad

 Greater scope for acquisitions and strategic alliances due to strong financial position

Threats
 HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%. Though it is a
slight variation it’s not a good sign for the financial health of the bank
 The non-banking financial companies and new age banks are increasing in India

 The HDFC is not able to expand its market share as ICICI imposes major threat

 The government banks are trying to modernize to compete with private banks

 RBI has opened up to 74% for  foreign banks to invest in Indian market

Vision & Mission Statements of HDFC Bank

30
  Vision

"Become the undisputed market leader in providing housing related finances, to realize the
dream of shelter for all in Sri Lanka"

 Mission
To our shareholders, our mission is to optimize returns.
To our customers, our mission is to provide a caring service by anticipating their
requirements and innovatively satisfying them beyond their expectations.
To our staff, our mission is to identify their multi-faceted talents, develop, motivate,
recognize and reward them towards fulfillment of the institutional and national
housing vision.
To the national economy and the industry regulator, we are the key driver and thought
leader, shaping and financing the national housing policy.
To our natural environment, we enforce sustainable practices across all our activities.

Management Team of HDFC

31
 Technology used by HDFC Bank

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. In terms of core
banking software, the Corporate Banking business is supported by Flexcube, while the Retail
Banking business by Finware, both from i-flex Solutions Ltd. The systems are open,
scaleable and web-enabled.

32
The Bank has prioritised its engagement in technology and the internet as one of its key goals
and has already made significant progress in web-enabling 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.

33
ABOUT THE TOPIC

34
 INNOVATION & BANKING (DIGITALIZATION)

The term “Innovation” means ‘to make something new’

Banks no longer restricted themselves to traditional banking activities but explored newer
avenues to increase business and capture new market.

Banking Innovations

Over the years, the banking sector in India has seen a number of changes. Most of the banks
have begun to take an innovative approach towards banking with the objective of creating
more value for customers. Information technology has given rise to new innovations in the
product designing and their delivery in the banking and finance industries. Technology
offers a chance for banks to build new systems that address a wide range of customer needs
including many that may not be imaginable today.

Financial innovation associated with technological change totally changed the banking
philosophy and that is further tuned by the competition in the banking industry. Challenging
business environment within the banking system create more innovation in the fields of
product, process and market.

35
 “Digitalisation in banking is the major innovation. “

E-Banking

E-Banking is a major innovation in Banking. E-Banking means provision of banking

products and services by banks directly to customers through electronic delivery channels.

Benefits of E-Banking

1. E-Banking gives a better brand image to banks.

2. There is more scope for offering differential services under e-banking.

3. The operational cost of banking would come down.

4. Customers can enjoy banking products at reduced cost.

5. Quicker, easier and continuous access to information is made available to the customers.

6. Facilitates pre-authorized direct withdrawals for marking bill payments.

36
7. It facilitates electronic fund transfer(EFT).

8. Online purchase of goods and services and online payment for the same provided by e-
banking is a boon to the customers.

Debit card

Debit card is a plastic card which provides an alternative payment method to cash when
making purchases. Functionally, it can be called an electronic check, as the funds are
withdrawn directly from either the bank account or from the remaining balance on the card.

Credit Card

A credit card is part of a system of payments named after the small plastic card issued to
users of the system. It is a card entitling its holder to buy goods and services based on the
holder's promise to pay for these goods and services. The issuer of the card grants a line of
credit to the consumer (or the user) from which the user can borrow money for payment to a
merchant or as a cash advance to the user.

37
Automated Teller Machines (ATM)

ATMs are widely used electronic channels in banking. It is operated by plastic card with its
special features. It is a computer-controlled device at which the customers can make
withdrawals, check balance without involving any individuals

ATM can be interior (i.e., located in the branch premises) or exterior (located anywhere
outside the branch premises).

The banks increased their penetration further with the total number of ATMs reaching 0.22
million in 2018. However, there was a decline in growth of ATMs of both Public Sector
Banks as well as Private Banks. Public Sector Banks recorded a growth of 16.7 per cent
during 2017-18 maintaining a share of around 70 per cent in total number of ATMs.

RTGS Real Time Gross Settlement (RTGS)

✓ It stands for ‘Real time gross settlement system

✓ It is a fund transfer mechanism where transfer of money takes place from one bank to
another on a ‘real time’ and on ‘gross basis’.
✓ This is the fastest possible money transfer system through the banking channel.
✓ It is different from EFT and NEFT
✓ It is primarily for large volume transaction
✓ The time taken for effecting funds transfer from one account to another is normally 2
hours

NEFT National Electronic Funds Transfer (NEFT)

It is an Indian system of electronic transfer of money from one bank or bank branch to
another. Under NEFT, individuals, firms and corporates can electronically transfer funds
from any bank branch to any individual, firm or corporate having an account with any other
bank branch in the country participating in the Scheme.

38
The funds under NEFT can be transferred by individuals, firms or corporates maintaining
accounts with a bank branch.

Even individuals not having a bank account can deposit cash at the NEFT-enabled
branches with instructions to transfer funds using NEFT

However, such cash remittances will be restricted to a maximum of Rs.50, 000/- per
transaction. Such walk-in-customers have to furnish full details including complete address,
telephone number, etc. NEFT.

It is a service provided by banks so that people can find out information about their bank
account, pay bills etc. using the Internet. Internet Banking allows you to conduct bank
transactions online, instead of finding a bank and interacting with a teller. In a broad sense, it
is the use of electronic means to transfer funds directly from one account to another, rather
than by cheque or cash.

With the advent of the internet, everything has transformed into its electronic version.
Banking is not far behind. Now when people have access to all kinds of gadgets like laptops,
phones, tablets - banking is just one click away from making financial transactions!

The biggest advantage of internet banking is the convenience. It is much better than
physically going to the bank in many ways:

You can make a transaction from anywhere - you need not actually go to a bank counter -
you have access from home, work or even when you are on a holiday

You can make a transaction at any time - you need not abide by the working hours of the
bank.

You need not even worry about Sundays or other holidays - your account is accessible 24x7.

You can use any device with internet access for your bank activities - phones, laptops,
desktops & tablets - anything.

Banks offer a wide range of services - payment of bills, transfer of money, checking account
transactions via the internet.

39
All the transactions are automatically updated immediately; therefore, you always have
access to your information without submitting any slips or documents. Thus, your account is
always up-to-date without any discrepancies since the process is completely automated.

The best part about internet banking is that one can keep track of all your different accounts
simultaneously. In case one has multiple accounts, he need not go to different branches of
your bank. This saves a lot of time

MOBILE BANKING

Mobile banking refers to the use of a smartphone or other cellular device to perform online
banking tasks while away from your home computer, such as monitoring account balances,
transferring funds between accounts, bill payment and locating an ATM.

It uses software, usually called an app, provided by the financial institution for the purpose.
Mobile banking is usually available on a 24-hour basis. Some financial institutions have
restrictions on which accounts may be accessed through mobile banking, as well as a limit
on the amount that can be transacted.

From the bank's point of view, mobile banking reduces the cost of handling transactions by
reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit
transactions. Mobile banking does not handle transactions involving cash, and a customer
needs to visit an ATM or bank branch for cash withdrawals or deposits.

Advantage of Mobile Banking

1. Mobile Banking uses the network of service provider and it doesn't need internet
developing countries like India where there is no internet connection in the interiors there is
the presence of mobile connectivity.

2. Mobile Banking is available round the clock 24/7/365 and is easy and Continent mode for
many Mobile users in the rural areas.

3. Mobile Banking is said to be more secured and risk free than online/internet Banking.

40
4. With the help of Mobile Banking you can pay your bills, transfer funds, check account
balance, review your recent transaction, block your ATM card etc.
5. Mobile Banking is cost effective and Banks offer this service at very low cost to the
customers.

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Other financial services: -

1. TOTAL BRANCH AUTOMATION

✓ Speed up bank transactions and less error

✓ More customer friendly and flexible

✓ Towards paperless transactions

2. ANY BRANCH BANKING

It is a facility for customers to operate their account from any of the same banks network
branch

Facilities available:

Cash withdrawal & Cash deposits

Facility to issue multi- city cheques

DEMAT SERVICES
It offers secure and convenient way to keep track your securities and investment over
a period without the hassle of handling physical documents
It provides facility of online trading

MICROFINANCE

It refers to a movement that envisions a world in which low income households have
permanent access to a range of fin services & credit

DIGITALISATION IN HDFC BANK

42
 Innovation is now embedded in the DNA of HDFC Bank Employees are encouraged
across functions to continuously come up with new ideas and act as digital evangelists.
Innovation in the Bank has been driven by digitalization, the building block for which
was laid two decades ago by investing in technology. Digitization has been a theme for
the Bank in the last two years and it gained substantial momentum in the year under
review. The Bank has a Digital Innovation team, perhaps the only such group in the
Indian banking context, to scout for and experiment with technology both contemporary
and even futuristic.

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.

Some of the major digital innovations introduced this year are:

INNOVATIONS IN RETAIL BUSINESS

PayZapp with Smart Buy: A comprehensive, convenient and secure payment solution
which allows customers to link their cards once and then pay through one click. Smart Buy
43
within PayZapp brings the best deals and discounts offered by merchant partners exclusively
for HDFC Bank customers. PayZapp offers the unique combination of the convenience of 1-
click payments and security. PayZapp for business allows merchants to bill their customers
and receive payments instantly over the mobile, thereby making it easier for them to collect
cash remotely and expand

1) second Personal Loan: A pre-approved instant loan on Net Banking which is offered
to select customers and is disbursed within 10 seconds of applying.

2) Zip Drive: An instant auto loan approval, which allows customers to generate an
online approval with reference number, walk into a dealership and drive out with the
car of their choice. This approval, valid for 30 days, enables the dealer to request
HDFC Bank for the already pre-approved loan sanctioned to the customer.

3) Virtual Relationship Manager: Offered to High Net Worth customers by invitation,

this is a 24*7 access to a relationship manager through a safe and secure video
interface on the mobile banking app.

4) Chillr: The Bank’s partner app, which allows customers to send and receive money
using phone book contacts. The app also allows customers to recharge mobiles, DTH,
data cards and make merchant payments.

44
 5) Design Your Own Loan Against Securities (LAS) : This combines the power of a
loan and a bank account. LAS can be availed against securities ranging from equity to
mutual funds to Kisan Vikas Patra. What’s more, customers can design the loan on
the basis of these securities.
6) Loans on ATMs: HDFC Bank offers 10 second personal loans on ATMs. Various
consumer loans and top-up of existing loans to customers through ATMs will also be
made available in the future.
7) Missed Called Recharge: A simple and innovative way of recharging pre-paid
mobile phones. It requires one-time activation of

the service. The mobile number gets recharged for

the selected amount, every time the customer
gives a missed call to a particular number.

6) Watch Banking: Bank has launched a new app for the Apple Watch. With the new app,
HDFC Bank becomes the first bank in the country to foray into watch banking. With the
launch of wearable devices and potential demand for wearable devices in

45
 – a wearable device – to their current portfolio of devices. A
banking experience on a personalized wearable device would take
the

consumer’s interaction with the bank to a whole new level.

HDFC Bank is starting with the Apple Watch and aims to provide
banking services through all wearable devices across platforms like
iOS and Android Wear.

Innovations in Wholesale Business

❖ Trade on Net and E Net on Mobile for corporate customers:

For cash management, trade finance, treasury and supply chain services, dynamic digital
platforms like ‘Enet’ and ‘Trade on Net’ offer value additions at every stage of the financial
value chain. With Trade Finance Mobile, the services are now accessible anytime,
anywhere, allowing customers to authorize transactions on-the-go with OTP based security.

SERVICE QUALITY INITIATIVES: -

A regular process of reviewing the service levels and capturing feedback from
customers is undertaken for continuous improvement in product, processes and
service levels.

This has gained even more criticality as the customer can now access the Bank’s
services across traditional touch points like branches, ATMs as well as the digital
ones like the Internet and Mobile.

The Bank has therefore augmented the training and skill development mechanism
to empower and equip employees to deliver improved quality of Customer
Service, as well as put in place a more stringent grievance monitoring and
redressal mechanism across different delivery channels

46
. The effectiveness of these measures is reviewed periodically at different levels including
the Board of Directors. All these initiatives have helped in consistent reduction in total
number of customer complaints. It is also a testimony to the Bank’s strong and objective
review mechanism

47
LITERATURE REVIEW

LITERATURE REVIEW

Sharma M. (2012) defines consumer preferences as the subjective (individual) tastes,

as measured by utility, of various bundles of goods. They permit the consumer to rank
these bundles of goods according to the levels of utility they give the consumer. Note
that preferences are independent of income and prices. Ability to purchase goods does

48
not determine a consumer's likes or dislikes. This is used primarily to mean an option
that has the greatest anticipated value among a number of options.

Customer preference refers to how customers select goods and services in relation to
factors like taste, preference and individual choices. Factors such as the consumer's
income and price of the goods do not influence the customer's preferred products or
services. Mishra (2007) highlighted that the rapid growth of retailing in recent years
has necessitated the upcoming many new firms to benchmark. Retail firms are
concerned about the available resources and their optimum utilization with respect to
consumers’ need and preference.

Jack and Rose, (2012) opined that it would be difficult and almost impossible to
create quantitative variables to describe the overall appearances of the main characters
combining varying views (e.g., price, taste, quality, hygiene etc.) as well as the
dynamic design, colours, and sounds of the machine in that vending solution, which
may have a significant impact on consumers' preferences.

Sinha P.K, Banerjee A and Uniyal D.P. (2012) studied store choice behaviour of
shoppers in the context of the changing retailing environment. They have tried to
identify major drivers behind choice of stores for various shopping needs as exhibited
by a typical Indian consumer. Their study revealed that convenience and merchandise
are the primary reasons behind choosing a store.

Seiders and Tigert (2012) compared supercenter shoppers with traditional

supermarket shoppers in his study. Supercenter shoppers identified low prices and
range of product assortment as the primary reasons for their format choice. In
contrast, traditional supermarket shoppers placed more importance on location and
product quality.

White and Schlosser (2005) found that effect of a large assortment was found to be
dependent on the familiarity of the purchaser with the product group and their attitude
towards risk. However, this study also found that a wide variety did not always result
in reduced purchasing. Where product choices were described in terms of their

49
experiential attributes and not merely physical characteristics then large assortments
were more likely to result in purchases (Diehl, 2005). Herrmann and Heitmann (2006)
found that large assortments may prevent a purchasing decision. The process
consumers use to form preferences depends on their level of involvement in the
purchase decision and their need for cognition, as well as the capability of their
memory (Alba et al, 1992). Certain consumers may be more concerned with the
specific attributes of their choice object/s; others may focus more on how it makes
them feel or its affect (Powell Mantel and Kerdes, 1999).

Shendge, (2013) states that Preference (or "taste") is a concept, used in the social
sciences, particularly economics. It assumes a real or imagined "choice" between
alternatives and the possibility of rank ordering of these alternatives, based on
happiness, satisfaction, gratification, enjoyment, utility they provide. More generally,
it can be seen as a source of motivation. In cognitive sciences, individual preferences

enable choice of objectives/goals. Virmani R. T., (2011) stated the reasons for
preference of the brands ranged from quality to availability. But it was quality that
was ranked as the No. 1 parameter for brand preference. Most of the consumers
reported that they do get carried away by advertisements sometimes but in the end it
is the quality of the product that is a decisive factor for purchase. Sanjeev Verma
(2007) studied consumer preferences for retail store selection in Mumbai. The study
was undertaken to understand the factors affecting consumer preferences for retail
store selection and developing marketing strategies towards meeting the needs and
wants of consumers. This study examines the linkage between consumer preferences
and the importance of some salient store attributes.

(Singh and Agarwal, 2013), Verma and Khandelwal, 2011; Brand and Leonard,
2001), store attributes (Bianchi, 2009), AHP (Saaty, 1980; Subbaiah, 2011), retailer
selection (Liisa 1990; Mitchell and Kiral 1998; Arora, 1999; Franklin, 2001; Liu -
Hai, 2005; Philippidis and Hubbard, 2003; Tzeng et al., 2002). Retailer selection
decisions are complicated by the fact that various criteria must be considered in
decisions making process. Studies by (Goffin, Szwejczewski and New, 1997; Howe,
1998; Dawson, 2000) were focused on groceries and nutrition products. Attitudes

50
cannot be observed directly, they are mental positions that marketers must try to infer
through research measures (Wilkie, 1994: 83). Based on the consumers’ preference,
the consumer can score the relative preference level between two attributes from 1 to
9, where 1 is nominally preferred and 9 is extremely preferred (Tseng and Lin, 2005,
201).

Pan and Zinkhan (2013) studied the consumer store patronage and store choice in
the retailing literature. These studies suggest that several attributes affect consumer’s
preferences and expectations of retail stores, such assortment, service, product
quality, store atmosphere, store location, price level, checkout speed, hours of
operation, friendliness of salespeople, and parking facilities. When choice is
unconstrained consumers will enact their purchase preferences and buy only their
preferred products (East, 1990).

Clarke et al (2014) concluded that purchase behaviour is not always a demonstration

of consumers’ actual preferences, and the most frequently purchased good or service
may not actually be the preferred choice. Economic studies traditionally view
consumer preferences as both fixed and external to the market. As such they are not
considered to directly influence the structure of the market. Carpenter and Nakamoto
(1994) suggest that consumer preferences for attributes evolves with consumer
experience. Arnould et al (2004) conclude that preference formation is a dynamic
process that results from comparing new experiences and opportunities in the market
with previous ones.

Varun Jain (2014) concluded that the shoppers in India prefer the local kirana stores
over malls. The shoppers love to hangout and shop from their local traditional stores
because of the familiarity with ambiance, ease of access, emotional attachment, early
opening and late closing times etc., which suits the local residents.

Leszczyc, Sinha and Timmermans, (2014) formulated and tested a model of store
choice dynamics to measure the effects of consumer demographics on consumer

51
grocery store choice and switching behaviour. A dynamic hazard model was
estimated to obtain an understanding of the components influencing consumer
purchase timing, store choice, and the competitive dynamics of retail competition.
The hazard model was combined with an internal market structure analysis using a
generalized factor analytic structure.

Baltas and Papastathopoulou, (2015) studied the Greek grocery customers

concluded that product quality and product features were considered the most
important product choice criteria. Gomez et al. stated that quality is seen as "a
satisfaction-maintaining factor in the supermarket sector" in that improvements in
quality have a small positive impact on satisfaction while reductions in quality of the
same magnitude have a significantly greater chance of reducing satisfaction.

Maruyama and Trung (2015) in their study in Vietnam on the factors which
influence decision-making by consumers when selecting traditional bazaars vs
supermarkets revealed that freshness, price and convenience were found to be
important in shaping the choice by consumers for traditional outlets for fresh food,
while price played a key role in selecting shopping outlets for processed food and
drinks and non-food products.

Hutcheson and Moutinho (2015) found that the quality of fresh and packaged
produce, low prices, length of queues, friendliness of staff and convenient location
were all considered important when choosing a preferred supermarket and that quality
of staff and product and prices heavily influenced levels of satisfaction with store
choice. When shopping then, a customer is likely to refer to only a limited number of
store attributes before making a choice For grocery purchases the two most
significant factors influencing store choice have been found to be location and price.

Spiller Bolten and Kennerknecht (2016) identified service and product quality as
main determinant of customer satisfaction. They propose that customer consider
freshness of fruits and vegetables as the quality of whole assortment. Study by Kim et
al., (2012) concluded that the retailing scenario has changed significantly during the

52
last two decades. The retailing industry in the world has converted from the domestic
market-based traditional market format of the past to large scaled franchising and
establishment of brand names.

Grocery industry is strongly driven by price competitiveness (Taylor, 2016).

‘‘Credit’’ is a predictor of grocery shopping expenditures spent out of the community
and consumers spending a medium proportion of their grocery expenditures out of a
locality had the highest overall shopping expenditures in all categories (Sullivan and
Savitt, 1997). Product selection, assortment and courtesy of personnel are also very
important in determining format choice and cleanliness is the most important attribute
regardless of the format of grocery found that grocery shoppers consider quality to be
most important, followed by price, locality, range of products and parking. Fox et al.
concluded that shopping and spending vary much more across than within formats,
and expenditures respond more to varying levels of assortment and promotion than
price, although price sensitivity was most evident at grocers.

Yang (2016) concluded that spatial separation distance best explained respondents’
shopping destination choice behaviour, followed by store selection criteria. A study in
Vietnam on the factors which influence decision-making by consumers when
selecting traditional bazaars vs supermarkets revealed that freshness, price and
convenience are important in shaping the choice by consumers for traditional outlets
for fresh food, while price played a key role in selecting shopping outlets for
processed food and drinks and non-food products concluded that grocery shopping
patterns vary with culture.

53
 RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY

54
Research methodology is the process to collect the information and data for the purpose of
making business decisions. The methodology may include publication interviews, research,
surveys and other research techniques.

The method of training was on the job training and I was given the field work. I acted as an
employee and the basic method opted by me was to solve all problems related to Digital
Banking and aware them about the Digitalization.

I also interviewed people belonging to different age groups (youth, married with small
children, married with grown up children and old ones) and also the house wives.

The questionnaire was filled by 100 people where group of different people i.e. age, type of
account, No. of transactions were considered.

Research was carried out at HDFC Bank ltd. to find out the Impact of Digitalization.

Objective of the study

 To identify the awareness and usage of Digital-Banking.

 To study the impact of digitalization.
 To know how much banking services has been improved.
 To study the satisfaction level of respondents.

Research design
Research design serves as a bridge between what has been established(the research
objectives)and how to accomplish these objectives. In fact, the research design is the
conceptual structure within which research is conducted; it constitutes the blueprint for the
collection, measurement and analysis of data. More explicitly, the design decisions happen
to be in respect of:

55
  What is the study about?

 Why is the study being made?

 Where will the study be carried out?

 What type of data is required?

 Where can be the required data found?

 What period of time will the study include?

 What will be the sample design?

 What techniques of data collection will be used?

 How will the data be analyzed?

 In what style will the report be prepared?

The function of research design is to provide for the collection of relevant evidence with
minimal expenditure of effort, time and money. But how all these can be achieved depends
mainly on the research purpose.

Research type
In this report I have used Descriptive research techniques. Descriptive research includes
surveys and facts -Findings enquiries of different kinds. The main purpose of descriptive
research is description of the state of affairs as it exists at present. The main characteristic of
this method is that the researcher has no control over the variables.

Sampling Design:
For my survey I have used Convenience sampling techniques.

Convenience sampling is a non-profitability sampling technique where subjects are selected

because of their convenient accessibility and proximity to the researcher.

SAMPLE SIZE- Sample of 100 people was taken in order to conduct the research.

UNIVERSE- In accordance to the specified research universe is Barara; HDFC Bank

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Sources of Data Collection:

PRIMARY DATA is the data which has been collected through personal contact.

✓ Through Questionnaire - questionnaire is a written set of questions, the answers to

which are recorded by the respondents.

✓ Through Personal Interactions – In personal Interaction an interviewer as questions

in a face to face contact to another person.

SECONDARY DATA is the data which are available in the form of facts and figures. The
sources of secondary data are:

Websites
Magazines
Articles

Data Collection Tools:

For my survey I have used Pie Charts and Graphs.

Methods of Data Collection;

For my survey I have collected data through Questionnaire.

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DATA ANALYSIS

&

INTERPRETATION

DATA ANALYSIS

58
 1. Age

Response No of Respondents Respondents in %

18-30 62 62
30-50 37 37
>50 1 1
Total 100 100

1%

37%
18-30
30-50
>50

62%

Source : Primary Data

Interpretation:

As per the research conducted it is concluded that 62% of the respondents are between the
age of 18-30 ,37% are between 30 to 50 and only 1% is above 50.

Q2. What Type of Account do you have in HDFC bank?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Savings Account 65 65

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 Current Account 28 28
Salary Account 5 5
Other 2 2
TOTAL 100 100

Table No-1

2%
5%

28% Savings Account

Current Account
Salary Account
Other

65%

Figure No-1

INTERPRETATION: -

Out of 100 respondents that I have taken for my survey 65% respondents have savings
account, 28% have current account, 5% have salary account and 2% respondents have other
account which include NRI and fixed-deposit account in bank. It means that the bank has a
very good amount of savings account customers as compare to other account.

Q3. Since how long you are having account in HDFC bank?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
0 - 1 years 16 16
1 - 2 years 19 19
2 - 3 years 28 28
3 years & above 37 60 37
TOTAL 100 100
 Table No-2

16%

37%
0 - 1 years
1 - 2 years
19% 2 - 3 years
3 years & above

28%

Figure No-2

Interpretations:

Out of 100 respondents 33% have their account in HDFC Bank from the last 3 years and more.

Q4. Do you use Digital Banking services of HDFC Bank?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Yes 95 95
No 5 5
Total 100 100

Table No-4

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 5%

Yes
No

95%

Figure No-4

Interpretations:

Out of the 100 respondents 95% of them use digital banking and 5% does not prefer Digital
Banking Services.

Q.5 What are the reasons for choosing our Digital banking Services?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Convenience 20 20

To save time 30 30

24 hours access 28 28

Security Reasons 22 22

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 Total 100 100

Table No-5

22% 20%

Convenience
To save time
24 hours access
Security Reasons

28% 30%

Figure No-5

Interpretations:

Out of 100 respondents 20% uses digital banking for convenience ,30% uses to save time
and 28% use due to 24 hours access.

Q6. Which Digital banking services do you use at HDFC Bank?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Internet Banking 30 30
Mobile Banking 22 22
Instant Alerts/SMS Query 18 18

ATM 30 30

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 Total 100 100

Table No-6

30% 30%

Internet Banking
Mobile Banking
Instant Alerts/SMS Query
ATM

18%
22%

Figure No-6

Interpretations:

Out of 100 respondents 30% of them use Internet Banking ,22% use Mobile banking,18% use
Instant alert/SMS Query, and 30% of respondents use ATM service

Q7. For what purpose you use Digital Banking Service at HDFC bank?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Money transfer 30 30
Bill Pay 15 15
Balance details 25 25

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 Recharge 30 30
Total 100 100

Table No-7

30% 30%

Money transfer
Bill Pay
Balance details
Recharge

15%
25%

Figure No-7

Interpretations:

Out of 100 respondents30% use digital banking services for Money Transfer, 15% use for
Bill Pay, 25% use to get balance details, and 30% use for Recharge.

Q8. Are you aware about HDFC bank Digital initiatives i.e. Go Digital?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Yes 45 45
No 55 55
Total 100 100

Table No-8

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 45%
Yes
No
55%

Figure No-8

Interpretations:

As shown in above pie Chart 45% of respondents out of 100 are aware about HDFC bank Go
Digital Initiative while 55% of them are not aware.

Q9. Which Digital Initiative of HDFC you know about?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
PayZaap 20 20

Chiller 30 30

Digital Wallet 40 40

Watch banking 10 10
Total 100 100

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 Table No-9

10%
20%

PayZaap
Chiller
Digital Wallet
Watch banking
40%

30%

Figure No-9

INTERPRETATION:

Out of 100 respondents that I have taken for my survey approximately those customers 20%
knows about PayZaap, 30% Know about Chillr,40% Know about Digital Wallet 10% Know
about Watch banking.

Q10. Do you use HDFC bank Go Digital services?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Yes 40 40
No 60 60
Total 100 100

Table No-10

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 40%

Yes
No

60%

Figure No-10

Interpretations:

Out of 100 respondents 40% of them use HDFC Bank Go Digital Banking Services and 60%
do not use it.

Q11. Do you think HDFC bank Banking services has improved through Digitalization?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Yes 95 95
No 5 5
Total 100 100

Table No-11

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 5%

Yes
No

95%

Figure No-11

Interpretations:

Out of 100 respondents 95% think that digitalization improved the banking services of
HDFC Bank and 5% of the respondents do not think that digitalization has improved the
Banking services.

Q12. Please rate how much Digitalization has improved the Banking Services?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
5 stars 14 14

4 stars 68 68

3 stars 18 18

2 stars 0 0
1 stars 0 0
Total 100 100

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 Table No-12

14%
18%

5 stars
4 stars
3 stars
2 stars
1 stars

68%

Figure No-12

INTERPRETATION:

Out of 100 respondents 14% of them rate 5 stars to the digital improvement in the banking
services,68% rate 4 stars, and 18% rate 3 stars.

Q13. What is level of satisfaction with HDFC Bank digital service?

RESPONSES RESPONDENTS Respondents

(In Number) (In %)
Fully satisfied 33 33

Satisfied 65 65

Somewhat Satisfied 2 2
Not satisfied 0 0
Total 100 100

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 Table No-13

2%

33%

Fully satisfied
Satisfied
Somewhat Satisfied
Not satisfied

65%

Figure No-13

Interpretations:

Satisfaction level is more important for the direct banking channel of bank. In the above
graph we can see that 65% are satisfied with HDFC Bank Digital Services, 33% Customers
are fully Satisfied and only 2% are somewhat satisfied. It indicates that HDFC bank
customers have high satisfaction level from the services they get.

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 RESULTS AND FINDINGS

RESULTS AND FINDINGS

The following are the major findings of the study:

 In our study we find that 100% respondents are aware with the ATM Facility and
around 75% of them use Internet Banking, 60%use mobile banking but the awareness
of Insta alerts is only 24%.
 Most of Customers believe that Digital Banking is more convenient way for Banking
and most of use Digital Banking in order to save time and also as it has 24 hours
access.
 Customers uses digital banking services at HDFC bank for money transfer ,to pay
bill, for recharge, online shopping. HDFC provides very quick Services to its
Customers.
 Most of the respondents who are not using Go Digital Initiatives of the bank, it is
because they are not much aware about the initiatives of the bank.

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 The customers are using the digital banking services for few purpose it means the use
of digital banking channel is limited for few transactions.
 Most of respondent who are using the digital banking services are satisfied with the
services of the bank for the particular digital banking Service.
 This responses of respondents indicates that digitalization has a good and positive
impact on the banking services.
 According to the response of the respondents it shows that digitalization improved
the banking services very much for the customers.

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 SUGGESTION

SUGGESTION

The following are the list of recommendations which are suggested by the researcher but they
are not conclusive.

 Even though the bank is progressing and implementing new methods towards the
adoption of digital banking, there were a few suggestions which were proposed.

 Just like the way there is an automated passbook update machine, an automatic fixed
deposit receipt issue machine can be kept as well.

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  Where the customer will insert their existing receipts and then enter the time for
which they want to renew it. Accordingly, a new fee receipt will be generated and the
existing one will be destroyed immediately.

 For cheque deposit, a machine can be kept where the cheque can be directly
deposited.

 An automatic demand draft machine can be kept, where the customer can just feed its
account number, amount and name in favour of demand draft, the draft will be
automatically printed and can be used.

 Bank can introduce a cheque book request machine wherein customers who are not
able to punch their cheque books by methods introduced by bank can pinch it.

LIMITATIONS OF THE STUDY

However the researcher has tried her best in collecting the relevant information for research
report, yet there have been some problems faced by the researcher. The prime difficulties
which researcher has faced in collection of information are discussed below:

Due to security reasons and the banking policies, some of the sensitive data was not able to
be extracted.

 Because of Bank Policies I have to submit my original Research i.e. original

Questionnaire.

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 Backend data was inaccessible for the project work due to bank’s terms and

conditions.

 This study is limited only to the customer of HDFC bank, Barara only.

 The responses of the customer may be biased

 Sample Size is Limited to 100.

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 CONCLUSION

CONCLUSION

The project speaks about the study of all departments which are present in the specific
branch of the bank. Learn the processes that take place in each departments.

During the first half of the internship, the project undergoes the study of all the departments
individually by working under every department dealing with real time customers.

The final aim of the project is to study how the adoption of digitalization has affected the
financial status of the bank. It is also crucial to know the profits and the losses the bank
undergoes while adopting this methods.

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During this first half of the project, while studying about the departments, it was also studied
how digitalization was adopted in each department and how it has benefited both, the
customers and the bank officials.

A survey was made to study how digitalization has helped branch. Customers not using the
digital banking were also convinced to start using the same.

HDFC bank was the first bank in the banking sector to adopt digitalization and has won an
award for the same.

Through digital banking, banking is now available to the customers on the tip of their
fingers, by providing the facility of banking over mobile phones. Even with a basic phone
without internet access, a customer can bank using SMS and Missed Call Banking. Through
mobility, the bank is delivering a greater flexibility to the customers.

Hence, now the mobile platform today accounts for the largest share that is 40% of total
value transacted over mobile phones in the country.

The bank’s website acts as a 24x7 virtual branch. Powered with Search, Select and Buy
features, the site receives 13 million unique visitors a month, making it one of the most
visited financial

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 BIBLIOGRAPHY

BIBLIOGRAPHY

Books

1. Kothari C R(2004), “Research Methodology-Methods & Techniques”, New Delhi: New

Age International (P) Ltd.,PP-185-186
2. Jain T.R. &Aggarwal S.C. (2004), “Statistics for MBA”, VK publication, New
Delhi,PP -1-3 Part b, PP-131-134.
3. Hair Joseph f. & Robert P. Bush (2005), “Marketing Research”, New Delhi: Kalyan
Publishers, PP-115-138.

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4. Etzel J. Michael, Walker J. Bruce, Stanton J. William &Pandit Ajay
(2008),“Marketing Concepts & Cases”, 13th Edition, Tata McGraw Hill Publishing Co.
Ltd. New Delhi, PP- 418-430.
5. Beri G.C.(2008),“Marketing Research”, New Delhi: Publishing House, PP- 67-70.
6. Kotler Phillip & Armstrong Gary (2008),“Principles of Marketing”, 12th Edition,
Prentice hall of India Pvt. Ltd., New Delhi, PP- 493-505.
7. Sharma D.D, “Marketing Research”,Himalaya Publishing House New Delhi, PP 68-78
Journals & Magazine

8. SurajCommuri, Journal of Marketing, “Building consumer brand relationship: (may 2008),

PP-86-111
9. Penghuang, Nicholas H.luire, Journal of the Marketing “Implications of loyalty programs
membership and services experiences for customer retention and value” (march2009)
Vol.28, 95-108.
10. Dr.k.Shivkumar, “Indian Journal of Marketing”,( January 2004) PP-35
11. Christian Homburg, Nicole Koschate& Wayne D. Hoyer”, Journal of Marketing, “Do
satisfied customer really pay more? A study of the relationship between customer
satisfaction and willingness to pay” (April 2005) Vol.69, 84-95
12. Chandrashekaran, Murali, Kristin Rotte, Stephen S.Tax and Rajdeep Grewa, Journal of
Marketing,“Satisfaction strength and customer loyalty”, 2007, Vol.44, 153-163
13. Itamarsimonson, Journal of Marketing, “determinants of consumer purchasebehavior and
loyalty”(January 2005);Vol.71, 19-35
14. Miss m. hemameena, Dr.S.bhanumathy, Indian Journal of Marketing;“Brand
Experience: What Is It? How Is It Measured? Does Is Affect Loyalty?”
(June2006),Vol.73, pp-52-68.
15. Dr. K. Shiv Kumar, Indian Journal of Marketing,( January 2004);pp-35
16. Lilly.JIndian, Journal of Marketing, “Managing what consumers learn from experience” ,
(April 2010), Vol.53, 1-20

Websites

17. Onlineavailablewww.esurveyspro.com/customer-statisfaction-surveys.asinformation about

questionnaire.
18. Online available http://www.dabur.com/default.aspx
19. Online available http://www.dabur.com/nepa

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20. Online available www.dabur.com/About Dabur-Company Details
21. Onlineavailablewww.google.co.in/#q=dabur&hl=en&prmd=imvnsuz&source=univ&tbm=nws&
tbo=u&sa=X&ei=NG1fUJi1OYbprQfBjo

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 ANNEXURE

Questionnaire

Dear Sir\Madam

You are requested to fill in the below mentioned questions which I am letting filled for
my academic purpose. I assure you that the details provided by you will be used
confidentially only for academic purpose and not for any other malicious acts.

Respondents Profile

82
Name : ___________________________________

Age : ___________________________________

Place : ___________________________________

Occupation : ___________________________________

Q1. Age

a. 18-30
b. 30-50
c. >50

Q2. What Type of Account do you have in HDFC bank?

 Savings Account
 Current Account
 Salary Account
 Other

Q3. Since how long you are having account in HDFC bank?

 0 - 1 years
 1 - 2 years
 2 - 3 years
 3 years & above

Q4. Do you use Digital Banking services of HDFC Bank?

 Yes
 No

Q.5 What are the reasons for choosing our Digital banking Services?

 Convenience
 To save time
 24 hours access

83
  Security Reasons

Q6. Which Digital banking services do you use at HDFC Bank?

 Internet Banking
 Mobile Banking
 Instant Alerts/SMS Query
 ATM

Q7. For what purpose you use Digital Banking Service at HDFC bank?

 Money transfer
 Bill Pay
 Balance details
 Recharge

Q8. Are you aware about HDFC bank Digital initiatives i.e. Go Digital?

 Yes
 No

Q9. Which Digital Initiative of HDFC you know about?

 PayZaap
 Chiller
 Digital Wallet
 Watch banking

Q10. Which Digital Initiative of HDFC you know about?

 PayZaap
 Chiller
 Digital Wallet
 Watch banking
 Q10. Do you use HDFC bank Go Digital services?
 Yes
 No

Q11. Do you think HDFC bank Banking services has improved through Digitalization?

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  Yes
 No

Q12. Please rate how much Digitalization has improved the Banking Services?

 5 stars
 4 stars
 3 stars
 2 stars
 1 stars

Q13. What is level of satisfaction with HDFC Bank digital service?

 Fully satisfied
 Satisfied
 Somewhat Satisfied
 Not satisfied

1.

85