You are on page 1of 65

1

1 PROJECT SIKKIM MANIPAL UNIVERSITY LEARNING CENTRE CODE: 01513 PLACE - KOLKATA (West Bengal) AN INSIGHT

PROJECT

SIKKIM MANIPAL UNIVERSITY

LEARNING CENTRE CODE: 01513

PLACE - KOLKATA (West Bengal)

AN INSIGHT TO THE

CUSTOMER RELATIONSHIP MANAGEMENT

Of

HDFC BANK LTD. (A Division of HDFC LTD.)

Research Conducted By

:PINTU BOSE

Student

:Sikkim Manipal University

Course

:MBA

Semester

:Fourth (4 TH )

Specialization

:Marketing

S.M.U Roll No. Learning Centre

:520762509

:2/1C Townshend Road, Kolkata – 700 025.APEX, I.D NO - 270072121

2

PROJECT FINAL REPORT

ON

CUSTOMER RELATIONSHIP MANAGEMENT

BY

PINTU BOSE

AT

2 PROJECT FINAL REPORT ON CUSTOMER RELATIONSHIP MANAGEMENT BY PINTU BOSE AT

3

PROJECT TITLE

A project report on

CUSTOMER RELATIONSHIP MANAGEMENT

OF

3 PROJECT TITLE A project report on CUSTOMER RELATIONSHIP MANAGEMENT OF COMPANY GUIDE ================ Mr. Sunandit

COMPANY GUIDE ================

Mr. Sunandit Chatterjee

Branch Manager Kolkata

Prepared by :

Pintu Bose

Roll no. 520762509, Sem-Fourth(4) APEX(KOLKATA)

4

Customer Relationship Management (CRM)

What is CRM?

CRM stands for Customer Relationship Management. It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.

CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers.

5

CRM Software Sales Force Automation Contact management

Contact management software stores, tracks and manages contacts, leads of an enterprise.

Lead management

Enterprise Lead management software enables an organization to manage, track and forecast sales leads. Also helps understand and improve conversion rates.

eCRM or Web based CRM Self Service CRM

Self service CRM (eCRM) software Enables web based customer interaction, automation of email, call logs, web site analytics, campaign management.

Survey Management Software

Survey Software automates an enterprise's Electronic Surveys, Polls, Questionnaires and enables understand customer preferences.

Customer Service

Call Center Software

6

Help Desk Software

Partner Relationship Management

Contract Management Software Contract Management Software enables an enterprise to create, track and manage partnerships, contracts, agreements. Example: Upside Software, Accruent Software, diCarta, I-Many.

Distribution management Software

7

Thanks to the expanding global workforce, heightened competition, and the continued need to cut costs and drive productivity, companies today are facing a new array of challenges. Many organizations have employees working out of the office, whether it’s your traveling salesperson, or workers in other states, countries, or from home. Collaborating as a unified team (Workforce Collaboration) has never been more crucial and sharing information with a teammate in the next cubicle is only a small piece of the puzzle. That’s where Business Software and Customer Relationship Management (CRM) applications come in.

CRM programs enable businesses to centrally access and manage customer information. Whether information is being shared amongst a large group, such as in a call center or simply between a few employees in a small business, it has to be accurate and reliable. In order to retain customers, their information needs to be recorded securely and correctly. Most people have encountered the reverse of this scenario and know how infuriating it can be when companies have poor organization and communication among their workers. To ensure your customers are satisfied, you need to stand above the rest and have an information hub where all workers have access to vital information about customers. This will help you achieve proper customer service, sales, marketing, and to unite all departments of your business. CRM’s make Workforce Collaboration easier than ever!

Of course, not all team members should have access to the same information, and that’s why certain CRM applications enable you to share information with your team members securely and with necessary territorial controls. That means team leaders can view more information and each department will see all relevant information. This ensures excellent Project Management for any organization, which is

8

vital to your success.

CRM applications help all companies reduce the time and complexity it takes to report individual sales activities. Without a CRM, your workers will require an extra 64 to 70 hours per week! For instance, it will take 4-6 hours to consolidate, view, and analyze information about all customer contacts and engagements, current opportunities, probability of success, etc. Another 8-10 hours to get accurate activity reports from staff (not including the time it takes them to create those reports). Add 2-4 hours to find key potential prospects so that you target the right customers, or weed out the poor prospects. Finally, add on another 1/2 hour or so to research each customer regarding past history, needs, etc.

Any company that needs Process Improvement will find that in order to be more effective and cost efficient, a system of Sales Force Automation must be implemented. Certain CRM systems can significantly reduce wasted time and increase sales. Not only is Sales Force Automation important to sales teams, companies are increasingly required to automate common practices and processes. Sending emails to clients, entering vital information, and other crucial steps are automated with popular CRM applications to reduce wasted time of manually performing mundane tasks.

CRM applications make Project Management easier for company leaders with simple ways to monitor and measure individual and team success. Workers perform best when they have a clear-cut way to measure their success and see improvement. Of course, by measuring success, rewards can be given to enhance team morale! Employees that are struggling to perform can be encouraged and further trained to boost productivity. Everyone in the business world is

9

competitive, especially salespeople; that's the point of quotas and commissions. When reps see how their doing against their quota, or even against other reps, that is encouragement to do better.

With handy tools in CRM applications, your company can effectively improve Workflow by targeting a) prospects for new business and b) existing customers for repeat business. This is a crucial tool to reduce wasted time and eliminate bothering the wrong customers. Your team will be able to quickly divide lead lists into groups that you create such as by ZIP code or last date of purchase. This enables your sales team to slice and dice their customer data to find the best approach. Creating "data policies" is a great way to do that. For example, if a new prospect is introduced and there is data indicating their interest in "Trucks," a completely different selling process can start for that prospect.

As times have changed, a simple phone call or visit isn’t always enough. CRM applications will provide you with multiple ways to communicate to customers such as email marketing campaigns. By combining CRM Sales Force Automation data management and email campaigning in one application, you can specify your lead, prospect, and account targets, embedded personal information into each email, and measure results across your sales cycle.

Your CRM will make it easier to target the right customers with email lists and to make sure your message isn’t viewed as spam by filters or customers! Newsletters make excellent campaigns to provide your reader with information that will help them improve their situation in an unobtrusive way. Meanwhile, it positions you as a reputable source of useful information. The better your content is, the better your chance that they will forward the newsletter to colleagues

10

and peers or look forward to the next email from you. Your CRM will assist you in your email campaign efforts by offering simple templates in HTML form and providing you with statistics such as: who opened the email, who clicked on your link from the email, who unsubscribed, etc. Creating automated callback lists for customers who appeared to be interested (clicked on links, opened email, etc.) is a highly successful tool.

A CRM application will enable your organization to build on customer data with information relating to: opportunities, products, services, projects, customer feedback, referrals, accounting, and more. A Sales Force Automation CRM will automate processes that used to take days and will simplify it!

The answer to the problems associated with the expanding global workforce is through Web Collaboration technologies. This means operating a successful CRM and Business Software system for your company. You can be sure to:

- Win Customers: Nothing will be left to chance. From the first contact through first sale, everything is tracked. - Work Together: It doesn’t matter where you employees are in the office, state, country, or world, they will have the information they need to close more deals. - Work Smarter: Working smarter is better than harder. It helps cut wasted time, efforts, and money! You have the reporting data you need to make great decisions.

11

Acknowledgements

If words are considered to be signs of gratitude then let these words Convey the very same My sincere gratitude to HDFC BANK for

providing me with an opportunity to work with

BANK and giving

necessary directions on doing this project to the best of my abilities.

I am highly indebted to Mr. Sunandit Chatterjee, Branch Manager

and company project guide, who has provided me with the necessary information and also for the support extended out to me in the completion of this report and his valuable suggestion and comments on bringing out this report in the best way possible.

I also thank Prof. Pragna Kaul, IBMR_Kolkata, who has sincerely supported me with the valuable insights into the completion of this project.

I am grateful to all faculty members of IBMR_Kolkata and my friends who have helped me in the successful completion of this project.

12

 

CONTENTS

 

Sr. No.

Subject Covered

Page No.

1

Banking Structure in India

6-7

2

Indian Banking Industries

8-9

3

Upcoming Foreign Bank in India

10

4

HDFC BANK

11-12

5

Company Profile

13-15

6

Technology used

16-19

7

Product and Customer segments

20-23

8

Business Strategy

24-25

9

Inside Hdfc Bank

26-31

10

Rupee Earned – Rupee Spent

32-33

11

Recent Development

34-41

12

SWOT Analysis

42-48

13

Project on Plastic Money

49-55

13

BANKING STRUCTURE IN INDIA

Scheduled Banks in India

  • (A) Scheduled Commercial Banks

Public sector

Private sector

Foreign

Regional Rural

Banks

Banks

Banks in

Bank

India

 

(28)

(27)

(29)

(102)

Nationalized Bank Other Public

Old Private Banks New

   

Sector Banks (IDBI) SBI and its Associates

Private Banks

  • (B) Scheduled Cooperative Banks

Scheduled Urban Cooperative Banks (55)

Scheduled State Cooperative Banks (31)

14

Here we more concerned about private sector banks and

ompetition among them. Today, there are 27 private sector banks

in the banking sector: 19 old private sector banks and 8 new

Private sector banks. These new banks have brought in state-of-

the-art technology and Aggressively marketed their products.

The Public sector banks are Facing a stiff competition from the

new private sector banks. The banks which have been setup in

1990s under the guidelines of the Narasimham Committee are

referred to as NEW PRIVATE SECTOR BANKS.

15

New Private Sector Banks

Superior Financial Services

Designed Innovative Products

Tapped new markets

Accessed Low cost NRI funds

Greater efficiency

INDIAN BANKING INDUSTRIES

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

Assets expected to reach US$1 trillion by 2010. An expanding

economy, middle class, and technological innovations are all

contributing to this growth.

The country’s middle class accounts for over 320 million people.

16

In correlation with the growth of the economy, rising income levels,

increased standard of living, and affordability of banking products

are promising factors for continued expansion.

16 In correlation with the growth of the economy, rising income levels, increased standard of living,Prathima Rajan , analyst in Celent's banking group and author of " id="pdf-obj-15-11" src="pdf-obj-15-11.jpg">

The Indian banking Industry is in the middle of an IT revolution,

Focusing on the expansion of retail and rural banking.

Players are becoming increasingly customer - centric in their

approach, which has resulted in innovative methods of offering new

banking products and services. Banks are now realizing the

importance of being a big player and are beginning to focus their

attention on mergers and acquisitions to take advantage of

economies of scale and/or comply with Basel II regulation.

“Indian banking industry assets are expected to reach US$1 trillion by

2010 and are poised to receive a greater infusion of foreign capital,”

says Prathima Rajan, analyst in Celent's banking group and author of

17

the report.

“The banking industry should focus on having a small

number of large players that can compete globally rather than having

a large number of fragmented players."

UPCOMING FOREIGN BANKS IN INDIA

By 2009 few more names is going

to be added in the list of foreign

banks in India. This is as an aftermath of the sudden interest shown

by

Reserve Bank of India paving roadmap for foreign banks in India

greater freedom in India. Among them is the world's best private bank

by EuroMoney magazine, Switzerland's UBS.

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

18

Royal Bank of Scotland

Switzerland's UBS

US-based GE Capital

Credit Suisse Group

Industrial and Commercial Bank of China

18 ∑ Royal Bank of Scotland ∑ ∑ Switzerland's UBS ∑ ∑ US-based GE Capital ∑

WE UNDERSTAND YOUR WORLD

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 liberalization 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

19

commenced operations as a Scheduled Commercial Bank in January

1995.

HDFC is India's premier housing finance company and enjoys an

impeccable track record in India as well as in international markets.

Since its inception in 1977, the Corporation has maintained a

consistent and healthy growth in its operations to remain the market

leader in mortgages. Its outstanding loan portfolio covers well over a

million dwelling units. HDFC has developed significant expertise in

retail mortgage loans to different market segments and also has a

large corporate client base for its housing related credit facilities.

With its experience in the financial markets, a strong market

reputation, large shareholder base and unique consumer franchise,

HDFC was ideally positioned to promote a bank in the Indian

environment.

HDFC Bank began operations in 1995 with a simple mission : to be a

“ World Class Indian Bank.” We realized that only a single minded

focus on product quality and service excellence would help us get

there.

Today,

we

are proud to say that we

are

well on our

way

towards that goal.

20

COMPANY PROFILE

STRONG NATIONAL NETWO

21

21 HDFC BANK March 2006 March 2007 March 2008 Citied 228 316 327 Branches 535 684

HDFC BANK

 

March 2006

March 2007

March 2008

Citied

228

 
  • 316 327

Branches

535

  • 684 761

 

ATMs

1323

1605

1977

21 HDFC BANK March 2006 March 2007 March 2008 Citied 228 316 327 Branches 535 684

As of March 31, 2008, the Bank’s distribution network was at 761

Branches and 1977 ATMs in 327 cities as against 684 branches

22

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 Bank’s 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.

he 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

23

nonperforming assets at 1.3% and net non-performing assets at

0.4% of total customer assets. The Bank’s provisioning policies for

specific loan loss provisions remained higher than regulatory

requirements.

TECHNOLOGY USED IN HDFC BANK

In the era of globalization each and every sector faced the stiff

competition from their rivals. And world also converted into the flat

from the globe. After the policy of liberalization and RBI initiatives to

24

take the step for the private sector banks, more and more changes

are taking the part into it.

And there are create competition between

the private sector banks and public sector bank.

Private sector banks are today used the latest technology for the

different transaction of day to day banking life. As we know that

Information Technology plays the vital role in the each and every

industries and gives the optimum return from the limited resources.

Banks are service industries and today IT gives the innovative

Technology application to Banking industries. HDFC BANK is the

leader in the industries and today IT and HDFC BANK together

combined they reached the sky. New technology changed the mind of

the customers and changed the queue concept from the history

banking transaction. Today there are different channels are available

for the banking transactions.

We can see that the how technology gives the best results in the

below diagram. There are drastically changes seen in the use of

Internet banking, in a year 2001 (2%) and in the year 2008 ( 25%).

These type of technology gives the freedom to retail customers.

25

Centralized Processing Units

Centralized Processing Units Derived Economies of

Derived

Economies

of

Scale

Electronic

Straight

Through

Electronic Straight Through Reduced Transaction Cost

Reduced Transaction Cost

 

Processing

 

Data Warehousing , CRM

Data Warehousing , CRM Improve cost efficiency,

Improve

cost

efficiency,

Cross sell

Innovative

Technology

Innovative Technology Provide new superior or

Provide

new

superior

or

Application

products

HDFC BANK is the very consistent player in the New private sector

banks.

New private sector banks to withstand the competition from

public sector banks came up with innovative products and superior

service.

2001

26

26 Phone Banking Branches 43% Internet 2% Mobile 1% ATM 40% 14% 2005
  • Phone Banking

  • Branches 43%

  • Internet 2%

  • Mobile 1%

  • ATM 40%

14%

2005

27

Mobile 1% Internet 25% Phone Banking 12% ATM 45% Branches 17%
Mobile 1%
Internet 25%
Phone Banking 12%
ATM 45%
Branches 17%

(

% customer initiated Transaction by Channel )

28

HDFC BANK PRODUCT AND CUSTOMER SEGMENTS

PERSONAL BANKING

Loan Product

Deposit Product

Investment & Insurance

Auto Loan

Saving a/c

Mutual Fund

 

Loan

Against

Current a/c

Bonds

Security

Fixed deposit

Knowledge Centre

Loan

Against

Demat a/c

Insurance

Property

Safe

Deposit

General

Health

and

Personal loan

Lockers

Insurance

 

Credit card

 

Equity

and

2-wheeler loan Commercial vehicles finance Home loans

Derivatives Mudra Gold Bar

Retail business banking Tractor loan Working Capital Finance Construction Equipment Finance

 

Health

Care

Finance Education Loan Gold Loan

Cards

Payment Services

Access To Bank

 

29

     

Credit Card

NetSafe

NetBanking

Debit Card Prepaid Card

Merchant Prepaid Refill Billpay Visa Billpay InstaPay

OneView InstaAlert MobileBanking ATM Phone Banking

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

DirectPay

Email Statements

----

Forex Services

VisaMoney

Branch Network

Transfer

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

 

e–Monies

----

 

Product & Services Trade Services

Electronic Funds Transfer Online Payment

Forex service Branch Locater RBI Guidelines

 

of Direct Tax

30

WHOLESALE BANKING

 

Corporate

Small and Medium Enterprises

Financial Institutions and Trusts

Funded

Funded Services

BANKS

 

Services

Non

Funded

Clearing

Sub-

Non

Funded

Services

Membership

Services Value Added

Specialized Services

RTGS submembership

 

Services

Value

added

Fund Transfer

Mutual Funds

Internet

services

ATM Tie-ups

 

Banking

Internet Banking

Corporate Salary a/c

 

Tax Collection Financial Institutions

Stock Brokers

Insurance Companies

Commodities

Business

Trusts

31

BUSINESS MIX

Total Deposits Retail
Total Deposits
Retail

Gross Advances

31 BUSINESS MIX Total Deposits Retail Gross Advances Wholesale Net Revenue ∑ HDFC Bank is a

Wholesale

Net Revenue

HDFC Bank is a consistent player in the private sector

bank and have a well balanced product and business

mix in the Indian as well as overseas markets.

Customer segments (retail & wholesale) account for

84% of

Net revenues ( FY 2008)

Higher retail revenues partly offset by higher operating

and credit costs.

Equally well positioned to grow both segments.

.

32

NRI SERVICES

Accounts & Deposits

 

Remittances

Rupee Saving a/c

   

North America

Rupee Current a/c

UK

Rupee Fixed Deposits

Europe

 

Foreign Currency Deposits

South East Asia

Accounts

for

Returning

Middle East

 

Indians

Africa Others

 

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

Investment & Insurances

 

Loans

Mutual Funds

   

Home Loans

 

Insurance

Loans Against Securities

Private Banking

Loans Against Deposits

Portfolio Scheme

Investment

Gold Credit Card

 

Payment Services

 

Access To Bank

NetSafe BillPay InstaPay DirectPay Visa Money Online Donation

   

NetBanking OneView InstaAlert ATM PhoneBanking Email Statements Branch Network

33

BUSINESS STRETEGY
BUSINESS STRETEGY

HDFC BANK mission is to be "a World Class Indian Bank",

benchmarking themselves against international standards and best

practices in terms of product offerings, technology, service levels,

risk management and audit & compliance. The objective is to build

sound customer franchises across distinct businesses so as to be a

preferred provider of banking services for target retail and wholesale

customer segments, and to achieve a healthy growth in profitability,

consistent with the Bank's risk appetite. Bank is committed to do this

while ensuring the highest levels of ethical standards, professional

integrity, corporate governance and regulatory compliance. Continue

to develop new product and technology is the main business strategy

of the bank. Maintain good relation with the customers is the main

and prime objective of the bank.

34

HDFC BANK business strategy emphasizes the following :

Increase market share in India’s expanding banking and

financial services industry by following a disciplined growth

strategy focusing on quality and not on quantity and delivering

high quality customer service.

Leverage our technology platform and open scaleable systems

to deliver more products to more customers and to control

operating costs.

Maintain current high standards for asset quality through

disciplined credit risk management.

Develop innovative products and services that attract the

targeted customers and address inefficiencies in the Indian

financial sector.

Continue to develop products and services that reduce bank’s

cost of funds.

Focus on high earnings growth with low volatility.

35

INSIDE HDFC BANK

FIVE “S” , PART OF KAIZEN

WORK PLACE TRANSFORMATION

Focus on effective work place organization

Believe in

“ Small changes lead to large improvement ”

Every successful organization have their own strategy to win the

race in the competitive market. They use some technique and

methodology for smooth running of business. HDFC BANK also

aquired the Japanese technique for smooth running of work and

effective work place organization.

Five ‘S’ Part of Kaizen is the technique which is used in the bank

For easy and systematic work place and eliminating unnecessary

things from the work place.

36

BENEFIT OF FIVE “S”

It can be started immediately.

Every one has to participate.

Five “ S”

is an entirely people driven initiatives.

Brings in concept of ownership.

All wastage are made visible.

FIVE ‘S’ Means :-

S-1

SORT

SEIRI

S-2

SYSTEMATIZE

SEITON

S-3

SPIC-N-SPAN

SEIRO

S-4

STANDARDIZE

SEIKETSU

S-5

SUSTAIN

SHITSUKE

(1) SORT :-

It focus on eliminating unnecessary items from the work place.

It is excellent way to free up valuable floor space.

It segregate items as per “require and wanted”.

Frequently

   

Less

Required

Frequently

   

Remove

 

Required

   

everything from

   

Wanted but

 

workplace

 

not Required

     

Junk

37

(2) SYSTEMATIZE :-

Systematize is focus on efficient and effective Storage method.

That means it identify, organize and arrange retrieval.

It largely focus on good labeling and identification practices.

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

(3) SPIC- n - SPAN :-

Spic-n-Span focuses on regular clearing and self

inspection. It brings in the sense of ownership.

(4) STANDERDIZE :-

It focus on simplification and standardization. It involve standard

rules and policies. It establish checklist to facilitates autonomous

maintenance of workplace. It assign responsibility for doing

various jobs and decide on Five S frequency.

(5) SUSTAIN:-

It focuses on defining a new status and standard of

organized work place. Sustain means regular training to maintain

standards developed under S-4. It brings in self- discipline and

commitment towards workplace organization.

38

LABELLING ON FILE

FILE NUMBER

SUBJECT
SUBJECT

FROM DATE

TO DATE
TO DATE
OWNER
OWNER

BOX LABEL

For Example

1 / 3 / A / 6

  • 1 – Work Station (1)

  • 3 – Drawer (3)

A - Shelf

(A)

  • 6 – File Number ( 6)

39

COLOUR CODING OF FILES

DEPARTMENT

 

Welcome Desk

 
 
 

Personal Banker

 
 
   

Teller

 

Relationship Manager

 
 
 

Branch Manager

 
 

Demat

 
 

Others

 
 

In the HDFC BANK each department has their different color coding

apply on the different file. Due to this everyone aware about their

particular color file which is coding on it and they save their valuable

time. It is a part of Kaizen and also included in the system of the Five

40

‘S’. Logic behind it that , the color coding are always differentiate the

things from the similar one.

HUMAN RESOURCES

The Bank’s staffing needs continued to increase during the year

particularly in the retail banking businesses in line with the business

growth. Total number of employees increased from 14878 as of

March31,2006 to 21477 as of March 31, 2007. The Bank continues to

focus on training its employees on a continuing basis, both on the job

and through training programs conducted by internal and external

faculty.

The Bank has consistently believed that broader employee ownership

of its shares has a positive impact on its performance and employee

motivation. The Bank’s employee stock option scheme so far covers

around 9000 employees.

41

RUPEE EARNED -

RUPEE SPENT

It is more important for every organization to know about from where

and where to spent money. And balanced between these two things

rupee earned and rupee spent are required for smooth running of

business and financial soundness. This type of watch can control

and eliminate the unnecessary spending of business. In this diagram

it include both things from where Bank earned Rupee and where to

spent.

42

42 HDFC BANK earned from the ‘Interest from Advances’ 51.14 % , ‘Interest from Investment’ 27.12

HDFC BANK earned from the ‘Interest from Advances’ 51.14 % ,

‘Interest from Investment’ 27.12 %, bank earned commission

exchange and brokerage of 15.25 %. These are the major earning

sources of the bank. Bank also earned from the Forex and

Derivatives and some other Interest Income.

Bank spent 39.75 % on Interest Expense, 30.27 % on Operating

Expense and 14.58 % on Provision. Bank also spent Dividend and

Tax on dividend, Loss on Investment , Tax.

As we discuss above that balancing is must between these two for

every organization especially in the era of globalization where there

are stiff competition among various market players.

43

RECENT DEVELOPMENT

43 RECENT DEVELOPMENT The Reserve Bank of India has approved the scheme of amalgamation of Centurion

The Reserve Bank of India has approved the scheme of

amalgamation of Centurion Bank of Punjab Ltd. with HDFC Bank

Ltd. with effect from May 23, 2008.

All the branches of Centurion Bank of Punjab will function as

branches of HDFC Bank with effect from May 23, 2008. With RBI’s

approval, all requisite statutory and regulatory approvals for the

merger have been obtained.

44

44 The combined entity would have a nationwide network of 1167 branches; a strong deposit base

The combined entity would have a nationwide network of 1167

branches; a strong deposit base of around Rs.1,22,000 crores and

net advances of around Rs.89,000 crores. The balance sheet size of

the combined entity would be over Rs.1,63,000 crores.

Merger with Centurion Bank of Punjab Limited

On March 27, 2008, the shareholders of the Bank accorded their

consent to a scheme of amalgamation of Centurion Bank of Punjab

Limited with HDFC Bank Limited. The shareholders of the Bank

approved the issuance of one equity share of Rs.10/- each of HDFC

Bank Limited for every 29 equity shares of Re. 1/- each held in

Centurion Bank of Punjab Limited. This is subject to receipt of

45

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.

46

46 Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's leading housing finance company, HDFC

Promoted in 1995 by Housing Development Finance Corporation

(HDFC), India's leading housing finance company, HDFC Bank is one

of India's premier banks providing a wide range of financial products

and services to its over 11 million customers across hundreds of

Indian cities using multiple distribution channels including a pan-India

network of branches, ATMs, phone banking, net banking and mobile

banking. Within a relatively short span of time, the bank has emerged

as a leading player in retail banking, wholesale banking, and treasury

operations, its three principal business segments.

The bank's competitive strength clearly lies in the use of technology

and the ability to deliver world-class service with rapid response time.

Over the last 13 years, the bank has successfully gained market

share in its target customer franchises while maintaining healthy

profitability and asset quality.

As on March 31, 2008, the Bank had a network of 761 branches and

1,977 ATMs in 327 cities. For the year ended March 31, 2008, the

47

Bank reported a net profit of INR 15.90 billion (Rs.1590.2crore),

up 39.3%, over the corresponding year ended March 31, 2007.

As of March 31, 2008 total deposits were INR 1007.69 billion,

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

March 31, 2007. Total balance sheet size too grew by 46.0% to INR

1,331.77 billion (133177 crore). Leading Indian and international

Publications have recognized the bank for its performance and

quality.

48

48 Centurion Bank of Punjab is one of the leading new generation private sector banks in

Centurion Bank of Punjab is one of the leading new generation

private sector banks in India. The bank serves individual consumers,

small and medium businesses and large corporations with a full

range of financial products and services for investing, lending and

advice on financial planning. The bank offers its customers an array

of wealth management products such as mutual funds, life and

general insurance and has established a leadership 'position'.

The bank is also a strong player in foreign exchange services,

personal loans, mortgages and agricultural loans.

Additionally the bank offers a full suite of NRI banking products to

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

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

statutory and regulatory approvals. This merger has further

strengthened the geographical reach of the Bank in major towns and

cities across the country, especially in the State of Kerala, in addition

to its existing dominance in the northern part of the country.

49

Centurion Bank of Punjab now operates on a strong nationwide

franchise of 404 branches and 452 ATMs in 190 locations across the

country, supported by employee base of over 7,500 employees.

In addition

to

being listed

on

the major Indian stock exchanges,

the Bank’s shares are also listed on the Luxembourg Stock

Exchange.

50

ACHIEVEMENT IN 2007

Business

Today-

   

Monitor

Group

survey

One of India's "Most Innovative Companies"

Financial

Express-

 

Ernst

Young

&

Best Bank Award in the Private Sector category

Award

Global

HR

Excellence Awards - Asia Pacific HRM Congress:

 

Business Today

   
   

Dun & Bradstreet – American Express Corporate Best Bank Award 2007

 

The Bombay Stock

 

Exchange

and

Nasscom

Foundation's

   

Business for Social Responsibility Awards 2007

 

Outlook

Money

&

Best Bank Award in the Private sector category.

NDTV Profit

The

Banker

Asian

 

51

Excellence in Retail Financial Services Awards

 

Asian Banker

51 Excellence in Retail Financial Services Awards Asian Banker <a href=HDFC BANK Managing Director Aditya Puri wins the Leadership Achievement Award for India " id="pdf-obj-50-18" src="pdf-obj-50-18.jpg">

52

SWOT ANALYSIS

STRENGTH

   

WEAKNESSES

 

Right

strategy

for

the

Some

gaps

in

range

for

right products.

certain sectors.

Superior

customer

Customer service staff need

service vs. competitors.

training.

Great Brand Image

 

Processes and systems, etc

required

Management

cover

Products have accreditations.

 

insufficient.

High degree of customer

Good place to work

Sectoral

growth

is

satisfaction.

constrained by low unemployment levels and competition for staff

Lower

response

time

 

with

efficient

and

effective service.

Dedicated workforce

aiming at

making a

long-term career in

 

the field.

53

 

Opportunities

 

Threats

Profit margins will be good.

Legislation could impact.

 

Could extend to overseas broadly.

Great risk involved

Very

competition

high

New specialist applications.

prevailing in the industry.

 

Could seek better customer deals.

Vulnerable to reactive

 

attack by major competitors

Fast-track

career

Lack

infrastructure

of

in

development

opportunities

rural areas could constrain

on an industry-wide basis.

investment.

An applied research centre to create opportunities for developing techniques to provide added-value services.

High volume/low cost market is intensely competitive.

 

54

COMPETITIVE SWOT ANALYSIS WITH ICICI BANK

 

STRENGTHS

WEAKNESSES

O

   

P

S – O Strategies

W – O Strategies

P

O

Strength: Large Capital base.

Weakness: Workforce

R

T

Opportunity: Market Expansion.

Responsiveness.

U

N

Opportunity: Outsourcing of Non –

I

Strategy: Deep Penetration into

Core Business.

T

I

Rural Market.

Strategy: Outsource Customer

E

Care & other E-Helps.

S

 

S – T Strategies

W – T Strategies

T

H

Strength: Low operating costs

Weakness: Not Equal to

R

International Standards.

E

A

Threat: Increased Competition

Threat: Entry of many Foreign

T

from others Pvt. Banks.

Banks.

S

Strategy: Steps to Ensure Loyalty by old Customers.

Strategy: Consider additional benefits

55

Detailed Analysis:

  • i. Strength - Opportunity Analysis.

Strength:

It is well know that ICICI Bank has the largest Authorised Capital

Base in the Banking System in India i.e. having a total capacity to

raise Rs. 19,000,000,000 (Non – Premium Value).

Opportunity:

Seeing the present financial & economic development of Indian

Economy and also the tremendous growth of the Indian

Companies including the acquisition spree followed by them,

it clearly states the expanding market for finance requirements

and also the growth in surplus disposal income of Indian citizens

has given a huge rise in savings deposits – from the above point it

is clear that there is a huge market expansion possible in banking

sector in India.

Strategy:

From the analysis of Strength & Opportunity the simple and

56

straight possible strategy for ICICI Bank could be - to penetrate

into the rural sector of India for expanding its market share as well

as leading all other Pvt. Banks from

a great

gap.

ii.

Strength - Threat Analysis.

Strength:

ICICI Bank is not only known for large capital but also for having a

low operations cost though having huge number of branches and

services provided.

Threat:

After showing a significant growth overall, India is able to attract

many international financial & banking institutes, which are known

for their state of art working and keeping low operation costs.

Strategy:

To ensure that ICICI Bank keeps going on with low operation cost

& have continuous business it should simply promote itself well &

provide quality service so as to ensure customer loyalty, therefore

guaranteeing continuous business.

57

iii.

Weakness - Opportunity Analysis.

Weakness:

It is well known that workforce responsiveness in banking sector is

Very low in Indian banking sector, though

ICICI Bank has better

responsible staff but it still lacks behind its counterparts like HSBC,

HDFC BANK, CITI BANK, YES BANK etc.

Opportunity:

In the present world, India is preferred one of the best places for

out – sourcing of business

process works and

many

more.

Strategy:

As international companies are reaping huge benefits after out-

sourcing there customer care & BPO’s, this same strategy should

be implemented by ICICI Bank so as to have proper customer

service without hindering customer expectations.

58

iv.

Weakness - Threat Analysis.

Weakness:

Though having a international presence, ICICI Bank has not been

able to keep up the international standards in providing customer

service as well as banking works.

Threat:

In recent times, India has witnessed entry of many international

banks like CITI Bank, YES Bank etc which posses an external

entrant threat to ICICI Bank – as this Banks are known for their art

of working and maintain high standards of customer service.

Strategy:

After having new entrants threat, ICICI Bank should come up with

More additional benefits to its customer or may be even reduce

some fees for any additional works of customers.

59

PROJECT ON PLASTIC MONEY

PPLLAASSTTIICC MMOONNEEYY
PPLLAASSTTIICC MMOONNEEYY

I give the project on Plastic Money to bank. The objective behind this

project is to increase the rich customers list in a bank. Plastic Money

title itself says the use of Credit Card and

Debit Card in day to day

transaction of the business.

I prepared

the presentation on it

and

60

submitted to bank and Bank already started work on this project.

Idea behind this project is to sale the bulk product. Target customer

Of this project are two parties one is Wholesaler and second is

Retailer. Due to this idea bank also sell their swipe machine to

wholesaler and create brand image in the market.

The idea behind this, bank give the credit card swipe machine to

wholesalers and retailers use the credit card of the bank. Bank gives

the 50 days credit to their credit card holders. So here retailers can

get benefit of long credit period and on the other side wholesalers can

get the benefit of same day payment. As a result bank got the wide

list of customers of wholesalers and retailers.

60 submitted to bank and Bank already started work on this project. Idea behind this project

61

POWERPOINT PRESENTATION ON PLATIC MONEY

 TTaarrggeett ccuussttoommeerrss aarree WWhhoolleessaalleerrss aanndd RReettaaiilleerrss OOBBJJEECCTTIIVVEE  BBuullkk ssaalleess ssuurreellyy  UUssee ooff PPllaassttiicc
 TTaarrggeett ccuussttoommeerrss
aarree WWhhoolleessaalleerrss aanndd
RReettaaiilleerrss
OOBBJJEECCTTIIVVEE
 BBuullkk ssaalleess ssuurreellyy
 UUssee ooff PPllaassttiicc
ppoossssiibbllee
MMoonneeyy
62  CCrreeddiitt CCaarrddaanndd DDeebbiitt CCaarrddaass aa mmeeddiiuumm ooff ttrraannssaaccttiioonn..  WWee ssaallee oouurr pprroodduucctt ttoo
62
 CCrreeddiitt CCaarrddaanndd DDeebbiitt CCaarrddaass aa mmeeddiiuumm ooff
ttrraannssaaccttiioonn..
 WWee ssaallee oouurr pprroodduucctt ttoo wwhhoolleessaalleerrss aanndd RReettaaiilleerrss
 BBaannkk ggoott tthhee nneeww ccuussttoommeerrss aass aa rreessuulltt..
 BBootthh tthhee ppaarrttiieess ggeett bbeenneeffiitt ffrroomm iitt ..
aanndd ccrreeaattee ggrroouupp ttrraannssaaccttiioonnss..
IIDDEEAA

Idea behind it, to convenience both the parties and create the group

transaction between them so bank can got the maximum benefit from

it. Each wholesaler has more than 15 to 20 retailers, so by this way

bank sell the bulk products.

63

 FFoorrccee ttoo ooppeenn aa bbaannkk aaccccoouunntt iinn HHDDFFCC BBaannkk ttoo bbootthh tthhee ppaarrttiieess..  CCoonnvviinnccee
 FFoorrccee ttoo ooppeenn aa bbaannkk aaccccoouunntt iinn HHDDFFCC BBaannkk
ttoo bbootthh tthhee ppaarrttiieess..
 CCoonnvviinnccee bbootthh tthhee ppaarrttiieess aanndd sshhoowwiinngg tthheemm aa
bbeenneeffiittssffrroomm iitt..
 CCoolllleecctt ddeettaaiillss ooff tthheeiirr RReettaaiilleerrss
HHooww iitt wwoorrkkss
 MMeeeett ttoo wwhhoolleessaalleerrssffiirrsstt

This power point slide shows the how idea works behind this project.

Meet the wholesaler first and get the details about their retailers and

convince both parties and shows the benefit of using this type of

transaction by plastic money.

64

 BBeeccaauussee wwhhoolleessaalleerrss aanndd rreettaaiilleerrss aarree iinn aa ggrroouupp  IInnddiirreecctt wwaayy ttoo mmaarrkkeettiinngg BBeenneeffiitt ttoo
 BBeeccaauussee wwhhoolleessaalleerrss aanndd rreettaaiilleerrss aarree iinn aa
ggrroouupp
 IInnddiirreecctt wwaayy ttoo mmaarrkkeettiinngg
BBeenneeffiitt ttoo BBaannkk
 BBuullkkpprroodduucctt sseelllliinngg

Bank always find those customers which are more involve in the

banking transaction. These type of group transaction between the

wholesalers and retailers maintain the well account in a bank.

65

ccuussttoommeerrss wwaannttyyoouurr ssoolluuttiioonn ttoo tthheeiirr pprroobblleemm...... ccoommmmuunniiccaattiinngg tthhee bbeenneeffiittss ooff yyoouurr pprroodduucctt oorr  IItt''ss sshhooww
ccuussttoommeerrss wwaannttyyoouurr ssoolluuttiioonn ttoo tthheeiirr
pprroobblleemm......
ccoommmmuunniiccaattiinngg tthhee bbeenneeffiittss ooff yyoouurr pprroodduucctt oorr
 IItt''ss sshhooww ttiimmee aanndd iitt''ss aabboouutt oonnee tthhiinngg----
MMaarrkkeettiinngg SSttrraatteeggyy
sseerrvviiccee iinn ssuucchh aa wwaayy tthhaatt pprroossppeeccttss oorr