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Summer Training Report

On

"STUDY OF TRAINING AND DEVELOPMENT HDFC BANK


A training report submitted in partial fulfillment of the requirement for the degree of

MASTERS OF BUSINESS ADMINISTRATION (2007-2009) Punjab Technical University


Submitted by: Mohit Manchanda

Chandigarh Business School. Landran, Mohali, Punjab. 2008

Declaration
I hereby declare that summer training report

entitled "STUDY OF TRAINING AND DEVELOPMENT HDFC


BANK is my own original research work & this report

has not been submitted to any university institute for the award for professional degree.

manchanda 3 CBS

(____________) Name: mohit MBA

Acknowledgement
The research study conducted to study the training and development techniques of Hdfc bank has given me the opportunity to enhance my knowledge in practical application. It has given me a greater insight into tough challenges of banking at the same time enhanced my knowledge of basic banking system. I would like to express my sincere gratitude to those persons who were responsible for it. I would like to express my Special regards towards Honourable Director of Chandigarh Business School , Dr. (Col) S.P.S Bedi. And Training Placement Officer for creating opportunity to undergo eight weeks management/ industrial training . I would like to thank Dr. R. K.Ghai (Dean, Chandigarh Business School), & Dr. Meenu Jaitly (Head, MBA Programme) their valuable guidance. I am highly indebted and extremely thankful to Ms. Geetika Sharma my project guide who was a constant source of inspiration and encouragement to me. The strong

interest evinced by her has helped me in dealing with the problems; I faced during the course of the project work. I express my profound sense of gratitude to her for timely help and cooperation in completing the project. At the outset I would like to convey my sincere thanks to Mr. Lalit Batra the cluster Head of Hdfc for providing me with all the facilities at their premier branch of Mohali. (Mohit Manchanda)

Certificate

Table of Contents
1.

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

Contents
2.

Objectives of the study


3.

Executive Summary
4.

An Introduction to the Indian Banking Industry


5.

An Introduction to training and development.


6.

Training in the Indian banking Sector


7.

HDFC Bank Profile


8.

Research Methodology
9.

Findings and interpretation


10.

Recommendations
11.

Conclusion
12.

Annexure
13.

Bibliography

Objective of the Study


Objectives:

My objectives of studying the training and development techniques are as under:

Major Objective:
The major objective of the study is to have an understanding of the concept of training and development and to have an idea about the various training and development methods be adopted by the banks. The major emphasizes is on the training and development facilities adopted by the Hdfc bank and their evaluation.

Sub - Objective:
To study the training process of the bank. To study the various objectives for which the employees need to be provided training. To find the strengths and weakness of the methods adopted by the bank. To evaluate performance of the training program of the organization. To provide suggestion to the bank to make their training program more effective and efficient.

Motivation of Research:
Desire to get a research degree along with its consequential benefits. Desire to face the challenges in solving the unsolved problems i.e. concern over practical problems initiates research. Desire to get intellectual joy of doing some creative work.

Executive Summary

The present day scenario training and development have a major role to play in the success of an organization. It is important not only from the point of view of the organization, but also for the employees. Training is valuable to the employees because it will give them greater job security and an opportunity for advancement. A skill acquired through training is an asset for the organization and the employee. The project i have selected provides a deep insight regarding the various training and development techniques that could be adopted, and a better idea for making training process more effective and result oriented.

Statement of Problem:
To have a deep insight of the concept of training and development.

Objective of study:
To study the various training and development methods adopted by hdfc bank, the objectives for which these methods are being selected, the strengths of these methods and the evaluation of the training process of the bank.

Methodology:
Primary data was obtained by getting questionnaire filled. Secondary data has also been used in the preparation of the report

Sample Size: I selected a sample of 30 respondents, who are employees


of hdfc bank.

Analysis Details:
1. To get an insight about the various training and development methods. 2. To study the various training and development method adopted by the hdfc bank. 3. bank. To find the strengths and weakness of the methods adopted by the

4. To evaluate performance of the training program of the organization.

LIMITATIONS OF THE STUDY:


In an attempt to make this project authentic and reliable, ever possible aspect of the topic was kept in mind. Nevertheless, despite this fact lot many constraints were at play during formulation of this project. The main being: Paucity of time resources due to which we cold take sample of only 25 respondents. Despite the best efforts to include all important aspect the chances of unintentional exclusion few cannot possible be ruled out. The chances of biased cannot be eliminated, though all necessary steps wee taken to avoid the same. Lack of interest on the part of few respondents restricted the scope of the research.

An Introduction of the Indian Banking Industry

News Release
HDFC BANK LTD. - FINANCIAL RESULTS (INDIAN GAAP) FOR THE YEAR ENDED MARCH 31, 2008
The Board of Directors of HDFC Bank Limited approved the annual audited (Indian GAAP) accounts for the year ended March 31, 2008 at their meeting held in Mumbai on Thursday, April 24, 2008.

FINANCIAL RESULTS: Profit & Loss Account: Quarter ended March 31, 2008
The Bank earned total income of Rs.3,505.5 crores for the quarter ended March 31, 2008, as against Rs.2,321.0 crores in the corresponding quarter ended March 31, 2007, registering a growth of 51.0%. Net revenues (net interest income plus other income) were Rs.2,191.4 crores for the quarter ended March 31, 2008, an increase of 51.2% over Rs.1,448.9 crores for the corresponding quarter of the previous year. Interest earned (net of loan origination costs and amortization of premia on investments held in the Held to Maturity (HTM) category) increased from Rs.1,926.5 crores in the quarter ended March 31, 2007 to Rs.2,956.2 crores in the quarter ended March 31, 2008, up by 53.4%. Net interest income (interest earned less interest expended) for the quarter ended March 31, 2008 increased by 55.7% to Rs.1,642.1 crores, driven by average asset growth of 50.3% and a core net interest margin of around 4.4%. Other income (non-interest revenue) registered strong growth of 39.3% from Rs.394.4 crores for the quarter ended March 31, 2007 to Rs.549.3 crores for the quarter ended March 31, 2008. The main contributor to Other Income for the quarter was fees and commissions of Rs.490.4 crores, up 37.6% from Rs.356.3 crores in the corresponding quarter ended March 31, 2007. The other two major components of other income were foreign exchange/derivatives revenues of Rs.60.4 crores and profit/ (loss) on revaluation/sale of investments of Rs. 11.4 crores, as against Rs.103.3 crores and Rs. (65.6) crores respectively for the quarter ended March 31, 2007.

Operating expenses for the quarter were at Rs.1,102.7 crores, as against Rs. 683.9 crores for the corresponding quarter of the previous year. Provisions and contingencies for the quarter were Rs.465.1 crores (against Rs.267.1 crores for the corresponding quarter ended March 31, 2007), principally comprising of specific provisions for non-performing assets and general provisions for standard assets of Rs.293.0 crores and provisions for tax, legal and other contingencies of Rs. 172.7 crores. After providing Rs.152.5 crores for taxation, the Bank earned a Net Profit of Rs.471.1 crores, an increase of 37.1% over the quarter ended March 31, 2007.

Profit & Loss Account: Year ended March 31, 2008


For the year ended March 31, 2008, the Bank earned total income of Rs.12,398.2 crores as against Rs.8,164.2 crores in the previous year. Net revenues (net interest income plus other income) for the year ended March 31, 2008 were Rs.7,511.0 crores, up 50.7% over Rs.4,984.7 crores for the year ended March 31, 2007. Net Profit for year ended March 31, 2008 was Rs.1,590.2 crores, up 39.3%, over the corresponding year ended March 31, 2007.

Balance Sheet: As of March 31, 2008


Total balance sheet size increased by 46.0% from Rs.91,236 crores as of March 31, 2007 to Rs.133,177 crores as of March 31, 2008. Total deposits were Rs.100,769 crores, an increase of 47.5% from March 31, 2007. With savings account deposits of Rs.26,154 crores and current account deposits at Rs.28,760 crores, the CASA mix continued to remain healthy at around 54.5% of total deposits as at March 31, 2008. Net advances as at March 31, 2008 were Rs.63,427 crores, an increase of 35.1% over March 31, 2007. The Banks total customer assets (including advances, corporate debentures, investments in securitised paper, etc. net of loans securitized and participated out) were Rs.70,403 crores as of March 31, 2008.

Dividend:
The Board of Directors recommended an enhanced dividend of 85% for the year ended March 31, 2008, as against 70% for the previous year. This would be subject to approval by the shareholders at the next annual general meeting .

Capital Infusion & Capital Adequacy:


In June 2007, the Bank allotted 1,35,82,000 equity shares on a preferential basis to HDFC Ltd. aggregating to Rs. 1,390 crores. In July 2007, the Bank

made a public offering of 6,594,504 American Depositary Shares (ADS), aggregating to of Rs. 2,393 crores (net of underwriting discounts and commissions). The Banks total Capital Adequacy Ratio (CAR) as at March 31, 2008 stood at 13.6% as against the regulatory minimum of 9.0%. Tier-I CAR was 10.3% as against 8.6% as of March 31, 2007.

BUSINESS UPDATE:
As of March 31, 2008, the Banks distribution network was at 761 branches and 1,977 ATMs in 327 cities as against 684 branches and 1,605 ATMs in 320 cities as of March 31, 2007. Against the regulatory approvals for new branches in hand, the Bank expects to further expand the branch network by around 150 branches by June 30, 2008. During the year, the Bank stepped up retail customer acquisition with deposit accounts increasing from 6.2 million to 8.7 million and total cards issued (debit and credit cards) increasing from 7 million to 9.2 million. Whilst credit growth in the banking system slowed down to about 22% for the year ended 2007-08, the Banks net advances grew by 35.1% with retail advances growing by 38.6% and wholesale advances growing by 30%, implying a higher market share in both segments. The transactional banking business also registered healthy growth with cash management volumes increased by around 80% and trade services volumes by around 40% over the previous year. Portfolio quality as of March 31, 2008 remained healthy with gross nonperforming assets at 1.3% and net non-performing assets at 0.4% of total customer assets. The Banks provisioning policies for specific loan loss provisions remained higher than regulatory requirements.

Merger with Centurion Bank of Punjab Limited


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

also accorded their consent to issue equity shares and/or warrants convertible into equity shares at the rate of Rs.1,530.13 each to HDFC Limited and/or other promoter group companies on preferential basis, subject to final regulatory approvals in this regard. The Shareholders of the Bank have also approved an increase in the authorized capital from Rs. 450 crores to Rs. 550 crores. Note: Rs. = Indian Rupees 1 crore = 10 million (iii) All figures and ratios are in accordance with Indian GAAP. Certain statements are included in this release which contain words or phrases such as will, aim, will likely result, believe, expect, will continue, anticipate, estimate, intend, plan, contemplate, seek to, future, objective, goal, project, should, will pursue and similar expressions or variations of these expressions that are forward-looking statements. Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for various banking services, future levels of our non-performing loans, our growth and expansion, the adequacy of our allowance for credit and investment losses, technological changes, volatility in investment income, cash flow projections and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result, actual future gains, losses or impact on net income could materially differ from those that have been estimated. n addition, other factors that could cause actual results to

differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions in India and the other countries which have an impact on our business activities or investments; the monetary and interest rate policies of the government of India; inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices; the performance of the financial markets in India and globally; changes in Indian and foreign laws and regulations, including tax, accounting and banking regulations; changes in competition and the pricing environment in India; and regional or general change in asset valuations.

SCHEME OF AMALGAMATION Centurion Bank of Punjab Limited Transferor Bank with HDFC Bank Limited... Transferee Bank
This Scheme of Amalgamation provides for the amalgamation of Centurion

Bank of Punjab Limited (formerly known as Centurion Bank Limited), a

company incorporated under the Companies Act, 1956 (hereinafter referred to as the Companies Act) and a banking company under the provisions of the Banking Regulation Act, 1949 (hereinafter referred to as the Banking Act), having its registered office at Shanta Durga Niwas, Mahatma Gandhi Road, Panaji - 403 001, Goa (hereinafter referred to as the CBoP or the Transferor Bank) with HDFC Bank Limited, a company incorporated under the Companies Act and a banking company under the provisions of the Banking Act, having its registered office at HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai 400 013 (hereinafter referred to as HDFC Bank or the Transferee Bank), pursuant to Section 44A and other relevant provisions of the Banking Act. The Transferor Bank and the Transferee Bank intend that pursuant to the consolidation to be effected through this Scheme, a strong bank with good branch quality, and emphasis on commercial and social banking in compliance with applicable Law and policy of the RBI, shall be created, and the consolidated bank shall be an employee-friendly institution that would be a preferred employer in the banking sector.

1 Definition
In this Scheme (as defined herein below), unless inconsistent with the subject or context, the following expressions shall have the following meaning:

1.1 Appointed Date means April 1, 2008 or such other date as may be
fixed or sanctioned by Reserve Bank of India;

1.2 Assets shall mean and include:


(a) all the assets and properties of CBoP including without limitation, assets, residential premise and properties of all branches and offices of CBoP including

but not limited to the extension counters and automated teller machines (ATMs), whether situated in India or outside India; (b) without prejudice to the generality of sub-clause (a) above, it shall include all the properties (whether movable or immovable, tangible or intangible), assets, investments of all kinds (including but not limited to shares, scrips, stocks, bonds, debentures, debenture stocks, certificate of deposits, units or pass through certificates), all cash balances with the RBI and other banks, money at call and short notice, loans, advances, contingent rights or benefits deposits (made with any authority or person whatsoever), lease and hire purchase contracts and assets, securitized assets, receivables, security receipts, benefit of assets or properties or other interest held in trust, benefit of any security arrangements, authorities, allotments, approvals, reversions, buildings and structures, office and residential premises, tenancies, leases, licenses, fixed assets and other assets, powers, consents, authorities, registrations, exemptions, benefits, waivers, security and other agreements, contracts, engagements, arrangements of all kinds, rights, titles, interests, benefits and advantages of whatsoever nature and where so ever situate belonging to, or in the ownership, power or possession of, or in the control of, or vested in, or granted in favour of, or held for the benefit of, or enjoyed by CBoP, or to which CBoP may be entitled and include but without being limited to trade and service names and marks and other intellectual property rights of any nature whatsoever, permits, approvals (including approvals from the RBI for branches and other offices), authorizations, rights to use and avail of telephones, telexes, facsimile, email, internet, leased line connections and installations, utilities, electricity and other services, reserves, provisions, funds, benefits of all agreements, all records, files, papers, computer programs, manuals, data, catalogues, sales and advertising materials, lists and other details of present and former customers and suppliers, customers credit information, customer and supplier pricing information and other records in connection with or relating to CBoP and all other interest of whatsoever nature belonging to or in the ownership, power or possession and in the control of or vested in or granted in favour of or held for the benefit of or enjoyed by CBoP in India. 1.3 Banking Act means the Banking Regulation Act, 1949 including the guidelines for merger/ amalgamation of private banks issued by the Reserve

Bank of India dated May 11, 2005 and shall include any statutory modification, re-enactment or amendment thereof for the time being in force.

1.4 Board of Directors of CBoP means the Board of Directors of


CBoP, any committee(s) constituted or to be constituted by the Board of Directors of CBoP or any other person authorized or to be authorized by the Board of Directors of CBoP or any committee thereof nominated or authorized by the Board of Directors of CBOP to exercise any powers including the powers in terms of this Scheme.

1.5 Board of Directors of HDFC Bank means the Board of


Directors of HDFC Bank, any committee(s) constituted or to be constituted by the Board of Directors of HDFC Bank or any other person authorized or to be authorized by the Board of Directors of HDFC Bank or any committee thereof nominated or authorized by the Board of Directors of HDFC Bank to exercise any powers including the powers in terms of this Scheme.

1.6 CBoP means Centurion Bank of Punjab Limited, a banking company


incorporated under the Companies Act and licensed by the Reserve Bank of India under the Banking Act and having its registered office at Shanta Durga Nivas, Mahatma Gandhi Road, Panaji - 403 001, Goa.

1.7 Companies Act means the Companies Act, 1956 and shall include
any statutory modification, reenactment or amendment thereof for the time being in force.

1.8 Cut-off Date shall bear the meaning ascribed to the term in Clause
15 hereof;

1.9 Effective Date means the date on which the Scheme is sanctioned
by Reserve Bank of India or such other date as may be specified by Reserve Bank of India by an order in writing passed in this behalf.

1.10 Employees means all the employees of CBoP in service as on the


Effective Date.

1.11 HDFC Bank means HDFC Bank Limited, a banking company


incorporated under the Companies Act and licensed by the Reserve Bank of India under the Banking Act and having its registered office at HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai 400 013. 1.12 HR Integration Committee means the committee to be constituted in terms of Clause 7.2. 1.13 Integration Committee means the committee to be constituted in terms of Clause 8.3. 1.14 Law means and includes all applicable statutes, enactments, acts of legislature or parliament, ordinances, rules, bye-laws, regulations, notifications, guidelines, directions of regulatory bodies and orders of any statutory authority, or judicial authority including any quasi-judicial authority, tribunal, court or such other authority of the Republic of India.

1.15 Legal Proceedings shall bear the meaning ascribed to the term in Clause 6 hereof. 1.16 Liabilities means all debts, liabilities, demand deposits, saving
bank deposits, term deposits, certificate of deposits, time and demand liabilities, rupee and foreign currency borrowings, bills payable, interest accrued, statutory reserves, provisions and all other liabilities including tax and contingent liabilities, duties, undertakings and obligations of CBoP whether or not disputed or the subject matter of any court, arbitration or other proceedings. 1.17 License means any of the licenses to carry on banking business in India issued by the Reserve Bank of India under Section 22(1) of the Banking Act. 1.18 Material Adverse Change means any change, effect, event, occurrence or state of facts or discovery thereof which may result in:a) The License being revoked or suspended; b) Either Party being unable to continue their Business or operations or a substantial part thereof; c) An order of any court, government, governmental authority, ministry, administrative agency or tribunal of competent jurisdiction being issued the effect of which would be to make the Merger illegal or which otherwise prevents the consummation of the Merger; or

d) The appropriation or institution of enforcement proceedings against any of the Parties such that it is not feasible to consummate the Merger substantially on the terms contemplated by this Scheme. 1.19 Members mean the shareholders of HDFC Bank or CBoP, as the case may be.

1.20 Merged Entity means HDFC Bank in which the Undertaking of the
Merging Entity shall stand vested and transferred upon consummation of the Scheme.

1.21 Merging Entity means CBoP. 1.22 New Equity Shares shall bear the meaning ascribed to the term
in Clause 9.1 hereof.

1.23 Parties means HDFC Bank and CBoP, collectively. 1.24 Party means HDFC Bank or CBoP, as the case may be. 1.25 RBI means the Reserve Bank of India. 1.26 Record Date means such date to be fixed by the Board of
Directors of CBoP to determine the Members of CBoP to whom equity shares of HDFC Bank will be allotted and to ensure allotment of equity shares of HDFC Bank in accordance with Clause 9.1 of the Scheme.

1.27 Scheme means this scheme of amalgamation as approved and


passed by the Members of HDFC Bank and CBoP in their respective General Meetings and shall include any modifications or amendments made in accordance herewith and in terms of applicable Law.

1.28 Undertaking means the entire businesses of CBoP including


without limitation all the properties (whether movable or immovable, tangible or intangible), all Assets, Liabilities, and Legal Proceedings of and against CBoP including assets and liabilities of the branches and offices of CBoP.

2. DATE OF TAKING EFFECT AND OPERATIVE DATE


The Scheme as set out herein in its present form shall be effective from the Appointed Date and shall be operative from the Effective Date.

3. SHARE CAPITAL
3.1. The share capital of CBoP as on December 31, 2007 is as under: (Rupees in lacs)

On and from the Effective Date, the authorised share capital of CBoP shall stand merged into the authorised share capital of HDFC Bank and shall become available for issuance of further equity shares by HDFC Bank, whether pursuant to this Scheme of Amalgamation or otherwise.

4. TRANSFER AND VESTING OF UNDERTAKING

4.1 With effect from the Appointed Date and upon the Scheme becoming effective, the entire Undertaking of CBoP including all its Assets and Liabilities of whatsoever nature shall, under the provisions of Section 44A of the Banking Act and pursuant to the order of the RBI sanctioning the Scheme, without any further act or deed stand transferred to and/or deemed to be transferred to and vested in HDFC Bank. 4.2 Transfer of Assets Upon coming into effect of the Scheme and with effect from the Appointed Date and subject to the provisions of the Scheme: (a) all Assets of CBoP shall pursuant to the provisions of the Banking Regulation Act except for the portions specified in Clause 4.2(c) and 4.2(d) below of whatsoever nature and wheresoever situated and owned by CBoP and incapable of passing by physical delivery and including in particular the License and all other licenses, permits, approvals, incentives, rights, claims, leases, tenancy rights, subsidies, liberties, and other benefits or privileges enjoyed or conferred upon or held or availed of by and all rights and benefits that have accrued to CBoP shall, under the provisions of the Banking Act and pursuant to the order of the RBI, without any further act, instrument or deed, but subject to the charges, liens, liabilities or restrictions affecting the same as on the Effective Date, be and shall stand transferred to and vest in and be available to HDFC Bank so as to become as and from the Appointed Date the estates, assets, rights, title, interests and authorities of HDFC Bank and shall remain valid, effective and enforceable on the same terms and conditions to the extent permissible under Law without any further act, instrument or deed, and be and stand transferred to and vested in or be deemed to have been transferred to and vested in HDFC Bank as a going concern. (b) HDFC Bank shall continue to honour the trade arrangements, and the contractual obligations that CBoP has entered into and which exist as on the Effective Date. (c) Without prejudice to sub-Clause (a) above, in respect of such of the assets of the Undertaking as are movable in nature or are otherwise capable of transfer by physical delivery or by endorsement and/or delivery, the same may be so transferred by CBoP, and shall, upon such transfer, become the property, estate, assets, rights, title, interest and authorities of HDFC Bank. (d) In respect of moveable assets of CBoP other than those specified in subClause 4.2(c) above, including sundry debtors, actionable claims, outstanding loans, advances recoverable in cash or in kind or for value to be received and

deposits with Government, semi-government, local and other authorities and bodies the following procedure shall be followed: i. HDFC Bank shall give a notice by a publication in a widely circulated newspaper in India to its contract counter parties, debtors or depositees, as the case may be, that pursuant to the order of the RBI having sanctioned the Scheme, the said debt, loan, advances, etc., be paid or made good or held on account of HDFC Bank as the person entitled thereto to the end and intent that the right of CBoP to recover or realise the same stands extinguished and that appropriate entry should be passed in their respective books to record the aforesaid change. ii. CBoP or in an event of inability of CBoP, HDFC Bank shall also give notice by a publication in a widely circulated newspaper in India to its contract counter parties, debtors or depositee, that pursuant to the order of the RBI having sanctioned the Scheme between HDFC Bank and CBoP, the said person, debtor, or depositee should pay to HDFC Bank the debt, loan or advance or make the same on account of CBoP and the right of CBoP to recover or realize the same stands extinguished and that such right stands transferred to HDFC Bank. (e) All the post dated and other cheques issued in favour of CBoP which are unencashed or outstanding upon the coming into effect of the Scheme shall be encashed by HDFC Bank on or after the due date which shall be entitled to the proceeds thereof, as if such post dated cheques have been drawn and made in favour of HDFC Bank. (f) Security over any moveable and/or immoveable properties and security in any other form (both present and future), if any, created by any person in favour of CBoP for securing any obligation of the person to CBoP or for and on whose behalf a guarantee, letter of credit, letter of comfort or other similar instrument has been executed or arrangements entered into by CBoP shall, without any further act, instrument or deed stand vested in and be deemed to be issued in favour of HDFC Bank and the benefit of such security shall be available to HDFC Bank as if such security was ab initio created in favour of HDFC Bank. 4.3 Transfer of Liabilities (a) With effect from the Appointed Date and upon the Scheme becoming effective, all the Liabilities of CBoP shall without further act, instrument or deed also be and stand transferred or deemed to be transferred to HDFC Bank, so as to become the debts, liabilities, duties, undertakings and obligations of HDFC Bank and further that it shall not be necessary to obtain the consent of any

third party or other person who is a party to any contract or arrangement by virtue of which such debts, liabilities, duties and obligations have arisen in order to give effect to the provisions of the Scheme. (b) With effect from the Appointed Date and upon the Scheme becoming effective, any post dated cheques, debentures, bonds, notes or other debt securities, if any, whether convertible into equity, or otherwise (hereinafter collectively referred to as the Transferors Securities), issued by CBoP, which remain un-encashed or outstanding or which have not matured on the scheme coming into effect shall, without further act, instrument or deed become securities of HDFC Bank and all rights, powers, duties and obligations in relation thereto shall be transferred to and vest in and shall upon coming into effect of the Scheme, be exercised by or against HDFC Bank as if it were CBoP, in accordance with the terms of this Scheme. In the event of a default in relation to the aforesaid obligation, HDFC Bank shall indemnify and keep indemnified the officers and directors of CBoP as on the Effective Date from and against any liabilities that may arise due to such default in respect of the Transferors Securities and in relation to any bona fide action on the part of such officers and directors in the ordinary course of business, and in consonance with this Scheme. (c) With effect from the Appointed Date and upon the Scheme becoming effective, any loans or other obligation (including any guarantees, letter of credit, letters of comfort or any other instrument or arrangement which may give rise to a contingent liability in whatever form), due between or amongst CBoP and HDFC Bank, if any, shall stand discharged and there shall be no liability in that behalf on either party. (d) The transfer and vesting of Liabilities, as aforesaid, shall be subject to subsisting charges, if any, in respect of any Assets.

5. CONTRACTS, DEEDS, ETC


5.1 With effect from the Appointed Date and upon the Scheme becoming effective and subject to applicable Law and the provisions hereof all contracts, deeds, tenancies, leases, licenses or other assurances, agreements, arrangements and other instruments of whatsoever nature (including any document by virtue of which security is created in favour of CBoP) to which CBoP is a party or to the benefit of which CBoP may be eligible and which are subsisting or having effect immediately before the Effective Date, shall be in full force and effect against or in favour of HDFC Bank as the case may be and all or any of the rights, privileges, obligations and liabilities of CBoP shall be

transferred to and vest in HDFC Bank and may be enforced as fully and effectually as if, instead of CBoP, HDFC Bank had been a party, beneficiary or obligor thereto. 5.2 HDFC Bank shall, wherever necessary, enter into and/or issue and/or execute deeds, writings or confirmations or enter into tripartite arrangements, confirmations or novations to which CBoP will, if ecessary, also be a party in order to give formal effect to the provisions of the Scheme, on or prior to he Effective Date. HDFC Bank shall, under the provisions of the Scheme, be deemed to be authorized o execute any such writings on behalf of CBoP and to implement or carry out all such formalities or compliances referred to hereinabove on part of CBoP to be carried out or performed after the Effective Date.

6. LEGAL PROCEEDINGS
With effect from the Appointed Date and upon the Scheme becoming effective, all suits, actions and legal proceedings of whatsoever nature by or against CBoP pending and/or arising on or before the Effective Date (Legal Proceedings) shall be continued and be enforced by or against HDFC Bank as effectually as if the same had been filed by, pending and/or arising against HDFC Bank. On and from Effective Date, HDFC Bank shall, if required, initiate or defend any legal proceedings in relation to CBoP.

7. EMPLOYEES
7.1 All the Employees of CBoP in service on the Effective Date including the Managing Director shall become the employees of HDFC Bank on such date without any break or interruption in service, on terms and conditions which are no less favourable to the Employees of CBoP than those on which they are employed with CBoP as on the date immediately preceding the Effective Date. 7.2 The Employees of CBoP, on becoming employees of HDFC Bank, shall have the same standing as the continuing employees of HDFC Bank. To facilitate efficient and equitable integration of the existing employees of HDFC Bank and CBoP employees, a HR Integration Committee will be constituted by the Board of HDFC Bank including representation from the current senior management of CBoP and HDFC Bank.

7.3 It is expressly provided that, the provident fund, superannuation fund or any other special scheme(s), fund(s) created or existing for the benefit of the employees of CBoP, on and from the Effective Date, shall stand transferred to HDFC Bank and HDFC Bank shall stand substituted for CBoP for all purposes whatsoever relating to the administration or operation of such schemes or funds or in relation to obligations to make contributions to the said schemes or funds in accordance with the provisions of such schemes or funds as per the terms provided in the respective trust deeds or other documents to the end and intent that all rights, duties, powers and obligations of CBoP in relation to such funds or schemes shall become those of HDFC Bank. It is clarified that the service of the Employees of CBoP will be treated as having been continued for the purpose of the aforesaid funds or schemes or provisions.

8. CONDUCT OF BUSINESS
8.1 Upon the Scheme becoming effective, from the Appointed Date, and until and including the Effective Date: (a) CBoP shall be deemed to have carried on all its business and activities and shall be deemed to have held and been in possession of and shall hold and be in possession of all the Assets for and on account of and in trust for HDFC Bank; and (b) all profits and incomes accruing or arising to CBoP or expenditure or losses arising or incurred (including the effect of taxes, if any, thereon) by CBoP shall, for all purposes, be treated and deemed to be and accrue as the profits or incomes or expenditure or losses or taxes, as the case may be, of HDFC Bank. (c) The protection, if any, available to directors of CBoP shall continue to be honoured by HDFC Bank in relation to all tax liabilities of CBoP. 8.2 HDFC Bank and CBoP shall be entitled, pending sanction of the Scheme, to apply to any governmental or regulatory authority and other agencies as are necessary under Law for such consents, approvals and sanctions which HDFC Bank may require to own and carry on the business of CBoP.

8.3 The Parties agree to constitute an integration committee consisting of an equal number of employees from each Party (Integration Committee) to (a) implement or act in furtherance of the provisions of this Scheme; and (b) scrutinize until the Effective Date the proposals for placement before the appropriate sanctioning authorities of the respective Parties for decision including a review of the existing arrangements followed by the Parties for sourcing and credit policy, underwriting and collection. 8.4 The Integration Committee may appoint sub-committees with the consent of the Parties and delegate to such sub-committees such of its powers as it deems fit. Save as contemplated in this Scheme of Arrangement, no proposal shall be taken to the respective Boards by either Party unless the same is in compliance with Clause 8.2 of this Scheme. No decision of the Integration Committee shall be valid unless taken unanimously. It is clarified for the avoidance of doubt that the Integration Committee shall not have powers to amend this Scheme. 8.5 The Integration Committee and each sub-committee shall comprise at least one employee from each Party.

9. CONSIDERATION
9.1 Upon coming into effect of the Scheme and in consideration of the transfer of and vesting of the Undertaking of CBoP to HDFC Bank in terms of the Scheme, HDFC Bank shall subject to the provisions of the Scheme and without any further application, act or deed, issue and allot, at the earliest in accordance with Stock Exchange Listing Regulations, One equity share of HDFC Bank of the face value of Rs. 10/- each credited as fully paid-up in the capital of HDFC Bank which rank pari passu from the date of allotment with the existing shares of HDFC Bank to those Members of CBoP whose names are recorded in its Register of members (the said Members) on the Record Date for every 29 equity shares of the face value of Re. 1/- each held by the said Members of CBoP (referred to as New Equity Shares). All entitlements to equity shares of CBoP arising out of outstanding convertible instruments such as warrants and stock options granted prior to December 31, 2007 shall stand modified to entitlements to New Equity Shares in the same proportion i.e. the entitlement for every 29 equity shares of Re. 1/- each in CBoP, shall stand replaced by an entitlement to one equity share of a face value of Rs. 10/- each in HDFC Bank with the price for such conversion standing adjusted in the same proportion as the share swap ratio. All applicable fringe benefit tax shall be borne by and paid by the respective employees. Any holding of shares or debt by either bank in the other bank shall stand cancelled. New Equity Shares issued in terms of the Scheme shall, in compliance with applicable regulations, be listed and/or admitted to trading on the relevant stock exchange(s) in India where the equity shares of HDFC Bank are listed and/or admitted to trading. 9.3 Upon the New Equity Shares being issued and allotted to the shareholders of CBoP, the shares held by the said Members of CBoP, whether in the physical form or in the dematerialized form, shall be deemed to have been automatically cancelled and be of no effect, without any further act, deed or instrument. 9.4 In so far as New Equity Shares are concerned, the same will be distributed in dematerialized form to the equity shareholders of CBoP, provided all details relating to the account with the Depository Participant are available to HDFC Bank. All those equity shareholders who hold equity shares of CBoP and do not provide their details relating to the account with the Depository Participant will be distributed New Equity Shares in the Physical / Certificate form unless

otherwise communicated in writing by the shareholders on or before such date as may be determined by HDFC Bank or committee thereof. 9.5 Upon the coming into effect of the Scheme, the New Equity Shares of HDFC Bank to be issued and allotted to the said Members as provided in the Scheme shall be subject to the provisions of the Articles of Association of HDFC Bank and shall rank pari passu from the date of allotment in all respects with the existing equity share of HDFC Bank including entitlement in respect of dividends. Nothing contained herein shall restrict the issuance of equity shares of CBoP upon exercise of the stock options and warrants issued prior to December 31, 2007 by CBoP. The issue and allotment of New Equity Shares by HDFC Bank to the member of CBoP as provided in this scheme is an integral part thereof and shall be deemed to have been carried out as if the procedure laid down under Section 81(1A) and any other applicable provisions of the Companies Act and such other statutes and regulations as may be applicable were duly complied with. 9.6 Save and except as may otherwise be permitted or required under the provisions of this Scheme or for the utilization of balances lying in the securities premium account for adjustment of goodwill as appearing in the books of CBoP as of December 31, 2007 or upon exercise of any stock options or warrants granted prior to December 31, 2007 , CBoP shall not make any change in its capital structure, either by issue of new equity or Preference shares or Bonus shares, convertible debentures, share warrants, options or any other securities convertible into equity shares or otherwise effect decrease, subdivision, reduction, re-classification, consolidation, buy-back or in any other manner which may affect the share exchange ratio, except by consent of the Board of Directors of HDFC Bank. It is clarified for the avoidance of doubt that HDFC Bank may issue further equity shares and / or warrants convertible into equity shares to the Promoter Group of HDFC Bank Ltd. pending the final approval of the RBI to this Scheme, without disturbing the share swap ratio set out in Clause 9.1, subject to an overall cap on dilution at 2,62,00,220 shares of HDFC Bank. 9.7 Notwithstanding anything contained herein, in the event of any Member of CBoP having a shareholding such that such Member becomes entitled to a fraction of a New Equity Share, all the fractional entitlements of various Members shall be aggregated and without any further act, deed or thing to be done, such consolidated New Equity Shares shall stand vested in a trust to be set up by the Board of HDFC Bank. Such trust shall dispose of the aggregate of all such fractional holdings and distribute the net proceeds (after deduction of

expenses incurred) to the respective Members of CBoP in proportion to their respective fractional entitlements. 9.8 Upon the Scheme becoming effective, in connection with the global depository receipts with the equity shares of CBoP being the underlying securities, the Board of HDFC Bank may take any of the following actions at its sole discretion:(a) Holders of global depository receipts with the equity shares of CBoP being the underlying securities shall become entitled to global depository receipts of HDFC Bank with the underlying securities being the New Equity Shares in the proportion of one equity share of Rs. 10/- each of HDFC Bank for every 29 equity shares of Re. 1/- each of CBoP; or (b) Holders of global depository receipts with the equity shares of CBoP being the underlying securities shall become entitled to American Depository Shares of HDFC Bank with the underlying securities being the New Equity Shares in the proportion of one equity share of Rs. 10/- each of HDFC Bank for every 29 equity shares of Re. 1/each of CBoP; or (c) The global depository receipts with the equity shares of CBoP being the underlying securities shall stand replaced by equity shares of HDFC Bank in the same proportion as the share swap ratio set out in this Scheme. 9.9 Upon the Scheme becoming effective, the following stock options granted by CBoP shall stand vested on an accelerated basis:In the

case of stock options, the entitlements to the shares of HDFC Bank after the Effective Date shall stand adjusted in the same proportion as the share swap ratio set out herein, with the entitlements to the underlying shares of HDFC Bank being rounded off to the nearest higher integer

10. DECLARATION OF DIVIDENDS


HDFC Bank and CBoP shall be entitled to declare or pay dividends, whether interim or final, to their respective equity shareholders in respect of the accounting period prior to the Effective Date, such that the total payout is broadly in line with past payout percentages in the ordinary course. Any declaration or payment of dividend inconsistent with past practice and outside the ordinary course shall be subject to the prior approval of the Board of Directors of each of HDFC Bank and CBoP, and in accordance with applicable Law.

11. ACCOUNTING TREATMENT


11.1 Upon the coming into effect of the Scheme and with effect from the Appointed Date: a) All the Assets and Liabilities recorded in the books of CBoP shall be transferred to and vested in HDFC Bank pursuant to the Scheme and shall be recorded by HDFC Bank at their respective book values as appearing in the books of CBoP; b) The balance in Statutory Reserve Account of CBoP shall continue to be designated as Statutory Reserve Account in the books of HDFC Bank; c) Amalgamation Expenses Provision Account shall be credited, in the books of HDFC Bank, by an amount determined by the Board of Directors of HDFC Bank for the expenses and costs of the Scheme as per Clause 17 and for expenses and costs arising as a direct consequence on account of changes in the business of CBoP proposed or considered necessary by the Board of Directors of HDFC Bank (including but not limited to rationalization, upgradation and enhancement of human resources and any costs in relation to stock options and/or warrants of CBoP taken over upon this Scheme becoming effective and extraordinary expenses relating to modifying signage, modifying stationery, branding, changing systems and network, communication including media costs, impairment of technology and fixed assets, conducting general meetings, payment of listing fees and other statutory and regulatory charges, any costs relating to termination of contracts consequent upon the

implementation of this Scheme, costs of travel in relation to the consolidation contemplated in this Scheme, valuation, due diligence, investment banking expenses and charges relating to preparation of the Scheme, consultations in relation to the consolidation contemplated in this Scheme and training), and other extraordinary expenses on integration and consolidation under the Scheme, to be incurred by HDFC Bank and the corresponding debit shall be reckoned in arriving at the amount to be credited to the Amalgamation Reserve / debited to General Reserve as referred to in Clause 11.1(d). d) The excess of the value of the net assets of CBoP over the paid-up value of the shares to be issued and allotted by HDFC Bank pursuant to the terms of Clause 9 and after giving effect to aforesaid clauses and such further adjustments as may be deemed necessary by the Board of Directors of HDFC Bank, including provision against credit risk inherent in advances/assets and provision towards unprovided business / contingent liabilities of CBoP, and/or required by any regulatory or statutory authority including such adjustments as may be required to ensure the uniform application of accounting standards and policies adopted by HDFC Bank after adjusting against the Floating Provision Account to the extent available, and the balance shall be accounted for and credited by HDFC Bank to its Amalgamation Reserve net of tax effect on the said adjustment to record timing differences as deferred taxes. The shortfall, if any, in the event of a deficit, occurring whilst giving effect to the adjustments hereinabove, shall be debited to General Reserve. HDFC Bank shall record for the deferred tax asset, if any, with respect to provision.

12. MODIFICATIONS, AMENDMENTS, AND WITHDRAWAL


12.1 HDFC Bank and CBoP may pending sanction of the Scheme by RBI make or assent, from time to time, on behalf of all persons concerned to any modifications or amendments to the Scheme or to any conditions or limitations which the RBI or any other relevant or concerned authority under Law may direct or impose or which may otherwise be considered necessary, and may do and execute all acts, deeds, instruments, matters and things necessary for putting the Scheme into effect, or for the purpose of better structuring and effective implementation of the Scheme. The aforesaid power of CBoP and HDFC Bank may be exercised by their respective Boards of Directors, or by any sub-committee of the Boards of Directors as may be nominated by the respective Parties.

12.2 For the purpose of giving effect to the Scheme as sanctioned by the RBI, the Board of Directors of HDFC Bank may give all such directions which are not inconsistent with the provisions of the Scheme as are necessary, expedient, ancillary or desirable including directions for settling or removing any question of doubt or difficulty that may arise with regard to the implementation of the Scheme, as it thinks fit, and such determination or directions as the case may be, shall be binding on all persons connected herewith or otherwise interested in the Scheme. 12.3 This Scheme may be withdrawn before the Effective Date in any of the following events (i) by mutual consent of the Parties; or (ii) unilaterally by CBoP on the occurrence of a Material Adverse Change in respect of HDFC Bank; or (iii) unilaterally by HDFC Bank on the occurrence of Material Adverse Change in respect of CBoP.

13. CONDITIONS OF THE SCHEME


13.1 HDFC Bank and CBoP shall make applications under Section 44A and all other applicable provisions of the Banking Act for sanctioning of the Scheme by the RBI and obtain all approvals as may be required by the Law and for dissolution of CBoP without being wound up under the provisions of the Law. 13.2 The Scheme is specifically conditional upon and subject to: a) the consent of a majority in number representing two-thirds in value of the Members of HDFC Bank and of CBoP is obtained at their respective meetings, present either in person or by proxy at a meeting called for the purpose. b) all necessary consents, authorizations or other approvals of any kind which may be required from any governmental or other competent regulatory authority for the consummation of amalgamation, including without limitation the approval of the RBI under Section 44A and other applicable provisions of the Banking Act and the guidelines thereof. c) all other necessary consents, authorizations and other approvals which may be required by CBoP or HDFC Bank under the provisions of the Companies Act, any other applicable Law for the consummation of the amalgamation.

14. GENERAL TERMS AND CONDITIONS:


14.1 An order in terms of Clause 13.2(b) hereinabove and sub-section (6C) of Section 44A of the Banking Act shall be conclusive evidence that all requirements of Section 44A of the Banking Act relating to amalgamation have been complied with and a copy of the said order certified in writing by an

officer of the RBI to be a true copy of such order shall in all legal proceedings (whether in appeal or otherwise) be admitted as evidence to the same extent as the original order and the original scheme. 14.2 Any Member of HDFC Bank or CBoP, as the case may be, who has voted against the Scheme at the meeting of HDFC Bank or CBoP, as the case may be, or has given notice in writing at or prior to the meeting of HDFC Bank or CBoP, as the case may be, or to the presiding officer of the meeting of the shareholders of either HDFC Bank or CBoP, as the case may be, that he dissents from the Scheme, shall subject to approval of the RBI, be entitled, upto the Record Date, to claim from HDFC Bank or CBoP, as the case may be, in respect of shares held by him in HDFC Bank or CBoP, as the case may be, their value as determined by the RBI when sanctioning the Scheme and such Member, in consideration thereof, shall compulsorily tender the shares held by him, in HDFC Bank or CBoP, as the case may be, to HDFC Bank or CBoP respectively for cancellation thereof and to that extent the share capital of HDFC Bank or CBoP, as the case may be, shall stand reduced. The determination by the RBI as to the value of the shares to be paid to the dissenting Member shall be final and binding on such dissenting shareholders for all purposes.

15. VALIDITY OF THE SCHEME


In the event Effective Date shall not have occurred by March 31, 2009 or by such later date as may be agreed to by and between the respective Boards of Directors of CBoP and HDFC Bank (the Cut-off Date), the Scheme shall become null and void and in that event no rights and liabilities whatsoever shall accrue to or be incurred inter se by the parties or their shareholders or creditors or employees or any other person. In such case both, CBoP and HDFC Bank, shall bear their own costs.

16. SAVINGS OF CONCLUDED TRANSACTIONS


The transfer of properties and liabilities under Clause 4 above and the continuance of proceedings by or against CBoP shall not affect any transaction or proceedings already concluded by CBoP until the Effective Date, to the end and intent that HDFC Bank accepts and adopts all acts, deeds and things done and executed by CBoP in respect thereto as done and executed on behalf of itself.

17. COSTS

Each Party shall bear its own costs and expenses in respect of all matters arising out of, or in connection with, this Scheme unless otherwise expressly agreed in writing. Expenses towards the joint valuation shall be borne by the Parties equally. The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.

Corporate Governance

HDFC Bank recognizes the importance of good corporate governance, which is generally accepted as a key factor in attaining fairness for all stakeholders and achieving Organizational efficiency. This Corporate Governance Policy,

therefore, is established to provide a direction and framework for managing and monitoring the bank in accordance with the principles of good corporate governance.

Code of Corporate Governance Corporate Governance Rating Composition of the Board Profiles of Directors Board Committees Ownership Rights Promoters Rights (HDFC LTD.) Key Shareholders Rights Listing Registrars and transfer agents Grievance Redressal Dividend Policy Memorandum of Association Articles of Association Board Meetings Quarterly Updates Fair Practice Code for Lending Code of Ethics / Conduct

Banking Regulation Act, 1949 The banking regulation act, 1949 was landmark legislation. The act conferred wide range of powers to RBI relating to supervision and control over banking in India, establishment of banks, mergers and amalgamation and maintenance of certain operating standards for banks. The act vested licensing powers for opening branches. The act also gave the authority to conduct inspection of banks, thus enabling it to make qualitative assessment of the management is including the method of business from the viewpoint of depositors. The banking regulation act thus provided the framework for RBI supervision of banks. Standards for evaluating bank performance were drawn on the basis of the working of the well managed banks, which many small banks could not meet. This led to growth of banks.

Nationalization of major banks


The year 1969 was the turning point in the history of Indian banking ins\dusty. In July 1969, the government nationalized 14 major banks. It was felt by the government that it was necessary to acquire the ownership of banks to achieve the objectives of social control and enable the banks to play a more effective role as a catalyst for economic growth. The objective and reason accompanying bank system nationalization act 1969 started and institution such as the banking system which touches the lives of millions has to be inspired by large social purpose and has to serve national priorities and objectives such as rapid growth of agriculture, small scale industries and export, raising of employment levels, encouragement of new entrepreneurs and the development of the backward areas. For this purpose it was necessary for the government to take direct responsibility for extension and diversification of banking services and for the working of substantial part of the bank.

FIGURE1.1 CLASSIFICATION OF BANKS

Types of bank

Commercial bank

Cooperative Bank

Scheduled bank

Non- Scheduled banks

Commercial banks are of two types scheduled and non- scheduled of the RBI act, 1930. These banks satisfy the criteria laid down under section 42(6) of the act that they should have minimum required capital and their activities should not be detained to the interest of the depositors. The scheduled banks are required to maintain cash reserve equal to minimum of 3%of the demand and time liabilities which can go up to maximum of 15%under section 42(1) of the RBI act. These banks also enjoy certain privileges, as for example they can approach RBI for financial assistance under section 17 of the RBI for financial assistance under section 17 of the RBI act. Non scheduled banks were in large number earlier but their number drastically reduced as a result of take over validations and also in some cases up gradation into the scheduled bank category.

Privatization of banks
The decision to nationalize banks in July 1969 was made to prevent unfair competition and concentration of economic power with the industrial houses. But unfortunately, with the passage of time it was seen that public sector banks had degenerated into monopoly financial houses. Inspire of the vast expansion in the branch network there was a general decline in efficiency and profits. For well over two decades after nationalization no bank had been allowed to set up in the private sector. Progressively over this period the public sector banks had their branch network considerably and had catered to the socioeconomic needs of the masses, especially the weaker section and those in rural areas. The public sector banks had 91%of the total bank branches and handled 86%of the total banking business in the country. While recognizing the importance and the role of public sector banks and the need to introduce greater competition lead to higher productivity and efficiency of the banking system private section sector allowed to be set up. They have set up as scheduled commercial bank just as the nationalized banks being also as scheduled. While permitting the entry of the new private sector banks following considerations to be kept in mind. 1. They serve the goals underlying the financial sector reforms and thus provide competitive, efficient and low cost financial intermediary services for the society at large. 2. They are financially viable. 3. They should result in up gradation of technology in the banking sector, 4. They should avoid the shortcomings such as unfair pre-emption and concentration of credit, monopolization of economic power, cross holdings with industrial groups. 5. Freedom of entry into the banking sector needs to be managed carefully and judiciously

6. Based on these considerations the reserve bank formulated the following guidelines for establishment of new banks in private sector Such a bank shall be registered as a public limited company under the companies act, 1956. The RBI may, on merit, grant a license under the banking regulation act, 1949, for such bank. The bank may also be included in the second schedule of reserve bank of India, act, 1939 at the appropriate time. The decision of RBI in these matters shall be final. The bank will be governed by the provision of the banking regulation act will govern the bank, 1949 in regards to its authorized , subscribed and paid up capital for such bank shall be determined by the RBI and will also be subject to other applicable regulation. The shares of the bank should be listed on the stock exchange To avoid concentration of the head quarters of new banks in metropolitan cities and other over banked Ares, while granting a license preference may be given to those the head quarters of which are proposed to be located in a centre which does not have the head quarters of any other bank. The director of the bank should not be the director of any other banking company or of companies which among themselves are entitled to excise voting rights in excess of 20% of the total voting of all the shareholders of the banking company as laid down in the banking regulation act, 1949. The bank will also have compile with such directions of the RBI as are applicable to existing banks in the matter of export credit. For facilitating this it may issued an authorized dealers license to deal in foreign exchange, when applied for. The bank will be governed by the proviso of the reserve bank of India act, 1934. Banking regulation act, 1949 and other relevant

statutes, in regard to its management, set up, liquidity requirements and the scope of tits activities. The directives, instructions, guidelines and advice given by the RBI shall be applicable to such banks as in case of other banks. It would be ensured that a new bank would concentrate on core banking activities initially. Such a bank shall be subject to prudential norms in respect of banking operations; RBI lays down accounting policies and other policies as; the bank will have to achieve capital adequacy of 8% of the risk weighted from the very beginning.

Introduction to Training and development


After the newly appointed employees have joined the organization, the next phase of the personnel programme is to impart necessary training to them to make them fully fit for the jobs they are supposed to handle. In modern industrial organization, the need for training of employees is also widely recognized so as to keep the employees in touch with the new technological developments. Every company must have systematic training programme for the growth and development of the employees. It may be noted that the term training is used in regard to teaching specific skills , whereas the term development denotes overall development of personality of the employees.

Need and rationale of Training


Training is important not only from the point of view of the organization, but also for the employees. Training is valuable to the employees because it will give them greater job security and an opportunity for advancement. A skill acquired through training is an asset for the organization and the employee. The need for training arises because of the following reasons:

1. Changing Technology: technology is changing at a fast pace. The workers must learn new technologies to make use of advanced technology. Thus training should be treated as a continuous process to update the employees in new methods and procedures. 2. Quality Conscious Customers: the customers have become quality conscious and their requirements keep on changing. To satisfy the customers quality of products must be continuously improved through training of workers. 3. Greater Productivity: it is essential to increase productivity and educe cost of production for meeting competition in the market. Effective training can help increase productivity of the workers. 4. Stable Workforce: Training creates a feeling of confidence in the minds of the workers. it gives them a security at the work place. As a result labour turnover and absenteeism are reduced. 5. Increased Safety: Trained workers handle the machines safely. They also know the use of various safety devices in the factory. Thus, they are less prone to industrial accidents. 6. Better Management: Training can be used as an effective tool of planning and control. It develops skills among workers for the future and also prepares them for promotion. It helps in reducing the costs of supervision, wastages and industrial accidents. it also helps increase productivity and quality.

Definition of Training
Training is an organized activity for increasing the knowledge and skills of people for a definite purpose. It involves systematic procedures for transferring technical know-how to the employees so as to increase their knowledge and skills for specific jobs with proficiency. According to Edwin.B.Flippo, Training is the act of increasing the knowledge and skills of an employee for doing a particular job Training involves the development of skills that are usually necessary to perform a specific job. Its purpose is to achieve a change in the behavior of those trained and to enable them to do their jobs better. Training makes newly appointed workers fully productive in the minimum of time. Training is

q\equally necessary for the old employees whenever new machines and equipments are introduced and or there is change in the techniques of doing the things. Training programme should attempt to bring about appositive change in the 1) knowledge 2) skills 3) attitude of the workers.

Objectives of Training
Following are the main objectives for which an organization organizes training and development programmes for its employees. 1. To increase the knowledge of workers in doing specific jobs. 2. To impart new skills among of workers systematically so that they learn quickly. 3. To bring about change in the attitude of the workers towards fellow workers, supervisor and the organization.

Benefits of Training to employers:


1. Quick Learning; Training helps to reduce the learning time to reach the acceptable level of performance. The employees need not to learn by observing others and waste time if the formal training programme exists in the organization. The qualified instructors will help the new employees to acquire the skills and knowledge to do particular jobs quickly. 2. Higher Productivity: Training increases the skills of the new employee in the performance of a particular job. An increase in skill usually helps increase in both quantity and quality of output. Training is also of great help to the existing employees. It helps them to increase their level of performance on their present job assignments and prepares them for future assignments. 3. Standardization of procedures: With the help of training, the best available methods performing the work can be standardized and taught to all employees. Standardization will make high levels of performance rule rather than exception. Employees will work intelligently and make fewer mistakes when they process the required know-how and have an understanding of their jobs and of the interdependence f one job on another.

4. Less Supervision: Training does not eliminate the need for supervision, but it reduces the need for detailed and constant supervision. a well trained employee is self reliant in his work because the knows what to do and how to do. 5. Economical operation: trained personnel will be able o make better and economical use of materials and equipment. Wastage will also be low. In addition, the rate of accidents and damage to machinery and equipment will be kept to the minimum by the trained employees. These will lead to lower cost of production per unit. 6. Higher Morale: The morale of employees is increased if they are given proper training. A good training programme will mould employees attitudes towards organizational activities and generate better cooperation and greater loyalty. 7. Preparation of future managers: when totally new skills are required by an organization, it has to face great difficulties in the selection process. Training can be used in spotting out promising men and preparing them for promotion. 8. Better management: A manager can make use of training o manage in a better way. To him, training the employees can assist improve his planning, organizing, directing, controlling.

Benefits of Training to Employees:


Training helps the employees or workers in the following ways. 1. Confidence: training creates a feeling of confidence in the minds of workers. It gives a feeling of safety and security to them at their workplace. 2. New skills: training develops skills which serve as a valuable personal asset of a worker. It remains permanently with the worker himself. 3. Promotion: training provides opportunity for quick promotion and self development. 4. Higher earning: training helps in earning higher remuneration and other monetary benefits to the workers as their productivity is increased. 5. Adaptability: training develops adaptability among workers. They do not worry when work procedures and methods are changed.

6. Increased safety: Trained workers handle the machines safely. They also know the use of various safety devices in the factory. Thus they are less prone to accidents.

Types of Training
On the basis of purpose, several types of training programmes are offered to the employees. It should be noted that these programmes are not mutually exclusive. The important types of training programmes are as follow The job training Off the job training Vestibule training

Exhibit: Methods of Training

Methods of Training

On the job training

Off the job training

Vestibule training

Coaching Understudy Position rotation

Conferences Case study Sensitivity training Special projects Committee assignments

On the Job Training:


On the job training is considered to be most effective method of training the operative personnel. Under this method the worker is given training at the work place by his immediate supervisor. In other words the worker learns in the actual workplace. It is based on the principle of learning by doing.

Benefits of on the job training:


It is suitable for imparting skills and knowledge that can be learnt in a relatively short period of time. It has the chief advantage of strongly motivating the trainee to learn. It is not located in an artificial situation; it permits an employee to learn on the equipment and in the work environment.

On the job methods are relatively cheaper and less time consuming.

There are four methods of on the job training described below: Coaching: Under this method the supervisor imparts job knowledge and skills to his subordinate. The emphasis in coaching or instructing the subordinate on learning by doing. This method is very effective if the superior has sufficient time to provide coaching to his subordinates. Understudy: The superior gives training to a subordinate as his understudy or assistant. The subordinate learn through experience and observation. It prepares the subordinate to assume the responsibilities of the superiors job in case the superior eaves the organization Position Rotation: The purpose of position rotation is to broaden the background of the trainee in various positions. The trainee is periodically is rotated from job to job instead of sticking to one job so that he acquires a general background of different jobs. However rotation of an employee from one job to another should not be done frequently. Job Rotation: Job rotation is used by many organizations to develop all round development. The employee learns new skills and gain experience in handing different kinds of jobs. They also come o know the interrelationship between different jobs.

Vestibule Training: The term vestibule training is used to designate


training in a class-room for semi-skilled jobs. It is more suitable where a large number of employees must be trained at the same time for the same kind of work. It is frequently used to train clerks, machine operators, typists; etc.Vestibule training is adapted to the same general type training problem that is faced by on the job training. An attempt is made to duplicate, as nearly as possible, the actual material, equipment and conditions found in the real work place.

Benefits:

It is particular suitable where it is advisable to put the burden of training on line supervisors and where a special coaching is required. The trainees avoid confusion and pressure of the work situation and are thus able to concentrate on training. No interference with the regular processes of production.

Demerits:
The artificial training atmosphere may create the adjustment problems for the trainees when they return to the place of job. It is relatively expensive because there is duplication of materials, equipment and conditions found in a real workplace.

OFF THE JOB TRAINING


It requires the worker to undergo training for a specific period away from the work place. Off the job methods are concerned with both knowledge and skills in doing certain jobs. There are several off the job methods of training and development as described below; 1. Special lecture cum discussion: training through special lectures is also known as class room training. It is more associated with imparting knowledge than skills. The special lectures may be delivered by some executives of the organization or specialists from vocational and professional institutes. 2. Conference Training: A conference is a group meeting conducted according to an organized plan in which the members seek to develop knowledge and understanding buy oral participation. It is an effective training device for persons in the positions of both conference member and conference leader. As a member a person can learn from others by comparing his opinions with those of others. he learns to respect the viewpoint of others. 3. Case Study: The case study method is a means of stimulating experience in the classroom. Under this method, the trainees are given a problem or case which is more or less related to the concepts and principles already taught. They analyze the problem and suggest solutions which are discussed in the class. The instructor helps them reach a common solution

to the problem this method gives the trainee an opportunity to apply his knowledge to the solution of realistic problems

Designing a Training Programme.


The training program is an integral part of human resources management. As in the following fig. it consists of interrelated steps. 1. 2. 3. 4. Identification of training needs Setting training objectives Organization of training. Evaluation of training.

Identification of training needs Organizational Analysis Task Analysis Human Resources Analysis

Setting Training Objectives

Organization of Training Programme Trainee and Instructor Period of training Training Methods and Materials

Evaluation of Training Results

Concept of executive / management Development:


Executive or management development consists of all activities by which executives learn to improve their behavior and performance. It is designed to improve the effectiveness of managers in their present jobs and to prepare them for higher jobs in future. According to Chhabra, Ahuja, and jain Management development is the process by which managers acquire not only skills and competency in their present jobs but also capabilities for future managerial tasks of increasing difficulty and scope. Development of managers takes place not only by participating in formal courses of instruction drawn by the organization, but also through actual job experience in the organization. But also through actual job experience in the organization.

Nature of Executive Development:


1. Educational process: Development is more akin of education than it is to specific training in skills. Thus, a manager cannot be developed only by taking a course, attending lectures and conferences, job rotation assignments and the like. 2. Behavioral Change: Executive or management development is a planned process of learning and growth designed to bring behavioral change among the executives. It implies that there will be a change in knowledge and behavior of the individuals undergoing development programme. 3. Self-Development: The organization can merely provide faculties for development but the real urge of development should arise from within the individuals. 4. Continuous process: Executive development is an ongoing or never ending exercise rather than a one-shot affair.

Objectives of executive development


The objectives of management of executive development programme of any business concern are: To increase the overall knowledge and conceptual and decision makingskills of executives. To improve the performance of managers in their present positions. To ensure an adequate reserve of capable well-trained managers for future needs. To influence the behavior of workers through the executives; To introduce change in the organization by developing executives into change agents or facilitators. To provide opportunities to the managers for their career advancement. To prevent obsolescence of executive by providing them opportunities for updating their knowledge and skills.

Purpose 1.Job Knowledge

Method/technique a)on the job experience b)Coaching c)understudy a)job rotation b)multiple management a)special course b)specific readings a)in basket b)business game c)case study a)role play b)sensitivity training a)special projects b)committee assignments

2.Organisational Knowledge 3.General Knowledge 4.Decsion making skills 5.Inter-personal Skills 6. Specific Individual needs

1. Training means learning skills1. Development means the growth of and knowledge for doing a an employee in all respects. It shapes particular job attitudes. it increases job skills. 2. The term development is 2. The term training is associated with generally used the overall growth of the executives. to denote imparting specific skills3. Executives development seeks to among operative workers and develop competence and skills for employees. future performance. Thus it has a long 3. Training is concerned with term perspective. maintaining and improving 4. Development is career-centered in current nature. job performance. Thus it has a All development is self development. short term perspective. 5. The executive has to be internally 4. Training is job centered in motivated for self development. nature. 5. The role of trainer or supervisor is very important in training.

Training vs. Development

On the job methods


Multiple Management: Multiple management is the name given to the system whereby permanent advisory committees of executives study problems of the organization and make recommendations to higher management. The final decisions rest with the top management. Another device is the establishments of a junior board director in a company for the training of the executives. The junior board is given power to discuss any problem which the senior board could discuss. The greatest value of this additional board is the training of junior executives. Membership of the junior board becomes a pre-requisite to the membership of the senior board

Benefits:
Firstly it gives board members an opportunity to gain knowledge and experience in various aspects. It helps identify those who have good executive talent. The junior executives gain practical experience in group decision making and in team work. It is relatively less expensive method of development.

Committee Assignment:
Under this method, an dhow committee is constituted and is assigned a subject to discuss and make recommendations. The committee has assigned objectives and responsibilities related to some aspect of the organization. It will make a study of the problem and present its suggestions to the department head. Committee assignments can provide necessary general background to the trainees because every member of the committee gets a chance to learn from others. Committee assignment is an important device for educating the executives to acquire general backgrmund and to modify their behavior towards the selected problem.

Off the job methods:

Special Courses:The executives may be required to attend special courses which are formally organized by the enterprise with the help of experts from educational institutions. The executives may also be sponsored by their employees to attend the courses conducted by management institutes. It may be noted that only the big enterprises can send their executives to the management development courses run by management institutes because of the fee of these courses is very high. Special readings: The in charge of executive development programmes or human resource development manager can provide Xerox copies of specific articles published in journals such as fortune, Harvard business review, business today, and newspapers such as economic times and financial express to the executives for improving their knowledge. Sensivity training: Sensitivity training or t-group training is also known as laboratory training as it is conducted under controlled conditions. It means development of awareness and sensitivity to behavioral patterns of oneself and others.T groups are helpful in unlearning and learning certain things. They help the participants to understand how groups actually work and give them a chance to discover how they are interpreted by others. .it also aims at increasing tolerance power of the individual and his ability to understand others. The sensitivity training programmes are generally conducted under controlled laboratory conditions. Role Playing Role playing technique is used for human relations and leadership training. Its purpose is to give trainees and opportunity to learn human relations skills through practice and to develop insight into ones own behavior and its effect upon others. Thus its objectives is very narrow i.e. to increase the trainees skill in dealing with others. Under this method a conflict situation is artificially constructed and two or more trainees are assigned different roles to play. No dialogue is given beforehand. The role players are provided with a written or oral description of the situation and the role they are to play. After being allowed sufficient time to plan their actions, they must then act their parts spontaneously before the class. Benefits: It provides an opportunity for development human relations understanding and skills and to put into practice the knowledge they have acquired from textbooks, lectures discussions etc.

In- Basket Method: This method is used for developing decision-making skills among the trainees. As the name indicates, in-basket training is structured around the familiar receptacle used for collecting incoming, mail memos and reports. Materials that require problem solving are put into in basket and the trainee plays the role of a manager responsible for solving the problems. The trainee is given background information on the personalities and situations involved. Then using experience as a guide, the trainee is asked to take appropriate action within short time period. Individual or group discussion follows the written part of the exercise. Even the trainees who are satisfied with their methods of handling problems usually find that discussions broaden their knowledge of various possible ways to approach the same problem. Management games: A variety of business and management games have been devised and are being used with varying degrees of success in development programmes. A management game is a class room exercise in which a number of teams of trainees compete against each other to achieve certain objectives. The game is designed to be close representation of real life conditions. The trainees are asked to make decisions about production, cost, research and development inventories, sales etc for a simulated organization. Since they are often divided into teams a competing company, experience is also obtained in tem work. Under this method, the executives learn by analyzing problems by using some intuition and by making trial and error type of decisions. A management game has obsessive feedback of the consequences of business decisions.

Training in the Indian banking sector


During the last ten years, lifelong learning has become one of the most frequently heard terms in training circles. This is perhaps an apt response to the increasingly rapid changes under way in modern societies. As a sequel, every business entity worth its salt is placing utmost importance on the development of human capital- the knowledge, skills and motivation embodied in people. The growing share of economic output in the services sector, including that of banking is turning to the knowledge- and informationintensive. This in itself is placing a high premium on the continued upgrading of skills and competencies of the workforce. The growth of the knowledge economy that has of course partly been stimulated by demand for new types of goods and services, increasing globalization of economic activities and technological changes has only multiplies the need and urgency for new or additional type of competencies, such as teamwork, ability to co-operate in an unclear environment problem solving capacity to deal with non-routine processes, ability to handle decisions and responsibilities ,communication skills and capacity to see work place developments in a broader concept among the employees. With the kind of reforms and the resulting changes that are currently overawing the Indian banks, the urgency to inculcate such competencies among the workforce is getting intensified in the banking sector. High productivity work places, such as banks need to have heightened competencies to be widely spread throughout the branch network and not just concentrated among a few places. To ensure this, the life long learning concept

shall be made applicable not just to young people-tomorrows adults- but also to older workers. For this matter, the high level of initial general education that the current crop of young generation brings to the workplace will certainly assist them to anticipate and cope with the changes in the workplace. It is indeed the order staff who needs to be injected with fresh concepts to not only changes its mindset but also to hone up their competencies in tune with the changing market scenario.

Training in Indian banks: Current Scenario


Bank staff is at present provided with professional training through various avenues , in house training establishments of respective banks, training colleges of Reserve Bank of India and collaborative training institutes such as National Institute of bank management, Pune: Southern India Banks Staff Training College, Banglore; North East institute of bank Management, Guwahati, etc. Most of the training programs conducted by these institutes are confined to business processing and service delivery although current research carried out elsewhere indicates that banks today require a broader range skill than what was contemplated as essential in the early 1990s. It is being increasingly felt that certain specific personal attributes such as:

Loyalty Commitment Honesty and integrity

Enthusiasm Reliability Personal presentation Common sense Positive self esteem Sense of humor Balances attitude to work and home life Ability to deal with pressure Motivation adaptability

Are quiet necessary for organizational efficiency. Similarly, certain managerial skills are identified as key essentials even at the lower cadre if organizational productivity is to be optimized, particularly in turbulent times. Some such identifies skills are. Communication skills that contribute to productive and harmonious relations between employees and customers Teamwork skills that contribute to productive working relationship and outcomes. Problem solving skills that contribute to productive outcomes. Initiatives and enterprising skills that contribute to innovative outcomes. Planning and organizing skills that contributes to long and short term strategic planning. Self-management skills that contribute to employee satisfaction and growth. Learning skills that contribute to ongoing improvement and expansion in employee and company operations and outcomes and Technology skills that contribute to effective execution of tasks

SWOT Analysis:
STRENGTHS

Strong group backing and international recognition. Good networking in terms of geographical coverage. Location advantage as located on a highly commercial area. Skilled, motivated and professional staff. Pleasant and friendly bank atmosphere. Fully automated and all branches linked through VSATS thus making anywhere banking possible.

Innovative products to match varied preference of customers.

Longer banking hours.


Weaknesses:

Services yet not available on Sundays. ATMs less in number. Less aggressive advertising as compared to other bank
Opportunities:

Shift in customer preference from public to private sector banks. Change in customer preference of banking /service. Customers
are more conscious of various products and demand quality service. THREATS:

The public sector banks are reorganizing and restructuring them.


They already have an added advantage because of their large networks.

Increasing competition between new generation private banks


with emphasis on better and advanced technology.

Aggressive advertising by competitors.

HRM POLICIES OF HDFC BANK LTD. INTRODUCTION


Management in hdfc Bank is committed to basic principles of employment equality not only as prescribed by legislation but also as required by the details of our Vision, Mission and Values. We recognize that the enlightened management of our people means developing the full potential of all employees and creating a climate in which equal opportunities is a reality in both attitude and practice of employment.

The Bank wants to be recognized as " the employer of choice" in the banking industry and as the benchmark against which other banks and financial institutions judge their success in the field of people management.

POLICY STATEMENT
As an employer, the Bank is committed to ensuring that the talents and resources of all employees are utilized to the full and to the greatest benefit of both employer and employee. The Human Resource Management Department has, in addition to its administrative function, a direct responsibility to become a strong supporter of change and development in the Bank. This will be achieved by creating and monitoring an expanded range of HR policies and providing comprehensive personnel services in support of line management. The Department will be staffed with professionals with the necessary skills and experience needed to effectively carry out the revised role and responsibilities allocated and ratified as part of this HRM policy The objective of the Human Resource Management Department will be to support management in making the bank " the employer of choice" in the banking industry.

RESPONSIBILITIES OF THE HUMAN RESOURCE MANAGEMENT DEPARTMENT


a. Role

The role of the Human Resource Department is to create the


climate and conditions in which management throughout the Bank will be enabled to optimize the individual and collective

contribution of all employees to the short and long-term success of the Bank. b. Responsibilities

To be the principal sponsor and "guardian" of HR policies in the


Bank. To propose and obtain agreement on changes to these policies from time to time and to ensure that policies which have been agreed are being implemented throughout the Bank.

To contribute fully to the task of meeting the business challenges


which the bank has to face by supporting Branch/Unit Managers in continuously developing the potential of employees and in creating conditions in which all employees are motivated to meet the objectives of the Bank.

To continually monitor the bank's strategies to ensure that HR


policies are appropriate and that employee numbers and skills are fully supportive of such strategies.

To deliver a full range of personnel services in support of line


management. These services include manpower planning, recruitment/transfer, remuneration, and training and employee welfare.

To support line management in their day-to-day management of


the workforce by providing advice and consultancy on personnel and performance management issues.

EMPLOYMENT EQUALITY POLICY


Introduction

The Banks Policy on Employment Equality is designed to build on the statutory position as laid down by equality legislation and to create an awareness and a climate in which equal opportunity is developed and promoted in accordance with the spirit as well as the letter of the law of the land. Policy Statement The Bank, as an employer, is committed to ensuring that the talents and resources of all employees are utilized to the full and to the greatest benefit of both employer and employee and that no job applicant or employee receives less favorable treatment than another on the grounds of sex, marital/family status, race, color, ethnic origin, religious/political benefits or physical disability or is disadvantaged by conditions or requirements which are not relevant to the job. Management Commitment to Equality The Banks success in applying an effective employment equality policy depends to a significant extent upon the contribution of all its employees. Basic principles of employment equality are prescribed by legislation but sole reliance on such provisions will not ensure that employment equality is promoted. Management recognizes the importance of employment equality as a means of developing the full potential of all employees and of creating a climate in which equal opportunities are a reality both in attitude and in practice of employment The Banks Human Resource Policy and Procedures reinforce this position. Management is committed to work towards the elimination of inequalities, which may exist relative to the bank's stated policy.

EMPLOYMENT EQUALITY IN PRACTICE

Recruitment The Bank will not discriminate against any prospective employee as outlined in the Policy. Those involved in recruitment and selection will receive appropriate training to ensure that this process is as objective as possible and complies with the legislative requirements. Disabled persons will receive full consideration for employment as suitable vacancies arise. All applications will be evaluated on the basis of ability, merit, personal qualifies and job-related criteria.

Interviews Interviews will be carried out objectively and individuals judged on merit and their ability to do the job. Both sexes should be represented, as far as possible on an interview panel. Interviewers should be fair to all applicants/potential employees There should be no assumptions, those individuals because of sex, marital/family status or race posses characteristics, which might put them at a disadvantage/advantage. Information sought should refer to the requirements of the job. Information regarding applicants domestic commitments, i.e. husband/wife/children should not be sought unless it is relevant to the demands of the job. Where it is necessary to determine whether personal circumstances would have an adverse effect on performance of the job, e.g., extensive travel, etc., then appropriate questions will be asked equally of all interviewees.

Placement/Transferability Initial placement and subsequent transfers of employees are based on the staffing requirements of our many branches and departments and on the need to accommodate the personal development of employees.While recognizing the importance of transferability/mobility in the development of employees and in meeting the needs of the organization, transferability would be realistically assessed and without prejudice to the individual concerned. The Bank will endeavor to keep the number of transfers of an individual as low as possible and to accommodate, as far as possible, the needs of employees. Development and Training Development and training is an integral part of one's career path and the bank will endeavor to offer opportunities to all employees to seek and achieve high standards of performance. Management will help to identify training needs for improvement in job performance and experience and encourage all staff to undertake selfdevelopment. Selection for internal/external training and varied work experience should be based upon the employee's abilities and job performance. The Bank will provide equal opportunities for training and development of disabled employees and would also ensure that where possible, disabled employees are facilitated in making a full contribution through the alteration of workstations and the adjustment or modification of equipment. The various training and development method adopted by the organization are:

On the job training Refresher training Job rotation

Coaching Understudy Special readings.

Promotion The Bank will give equal opportunity to all employees for promotion in line with the Banks policy. The Bank has a policy of internal selection where possible. Staff vacancy notices will invite applications for promotional vacancies in a non-discriminatory manner. It will be assumed that both sexes are potentially suitable for all jobs and can provide the bank's future management. Applicants will be assessed on their qualifications, relevant knowledge, experience, personal qualities and their current level of job performance. Selection criteria and procedures will be reviewed from time to time to ensure that employees are selected, promoted and treated on the basis of their relevant merits, abilities and job performance. Performance Appraisal Reviews These will be designed to assess and improve actual performance on the job and to identify training and development needs. They will be based on standards which include the bank's Employment Equality Policy.

Research Methodology
Research Problem The main reason behind conducting this research study was to have a deep insight of the concept of training and development and the various methods and techniques to provide effective and efficient training to the employees. The other reasons were as: To evaluate the training programme of the organization Research Design The research process was designed to Analysis the Recruitment, Selection, Induction and Placement in HDFC Bank. So Descriptive and Exploratory research design was used in this study. Data Collection Primary data has been collected for meeting the objectives of the research. PRIMARY DATA For the purpose of collection of primary data personal interviews of respondents were conducted. An unbiased, undisguised structured questionnaire was prepared which was administered to the respondents for the purpose of getting the information. Sample size:

We selected a sample size of 25 respondents who are the employees of hdfc bank ltd. We talked to the employees of varied designation so that we cannot be partial in analysis and also for the accuracy of our research.

Methods of data collection: Adequate and authentic data is the foundation stone for an analysis. So a great care taken during the process of data collection. Information regarding the training and development is collected through comprehensive questionnaire. For getting information about the banks performance and history and growth we mainly relied on secondary data, in form of various books, magazines, government releases and journals. SAMPLING TECHNIQUE All the respondents who were easily accessible and willing to share the information were administered the structured questionnaire to get the desirable information. A non-probability sampling techniques i.e. convenience sampling was used. STASTICAL TOOLS USED Mathematical tools like Mean score, Percentage Correction Hypothesis testing etc were testing etc were used in the study. LIMITATIONS OF THE STUDY Some employees might have given biased information. There might be mistakes in interpreting the information obtained correctly. Due to time constraints the study was limited in extent. and

Due to the use of Convenience sampling technique the sample might not represent the true preference of the population.

Annexure
Questionnaire to evaluate a training programme Dear Respondent: We are conducting a study regarding the training and development methods adopted by the Hdfc bank Ltd. The objective of this study is to understand the training and development method adopted by the Hdfc effectiveness of these methods, its impact on the employees, and to analyze the strengths and weaknesses of each method. To meet these objectives we need your cooperation and some valued information. We assure you that this information will be kept strictly confidential and will be used for the study purposes only. Personal Details: Name----------------------------Male/Female------------------Telephone No. ---------------Age ------------------------------------Address ---------------------------------

Note: Please circle your most appropriate response in the 5 point scale on the right hand side. One represents the lowest range and 5 represent the highest range.
1 1. The extent to which you are informed about the training programme at your nomination 2. The extent to which the training objectives were explained at the commencement 1 4. The extent to which the programme objectives were fulfilled. 5. The extent to which the objectives Of the programme was in line with your need. 1. The extent to which your need was satisfied 6. The duration of the programme Too less less Just rightmuch Too much was 2. Do you agree that program Strongly Agree Difficult Little Not at all would agree To have been more beneficial if say some more background material would have been sent in advance. 3. The relative coverage of Highly Inadeq-Avg. SufficieIdeal various Inadequ uate nt topics was -ate 4. How well was the programme organized? Very badly Badly well Very well ExceptioNally well 2 3 4 5 2 3 4 5

1 10. Direct work situation 11. Indirect work situation 12. Off the work situation

13. Effectiveness of training methods.


Training Method Case study Discussion Method Lecture with questions Knowledg Changing Problem Interpersona Participate Knowledge e Attitude Solving l Acceptance Retention Acquisitio n

Note: Assign the appropriate score from the no. one to eight for each attribute corresponding to the training method., where one represent very effective and 8 represent non effectiveness. 14. Please specify any suggestions if you have ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Findings & Interpretations of the research


The extent to which trainees are made aware of the objectives of the programme at the time of nomination. 10% 0% 17%

20%

no info little info suffice info more than suffice too a great extent

53%

INTERPRETATIONS: 53% of all the respondents believe that the information provided to them before training is sufficient. 17% of the respondents believe that information provided to them is more than sufficient. 10% feel it is more than sufficient, whereas 20% feel it is little.

The extent to which the objectives are explined at the commmencement of the training program

13%

0% 7%

33%

47%

No infor lit'e info sufficient more than suffi too a great extent

INTERPRETATIONS: 47% of the respondents said the information provided to them by the bank regarding the training objectives is sufficient. 33% said the information provided to them was more than sufficient. 7% said the explanation regarding objectives was basic, no detailed information regarding objectives was being provided to them. 13% said the information provided was more than what was required.

The extent to which the objectives are fulfilled 15 10 5 0 3-D Column 1

zero

less than avg

avg.fulfil More than All avg objectives

INTERPRETATION: 50% of the respondents believe that training helps in the average fulfillment of objectives. 33% believe the less than half the objectives were achieved. 10% believe that training helps the bank to achieve more than 50% of objectives. 7% said the objectives fulfillment was almost zero.

The extent to which training satisfy the need

0% 7% 11% 37%
0% less than 50% 50% more than 50% 50% <>100% 100%

45%

The background material could prove beneficial?


20 15 10 5 0 Strongly agree agree difficult to say little not at all 3-D Column 1

INTERPRETATION 18 respondents out of 30 strongly agree to the statement that background material could prove beneficial 16 respondents said they are agreeing to the above statement. 4 respondents were not sure about this.

How well was the programme organised?


20 15 10 5 0 v.badly badly well v.well ex.well 3-D Column 1

Interpretations: 20 of the view that training programme of bank was well organized 5 said it was badly organized 5 said it was very well organized

Usefulness of the Programme in direct work situation

12 10 8 6 4 2 0 Not at all Little just right good v.useful 3-D Column 1

INTERPRETATIONS Out of 30, twelve said the programme could prove good in direct work situations, 4 said it could be very useful.

Usefulness of the programme in indirect work


16 14 12 10 8 6 4 2 0 no use little j.right good v.useful 3-D Column 1

Usefulness of the programme in personal growth and development.


12 10 8 6 4 2 0 no use little enough use good v.useful 3-D Column 1

Evaluation of the effectiveness of case study method of training and development


25 20 15 10 5 0 1 2 3 4 5 6 7 8 knwoledge acquisiion changing attitude problemsolving interpersonal skill participation accept knowledge retention

Note: The number one to eight represent the effectiveness of the method in different applications. One represent the areas for the training in which it is most effective and eight represent the areas of training in which it is least effective.

INTERPRETATION: The area in which the case study method is most effective is problem solving, the other areas are knowledge acquisition, participation acceptance and knowledge retention. The area in which the case study method has the average effectiveness is interpersonal skills and changing attitude.

Evaluating the effectiveness of the disscussion method in different areas 14 12 10 8 6 4 2 0 1 2 3 4 5 6 7 8 Know.acq Changin atti problm solv interpersonal participation knowg.retention

INTERPRETATIONS: Participation is one area in which discussion method is most effective. Discussion method proves to be average effective in case of interpersonal skills. The area in which this method seems to be least effective is knowledge retention. .

Lecture Method with questions


12 10 8 6 4 2 0 1 2 3 4 5 6 7 8 kng.acqui Changing atti problem solv interpersonal skills participatin acceptance knog.retention

INTERPRETATIONS Lecture with questions method is not most effective in no area. The areas in which it is least effective are interpersonal skills and knowledge retention. Note: It is better for an organization to avoid this approach.

Recommendation
HDFC should pay great attention to identification of right persons to be appointed as faculty. While picking up the faculty it should ensure that the incumbent: Has experience in virtually all tasks and techniques of the entire range of training methodology and can carry out these activities at an acceptable level of proficiency. Is flexible and versatile and open to change. Takes risks and could submerge his ego for the good of the group Can great excitement in training and has a sense of humor has enough independence and toughness of mind. Assessment of training Gaps: Before providing the training to the employees bank should do a need assessment study. It helps to identify discrepancies between employees skills and the skills required for effective job performance, discrepancies between current skills and the skills needed to perform the job effectively in the future. Need analysis consist of? Organizational analysis: Training needs at this level could be ascertained from: Corporate goals and objectives Manpower plan Skill pool Organizational climate Induction of new technology. Job Analysis: It involves: What is the task How it need to be performed Different activities involved

Identification training.

of

areas

that

can

benefit

from

Personal analysis It reveals who needs to be trained? What kind of training needs to be provided? This analysis should be done by someone who is observing the employees performance. Training Methodology: The lecture method adopted by the HDFC bank is the least effective method of training instead of using this techniques bank should consider other methods like case study, as it provides opportunities for exchange of ideas and consideration of possible solutions to problems the trainees will face in the work situation but free from the pressure of the actual world. it also promotes reflection, deep understanding and motivation among the trainees. Role playing is good for changing attitude or interpersonal skills but demands from a trainer some knowledge of psychology, a lot of experience with various types of human problems and ability to quickly react in the discussions.

Evaluation of Training: Bank should use the program evaluation as the final phase of training Process, during which effectiveness of the training program is measured. This information helps bank decide whether to continue to use a particular program in the future, whether to use a particular training methodology in the future or not. Training evaluation could be done at four levels: First at reaction level Second at learning stage Third at change in behavior finally the impact of Training on banks performance.

Conclusion
The Indian banking system is passing through a great transition. Never has it in the past been threatened by so many challenges. Banks are struggling to edge-out challenges posed by first generation reforms through an archaic training system. It is time banks switch over to systematic assessment of training needs across the system and reengineer their training programs as also the style of their delivery in such a way that they simply make the workforce competent enough to deliver banking services in the changed atmospherics. To remain high productive centers of banking services banks need to hone up the functional abilities of their staff and faster they do it better would be their sustainability.

BIBLIOGRAPHY
Bibliography

Magazines Referred Human Resource Capital Human Resource Review Websites Referred www.google.com www.HDFCbank.com

End of the Report.