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Chapter-1
INTRODUCTION OF RETAIL BANKING
The Project report is prepared on Retail Banking at HDFC Bank. It is on a research to find out
whether people of Nagpur city prefer to deal with private sector banks or nationalized banks. It is
also to find out the reasons why they deal with their bank and the most frequently services by
them.
This was basically to find out for what reason they deal with particular bank and to know their
level of satisfaction with the services of their bank.
I have collected the research by collecting the primary data. This research was conducted with the
employees of private and government sector, businessman, professionals and students in equal
numbers.
This report gives a brief idea about the banking industry and the tough competition faced by the
banks. Secondly it gives an overview of the company, its history, its products, its various
marketing strategy and much more.
Then the main part of the project comes wherein the research and the analysis is included.
Stratified random sampling was adopted where the people of various occupations were selected at
random from different part of the city. The sampling size selected was 50.
Data analysis was done as per the questions through various techniques as per requirement. Finally
findings and the data collected concluded that the most preferred bank was HDFC Bank, and the
most people were highly satisfied with the services of HDFC Bank where ATM was the most
frequently used services. It was found that for what reason private and government employees,
students, professionals and businessman deal with the bank and how frequently they visit the bank.
Through this research the company can know the choice of different occupational groups and the
research for how satisfied they are with the bank they deal with. They can also know the most
frequently used services so that they can improve further improve it or encourage the use of their
services.
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Meaning:
Retail banking can be crudely defined as the antonym of wholesale or bulk banking. It is nothing,
but shared business. The corporate and retail divide is nothing but internal segmentations and the
customer remains always a customer.
Retail banking generally refers to offering financial services, products related to deposits
and assets to individual customers for personal consumption.
Retail banking refers to banking in which banking institutions execute transactions directly
with consumers, rather than corporations or other banks. Services offered include: savings and
transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth.
Investopedia of Retail Banking:
Retail banking aims to be the one-stop shop for as many financial services as possible on behalf of
retail clients. Some retail banks have even made a push into investment services such as wealth
management, brokerage accounts, private banking and retirement planning. While some of these
ancillary services are outsourced to third parties (often for regulatory reasons), they often
intertwine with core retail banking accounts like checking and savings to allow for easier transfers
and maintenance.
Retail banking is banking that provides direct services to consumers. Many people with
bank accounts have their accounts at a retail bank and banks that offer retail banking services may
also have merchant and commercial branches that work with businesses. For people with high net
worth and special banking needs, private retail banking services may be pursued. These offer a
high level of service with a number of options that are not available to average members of the
public.
The most basic retail banking services include savings and checking accounts. Most retail
banks, however, try to make themselves into a one stop shop for banking customers. This increases
customer retention and loyalty, ensuring that the bank has a steady supply of customers. Expanding banking services also provides more opportunities for the bank to turn a profit.
Definition:
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“Retail banking is typical mass-market banking where individual customers use local
branches of larger commercial banks. Services offered include: savings and checking accounts,
mortgages, personal loans, debit cards, credit cards, and certificates of deposit (CDs).
The world of retail banking is experiencing change to an extent that has never been seen
before. Channel proliferation driven by new technologies, consolidation driven by the need for
economies of scale and product proliferation driven by the need to cross-sell to existing customers
all combine to increase the complexity of delivering financial services profitably.
Customers are becoming more demanding and discriminating when choosing to do
business with financial services organizations. In addition, non-banks are entering the competitive
space, competing for business traditionally offered by the financial services industry. As
competition increases, customer service is becoming a key focus for differentiation. Leading banks
are adopting strategies designed to transform their organization from one with a product and
channel-centric models to one with a customer-centric focus.
RETAIL BANKING - BANKING IN THE CUSTOMER
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Retail banking is finding itself in dramatic change. Over the last five years the new
information technologies and the new communication infrastructures have become revolutionary
forces changing business models , cost relations and not least the nature of customer relationships.
Retail banking is no longer what it used to be. Now the strategy is simple, make products available
where the customers’ traffic is the highest.
The banking industry is changing fast. Mergers, acquisitions and changes to banking laws
have brought about unprecedented an opportunity-which opens up unprecedented choices for
banking customers. Even, public sector banks which are trying to shed their ancient grab often
associated with bureaucracy and red-tapism, are going all out in becoming technology savvy and
orienting their staff to be more customers friendly. There is no other way to face the growing
competition from their private sector compatriots.
Consolidations within the banking industry with mergers and acquisitions between public
and new private sector banks have heralded in a new age of business in the banking arena. Banks
are also joining hands with its counterparts in order to promote its product. For example, Dena
Bank Ltd entered into a strategic alliance with the new private sector HDFC Bank Ltd to launch a
co-branded debit card and share of ATM facilities. One of the day areas of focus that emerged
from this alliance was ATM expansion and availing the existing ATM facilities to the mutual
benefit of both the banks. ICICI Bank Ltd’s customer base grew three fold in the one year from
15.5 lakhs in March 2008 to over 4 million by March 2009, after its merger with old player Bank
of Madura. Another major private sector player HDFC Bank also achieved strong growth on the
basis of its retail thrust. The bank which acquired Times Bank Ltd, in 2007-2008, is set to increase
its branch network, customer base, opportunities to cross-sell and leverage alternative delivery
channels. It has expanded its retail loan products to include car loans, personal loans and consumer
durable loans and has extended these offerings to a large number of cities.
Among emerging trends, ‘Bank assurance’ is the new buzzword for the marketing of
insurance products by tapping the retail distribution network of banks. It is felt that banks can play
a key role in the marketing of insurance products as they already have the infrastructure and
organizational workforce in place.
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Changes in consumer behavior are evident from the significant growth in the use of
‘plastic’ as against money in India; card issuers are heavily promoting debit cards in a bid to
discourage the need out carrying around paper money. India’s debit card base, which was three
lakhs in March 2008, has shot up to 22.8 lakh during the first half of 2008-2009 smart cards and
Credit cards are simultaneously being aggressively promoted.
Banks these days finance almost anything from homes to cars, consumer durables,
education, schemes for senior citizens, schemes for children etc, and also retail mutual funds and
insurance thereby converting into a one stop financial services supermarket.
Banks (even the public sector ones) have taken the business of ‘keeping pace with times’
very seriously. For example, Bank of Baroda, the country’s second largest public sector bank
intends to expand its activities in core-banking, internet banking, myriad of delivery channels, like
ATMs and Kiosks, reaching to customers through several touch points, using wide area
networking. Software such as ‘CRM’ (customer relationship management), which enable heaps of
relevant customer information to be stored in computers and to be retrieved at the click of a button,
are becoming popular among public, private and foreign banks as it enables them to ‘know’ their
customer better.
In an ever changing environment where loyalties are fickle and competition if fierce, banks
are trying to prove their worth by wooing customers with a gamut of ‘value added’ services as now
the race is to be better than the best. Retail banking requires a high quality of customer service over
a very large number of small transactions.
IDBI Bank offers mobile banking service through short message services (SMS). The
customers can do balance enquiry, fixed deposit enquiry, check cheque payment status and request
of cheque book by pressing a few keys on the mobile phone. That’s not all. Banks are finding
innovative ways to enlarge their networks and grab cross-selling opportunities with in and outside
the group. For example, Corporation Bank entered into a strategic alliance with the LIC and
recently with New India Assurance Company for distributing insurance products and using their
premises for setting up ATMs of the bank.
Indeed, convergence in financial sector has acquired much larger shape than in other
sectors. Going forward, increasing competition, thrust to reduced costs and some amount of
consolidation in the financial sector will further work in the favors of the customers.
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International studies have shown that in retail financial services, 35 per cent of customers
generate between 140 to 170 per cent of profits. The role of technology would become more
evident, as banks would be required to use more and more of technology in order to become
successful.
It could be aptly remarked, that the foundation of retail success will come from
understanding customers and markets. Relationship management skills would prove to be very
crucial for survival. The focus of future winners would be an intensive and intelligent use of
available resources to sustain a durable relationship with the existing customers, apart from
creating new ones.
RETAIL BANKING V/S WHOLESALE BANKING
In marketing language, retailing includes all the activities involved in selling goods or
services directly to final consumers for personal, non-business use. A retailer or retail store is any
business enterprise whose sales volume comes primarily from retailing.
In marketing language, retailing includes all the activities involved in selling goods or
services to those who buy for resale or business use. Wholesaling excludes manufacturers and
farmers because they are engaged primarily in production, and it excludes retailers.
On the same line, retail banking and wholesale banking could be differentiated in a broadmanner, if not in details.
Retail banking, broadly refers to the provision of services to individuals and small
businesses where the financial institutions are dealing with large number of low-value transactions.
In sharp contrast, wholesale banking encompasses a large customer base; often
multinational companies, governments and governmental enterprises, and the financial institutions
deal in small number of high-value transactions. Wholesale banking as opposed to retail banking is
characterized by a narrow client base but large size of individual transactions. The different
services offered by the banks as part of their wholesale banking activities can be best seen from the
point of view of the ultimate consumer of these services-what are the various financial needs of the
corporate sector and how these needs are being met by services offered by the banks.
While a few institutions continue to specialize in wholesale banking or in retail banking in
an isolated manner, there is no longer a complete separate wholesale banking system nor a
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completely separate retail system. Although, the skill and knowledge required to carry out these
businesses are different; there are some common critical success factors such as customer
orientation, investment technology, etc.
RETAIL BANKING DELIVERY CHANNELS
These days, one does not have to get his passbook updated every time the conducts a
transaction. One does not have to ask apologetically to the bank for his balance in case the
passbook remained back at home. One need not see unhelpful faces at the branch-in fact; one need
never make a trip to the bank at all.
Phone banking, ATM banking and Net banking have made managing money easy. There is
suddenly a barrage of direct banking, transaction details on cell phones, unsolicited free research,
even animals besides bulls and bears and honeyed language are now being used.
The various multiple delivery channels used by banks to cater its customers are as follows:
• Automatic Teller Machines (ATMs)
An ATM is basically a machine that can deliver cash to the consumers on demand after
authentication. An ATM downs the basic function of a bank’s branch, i.e., delivering, money on
demand. Hence, setting of newer branches is not required, thereby, significantly lowering
infrastructure costs. Banks are tying up with other enterprises to promote its ATM expansion. For
example, Corporation Bank has signed an agreement with Delhi Metro Rail Corporation (DMRC),
for the installation of ATMs at its stations.
•Phone BankingThis means carrying out of banking transactions through the telephone. A customer can call
up the banks help line or phone banking number to conduct transactions like transfer of funds,
making payments, checking of account balance, ordering cheques, etc. this also eliminates the need
of the customer to visit the bank’s branch.
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• E-Broking
Net broking is finally coming of age, and thousands of small investors are excitedly
logging on to e-broking sites. Taking the example of ICICI, every day, about 1,500 of the 10,000registered customers of ICICI Direct log on to trade. They don’t move a bit of paper. They just
enter the details of the trade they want to execute and hit the mouse. The site does the rest. It
moves funds from their bank account and transfers shares to their depository account. All within a
minute or so.
Quick, instantaneous trading and transparency are driving Net trading. Many more
individual investors are signing up with Web trade services. However, banks, so far, are not so
flexible with their customers. To become an ICICI web-trade customer, it is mandatory to hold an
ICICI bank account, as also its depository account. There are two reasons for this-banks have strict
systems before they can put a trade through and therefore are more comfortable when all the
related transactions are within their control. Second, and are more important, it makes a better
revenue mode. In the case of ICICI, that’s three birds with one stone. It gets money from its
customer for its banking service, depository service and finally its broking service.
But there is a caveat! Now, e-broking rate are lower than offline rates but the technology
and investment for incremental e-broking business is very high. Right now, when the market opens
everyday, there are around 2.000 trades waiting to be executed on ICICI Directs site. With even
0.2- second speed per trade, it may take 5 minutes for the last transaction to be executed. Now to
bring that down requires a more expensive technology. Further, providing the latest technology in
the site costs money. So, investors must be cautious with sites that promise low brokerage. They
simply won’t be able to match the services of the one that charges a reasonable fee. This means
that in the long run, companies whose business revolves around broking revenues will not survive.
They will need to offer a range of personal finance services or product, which can be priced so as
to subsidize the broking business. The point of web trading is instantaneous trade and anything else
is only a compromise
• Credit cards
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A credit card is an instrument, which provides instantaneous credit facilities to its holder to
avail a variety of goods and services at the merchant outlets. It is also termed as ‘Plastic Money’,
as it is made of plastic.
The card industry, which has been growing at the rate of over 45 per cent per annum over
the couple of years, is today flooded with carks ranging from Gold, Silver, Debit, Smart, Global,
Classic to even a Doctors. The three most common types of cards available in the Indian card
market in 1996 were, credit card, the charge card, and the corporate card. But that was 1996, and
this is 2010. now every kinds of card exist in the competitive market, (as been mentioned earlier).
The number of major players too has increased from just two in the 80s to over 40 now, including
the likes of HSBC,HDFC bank, Citibank, ICICI, Standard Chartered Grindlays Bank and also
many nationalized banks such as SBI, Bank of India (BOI) and so on. All this has led to a situation
where the players are fighting out with each other to increase their base. Recently, HDFC Bank
launched its international credit card in Delhi in order to fill a critical gap in its portfolio.
The major factors influencing growth were the rapid lifestyle changes as a result of
increasing affluence, a burgeoning middle class and rapid proliferation of new technology.
• Net Banking
In the past, parents visited the bank’s branch to conduct their transaction. One tends to hop
into the ATM counter round the corner. Now, if one is a fast learner, one can log on to his/ her
bank’s website, and conduct most of the transactions over the Internet. So Internet banking is one
channel that your bank has launched to offer you better service. Thus, the need for a branch is
completely eliminated by technology. Also, this helps in serving the customers better and tailoring
products better suited for the customer. A customer can view his account details, transaction
history, order drafts, electronically make payments, transfer funds, check his account position and
electronically communicate with the bank through the internet for which he/ she may have wanted
to visit the bank branch. Net banking helps a bank spread its reach to the entire would at a fractionof the cost.
The mechanics is very simple and is not anything from the heaven: if one needs to check
the balance in his account, instead of rushing to the nearest ATM or branch, he could visit his
bank’s Internet site. He only needs to enter his Personal Banking Number followed by his Personal
Identification Number (PIN) and Internet banking password, and he is logged in. he is shown his
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different accounts d(current, savings, fixed, etc.). After that, he needs to click on Saving and is
shown the balance in this account. Another click of the button and he is able to view a record of his
past transactions. How, if one wants to move his money, which is lying idle in his Savings account,
to a instructions about what to do when the fixed deposit matures (transfer principal and interest to
savings account, or reinvest in an FD, or reinvest only the principal and interest to savings account,
or reinvest only principal in FD, etc). he is also able to view details of Tax Deducted at Source
(TDS). Besides, if one deposits a cheque in one of his Bank’s drop-boxes, he uses the Internet to
see whether the cheque has been credited to his account. Also, for example, if someone issues a
cheque in favors of a vendor, but suddenly realizes that the goods are shoddy. He could issue a
stop-cheque order over the Internet. But the order should reach the bank in the nick of time-before
it makes the payment to the concerned vendor.
• Mobile Banking:
Banks can now help a customer conduct certain transactions through the Mobile Phone
with the help of technologies like WAP, SMS, etc. this helps a bank to combine the Internet and
telephone and thereby leverage it to cut costs and at the same time provide its customer the
convenience.
It could be very well seen, that tech savvy banks are tapping all the above alternative
channels to cut costs, besides improve customer satisfaction. In the case of banking customers,
convenience is defined as 100 per cent availability, faster response times and enhanced transaction
experience in every single interaction. Banks are vying for opening new channels for the public.
For example, in order to this, HDFC Bank has decided to implement Unicenter e-business
infrastructure management solution. This has eventually helped in getting people to access the
system and stay away from the branch.
TECHNIQUES TO EVALUATE RETAIL BANKING OPERATIONS
Over the last few years, retail banking has become more complex and dynamic than ever before.
Naturally, a large number of techniques have been evolved to plan and evaluate retail-banking
operation. The various approaches are as follows:
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Funds Management: Funds management is an extremely important area for retail sector
banks since a proper strategy in this respect can increase profitability to large extent. There are also
major types of Funds Management.
i) Cash Management: Although our society is fast progressing, it still remains a cash
managed society compared to a credit managed society as in the west. Thus small customers are
greatly dependent on cash for their routine transactions forcing banks to hold large amounts of
cash whether in extension counters, cub-offices of the parent bank, non-currency chest branches or
currency chest branches. However, holding large amounts of cash means as opportunity lost for
profitable investments. Therefore, a skillful management of cash is needed so that the need for
liquidity does not erode profitability. For this, excess build up can be eliminated links, which are
quite feasible in the current Indian scenario. Also banks should educate their customers on the
movement from a cash based society to a credit based society.
ii) Product Profitability Analysis: In the transactional banking scenario, Product
profitability Analysis is of utmost importance in determining which products to promote or
withdraw. It is basically a cost-benefit analysis of each product. The transactions of each product
are flow-charted. At each stage of the flow, costs are allocated to the product depending on the raw
material attention time, overheads, etc. the final cost of the product is then worked out at each
stage. Product also serves as a toll to generate new products since the costs of a particular service
can be worked out in advance.
iii) Investment Management: In the light of retail banking, banks have to match their
assets with their liabilities, which are generally of short-term duration. Thus although long- term
securities would give maximum yield, they would not be able to match the short-term liabilities. In
this situation, retail banks should try for short-term investments. This may be done throughTreasury Bills, which have low yields. A secondary market for bonds can allow for maturity
matching. Banks should also venture into areas like consumer durables financing, loans against
shares, etc, which are short-term lending. However, these activities need economies of scale and
prompt service, which will be essential for future earnings. With the deregulation of interest rates,
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banks can come up with schemes for deposits and loans, which are in keeping with the duration
requirements of the bank.
Profit Planning: The profitability of retail operations of banks has been declining in recent
years. To find the reasons for this phenomenon and to take action in specific areas, profit planning
has to be undertaken. There are basically three approaches to profit planning, namely, Profit and
Loss Account approach, Balance Sheet approach and product/ Service approach.
CURRENT SCENARIO OF RETAIL BANKING
To say retail banking is changing is a massive understatement. The greatest challenge faced
by today’s retail banks is how to provide their customers with convenient banking – for if they do
not, a new competitor will find a way of doing so. The changes now taking place in the retrial
banking industry are the most radical in decades. Evolving customer demographics, developments
in new technology and a bombardment of new competition, have led the major banks to re-
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examine their customer- is no longer dependent upon the services they alone offer, but has many
other options from which to select the type of retrial banking services required.
Retail banking has been increasing in India at a very fast pace. Between June 1969 and June 1993,
the number of commercial branches rose from 8262 to 61248, a very large majority of which caters
to the retail sector. The average population served per bank office decreased from 65000 in 1969 to
11000 in June 1993. however, little regard was paid to the economies of running them.
Retail banking is undergoing a transformation. There could be a number of reasons
attached to this phenomenon. For years, retail banking was dominated by conservative savers who
were content with moderate- yield. However, attitudes and needs are changing now. The new
generation of savers prefers to invest, to build wealth rather than save to protect wealthy, demands
exceptionally high levels of convenience, expects better work technology, requires information and
advice that can be acted on, and prefers wide range of alternative products. The level of
competitive intensity in this segment is increasing steadily. Besides, the foreign banks, which bring
with them there are experience of operating in the international arena, attract the nationalized
banks. Similar other factors have also contributed to the marked change in retail banking.
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SWOT ANALYSIS
STRENGTH
• Retail banking supermarket with the ability to cross-sell entire range of credit products.
• Innovative products
• Technological superiority
• Wide distribution
• High top of mind awareness due to aggressive advertising
• Strong Credit controls
• High Customer Service Standards
• Economies of scale through growing volumes.
• 24x7 service levels
WEAKNESSES
• Efforts are concentrated more towards the urban consumers thus ignoring the rural
counterpart.
• Number and spread of branches is very low as compared to PSU banks.
• Excessive focus on non-branch distribution channel reducing the scope of personal
interaction needed for the sale of retail products.
OPPORTUNITY
• Changing consumer outlook towards loans and related products
• Rising consumer income levels
• Increasing banking habits among Indian consumers
• Being No.1 in the auto finance segment paves the way to consolidate its market leadership
across all the segments.
• Rapid increase in the retail loan market size to the tune of 30 – 40 %.
THREAT
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• Stiff competition in the housing loans segment from HDFC, LIC Housing etc.
• In the Credit card segment, competition from Citibank, StanChart etc.
• Of late, lots of Non Banking Financial Institutions have emerged and have eaten up the
banks’ market share.
• Educating people by way of advertisements might help competitors to reap the benefits.
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CHAPTER -2
COMPANY PROFILE
History
HDFC Bank Ltd. (BSE: 500180, NYSE: HDB) is a major Indian financial services
company based in India, incorporated in August 1994, after the Reserve Bank of India allowed
establishing private sector banks. The Bank was promoted by the Housing Development Finance
Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,725
branches and over 4,232 ATMs, in 779 cities in India, and all branches of the bank are linked on an
online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion.
For the fiscal year 2008-09, the bank has reported net profit of 2,244.9 crore (US$498.37 million),
up 41% from the previous fiscal. Total annual earnings of the bank increased by 58% reaching at19,622.8 crore (US$4.36 billion) in 2008-09.
It was among the first companies to receive an 'in principle' approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector. The Bank started operations as a
scheduled commercial bank in January 1995 under the RBI's liberalization policies.
Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with
HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank.
In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than
1,000. The amalgamated bank emerged with a base of about Rs. 1, 22,000 crore and net advances
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of about Rs.89, 000 crore. The balance sheet size of the combined entity is more than Rs. 1, 63,000
crore.
TypePublic
(BSE: 500180, NYSE: HDB)
IndustryBanking
Financial services
Founded August 1994
Founder(s) Bibu Verghese
Headquarters Mumbai, India
Key people
C.M. Vasudev
(Chairman)
Aditya Puri
(MD)
Products
Investment Banking
Commercial Banking
Retail Banking
Private Banking
Asset Management
Mortgages
Credit Cards
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Revenue 20,266 crore (US$4.5 billion) (2010)
Operating income 4,419 crore (US$981.02 million) (2010)
Profit 3,032 crore (US$673.1 million) (2010)
Total assets US$ 39.723 billion (2009)
Total equity 21,158 crore (US$4.7 billion) (2010)
Employees 51,888 (2010)[
Website HDFCBank.com
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,
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.
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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.
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 availableinternationally, to build the infrastructure for a world class bank. The Bank's business is supported
by scalable and robust systems which ensure that our clients always get the finest services we
offer.
The Bank has prioritized 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.
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 was ideally positioned to promote a bank in the Indian environment.
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Capital Structure:
The authorized capital of HDFC Bank is Rs.550 crores. The paid-up capital is Rs.425.28
crores. The HDFC Group holds 40.62% of the bank's equity while about 23.87% of the equity is
held by the depository in respect of the bank's issue of American Depository Shares (ADS/ADR
Issue). The Indian Private Equity Fund, Mauritius (IPEF) and Indocean Financial Holdings Ltd.,
Mauritius (IFHL) (both funds advised by J P Morgan Partners, formerly Chase Capital Partners)
together hold about 10.9% of the bank's equity. Roughly 15.7% of the equity is held by FIIs,
NRIs/OCBs while the balance is widely held by about 108643220 shareholders. The shares are
listed on The Stock Exchange, Mumbai and the National Stock Exchange. The bank's American
Depository Shares are listed on the New York Stock Exchange under the symbol "HDB".
Times Bank Amalgamation
In a milestone transaction in the Indian banking industry, Times Bank Limited (another
new private sector bank promoted by Bennett, Coleman & Co./Times Group) was merged with
HDFC Bank Ltd., effective February 26, 2000. As per the scheme of amalgamation approved by
the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank
received 1 share of HDFC Bank for every 5.75 shares of Times Bank. The amalgamation added
significant value to HDFC Bank in terms of increased branch network, expanded geographic reach,
enhanced customer base, skilled manpower and the opportunity to cross-sell and leverage
alternative delivery channels.
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Branches in Nagpur
[A]
Area: Nagpur EC
Address: 269, Sharda ComplexNear Itwari Telephone Exchange,
Central Avenue
Nagpur - 440008
Maharashtra
Tel: 9890603333
Fax: NA
ATM: YES
Lockers: NO
IFSC Code: HDFC0000502
High Value Cut of Timing: No
MICR Cut off Timings: Mon to Fri: 01. 30 pm, Sat: 11. 00 am
Branch Working & Timing
Weekday: Monday to Friday, Timings: 09. 30 am - 03. 30 pm
Weekend: Saturday, Timings: 09. 30 am - 12. 30 pm
Weekly Off: Sunday
[B]
Area: Nagpur Pratap Nagar
Address: 45, Vidya Kunj
Kotwal Nagar
Veer Savarkar Marg, Ring Road
Nagpur - 440022
Maharashtra
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Tel: 9890603333
Fax: 0712-6648293
ATM: YES
Lockers: YES
IFSC Code: HDFC0001786
High Value Cut of Timing: No
MICR Cut Off Timings: Mon to Fri: 12. 30 pm, Sat: 11. 00 am
Branch Working & Timing
Weekday: Monday to Friday, Timings: 09. 30 am - 03. 30 pm
Weekend: Saturday, Timings: 09. 30 am - 12. 30 pm
Weekly Off: Sunday
[C]
Area: Nagpur-Dhantoli
Address: Bharuka Bhavan
Opp. Yashwant Stadium,
Dhantoli
Nagpur - 440012
Maharashtra
Tel: 9890603333
Fax: 0712-6633652
ATM: YES
Lockers: YES
IFSC Code: HDFC0001009
High Value Cut of Timing: No
MICR Cut Off Timings: Mon to Fri: 12. 30 pm, Sat: 11. 00 am
Branch Working & Timing
Weekday: Monday to Friday, Timings: 10. 00 am - 04. 00 pm
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Weekend: Saturday, Timings: 10. 00 am - 01. 00 pm
Weekly Off: Sunday
[D]
Area: Nagpur Kingsway
Address: 3/4/5 Shrimohini / Usha Complex
Sv Road,
Kingsway
Nagpur - 440001
Maharashtra
Tel: 9890603333
Fax: 0712-2551803
ATM: YES
Lockers: YES
IFSC Code: HDFC0001248
High Value Cut of Timing: No
MICR Cut Off Timings: Mon to Fri: 01. 00 pm, Sat: 11. 30 pm
Branch Working & Timing
Weekday: Monday to Friday, Timings: 10. 00 am - 04. 00 pm
Weekend: Saturday, Timings: 10. 00 am - 01. 00 pm
Weekly Off: Sunday
[E]
Area: Nagpur-Shankar Nagar
Address: 204, Bhagyashree Compound,
Cement Road, Shankar Nagar Square,
Dharampeth Extention
Nagpur - 440010
Maharashtra
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Tel 9890603333
Fax 0712-6613343
ATM YES
Lockers YES
IFSC Code HDFC0000102
High Value Cut of Timing No
MICR Cut Off Timings Mon to Fri: 10. 45 am, Sat: 09. 45 am
Branch Working & Timing
Weekday: Monday to Friday, Timings: 09. 30 am - 03. 30 pm
Weekend: Saturday, Timings: 09. 30 am - 12. 30 pm
Weekly Off: Sunday
Business focus
HDFC Bank deals with three key business segments. - Wholesale Banking Services, Retail
Banking Services, Treasury. It has entered the banking consortia of over 50 corporates for
providing working capital finance, trade services, corporate finance and merchant banking. It is
also providing sophisticated product structures in areas of foreign exchange and derivatives,
money markets and debt trading and equity research.
1. Wholesale banking services
Blue-chip manufacturing companies in the Indian corp. to small & mid-sized corporate 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 for it’s to corporate
customers, mutual funds, stock exchange members and banks.
2. Retail banking services
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The objective of the Retail Bank is to provide a full range of financial products and
banking services, giving the customer a one-stop window for all his banking requirements. The
products are backed by world class service and delivered to the customers through various delivery
channels including the branch network, as well as alternative delivery channels like ATMs, Phone
Banking, Net-Banking 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 Loans against shares,
Auto Loans, Personal Loans and Loans for Consumer Durables and Two-wheelers. It is also a
leading provider of Depository Participant (DP) services for retail customers.
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 debit card
allows the user to directly debit his account at the point of purchase at a merchant establishment, in
India and overseas. The Bank launched its credit card in association with VISA in November 2001.
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.
Loan-Based Products:
Advance against securities and IPO financing provides theclient with opportunities to leverage on his investment assets, without loss of ownership. What
could be better than having somebody manage your assets for you and be able to borrow against
the assets from the same entity?
Capital Market Products: Badla, arbitrage, stock lending are all products which are
beyond traditional asset management but allow you the opportunity to participate in the markets
with the additional comfort and safety of still dealing with your own Private Banker.
Off-Shore Products: The Private Bank, by making use of its international network, is
in a better position to also offer multi-currency, multi-location investment assets to its NRI clients,
including Trust services. (A word of caution here: there are a number of large banks in India
offering International Private Banking – essentially cloak and dagger outfits helping resident
Indians park funds overseas and hence, should be steered clear of!)
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So, if you are a professional, an entrepreneur, a trust or maybe a celebrity, there is a lot that
a Private Banker can offer. The trick is to know what to expect and to identify the correct one.
More on the same next time----------!!
3. Treasury
Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. These services 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.
Distribution network
A HDFC Bank Branch
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HDFC Bank is headquartered in Mumbai. The Bank has a network of 1725 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 has a presence in all
major industrial and commercial centers across the country. Being a clearing/settlement bank to
various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has a
strong and active member base.
The Bank also has 5,016 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.
Rating
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
program 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) program "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 program, with the outlook on
the rating as "stable". This rating indicates "highest credit quality" where "protection factors are
very high"
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 program and Upper Tier II Bond issue. In each of the cases
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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.
HDFC IN RETAIL BANKING
Retail banking, as the term itself signifies, is directed towards the common man who
requires a host of traditional banking facilities like deposits, loans, ATM facilities, and now capital
market related services like depository services etc. Many banks have now started offering
Investment Services to the retail customer, which is essentially advice and execution of mutual
fund investments and redemptions. Advice on debt and equity is restricted primarily to new issues,
with secondary market investments being discouraged. There are no charges for this service, in
fact, customers are paid incentives/commissions for investing through them. The bank essentiallygets its income from the mutual fund/broker directly and also cross-sells other banking products.
Although HDFC bank is in universal banking, retail banking is its key area. in an country like
India and for a new bank like HDFC surviving the competition of public sector bank is really a
praiseworthy job. Nobody would have imagined except a chosen few that a bank which had to face
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competition with both public sector and private sector including foreign bank would come up as
winner.
The picture is clear now. The recent data shows that HDFC bank has already been declared
most efficient and most IT driven bank in India. It is really a great achievement that starting with a
few branches just five year ago, it has now 535 branches and 1323 ATMs nationwide. This data
shows that it has taken great care of its retail customer. and vice-versa retail customer has shown
interest in its operation and they are now becoming satisfied &faithful customer. In India most of
the known banks are in retail banking operation .it is very difficult to survive in this competitive
market if one doesn’t have always something new to offer to its customer and one doesn’t values
relationship with customers.
HDFC bank has decided to be real innovator. It is customer friendly and most of the operations are
IT driven. It has a large portfolio of products and services that’s caters need of every customer. For
example, different kind of saving accounts, current accounts, net banking, phone banking, mobile
banking, ATM , fund transfer etc. it has decided to turn itself into a complete virtual bank in the
future. In its product range it has got something for everyone to choose from. large no of choices
are available and apart from that it always comes with some innovative product and services for
example recently it has tied up with Indian Railways. It will boo your rail tickets without any
service charge provided you make the payment through net banking. Other new services are also
available in its portfolio. You need to make your booking, purchase and others but you will have to
make payment by net banking.
AWARDS
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.It is extremely gratifying that our efforts towards providing customer convenience have been
appreciated both nationally and internationally.
2005
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Asia money Awards
“Best Domestic Commercial Bank”
Asia money Awards
“Best Cash Management Bank - India.”
The Asian Banker Excellence
“Retail Banking Risk Management Award in India for 2004”
Hong Kong-based Finance Asia magazine
“Best Bank – India”
The Asian Banker Excellence
“Retail Banking Risk Management Award for 2004”
Hong Kong-based Finance Asia magazine
"Best Bank in India"
Asia money Awards
“Best Domestic Commercial Bank Best Cash Management Bank - India.”
Economic Times Awards
"Company of the Year" Award for Corporate Excellence 2004-05.
Asia money also named the banks.
• Best Local Cash Management Bank in India 2004 - US$11-100m
•
Best Local Cash Management Bank in India 2004 - >US$501m
• Best Local Cash Management Bank in India 1989-2004 (poll of polls)
• Best Overall Domestic Trade Finance Services in India 2004
• Most Improved Company for Best Management Practices in India 2004
The Business Today-KPMG Survey published in the leading Indian business magazine Business
Today has named HDFC Bank "Best Bank in India" for the third consecutive year in 2005.
The Asset magazine named HDFC Bank "Best Cash Management Bank" and "Best Trade FinanceBank" in India, in 2006.
HDFC Bank named the "Most Customer Responsive Company - Banking and Financial Services
in The Economic Times - Avaya Global Connect Customer Responsiveness Awards 2005"
HDFC Bank has been named Best Domestic Bank in India in The Asset Triple A Country Awards
2005.
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HDFC Bank has been named Best Domestic Bank in India Region in The Asset Triple A Country
Awards 2004 and 2003.
In 2004, HDFC Bank was selected by Business World as "One of India's Most Respected
Companies" as part of The Business World Most Respected Company Awards 2004.
In 2004, Forbes Global again named us in its listing of Best Under a Billion, 100 Best Smaller Size
Enterprises in Asia/Pacific and Europe, in its November 1, 2004 issue.
In 2004, HDFC Bank won the award for "Operational Excellence in Retail Financial Services" -
India as part of the Asian Banker Awards 2003.
In 2003, Forbes Global named us in its ranking of "Best Under a Billion, 200 Best Small
Companies for 2003".
Leading business newspaper The Financial Express named HDFC Bank the "Best New Private
Sector Bank 2003" in the FE-Ernst & Young Best Banks Survey 2003.
Leading Personal Finance Magazine in India Outlook Money named HDFC Bank the "Best Bank
in the Private Sector" for the year 2003.
Leading Indian business magazine Business Today in a survey rated us "Best Bank in India" 2003,
and "Best Private Sector Bank" in India in 1999.
NASSCOM and economictimes.com have named us the 'Best IT User in Banking' at the IT Users
Awards 2003.
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.
The bank believes in adopting and adhering to the most superior corporate governance practices
and continuously benchmarking itself against each such practice in the industry. The bank
understands and respects its fiduciary role and responsibility to shareholders and continually
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strives to fulfill their expectations. We strongly believe that the best board practices, transparent
disclosures and shareholder empowerment are necessary for creating shareholder value.
The bank has infused the philosophy of corporate governance in all its activities. The philosophy
on corporate governance is an important tool for shareholder protection and maximization of their
long term values. The cardinal principles such as independence, accountability, responsibility,
transparency, fair and timely disclosures, credibility etc. serve as the means for implementing the
philosophy of corporate governance in letter and in spirit.
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PRODUCTS AND SERVICES OFFERED
HDFC bank has a wide range of product and services to offer from its portfolio that serves the
interest of retail banking operation as well as whole sale banking, corporate banking and other operations.
The most common and widely used products and services includes:-
CREDIT CARDS (FEATURE PACKED)
1. International gold card
2. International silver card
3. ESEVA international silver card( for the resident of Hyderabad only)
e -AGE BANKING CHANNEL
1. Net banking
2. One view
3. Mobile banking
4. International debit card
5. Bill pay
6. ATM
7. Phone banking
8. Direct pay
VALUE ADDED SERVICE
Foreign exchange service
OTHER INNOVATIVE SERVICES
1. Free train ticket booking
2. Movie ticket booking
3. Prepaid mobile recharging over ATM/SMS.
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DETAILS
Debit Card
Enjoy shopping at over 15,000 establishments in India and over 80 lakh establishments in 140
countries. Withdraw cash from 550 ATMs in India and over 6.3 lakh ATMs across the globe. The
amount you spend on your card is automatically debited from your Savings Account.
An example of the front of a typical debit card:
1. Issuing bank logo
2. EMV chip
3. Hologram
4. Card number
5. Card brand logo
6. Expiration date
7. Cardholder's name
An example of the reverse side of a typical debit card:
1. Magnetic stripe
2. Signature strip
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3. Card Security Code
Presenting the HDFC Bank International Debit Card that lets you shop and do much more than you
could do with your ATM Card. It replaces cash, so when you go shopping, you no longer need to
carry cash with you. This card can be used in India and abroad at merchant locations such as shops
and restaurants and to withdraw cash from a widespread network of ATMs. The value of the
payment made or cash withdrawn is instantly debited from your account. What's more, while all
your purchases and cash withdrawals are in the currency of the country you are in, your account is
debited in Rupees!
A debit card (also known as a bank card or check card) is a plastic card that 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. In some cases, the cards are designed exclusively for use on the
Internet, and so there is no physical card.
In many countries the use of debit cards has become so widespread that their volume of use
has overtaken or entirely replaced the check and, in some instances, cash transactions. Like credit
cards, debit cards are used widely for telephone and Internet purchases and, unlike credit cards, the
funds are transferred immediately from the bearer's bank account instead of having the bearer pay
back the money at a later date.
Debit cards may also allow for instant withdrawal of cash, acting as the ATM card for withdrawing
cash and as a check guarantee card. Merchants may also offer cash back facilities to customers,
where a customer can withdraw cash along with their purchase.
Bill Pay:
This free facility allows payment of your electricity, phone and mobile phone Bills with a single
call, or click, or from any of our ATMs. The bill amount for all utility services you have
registered for is presented online. But payment is made and the amount is deducted from your
account, ONLY on receiving your instructions. Private Banking Clients who hold an account with
HDFC Bank also have access to all the e-Age Banking channels.
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Phone banking:
HDFC Bank offers Phone Banking, a phone banking facility. Now your bank account is now just a
phone call away. You can carry out all your transactions, from checking your account balance to
ordering a new cheque book to stopping a cheque payment over the phone. You can request for
demand drafts / funds transfer, open a fixed deposit account, and even pay your electricity,
telephone and cell phone bills using the Bill Pay facility. So now, whenever you need to conduct
any of your transactions, just give us a call. These services have made banking in India a pleasure.
Phone banking facility is available round the clock, everyday, in Mumbai, Delhi, Chennai,
Kolkata, Bangalore, Hyderabad, Ahmadabad, Chandigarh and Pune.
Net Banking:
Internet or Online banking describes the use of a bank's secure website to view balances and
statements, perform transactions and payments, and various other facilities. This can be very
useful, especially for banking outside bank hours and banking from anywhere where internet
access is available. Since the internet revolution most retail banking institutions offer access to
current accounts via online banking.’’
Now, a FREE, safe and secure way to bank over the Internet! Check your account balance for up-to-the-second status, transfer funds between your accounts or to third parties, and much more
with just a click of the mouse.
Mobile Banking:
FREE access to your account on your mobile phone, through SMS or WAP services.
ATM in India for 24 Hour Banking:
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Now, your money is accessible to you 24 hours a day, 7 days a week, 365 days a year from any of
our over 775 ATM across India. So, wherever you are, at whatever time, you will always have
access to your account. Make the most of the e-Age Banking conveniences through HDFC Bank
ATM across the city and the country for 24 Hour Banking.
Get a FREE ATM Card and access your account from the wide network of ATMs, across the
country.
Some of the important products of the HDFC Bank are:
1.Savings Accounts
These Accounts are primarily meant to inculcate a sense of saving for the future, accumulating
funds over a period of time. Whatever your occupation, we are confident that you will find the
perfect banking solution. Open an account in your name or register for one jointly with a family
member today.
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2.Current Accounts
Now, with an HDFC Bank Current Account, experience the freedom of multi-city banking! You
can have the power of multi-location access to your account from any of our 500 branches in 220
cities. Not only that, you can do most of your banking transactions from the comfort of your office
or home without stepping out.
We make it our business, to help you with your business, by offering you a Current Account with
all the benefits you need, to stay ahead of your competition.
At HDFC Bank, we understand that running a business requires time and money, also that your
business needs are constantly evolving. That's where we come in. We provide you with a choice of Current Account options to exclusively suit your business - whatever the size or scope.
Open an HDFC Bank Current Account & control your business operations centrally.
3.Direct Pay
Ever thought of shopping without cash or card? Does online shopping unnerve you? Now, with
HDFC Bank's Direct Pay facility, you can dare to. No more carrying cash, no cheque, not even a
Debit Card or a Credit Card. All you need is your HDFC Bank Savings/Current Account.
HDFC Bank's Direct Pay facility is an e-Age Banking Channel where the purchases are debited
directly to your account and credited to the account of the establishment (or the website where the
purchases were made). If you are an account holder with HDFC Bank, all you have to do is to
register for the Net Banking facility to use this option.
However, shopping is not the only option that you have. If you are a resident of Hyderabad or
Secunderabad, it gets even better. Thanks to the bank's tie-up with E-seva, a unique integrated
service launched by the government of Andhra Pradesh, you can now pay your electricity, water
bills and municipal taxes (telephones to be introduced shortly) using the Direct Pay option. The
most important aspect of this service is that the payments made are updated in the database of the
utility companies on an online and real-time basis.
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What's more, both the Direct Pay and Net Banking facilities are available FREE of cost. HDFC
Bank offers the highest level of security available today - 128-bit SSL (Secure Socket Layer)
encryption. Your Net Banking details (Customer ID and password) are kept confidential and
cannot be viewed by the merchant.
4. Fixed Deposits
Long-term investments form the chunk of everybody’s future plans. An alternative to simply
applying for loans, fixed deposits allow you to borrow from your own funds for a limited period,
thus fulfilling your needs as well as keeping your savings secure.
5. De-mat
The perfect complement to your equity investments, our Demat account comes with Zero account
opening fees and low maintenance costs.
As per the finance (No 2) Act 2004, all fees & charges mentioned in the Tariffs, Charges or Fees
Brochures will attract Service Tax @10% & Education Cess @2% of the service tax amount
effective 10th September 2004. The same will appear as separate debits in the statements.
6. Personal loans
Borrow up to Rs 10, 00,000 for any purpose depending on your requirements.
• Flexible Repayment options, ranging from 12 to 48 months.
• Repay with easy EMIs.
• One of the lowest interest rates.
• Hassle free loans - No guarantor/security/collateral required.
• Speedy loan approval.
• Convenience of service at your doorstep.
• Customer privileges
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If you are an HDFC Bank account holder, we have special rates for you.
If you are an existing Auto Loan customer with a clear repayment of 12 months or more from any
of our approved financiers or us, you can get a hassle free personal loan (without income
documentation).
If you are an existing HDFC Bank Personal Loan customer with a clear repayment of 12 months
or more, we can Top-Up your personal loan.
7. Home Loans
• Home Loan - We offer home loans for individuals to purchase (fresh / resale) or construct
houses. Home loans can be applied for jointly. HDFC finances up to 90% of the cost of
the property (Agreement value + Stamp duty + Registration charges).
• Home Improvement Loan - HIL facilitates internal and external repairs and other
structural improvements like painting, waterproofing, plumbing and electric works, tiling
and flooring, grills and aluminum windows. HDFC finances up to 85% of the cost of
renovation (100% for existing customers).
• Home Extension Loan - HEL facilitates the extension of an existing dwelling unit. All the
terms are the same as applicable to Home Loan.
• Land Purchase Loan - Be it land for a dream house, or just an investment for the future,
HDFC Land Purchase Loan is a convenient loan facility to purchase land. HDFC finances
up to 70% of the cost of the land (Conditions Apply). Repayment of the loan can be done
over a maximum period of 10 years.
• Choose from Fixed Rate or Floating Rate with options to structure your loan as Partly
Fixed or Partly Floating.
• Flexible repayment options to suit your individual needs.
• E-age saving account - As a special offer you can open an HDFC Bank E-Age Savings
Account at a lower Average Quarterly Balance of Rs. 2,500, instead of the regular Rs.
5,000. You can avail of benefits like free Phone Banking, Free Net Banking, 24-Hour ATM
access, Inter-branch/Inter-city banking, a personalized cheque book and much more.
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• Free International credit card - Enjoy a waiver on the fees for the first year on
International Credit Card from HDFC Bank. The credit card is accepted world-wide and
comes with the most comprehensive insurance coverage. You can even withdraw 30% of
your entire credit limit through the ATM.
• Automated Repayment of Home loan EMI - You can give us standing instructions to
repay your Home Loan EMIs directly from your HDFC Bank Savings Account, thus,
saving you the trouble of procuring, signing and tracking post-dated cheques.
• Customer privileges - If you are an existing HDFC Bank Home Loan customer, you can
avail of other loans (such as Personal Loans, Car Loans, Two-wheeler Loans and Loan
against securities) at lower interest rates.
Apply Now
8. Car Loans
Covers the widest range of cars and multi-utility vehicles in India.
• Borrow up to 90% of the car's invoice value.
• Flexible repayment options, ranging from 12 to 84 months.
• Borrow up to 3 times your annual salary (for salaried professionals) and 6 times your
annual income (for self employed professionals)*.
•Speedy processing - within 48 hours.
• Repay with easy EMIs.
• Attractive car loan plans - To Fastrack your loan, just choose the plan that is right for
you.
• Among the lowest interest rates.
• Hassle-free documentation.
• Prepayment option - prepay the loan anytime after 6 months at a small charge.
• Customer Privileges
If you are an HDFC Bank account holder, we have special rates for you.
If you have had a Preferred Account or a Corporate Salary Account with HDFC Bank for more
than six months, you can get fast approvals on your loans with minimal documentation.
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If you are an existing HDFC Bank Car Loan customer with a clear repayment of 12 months or
more we can Top-Up your car loan at a reduced interest rate.
Only HDFC Bank gives you "One View" of 6 banks
Tired of logging in to different banks one after the other to check account balances? Bored
going from page to page to access your account details? It is time you registered for One View. For
the first time in India, this convenient service brings together your online bank accounts (including
those of family members), in one place, in total security.
Now, One View puts it all on one screen for you, so that tracking and managing your
online accounts becomes quicker and easier than ever before. Giving you a complete picture of
your finances across multiple accounts.If you have one or more accounts with HDFC Bank, Citibank, ICICI Bank, HSBC India,
Standard Chartered Bank and/or Global Trust Bank then One View is just right for you. Best of all,
it's absolutely free!
Foreign Exchange (FOREX) Facilities available at the branches:
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Are you planning to Travel abroad on Business? Or just taking an Overseas
Holiday?
You can now avail HDFC’s forex facilities to meet your personal or business travel requirements,
expenses for your medical treatment abroad, educational expenses for your children, emigration or
employment abroad, donations, gifts to your relatives abroad etc. and any more facilities available
at most of our branches all over India.
HDFC offers Forex Facilities like
1. Travelers Cheques in Foreign Currency
2. Foreign Currency Cash
3. Foreign Currency Drafts
4. Foreign Currency Telegraphic Transfers
These facilities are presently available at 134 branches all over India and we are in the process of
continuously adding to the list of our branches to offer Retail Foreign Exchange Facilities to our
valued customers.
1. Foreign Currency Travelers Cheques
Travelers Cheques are a Safe and Easy way to protect your travel money. When you are travelling
around the world, Travelers Cheques provide you the convenience of Encashment as well as peace
of mind which would have otherwise arisen out of unforseen circumstances like loss or theft of
Travelers Cheques.Travelers Cheques are offered in all the four major currencies like USD, GBP, Euro or JPY. At
present we offer Thomas Cook Travelers Cheques which are widely accepted at Merchant
Establishments and Financial Institutions worldwide across more than 200 countries.
2. Foreign Currency Cash
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Foreign Currency cash is a convenient way of meeting personal expenses along your journey,
paying for taxis / internal travel, food expenses etc.
You could avail of foreign currency cash in USD or GBP from our branches offering Foreign
Exchange facilities.
3. Foreign Currency Drafts
You can now avail of our FCY DD facility to make payments for various purposes such as
payment of University fees abroad, making a gift remittance to a friend or relative , payment of
application fees for various exams like TOEFIL , GMAT etc. , payment for medical treatment
abroad and all other permitted purposes as per the RBI guidelines. FCY Demand Drafts are issued
in all the four major currencies like USD, GBP, Euro and JPY.
4. Foreign Currency Telegraphic Transfers
You can now remit your funds by one of the fastest and the safest mode of transfer - Telegraphic
Transfer.
Through telegraphic transfers, the funds are credited directly to your bank account
CHAPTER -3
OBJECTIVE OF THE STUDY
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1. To study the concept of retail banking.
2. To analyse products, drivers of growth and opportunities of retail banking.
3. To understand the importance of technology in retail banking.
4. To understand the role of ATMs in bolstering bank’s bottom lines.
5. To understand the future growth of the industry
NEED AND SCOPE OF THE STUDY
"Need is the mother of Invention". Nobody goes for invention unless and until there is specific
need. Similarly a study is also undertaken when there is a curiosity to find out something or to
know in detail about something.
Study of Retail banking is the subject rarely chosen by the student especially in HDFC bank.
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I heard a lot about Retail banking and had keen interest to work on that, I got an opportunity to
undergo a project in retail banking in HDFC bank. The practical experience which I took here was
wonderful and cumbersome too. Since my area of working was in Nagpur City & Planed to do a
detailed study on it.
This study has a great scope as similar type of Retail banking followed by various other
financial institutions.
• All round increase in economic activity.
• Increase in the purchasing power. India has 200 million households and 400 million
middleclass population more than 90% of the savings come from the house hold sector.
Falling interest rates have resulted in a shift. “Now People Want To Save Less And
Spend More.”
• Nuclear family concept is gaining much importance which may lead to large saving;
large number of banking services to be provided is day by day increasing.
LIMITATIONS OF THE STUDY
The study has some limitations as follows:
1. LIMITATION OF TIME
The duration for conducting the survey was very limited and even the people who were
interviewed personally had a very limited time to share their views , mainly because of March
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ending i.e. when research was conducted. So overall information was collected in a limited
time period.
2. LIMITATION OF SAMPLE SIZE
The sample size selected was too less as compared to the actual target audience. So it may not
be enough representative of the population to a large extent.
3. LIMITATION OF RESPONDENT INDISPOSITION
Respondents might not have given correct information or might have hesitated in giving
correct information. therefore, respondent’s indisposition is a major limitation of any research.
4. LIMITATION OF SKILL
Being a student, there is a lack of experience and skill of conducting a marketing research. The
expertise needed is not available to high extent at this level.
CHAPTER-4
RESEARCH METHODOLOGY
Meaning of Research:-
Research is a scientific and systematic search for pertinent information on a specific topic. In fact,
research is an art of scientific investigation. It is an academic activity and as such the term should
be used in a technical sense. Research is, thus an original contribution to the existing stock of
knowledge making for its advancement. It is a pursuit of truth with the help of study, observation,
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comparison and experiment. In short, the search for knowledge through objective & systematic
method of finding solution to a problem is "Research".
Definition:-
1. According to Advanced Learner's Dictionary, "A research is a careful investigation or
inquiry especially through search for new facts in any branch of knowledge".
2. According to Clifford Woody, "Research comprises defining and redefining problems,
formulating hypothesis or suggested solutions; collecting, organizing and evaluating data;
making deductions and reaching conclusions; and at last carefully testing the conclusions to
determine whether they fit the formulating hypothesis".
3. “Business research is defined as the systematic and objective process of gathering,
recording, and analyzing data for the aid of making business decisions.” --- William
Zikmund
Research Design:
The study is based on primary data collection with a sample size of about 200 people. The
questionnaire used for the sample survey is a structured and non-disguised questionnaire and
consists of two major sections.
Methods of data collection-
Collection of data is by gathering of information for the subject matter under study of enquiry to be
taken.
Primary data collection:
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In primary data collection, you collect the data yourself using methods such as taking interviews
and filling up of questionnaires. The key point here is that the data you collect is unique to you and
your research and until you publish, no one else has an access to it.
• Questionnaires
• Focus Group Interviews
• Observations
• Case-Studies
Secondary data collection:
All methods of data collection can supply quantitative data (numbers, statistics or financial) or
qualitative data (usually words or text). Quantitative data may often be presented in tabular or
graphical format. Secondary data is data that has already been collected by someone else for a
different purpose.
• Websites.
• Books
• Journal
HYPOTHESIS:
Hypothesis is usually considered as the principle instrument in Research: Its main function is to
suggest new experiments and observations. In fact, many experiments are carried out with the
deliberate object of testing hypothesis. Hypothesis means a mere assumption or some supposition
to be proved or disproved. Thus a hypothesis may be defined as a proposition set forth as an
explanation for the occurrence of some specified group of phenomena either asserted merely as a
provisional conjecture to guide some investigation. A research hypothesis is a predictive statement,
capable of being tested by scientific methods, that relates and independent variables to some
dependent variables.
Literature Review
2.1
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One key industry where there are calls for greater levels of innovation is the retail banking
sector (Sullivan, 2009; KPMG & Innovaro, 2007; Capgemini, et al., 2008). The retail banking
sector is currently struggling as it comes under greater competitive pressure from a number of
sources. Customers are becoming more demanding (Accenture, 2008). Banking services are
gradually being seen as commodities (Onufrey & Moskowitz, 2008; Genesys, 2008). Non-banking
organisations are increasingly entering the marketplace to compete for customers (Deloitte, 2008).
Combing these trends, there appears to be a strong impetus for greater levels of innovation to
enable individual banks to differentiate themselves in an increasingly
International Journal of Arts and Sciences 3(2): 66 - 82 (2009) CD-ROM. ISSN: 1944-6934 ©
InternationalJournal.org competitive marketplace. Yet retail banks are behind other industries in
terms of managing the process of innovation (KPMG & Innovaro, 2007; Mckeon & Kandybin,
2006). In order to address this issue, a deeper understanding of innovation in the retail banking
sector would be valuable. Indeed, relatively little is known about innovation in the retail banking
sector. This is symptomatic of the wider problem that relatively little is known about ‘services
innovation’ in general (Tidd & Bessant, 2009).
From the body of research that has been conducted on innovation in the retail banking
sector, some significant findings have emerged. For instance, KPMG and Innovaro (2007:15) point
out that innovation in this sector tends to be both incremental and short-term in nature (ibid). A
longitudinal study conducted by Roberts and Amit (2003) on the Australian retail banking sector
offers further insights. According to this study, between 1981 and 1995, the vast majority of
innovations in the Australian sector were imported from banking industries in other countries.
Furthermore, the study shows that within the Australian sector, innovations were quickly copied by
competitors, usually within one year. In fact, only one of the twenty-six major innovations
observed by the study avoided imitation for a prolonged period of time. What is more, this rare
proprietary position did not realise significant financial performance improvements for the bank in
question. The study showed no evidence that innovating first in the market significantly impacted
financial performance. Rather, findings from the study suggest that a bank’s financial performance
was positively related to historically undertaking incremental innovative activities that were new-
to-the-firm, but not necessarily new to the sector as a whole. The findings from this study appear to
align with Michael Porter’s assessment of the retail banking sector (Klinkerman, 1998). According
to Porter, ‘The banking industry is overwhelmed by imitation...One bank goes into Internet
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banking; all banks go into Internet banking. One bank puts branches in supermarkets; all banks
put branches in supermarkets’ (ibid. p.40). However, Porter suggests that now is the time for
banks to move away from their imitative instincts in order to provide a differentiated offering in
the marketplace. In summary, these key findings demonstrate that innovation in the retail banking
sector tends to be incremental and imitative in nature, and retail bank performance is positively
related to the continuous adoption of new-to-the-firm ideas.
2.2 Distribution Channels
A key area of strategic importance for retail banks is distribution channel management
(Bruce et al., 2009; Capgemini et al., 2008). Fundamentally, a distribution channel can be
described as any delivery method through which a bank can provide services to customers. Each
individual bank typically operates an array of distribution channels, collectively termed the bank’s
multi-channel mix. Across the multi-channel mix, those channels that do not involve physical face-
to-face contact with bank staff members have been called ‘direct channels.’ Examples of the most
commonly employed direct channels include: call centres, web banking, direct mail, and automated
teller machines. Historically, banks have actively sought to migrate simple transactions, products
and services away from tellers towards direct channels. This global trend has been driven by a
combination of three underlying forces. Firstly, migration towards direct channels represents a cost
saving opportunity for banks, particularly migration towards web banking (Peppard, 2000;Farquhar & Panther, 2007). Secondly, the migration of simple, low-value activities away from in-
branch tellers, allows staff to focus instead on the sale of high-value products and services
(BearingPoint, 2006). Thirdly, direct channels have the potential to offer customers enhanced
levels of service and convenience (Peppard, 2000). As a result, most clicks and mortar banks must
now manage
International Journal of Arts and Sciences 3(2): 66 - 82 (2009) CD-ROM. ISSN: 1944-6934 ©
InternationalJournal.org innovation across a broad range of both direct and indirect distribution
channels. Given the aforementioned importance of innovation to firm performance, it is surprising
that there are no academic studies to our knowledge that have focused specifically on the nature of
innovation in the context of the multi-channel mix. Consequently, this study seeks to provide a
deeper insight into the nature of distribution channel innovation in the retail banking sector. In
particular this study seeks to identify best practice channel innovations for management
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consideration. Moreover, the study also seeks to bring to the surface relevant emerging channel
innovation trends
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CHAPTER -5
DATA ANALYSIS
After the data have been collected, the researcher turns to the task of analyzing them.
The analyzing of data requires a no. of closely related operations such as establishment
of categories, the application of these categories to raw data through coding, tabulation
and then drawing statistical inferences. The unwieldy data should necessarily be
condensed in to a few manageable groups and tables for further analysis. Thus data
should classify into some purposeful and usable categories. Data are transformed into
symbols that may be tabulated and counted. Editing is the procedure that improves the
quality of the data for coding. With coding the stage is ready for tabulation, is a part of
the technical procedure wherein the classified data are put in the form of tables.
Analysis work after tabulation is generally based on the computation of various
percentages; coefficients etc. by applying various well defined statistical formulae. In
the process of analysis, relationship or differences supporting or conflicting with
original or new hypotheses should be subjected to test of significance to determine with
what validity data can be said to indicate any conclusion.
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CHAPTER -6
DATA INTERPRETATION
Types of Business I have covered during the research
0
20
40
60
80
100
Trader
Shopkeeper
Professional
Service Provider
Graph No.-2.2
How many have current account
Do you have current a/c
0
20
40
60
80
100
120
140
160
Yes
No
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Graph No.-2.3
which bank you hold the A/C
0
10
20
30
40
50HDFC
Union Bank of
india
Sadhna sehkari
Bank
Nagpur nagrik
Bank
Axis Bank
Panjab National
Graph No.-2.4
1) Any special facility you are using from your existing bank?
0
20
40
60
80
100
120
140
160
Yes
No
Which type of facility
0
20
40
60
80
100
120cash credit
LAP
CashManagementSystem
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Graph No.-2.5
2) Does your bank provided convenience intercity banking like
•Free any where cheque payment
• Free payment and collection through NEFT
• Free RTGS collection and payment
• Free Demand Draft
• Free pay order
0
10
20
30
40
50
60
70
80
Yes
No
Graph No.-2.6
1) Does your bank provide personal banking?
0
20
40
60
80
100
120
140
Yes
No
Graph No.-2.7
1) Does your bank provide free account statement hard copy or soft copy?
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0
20
40
60
80
100
Yes
No
Graph No.-
1) What do you prefer more?
Cash transaction
Cheque transactionElectronic transaction
0
20
40
60
80
100
120
Cheque
Electronic
Cash
Graph No.-
1) Does your bank provide free NEFT, RTGS services?
0
20
40
60
80
100
120
140
160
Yes
No
Graph No.-
1) Does your bank provided phone banking?
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0
50
100
150
Yes
No
Graph No.-
1) Does your bank provided setting up facility?
0
20
40
60
80
100
120140
160
Yes
No
Graph No.-
1) Do you always get prompt services whenever you visit the branch?
0
20
40
60
80
100
120
140
yes
No
Graph No.-
1) Are you satisfied with your financial transaction with the bank?
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0
20
40
60
80
100
120
Yes
No
Graph No.-
Do you have swiping machine/ME
The Role of ATM
CULTURE BOLSTERING BANK’S BOTTOM LINES
In the last 2-3 years, technological changes coupled with increased customer
expectations have literally forced banks to offer services like ‘Anywhere, Anytime,Anyhow’ banking. This has perhaps led to the rapid growth of a kiosk termed ‘ATM’,
indigenously as well as globally.
Banks across the board have been on an ATM installation spree as part of their
retail strategy. Till 1997, there were just 400 ATMs across India. Two years thereafter,
largely driven by the new generation private banks storming the bastion of nationalized
banks, the number of ATMs soared to over 1,100,280 of them installed by foreign
banks, 350 December 2000, the number of ATMs galloped to 2,175 and by May 2000,
it touched 3,165. Banks went on the installation binge because, besides saving on
infrastructure and employee costs, ATMs do not require permission as is necessary for
opening a branch.
The question arises, whether RBI is now seeking to curb this trend or no? Well,
RBI’s rationale is that the directive does not prevent a bank from installing ‘stand-
alone’ off-site ATMs with functions of deposits and withdrawals, but only ensures that
these are not used for front or bank office functions. But experts are still mystified with
the unprecedented decision of RBI.
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Even with the regulation imposed by RBI, ATMs, though operational in the
country for quite some time, are expected to make a big headway in India. The growth
of the past few years is just the tip of the iceberg and the number of ATMs is likely to
cross all the limits, considering the current growth that banks are looming at, driven bytechnology and the retail thrust.
This means that the number of ATMs can move only one way and that is up.
The Indian ATM landscape is going to look a lot different. If RBI is serious about
pushing Indian banking to global standard, it may be time it did away with regulations
like these.
INTERNET BANKING- A BEGINNING THAT HAS NO END
So you’re tired of standing in a queue, waiting for your account statement to be
updated. And you still remember that draft which you wanted early but was only ready
by the next day? No wonder you were one of those cheering heartily when it was
announced that banking would soon migrate to the World Wide Web. At last, making a
demand draft wouldn’t be such a traumatic experience. Much has been made of the
entry into Internet banking by a few players in India. But the ground reality is a bit of a
let down. Net banking in India has quite a long way to go. Of course, things have
changed a bit since the old days because of technology. At present, banks in the country
are wooing customers with automated teller machines (ATMs) in virtually every city
and tele-banking is becoming more the norm than the exception (at least in
multinational and private sector banks). It can’t be denied that a beginning has also
been made in Net banking.
Within less than half a decade, since the launch of Net banking, India matches
America in the percentage of customers using Net banking (20 per cent) and has left
Europe far behind with only 12 to 15 percent users.ICICI Bank, the first to offer online banking, has more than one million
customers banking from their computers. That is a neat one-six months here. This is
also true for other banks such as HDFC, HSBC, City, IDBI, ABN-Amro, GTB and
UTI.
The thing about Net banking is that it only improves efficiency and increases
client satisfaction but also adds to the bank’s profitability by cutting operational costs.
Sample this survey conducted by Bank ware, a division of Polaris Software.
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Small wonder then that most banks are aggressively promoting their Net
banking services. As all the high-worth customers have Internet connections either at
their home or at their offices, a complete bouquet of Internet services is essential to
keep them happy. For the urban banker already logging on the net to check his balance,transfer funds from one account to another within bank, issue stop- cheque and
chequebook instructions, etc, the celebrations, might seem two years too late. But there
is another reason for the excitement among bankers: complete Internet banking.
A few months ago, the RBI set up the electronic fund transfer (EFT) facility,
which is about to take Internet banking to the next level of evolution. The EFT makes
complete Internet banking a possibility. With this facility, Internet bankers can now
transfer funds across different banks without as much as picking up their pen. An
account holder fills out a form on the Internet giving details of the account to which he
or she wants to transfer money. The bank sends the requests to RBI’s EFT for the inter-
bank settlement and the money is credited into the beneficiary’s account within one
working day. This is possible even in the beneficiary’s account is not Internet enabled.
Banking in India will never be the same again just as you are rushing off to
work on a depressing Monday morning; your wife decides to make things worse. “The
credit card bills have to be paid by tomorrow. You had better go to the bank to see
whether your salary cheque has been credited into your account,” she orders. You want
to argue, but decide against it. Ten minutes later you are at the bank. Unfortunately, so
is half the neighborhood. The bank clerk is nowhere. Perhaps his wife on a similar
errand has sent him. Half an hour later you finally manage to leave the damn bank, bur
you have missed your regular bus. You make it to office a full hour 99late.
Today, even the largest mainstream branches in the US have Net operations.
The reason: ‘low costs’. Management consultancy Booz Allen & Hamilton came out
with a North American Internet Banking Survey as far back as 1996, which cited
figures proving that a real –world branch was the most expensive way of delivering
services. Tele-banking and ATMs do lighten the load at the counter and reduce teller
costs, but the cheapest mode of delivery is Internet and PC banking. If banks are
redefined as organizations, which crunch information, then they just cannot do without
technology. They just cannot do without the Internet.
That is what the Internet banking revolution is ultimately all about. Web
banking has made a definite beginning hut the utility factor is on the low side.
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The survey’s estimates of cost to the bank per transaction: $1.07 (full-service
branch), $0.54 (telephone), $0.27 (full-service ATM), $0.015 (PC banking) and $0.01
(Internet banking). According to the survey, by 2009, 35 million US households were
banking through the Net. They were the most profitable customers, accounting for 40%of retail banking profits.
CHAPTER -7
FINDINGS OF THE STUDY
At the turn of the century, one of the largest employers in America was the U.S.
Ice trust, which cut, stored, and delivered ice for people’s “iceboxes.” That industry
doesn’t employ many people now, although it’s not because people have forsaken theneed to cool fresh food. Rather, a product born of new technology, the refrigerator,
entered American homes and all but eliminated the need for ice cutters.
What will happen to the retail banking industry in the coming decades critically
depends on how successfully banks can provide value to their customers. The challenge
for both managers and banking supervisors is to understand what customers want –to
distinguish between cutting ice and keeping food cold.
Banking has changed a lot in the last decade. These changes can be wholly and
solely attributed to the fast developments in information technology and its shrewd use
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by the bankers to quickly provide a new range of products and services to customers.
Banks have been forced to adopt technology to meet increasing customers. Banks have
been forced to adopt technology to meet increasing customer demands, to overcome
fierce competition from other banks and to deliver higher share holder value.Technology is now being seen as the key to retain customers and deal with falling
margins and ballooning costs. Many domestic banks still continue to rely on age- old
“counter” banking. The difference could be well established with private sector bank,
where, an ATM is seen as a more visible delivery channel than a branch. In contrast, the
PSU bank still relies on branch as the prime medium for trapping new customers the
present strategies seems inadequate.
STAGES OF INTERNET BANKING
Information kiosks
Bank websites offer basic traditional information on the financial products and services
on offer in traditional branches
Who’s there: Most Indian banks, especially public sector banks
Basic internet banking
Customers can do basic transactions like opening an account, paying utility bills andchecking their balance
Who’s there: Some of the smarter private sector and foreign banks
E-commerce
Banks become electronic marketplaces where individuals and companies can buy and
sell through a bank’s payment gateway
Who’s there: The real web enthusiasts like HDFC Bank
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ANALYSIS OF FINDINGS
On the basis of study done and data collected, the analysis has been made. It was found
that public sector banks still enjoy the hold over masses. Despite the excellent performance by private sector bank, most of the respondent still feel safe with public
sector bank . but the private sector banks are also gaining pace. Especially in the case of
HDFC bank it is amazing. Most of the 76 respondent were enthusiastic about HDFC
bank and 60 % of them were planning to open a new account with HDFC bank. The
reason behind this enthusiasm could be as per the respondent:
HDFC bank is
•
Most customer friendly• Technologically most advanced
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• Most innovative and efficient
• Fastest growing
Most of the respondent felt that HDFC bank is expanding its operation and network rapidly. According to the study done in DELHI I found that four years back there were
only 8 ATM but now in july 2003 , the number of ATM in Delhi has gone up to 60. its
amazing that in only one city HDFC installed 52 ATM in four years. According to
branch manager GKII, HDFC bank is planning few more ATM in Delhi this year. They
are really upbeat with this growth, particularly he was very optimistic about growth in
retail banking because he feels that it is associated with mass banking and with the help
of world class services and product they can pull the customer of public sector bank.Overall bank is exploring new market and coming up with new branches and ATM.
On the basis of data collected from Delhi and Deharadun it was found that most of the
customers of HDFC bank are well educated and equipped with internet services either
in home, office or at cybercafé. 40 % of the respondent frequently use net for different
purpose of banking but most of them around 70 % of the net users for banking still feel
insecure with the security problem arising in net banking despite the assurance from
banking this regard an employee of SDA branch of HDFC bank says that it is due to the
old mind set , we people in India cant shed this mindset easily, but he was optimistic
too that in the near most of the HDFC bank customer will be using net banking for all
the purpose rather checking balance and ordering cheque book only.
Data from Delhi shows it is fast turning into credit based society from cash based
society. 90% of the respondents were planning a loan from a bank. When asked from
which bank they are likely to avail the loan. 80 % of them were not sure of that they
had some preconditions in their mind eg. interest rate should be low, terms and
conditions should be easy, banks must be cooperative, there should not be any hidden
cost, approval of loan should not take longer period of time etc. in this regard I think
banks need to work hard to educate loan seeker about all the questions they have in
their mind. In fact bank should conduct time to time survey know the mind set of loan
seeker so that the product can be designed accordingly. in this regard HDFC bank in
Delhi has done a tremendous job . When visiting around the city I found people from
different banks including HDFC bank campaining at different places and dealing with
people regarding the loan provided by their banks, their terms and conditions and other
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related things. In fact HDFC bank has made loan facility very easy for loan-seeker and
the range of loans provided is wide. for example home loan, housing loan, vehicle
loan(4 wheeler and 2 wheeler), education loan and even loan for foreign trip.
Very few respondents were enthusiastic about insurance business of HDFC. ThoughHDFC has collaborated with DSP meryllnch in insurance segment, it still has to work
hard in this segment.
Overall HDFC bank is a real world class banking organization that is clear from study
and performance of the bank in Indian market. From the responses made by bank
employees and the data from other sources like magazines, websites etc. It is found that
HDFC bank has done very good job in field of technological infrastructure setup. It is
using world class software for its back office banking operation, net banking, phone
banking and mobile banking. You have access to your account virtually from
everywhere even from moving train or while you are flying. It uses software from iflex
solution, Intel corp. and others to help its operation. In fact HDFC bank is the real
technology enthusiast in the banking sector in India.
HDFC Bank Ltd.: Solution
HDFC Bank received many benefits from Internet banking solutions based on high-
performance Intel-based servers and software. These include a lower cost of entry than
RISC-based solutions, more freedom of choice in choosing vendors, products and
partners, and faster solution development due to ease of applications with the large base
of skilled technical engineers. HDFC Bank worked closely with solution providers I-
flex Solutions Ltd. and SR Singapore Pvt Ltd. for its Internet banking solutions, an
example of the broad ecosystem of fellow travelers conversant in Intel architecture,
software and solutions. These benefits come at no sacrifice to the essential robustness
required of any solution in the financial services industry.
"We have found that Intel architecture Internet banking solutions meet business-critical
standards of reliability, availability, scalability and manageability," says C.N. Ram,
head of Information Technology at HDFC Bank. "Cost effectiveness has also been very
good. Intel architecture provides a cost-effective growth path, from a low cost of entry
that can be scaled upward to meet a bank's growth needs." Commenting on the speed at
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which Intel architecture-based solutions can be deployed, Because Internet banking is
relatively new at HDFC Bank, detailed data is not yet available on return on
investment, but the early returns indicate that the bank's e-Business solutions have
helped to improve customer services, as well as in the acquisition of new customers.For instance, the bank's retail customer base has grown threefold during the two years
that Internet banking has been in operation. And on the corporate side, Internet banking
is popular and in demand, as many corporate customers are using it to automate their
own value chain.
Internet Banking Solution Details
The retail Internet banking solution, ITPS, is an Internet transaction processing engine
built around Microsoft Transaction Server-based middleware and uses the COM
application architecture. This is deployed using a Java* 2 Enterprise Edition (J2EE)
class application server, with the architecture layers interfacing with each other via
Extensible Markup Language (XML). The application server runs on two 8 way Intel®
Pentium® III Xeon™ processors with 4GB RAM. The Microsoft* SQL Server*
database supporting the application runs out of two 4 way Intel® Pentium® III Xeon™
processors with 4GB RAM.
In the retail space, the mobile Internet banking solution offers two services: GSM-based
cell phones utilize Short Message Service (SMS) via Short Message Service Centers
(SMSC) provided by the mobile service provider; Intel architecture-based Wireless
Application Protocol (WAP) services rely on a micro-browser from Phone.com on the
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WAP mobile clients. Two-way connections from the mobile service provider to the
bank's ITPS Internet transaction processing engine are via the Internet using SSL 3.0 to
guarantee security.
Developing the Solution
To complement its real-time services available via branch, ATM, phone banking and
call center, HDFC Bank decided to Internet-enable its services. At that point, HDFC
Bank executives gathered and reviewed information from multiple sources about
platforms and software solutions, and took into consideration the advice of I-flex and
other trusted solution providers. In evaluating the possible choices, HDFC Bank first
looked to the applications and system software that were available on Intel architecture.
In the retail space, for instance, I-flex proposed the ITPS Internet banking application
that runs on Intel-architecture, and from that point the basic due diligence began.
The key question, of course, was would an Intel-based solution offer the performance,
reliability, availability, scalability and manageability required of any business-critical
solution. Availability of consistent support was also a key consideration in choosing the
Intel platform. Says Mittal, "We generally do not have the luxury to reinvent the
wheel." With these elements in mind, HDFC Bank chose Intel architecture for retail,
corporate and mobile Internet banking.
"The lower cost of entry and faster time to market played a key role in our decision,"
says Mittal. In fact, HDFC Bank started with database and application software on the
same machine, and has since split these into separate servers. HDFC Bank is currently
scaling its solution to a Microsoft-based high-availability cluster. Says Mittal, "To keep
up with growing demand, we have been scaling both up and out." Intel architecture also
enabled HDFC Bank to take advantage of the latest technology enhancements inMicrosoft's product suite, and in the Web application server areas, Java deployment and
J2EE-based application servers.
In summary, HDFC Bank has been well pleased with its choice of Internet banking
using Intel architecture-based solutions. "The quality of the solutions is impeccable and
the attitude of Intel [e-Business Network] members has been very helpful," Mittal says.
"We are highly satisfied with our e-Business solutions running on Intel architecture."
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CHAPTER- 9
CONCLUSIONS
From the research we can derive many useful conclusions like:
1) Retail banking has become a much more fiercely competitive and complex
business that it was five or 10 years ago.
2) Managers must deal with multiple sales and delivery channels, increasing
competition and an ever-increasing reliance on technology to maintain
competitive advantage.
3) Banks that are serious about future prospects should get into action of
converting lofty strategic vision into a set of specific technology initiatives that
have owners, deadlines, and appropriate capital allocated for this completion.
4) Most of the people deal with private sector banks.
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5) Mostly the businessman visit the bank daily otherwise private employees visit it
monthly or fortnightly.
6) Most of the people use ATM more frequently followed by liability products and
loans.7) Most of the people deal with HDFC Bank followed by ICICI Bank and Bank of
Baroda.
8) Most of the customers of HDFC Bank IDBI Bank are highly satisfied.
9) Most of the customers deal with the bank due to the services provide to them
and secondly due to convenient location.
SUGGESTIONS AND RECOMMENDATIONS
Finally some recommendations for the company are as fallows:-
1. The bank should provide life time valid ATM card to all its customers.
2. Minimum balance for savings account should be reduced from Rs 5000 to Rs
1000, so that people who are not financially strong enough can maintain their
account properly The company should provide a pass book to all its customers
3. Make people understand about the various benefits of its products.
4. Company should organize the program in the society, so that people will be
aware about the company and different facilities of the bank.
5. Company should open more branches in different cities.
6. Company should open more ATM’S in different cities.
7. Company should appoint Technician at every branch for resolve the ATM’S
problem.
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BIBLIOGRAPHY
Books:
1. Kotler, Philip “Marketing Management”, the Millennium (10th) Edition,
Prentice Hall Inc, Page no. 142-45
2. Kothari, C, R., “research Methodology”, 2nd Edition, Wishwa Prakashan.
3. Brown, T. J., Churchill, G. A. & Peter, J. P. (1993), “Improving the
Measurement of Service Quality”, Journal of Retailing , Volume 69, No. 1,
spring, pp. 127-139.
4. Levesque, T. & McDougall, G. H. G., (1996), “Determinants of Customer
Satisfaction in “Retail Banking”, International Journal of Bank Marketing, 14/7,
pp. 12-20.
Journals
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1. Parikh, Shweta, ‘What is banking?’ Management of Financial Institutions, the
Institute of Chartered Financial Analysts of India (ICFAI),
2. Parikh, Shweta, ‘Wholesale and Retail Banking’ Management of Financial
Institutions, The Institute of Chartered Financial Analysts of India (ICFAI).
Magazines:
1. Mazumdar, Aloka, “turning to retail”, Business India, October.
2. Mopban, Devendra, “What the customer wants”, Business India,
3. Rao, Rohit, “E-banking posers”, Business India
Websites & Search Engines:
www.indiainfoline.com
www.googlesearch.com
www.equitymaster.com
www.bbcworld.com
www.hdfc.com
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