CHAPTER- 1

INTRODUCTION

CHAPTER- 1
INTRODUCTION

CHAPTER- 1
INTRODUCTION 1.1
HISTORY OF BANKING
Banking is nearly as old as civilization. The history of banking could be said to have
started with the appearance of money. The first record of minted metal coins was in
Mesopotamia in about 2500B.C. the first European banknotes, which was handwritten
appeared in1661, in Sweden. cheque and printed paper money appeared in the 1700s
and 1800s, with many banks created to deal with increasing trade.
The history of banking in each country runs in lines with the development of trade
and industry, and with the level of political confidence and stability. The ancient
Romans developed an advanced banking system to serve their vast trade network,
which extended throughout Europe, Asia and Africa.
Modern banking began in Venice. The word bank comes from the Italian word ban
co, meaning bench, because moneylenders worked on benches in market places. The
bank of Venice was established in 1171 to help the government raise finance for a war.
At the same time, in England merchant started to ask goldsmiths to hold gold and
silver in their safes in return for a fee. Receipts given to the Merchant were sometimes
used to buy or sell, with the metal itself staying under lock and key. The goldsmith
realized that they could lend out some of the gold and silver that they had and charge
interest, as not all of the merchants would ask for the gold and silver back at the same
time. Eventually, instead of charging the merchants, the goldsmiths paid them to
deposit their gold and silver.

The bank of England was formed in 1694 to borrow money from the public for the
government to finance the war of Augsburg against France. By 1709, goldsmith were
using bank of England notes of their own receipts.
New technology transformed the banking industry in the 1900s round the world,
banks merged into larger and fewer groups and expanded into other country.
BANKING STRUCTURE IN INDIA:1.2
In todays dynamic world banks are inevitable for the development of a country.
Banks play a pivotal role in enhancing each and every sector. They have helped bring
a draw of development on the worlds horizon and developing country like India is no
exception.
Banks fulfills the role of a financial intermediary. This means that it acts as a vehicle
for moving finance from those who have surplus money to (however temporarily)
those who have deficit. In everyday branch terms the banks channel funds from
depositors whose accounts are in credit to borrowers who are in debit.
Without the intermediary of the banks both their depositors and their borrowers would
have to contact each other directly. This can and does happen of course. This is what
has lead to the very foundation of financial institution like banks.
Before few decades there existed some influential people who used to land money.
But a substantially high rate of interest was charged which made borrowing of money
out of the reach of the majority of the people so there arose a need for a financial
intermediate.
The Bank have developed their roles to such an extent that a direct contact between
the depositors and borrowers in now known as disintermediation.

Banking industry has always revolved around the traditional function of taking
deposits, money transfer and making advances. Those three are closely related to each
other, the objective being to lend money, which is the profitable activity of the three.
Taking deposits generates funds for lending and money transfer services are necessary
for the attention of deposits. The Bank have introduced progressively more
sophisticated versions of these services and have diversified introduction in
numerable areas of activity not directly relating to this traditional trinity INDIAN
BANKING SYSTEM 1.3

INDIAN BANKING INDUSTRY ANALYSIS:1.4

The banking scenario in India has been changing at fast pace from being just the
borrowers and lenders traditionally, the focus has shifted to more differentiated and
customized product/service provider from regulation to liberalization in the year
1991, from planned economy to market.
Economy, from licensing to integration with Global Economics, the changes have
been swift. All most all the sector operating in the economy was affected and banking
sector is no exception to this. Thus the whole of the banking system in the country has
undergone a radical change. Let us see how banking has evolved in the past 57 years
of independence.
After independence in 1947 and proclamation in 1950 the country set about drawing
its road map for the future public ownership of banks was seen inevitable and SBI
was created in 1955 to spearhead the expansion of banking into rural India and speed
up the process of magnetization.
Political compulsions brought about nationalization of bank in 1969 and lobbying by
bank employees and their unions added to the list of nationalized banks a few years
later.
Slowly the unions grew in strength, while bank management stagnated. The casualty
was to the customer service declined, complaints increased and bank management
was unable to item the rot.
In the meantime, technology was becoming a global phenomenon lacking a vision of
the future and the banks erred badly in opposing the technology up gradation of
banks. They mistakenly believed the technology would lead to retrenchment and
eventually the marginalization of unions.
5

The problem faced by the banking industry soon surfaced in their balance sheets. But
the prevailing accounting practices unable banks to dodge the issue.

The rules of the game under which banks operated changed in 1993. Norms or income
Recognition, Assets classification and loan loss provisioning were put in place and
capital adequacy ratio become mandatory. The cumulative impact of all these changes
has been on the concept of state ownership in banks. It is increasingly becoming clear
that the state ownership in bank is no longer sustainable.
The amendment of banking regulation act in 1993 saw the entry of new private sector
banks and foreign banks.

MAJOR PLAYER IN INDIA

1. HDFC BANK LTD
2. ICICI BANK LTD
3. STATE BANK OF INDIA LTD
4. PUNJAB NATOINAL BANK LTD
5. BANK OF BARODA LTD
6. FEDERAL BANK LTD
7. AXIS BANK LTD
8. ING VYSYA BANK LTD
9. IDBI BANK LTD
10. INDUSIND BANK LTD
11. YES BANK LTD

INTRODUCTION
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
commenced operations as a Scheduled Commercial Bank in January 1995. HDFC is
6

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.
HDFC Bank Limited (the Bank) is an India-based banking company engaged in
providing a range of banking and financial services, including commercial banking
and treasury operations. The Bank has a network of 1412 branches and 3295
automated teller machines (ATMs) in 528 cities and total employees is 52687.

BRANCHES (NOS)

ATMs (Nos.)

3295

1412
684

2007

761

2008

1605

2009

2007

1977

2008

2009

43.9
38.2
29.1

2007

2008

2009

Snapshot
Company Background
Industry

Finance - Banks - Private Sector.

Business Group

HDFC Group

Incorporation Date

31/12/1994

Public Issue Date

31/12/1995

Face Value

10.0000

Company/Business Registration No

INE040A01018

Key Officials CEO

Aditya puri

HISTORY OF HDFC BANK1.5

HDFC BANK LTD 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.

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and
Chairman-Emeritus, of HDFC Group. HDFC BANK LTD was amongst the first
to set up a bank in the private sector. The bank was incorporated on 30th August 1994
in the name of HDFC Bank Limited, with its registered office in Mumbai.It
commenced operations as a Scheduled Commercial Bank on 16th January 1995. The
bank has grown consistently and is now amongst the leading players in the industry
.

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 In a milestone transaction in
the Indian banking industry, Times Bank was merged with HDFC Bank Ltd., effective
February 26, 2000.

MISSION
I.

World Class Indian Bank

II.

Benchmarking against international standards.

III.

To build sound customer franchises across distinct businesses

IV.

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

management and audit & compliance

VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards,
professional integrity and regulatory compliance. HDFC Banks business philosophy
is based on four core values such as:1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
The objective of the HDFC Bank is to provide its target market customers a full
range of financial products and banking services, giving the customer a one-step
window for all his/her requirements. The HDFC Bank plus and the investment
advisory services programs have been designed keeping in mind needs of customers
who seeks distinct financial solutions, information and advice on various investment
avenues.
BUSINESS STRATEGY
I.
II.
III.

Increasing market share in Indias expanding banking

Delivering high quality customer service
Maintaining current high standards for asset quality through disciplined credit
risk management

IV.

Develop innovative products and services that attract targeted customers

and address inefficiencies in the Indian financial sector.
10

BOARD OF DIRECTORS
PERSON

DESIGNATION

Mr. Jagdish Capoor

Vice President

Mr. Aditya Puri

Managing Director

Mr. Paresh Sukthankar

Executive Director

Mr. Harish Engineer

Executive Director

Mr. Keki M. Mistry

Director

Mr. Ashim Samanta

Director

Mr. Arvind Pande

Director

Mrs. Renu Karnad

Director

Mr. C M Vasudev

Director

Mr. Gautam Divan

Director

Dr. Pandit Palande

Directo

TOP MANAGEMENT
Abhay Aima

Equities & Private Banking and NRI Business

Anil Jaggia

Information Technology and Legal

Ashish Parthasarth

Treasury

Bharat Shah

Merchant SeRvices

G Subramanian

Audit & Compliance

Kaizad Maneck

Credit & Market Risk

Mandeep Maitra

H.R, Admin & Infrastructure

Navin Puri

Branch Banking

Pralay Mondal

Assets & CREDIT CARDS

11

Rahul N Bhagat

Retail Liabilities, Marketing & Direct Banking Channels

Ananthanarayan

Operations

Sashi Jagdishan

Finance

Sudhir Joshi

Treasury

BUSINESS HEADS
A Asokan

Emerging Enterprise Group

Amit Kumar

Retail Branch Banking-West 1

Anil Nath

Business Banking - Working Capital & Retail Agri

Arup Rakshit

Treasury

Ashima Khanna Bhat

Emerging Corporate Group

12

Ashok Khanna

Retail Assets TW

Bhavesh Chandulal

Wholesale Operations

Biju Pillai

Retail Assets - EL,PL,LAS & GOLD

Birendra Sahu

retail Operations

Deepak Maheshwari

Credit and Market Risk

Gsv Surya Prasad

Information Technology

Harpreet Singh

NRI Business

Jimmy M Tata

Corporate Banking

Munish Mittal

Information Technology

Nandkishor Laxman

Financial Institution Group

Nitin Subramanya

Equities and Private Banking

Parag Rao

Credit Cards

Rajender Sehgal

Financial Institution Group

Rohit Gaurav

Marketing

Sanjay B Dongre

Legal

Sanjeev Patel

Direct Banking Channel

Tarini Vaidya

Treasury

AWARDS

YEAR-2009
EUROMONEY
AWARDS 2009

'BEST BANK IN INDIA'

Economic Times
Most Trusted Brand - Runner Up
Brand Equity &
Nielsen Research
annual survey 2009
Asia Money 2009
Awards

'Best Domestic Bank in India'

13

IBA Banking
Technology
Awards 2009

'Best IT Governance Award - Runner up'

Global Finance
Award

'Best Trade Finance Bank in India for 2009

IDRBT Banking
Technology
Excellence Award
2008

'Best IT Governance and Value Delivery'

Asian Banker
Excellence in
Retail Financial
Services

'Asian Banker Best Retail Bank in India Award 2009 '

YEAR-2008
FINANCE ASIA
COUNTRY
AWARDS FOR
ACHIEVEMENT
2008

'BEST BANK AND BEST CASH MANAGEMENT

BANK'

CNN-IBN

'Indian of the Year (Business)'

Nasscom IT User
Award 2008

'Best IT Adoption in the Banking Sector'

Business India

'Best Bank 2008'

Forbes Asia

Fab 50 companies in Asia Pacific

Asian Banker
Excellence in
Retail Financial
Services

Best Retail Bank 2008

Asiamoney

Best local Cash Management Bank Award voted by

Corporates

Microsoft & Indian

Express Group

Security Strategist Award 2008

World Trade

For outstanding contribution to international trade

14

Center Award of
honour

services.

Business Today

One of India's "Most Innovative Companies"

Financial ExpressErnst & Young

Award

Best Bank Award in the Private Sector category

Global HR
Excellence Awards
- Asia Pacific
HRM

'Employer Brand of the Year 2007 -2008' Award - First

Runner up, & many more

Business Today

'Best Bank' Award

YEAR-2007
DUN &
BRADSTREET
AMERICAN
EXPRESS
CORPORATE
BEST BANK
AWARD 2007

'CORPORATE BEST BANK' AWARD

The Bombay Stock

Exchange and
Nasscom
Foundation's
Business for Social
Responsibility
Awards

'Best Corporate Social Responsibility Practice' Award

NDTV Profit

Best Bank Award in the Private sector category.

The Asian Banker

Excellence in
Retail Financial
Services

Best Retail Bank in India

Asian Banker

Our Managing Director Aditya Puri wins the

Leadership Achievement Award for India

15

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

Wholesale Banking Services:

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

16

transactional banking solutions to corporate customers, mutual funds, stock

exchange members and banks.

Retail Banking Services :

The objective of the Retail Bank is to provide its target market customers a full
range of financial products and banking services, giving the customer a one-stop
window for all his/her banking requirements. The products are backed by worldclass service and delivered to the customers through the growing branch network,
as well as through alternative delivery channels like ATMs, Phone Banking, Net
Banking and Mobile Banking.
The HDFC Bank Preferred program for high net worth individuals, the
HDFC Bank Plus and the Investment Advisory Services programs have been
designed keeping in mind needs of customers who seek distinct financial
solutions, information and advice on various investment avenues. The Bank also
has a wide array of retail
products including Auto Loans, Loans against marketable securities,
Personal Loans and Loans for Two-wheelers. It is also a leading provider of
Depository Participant (DP) services for retail customers, providing customers
the facility to hold their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit Card
in association with VISA (VISA Electron) and issues the Master card Maestro debit
card as well. The Bank launched its credit card business in late 2001. By September
30, 2005, the bank had a total card base (debit and credit cards) of 5.2 million cards.
The Bank is also one of the leading players in the "merchant acquiring" business with
over 50,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at
merchant establishments.

Treasury:

17

Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on
various treasury products are provided through the bank's Treasury team. To comply
with statutory reserve requirements, the bank is required to hold 25% of its deposits in
government securities. The Treasury business is responsible for managing the returns
and market risk on this investment portfolio.

PRODUCT OF HDFC BANK

ACCOUNT & DEPOSITS SERVICE1.7
Banking should be effortless. With HDFC Bank, the efforts are rewarding. No
matter what a customer's need and occupational status, we have a range of solutions
that are second to none. Whether you're employed in a company and need a simple
Savings account or run your own business and require a robust banking partner,
HDFC Bank not only has the perfect solution for you, but also can recommend
products that can augment your planning for the future.
It includes these services: Saving accounts.
Current accounts.
Fix deposits.
Demate account.
Safe deposits lockers.

Savings Accounts
These accounts are primarily meant to inculcate a sense of saving for the future,
accumulating funds over a period of time. Whatever persons occupation, bank have
confident that person will find the perfect banking solution. There some saving
accounts like: 18

Regular Saving Account:

An easy-to-operate savings account that allows you to issue cheques, draw Demand
Drafts and withdraw cash. Check up on your balances from the comfort of your home
or office through Net Banking, Phone Banking and Mobile Banking. If you need
money urgently then you can take money from the ATM machine. There are 1977
ATM centers across the country.
Saving plus Account
Introducing the best banking option for you with HDFC Bank Savings plus Account.
Now you can get access to some of the finest banking facilities with HDFC Bank's
Savings plus Account. All you have to do is maintain an Average Quarterly Balance of
Rs. 10,000/-.

Saving Max Account

Welcome to a world of convenience. Presenting Savings Max account, loaded with
maximum benefits to make your banking experience a pleasure. By maintaining an
average quarterly balance of just Rs. 25,000/- you get a host of premium services
from HDFC Bank absolutely free.

Senior Citizen Account

HDFC Bank appreciates your needs and endeavors, which is why, they present an
account especially dedicated to customer, which like a dutiful child will help you
fulfill your needs in the best manner possible.
No frills Account
In an effort to make banking simpler and more accessible for customers, bank has
introduced the 'No Frills' Savings Account, which offers customer all the basic
banking facilities. Customer can even avail of services like Net Banking, Mobile
banking free of cost. In this customer can put Zero Initial Pay-in and a Zero Balance
account

19

Institutional saving accounts

A specially designed account that offers twin benefits of a savings as well as a current
account. Customers funds continue to earn you interest while he enjoys hassle-free
banking & a host of other features. All this and more in a Zero Balance account.
Salary Accounts
In this account customer can get salary from where he/she doing such job and
organization or company at where the customer of the bank in doing job deposit their
salary in to the salary account a person can get salary.
There are various kinds of saving accounts in the HDFC Bank like: Pay roll account.
Classic salary account.
Regular salary account.
Premium salary account.
Defense salary account.
No frills salary account.
Reimbursement salary account.

Kids advantage account

Start saving for your child today and secure his/her future a sentence tells by the Hdfc
bank. Open a Savings Account and transfer money every month into customers Kids
Advantage Account and watch the savings grow as customers child grows. The
accumulated savings in the Kids Advantage Account can over the years help in
meeting customer child's needs.
Main features and benefits of this account are as follow:-

20

Current accounts
HDFC Bank Current Account gives the power of inter-city banking with a single
account and access to more than cities. From special cheques that get treated at par
with local ones in any city where branch, faster collection of outstation cheques
(payable at branch locations), free account to account funds transfer between HDFC
Bank accounts to Free inter-city clearing of up to 100 lakhs per month, banks
priority services have become the benchmark for banking efficiency.
Now, with an HDFC Bank Current Account, experience the freedom of multi-city
banking. Person can have the power of multi-locati
on access to his account from any of our 761 branches in 327 cities. Not only that, he
can do most of his banking transactions from the comfort of his office or home
without stepping out.
There are various kinds of current account in this bank like: Plus current account

HDFC Bank plus Current Account gives the power of inter-city banking with a single
account and access to more than cities. Plus Current Account requires maintaining an
average quarterly balance of Rs. 100,000.

Trade current account

In today's changing business requirements, you need to transfer funds across cities,
and time is of the essence. HDFC Bank Trade Current Account gives power of intercity banking with a single account.
From special cheques that get treated at par with local ones in any city where bank
have a branch, to free account to account funds transfer between HDFC Bank
accounts, to free inter-city clearing of up to 50 lakhs per month, banks priority
services have become the benchmark for banking efficiency. Trade Current Account
requires maintaining an average quarterly balance of Rs. 40,000.
21

Premium current account

Business needs a partner who can manage finances while concentrate on growing
business. Form this account customer can avail benefits of inter-city banking account
that requires an average quarterly balance of only Rs. 25,000, offers Payable-At-Par
cheque book facility & FREE inter-city clearing transactions across our network up to
Rs.25 Lacs per month.
A Current Account with the benefits of accessing account from a large network of
branches, and through direct access channels - the phone, mobile, Internet and
through the ATM.

Regular current account

A Current account is ideal for carrying out day-to-day business transactions. With the
HDFC Bank Regular Current Account, customer can access account anytime,
anywhere, pay using payable at par cheques or deposit cheque at any HDFC bank
branch. It also facilitates FREE NEFT transactions & FREE RTGS collections for
faster collections in account. Regular Current Account requires to maintain an average
quarterly balance of only Rs. 10,000.
With a vast network of branches in cities all over the country, and access to a
multitude of ATM's, customer can keep track of all transactions anytime.

Reimbursement Current Account

No more paperwork, no more receipts to keep track of - a hassle-free account that
allows deposit the reimbursements receive from company/organization on a monthly
basis.
To open this account a person has to follow these processes:
Procure an Account Opening Document (AOD) from HDFC Bank. (If person has just
joined, first request to company to open up a Salary Account for particular person).
22

Mention Salary Account number and Debit Card number on the AOD so that Debit
card can be linked to both, Salary Account as well as new Reimbursement Account.
Request company to directly credit cash payments to the Reimbursement Account.

RFC Domestic Account

Full name of this account is Resident foreign currency account.
Have you accumulated foreign currency from travelling abroad frequently? Received
gifts from relatives in foreign currency? Or earned it by any other means as approved
by the Reserve Bank of India?If so, open Resident Foreign Currency Domestic
Account and manage foreign currency efficiently. Person can choose to set up your
account either in US Dollar, Great Britain Pound or Euro.

To open this accounts a person as to follow this process: Choose the currency in which person wish to operate. Open account with an initial
amount as per the following-US Dollar = 250 Great Britain Pound = 200 Euro = 250
and maintain an Average Quarterly Balance of the same amount.

Flexi current account

Tired of static transaction limits during peak seasons? HDFC Bank Flexi Current
Account is the answer to changing banking needs during peak seasons.
With HDFC Bank Flexi Current Account Cash Deposit and Anywhere Transaction
limits are a multiple of the balance you maintain in Current Account. So, during peak
seasons, customer get the benefit of higher transaction limits due to the higher average
balances maintained in account. Whats more, during lean seasons, person need not
worry about maintaining huge balances to enjoy high transaction limits, which person
anyway may not need. Flexi Current Account requires to maintain a minimum
Average Monthly Balance (AMB) of just Rs. 75,000.

Apex current account

The top position is always the desirable position. With the Apex current account, take
business to a new high. On maintaining an average quarterly balance of Rs. 10 lakhs,
this account makes sure person make the most of every business opportunities coming
23

his way. Unlimited, free, anywhere Banking experience at the APEX is reserved for
person who joints this.
. Max current account
Maximum benefits and minimum hassles for customer with Max Current Account
with a Rs. 5 lakhs average quarterly balance requirement, bank present to world of
privileges that helps business expand and grow. Features like maximum free
transaction limits including other beneficial features on this current account truly
enhances business potential to the Maximum.

Fix deposits service

Long-term investments form the chunk of everybody's future plans. An alternative to
simply applying for loans, fixed deposits allow to borrow from own funds for a
limited period, thus fulfilling needs as well as keeping savings secure.
People can invest his/her money into either in security market or gold or mutual fund
or into a fix deposits. People always go to that way where he/she can get more
benefits and minimum risks. So, for this purpose he has a better chance to deposits
money in to the fix deposit.
If people believe in long-term investments and wish to earn higher interests on his/her
savings, now is the time to invest money in HDFC bank Fixed Deposit. Get up to
9.75% on HDFC Bank Fixed Deposit with an additional 0.50% for Senior Citizens.
What's more NO PENALTY if withdraw part of the FD in times of need. Flexibility,
Security and High Returns all bundled into one offering.

Regular fix deposit

As per the rules and regulation of the bank a person can deposit their money in to a fix
deposit in the bank and can get the benefits of these facilities.
.
24

Five year tax saving fix deposit

In 2006, it was announced for the first time that Bank fixed deposits booked by an
Individual/HUF for 5 years & up to Rs. 1,00,000/- will be allowed exemption under
Sec 80C of the Income Tax Act,1961 subject to necessary declarations taken from the
Customer.
.
Supper saver facility
Customer can enjoy a high rate of interest along with the liquidity of a Savings
Account by opting for a Super Saver Facility on his or her savings account. Avail of
an overdraft facility of up to 75% of the value of his or her Fixed Deposit.

Sweep-in facility
Do you wish to avoid taking overdrafts, and still take advantage of your Fixed
Deposits? Then what you need is a Sweep-In Facility on savings account. Link Fixed
Deposit to Savings or Current Account and use it to fall back on in case of
emergencies. A deficit in Savings or Current Account is taken care of by using up an
exact value from Fixed Deposit. Since deposits are broken down in units of Re 1/-,
customer will lose interest only for the actual amount that has been withdrawn.
.

Demat account service

Nowadays share market is becoming is the main occupation of the person. So to
avoid faulty processes demat account is really most important for the share market
and for the safety of shares it is most important.
HDFC BANK is one of the leading Depository Participant (DP) in the country with
over 8 Lac demat accounts.

25

HDFC Bank Demat services offers a secure and convenient way to keep track of
securities and investments, over a period of time, without the hassle of handling
physical documents that get mutilated or lost in transit.
HDFC BANK is Depository participant both with -National Securities Depositories
Limited (NSDL) and Central Depository Services Limited (CDSL).

Safe deposit locker

A Safe Deposit Locker with HDFC Bank is the solution to persons fear. Located at
select branches in cities all over the country, banks lockers ensure the safe keeping of
valuables.

Eligibility
An individual (not minor), firms, limited company, associations, clubs, trusts,
societies, etc may hire a locker.
Advantages of safe deposit locker in HDFC bank
Wide Availability.
Lockers available in various sizes. i.e. Small, Medium, Large and Extra Large with
varying rents.
Lockers are rented out for a minimum period of one year. Rent is payable in advance.
No deposits are required to avail a locker. Just open an account and get the locker
facility.
There is a nominal annual charge, which depends on the size of the locker and the
centre in which the branch is located.
Nomination for Safe Deposit Locker
The Lockers and their contents can be nominated to people near and dear to you.
Nomination facility is available to individual hirer of Safe Deposit Locker.

26

In the case of a sole hirer of a safe deposit locker, nomination can be made in favor of
only one individual.
Where the safe deposit locker is hired in the name of a minor, the nomination shall be
made by a person lawfully entitled to act on behalf of the minor.
Terms & Conditions
For obtaining a Locker at HDFC Bank you must be an account holder with Bank.
Lockers can be allotted individually as well as jointly.
The Locker holder is permitted to add or delete names from the list of persons who
can operate the Locker and can have access to it.
Loss of Key is to be immediately informed to the concerned Branch.

LOAN SERVICES1.8
In todays competitive world every thing happens only with the help of money or
through the money every person need money. But some time a person has not cash on
hand at that time he needs lone either from any friend or from any financial institute.
Lone dose not mean that only lower class person needs it but also upper class person
it is needed.
As per the requirement of the every person there are much type of loans are there in
the HDFC bank.

Personal loan
A person has so many dreams but some time due to scarcity of money a dream cant
be satisfy. So, here one solution for that person this is personal loan. From this he/she
can fulfill their needs or requirement. It can be any thing either a dream of vacation or
son/daughters admission to college or any wedding, so personal loan can be helpful
in this entire requirement.

27

As person ordered in the hotel for tea or coffee and it is immediately came fast, same
over here any person want to get a personal loan with the nominal documents he can
get the loan.

Home loan
HDFC Bank brings, HDFC home loans to doorstep. With over 30 years of
experience, a dedicated team of experts and a complete package to meet all housing
finance needs, HDFC Home Loans, help people realize dream.

Vehicles loan
Nowadays the life is being so fast, time value is becoming more important so to
reach at the destination of any business related occasion or for a boy to reach college
or any where at the fix time there are so many requirement of vehicles. But every
people have no capacity to purchase vehicles with cash so for that here in the HDFC
bank vehicles loan is available. There are many types of vehicles loan.
Types of vehicles loan:
Two wheeler loans.
New car loan.
Used car loan.
Tractor loan (for agree culture business).
Commercial vehicle loan.
So, as per the requirement of the person there are these types of loans are available
this are at the chip rate and hassel free from more documentation and other procedure.
And commercial businessman can get the benefits of the commercial vehicles loans.
Thus as per the need of different people there are vehicle loans available. And also
terms and condition are different as per the requirement.

28

Express loan plus

Bank offer Express Loans Plus at person Doorstep to help fulfill all his/her needs. The
procedure is simple, documentation is minimal and approval is quick. It is helpful to
person in repairing of house, School admission or also in the family holiday.

Gold loan
With HDFC Bank's Gold Loan, person can get an instant loan against gold jewellery
and ornaments. The procedure is simple, documentation is minimal and approval is
quick. A person can get 70% loan on the value of the gold jewellery and
ornaments.There is also availability of the overdraft on the gold jewellery. With this a
customer can get free additional services like free personalized cheque book, free
international debit card, and free net banking phone banking services.
Educational loan
Nowadays important of education becoming very high. ASs it important becoming
high it is becoming costly. So in the higher education some time people can not effort
a high price at a same time. So, there is education loan is also available for the
student.
A person can get loan up to 10 lakhs to study in India and 20 lakhs if he wants to
study in abroad. Loan available up to tenure of 7 years including moratorium period.
Loans disbursed directly to the educational institution. It is released as per fee
schedules of institutes. Exclusive Telegraphic Transfer facility available for courses
abroad. Loans available for short duration/ job oriented courses also.

Loan against security

With HDFC Bank's Loan against Securities, person can get an overdraft against
securities like Equity Shares, Mutual Fund Units(Equity, Debt, FMPs), Gold
Exchange Traded Fund(ETF),NABARD's Bhavishya Nirman Bonds, Policies issued
29

by LIC & Select Private Insurance Companies, NSC, KVP, UTI Bonds (ARS & US64
Bonds) and Gold Deposit Certificates, while still retaining ownership. And the best
part is that he can continue to enjoy all his shareholder benefits such as rights,
dividends and bonuses Loan available to NRIs against Shares, Mutual Funds (equity,
Debt, FMPs), US64 Bonds, Insurance Policies, NSC, and KVP.

Loan against property

HDFC Bank brings Loan Against Property (LAP). Person can now take a loan
against residential or commercial property, to expand his business, plan a dream
wedding, and fund his child's education and much more. He can depend on bank to
meet all his business requirements even to purchase a new shop or office for business.
Loan to purchase Commercial Property (LCP) is a specially designed product to help
person expand his business without reducing the capital from his business.
These are loans services providing by HDFC bank which are very hassle free and
really benefits for most of customer and most of customer are satisfied by the loan sk.

CARD SERVICES

In todays competitive and fast time card services providing by the banks are really
very important to every person and every business needs or to take meal in to the
hotel or to purchase jewellery from the jewellery shops cards are playing good role in
the banking sectors.
Bank ranges of Cards help to meet financial objectives. So whether persons are
looking to add to his buying power, conducting cashless shopping, or budgeting his
expenditure, he will find a card that suits him.

Credit cards
A person wants many things like, a trip to Bali, a diamond ring for wife's dreams.
Some dreams can't wait. If there's something person has always wanted. If a person
30

wanted fulfill his wants he can get benefits from the HDFC banks credit cards
facilities.

different types of credit

Classic cards
Silver Credit Card.
Value plus Credit Card.
Health Plus Credit Card.
Premium Cards:
Gold Credit Card
Titanium Credit Card
Woman's Gold Card
Platinum Plus Credit Card

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Visa Signature Credit Card

World MasterCard
Commercial Cards
Corporate Credit Card

Debit card
HDFC Bank Debit Cards give person complete and instant access to the money in his
accounts without the risk or hassle of carrying cash.
Types of debit card: Classic card
Easy shop international Debit card.
Premium card
Easy shop gold Debit card.
Specialized card
Easy Shop International Business Debit Card.
Easy Shop Woman's Advantage Debit Card.
Easy Shop NRO Debit Card.
Kisan Card.

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Prepaid card
Besides offering convenience, Prepaid Cards have been tailored to answer travel and
gifting needs.
ForexPlus Cards
Prepaid Travel Card.
Gift Plus Cards
Prepaid Gift Card.
Food Plus Cards
Prepaid Food Plus card.
Money Plus Card
The Corporate Payment card

INVESMENT AND INSURANCE SERVICE

Nowadays a ward investment is becoming more popular. Person invest their money in
to various schemes or in to the gold or share market etc. but some time he is in to the
difficult situation, for that bank help person invest wisely through financial and
investment services.
Types of investment: Mutual Funds
Invest through the Mutual Fund route to meet varied investment objectives.
Insurance

Traditional Plans

Unit Linked Plans

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HDFC children's PLAN.

HDFC Unit Linked Young Star Plus II.

HDFC Money Back Plan.

HDFC Unit Linked Young Star Suvidha.

HDFC Savings Assurance Plan.

HDFC Unit Linked Young Star Suvidha Plu

HDFC Assurance Plan.

HDFC Unit Linked Pension.

HDFC Term Assurance Plan.

HDFC Unit Linked Pension Plus.

HDFC Loan Cover Term Assurance Plan.

HDFC Unit Linked Endowment Plus II.

HDFC Endowment Assurance Plan.

HDFC Unit Linked Endowment Suvidha.

HDFC Single Premium Whole of Life Insurance HDFC Unit Linked Endowment Suvidha
HDFC Unit Linked Enhanced Life Protection

GENERAL AND HEALTH INSURANCE

Complete protection for business, health, travel & more.
Bonds
A secure investment avenue giving stable returns with tax benefits.
Financial Planning
Start Now Plan investments to meet financial goals
Knowledge Centre
Profit from research and make informed investment decisions.
Equities & Derivatives
Leverage banks vast information repository and transact online.
Mudra Gold Bar
Buy 24 Karat gold bars made in Switzerland and certified by Assay.

34

FOREX AND TRADE ERVICE

Nowadays businesses becoming worldwide e.g. India to America but main problems
are about monitory transaction because at every country the currency become changed
so for that banks are playing a very important for the businesses.
If people need to deal in foreign currency and keep tabs on exchange rates every now
and then, transfer monies to India, make payments etc., HDFC Bank has a range of
products and services that people can choose from to transact smoothly, efficiently
and in a timely manner.
Bank offering following Foreign Exchange Products and Services.
Foreign Exchange and Trade Services
The following are different methods of transacting in Foreign Exchange and remitting
money.
Travelers Cheques.
Foreign Currency Cash.
Foreign Currency Drafts.
Cheque Deposits.
Remittances.
Cash to Master.
Trade Services.
Forex Services Branch Locator.
Important guidelines and schedules All Foreign Exchange transactions are conducted
by strictly adhering to RBI guidelines. Depending on the nature of transaction or point
of travel, people will need to understand his Foreign Exchange limits.
RBI Guidelines.
Forex Limits.
35

Non HDFC Bank Account Holders.

FAQs

PAYMENT SERVICE
Nowadays life of a person become very stressful and he/she becoming busy with
their own business, but they have to payment for something so for that reason banks
payment services become started.With HDFC Bank's payment services, person can
bid goodbye to queues and paper work. Banks range of payment options make it easy
for pay for a variety of utilities and services.

Verified By Visa
Do you want to be worry free for your online purchases. Now you can shop securely
online with your existing Visa Debit/Credit card.

Net Safe
Now shop online without revealing your HDFC Bank Credit Card number. What
more, you can now use your HDFC Bank Debit Card also for online purchases.

Merchant Services
Accept all Visa, MasterCard, credit and Debit cards at your outlets through state of the
art POS Machines or through your website and experience hassle free payment
acceptance.

Prepaid Mobile Refill

If you are an HDFC Bank Account holder, you can now recharge your Prepaid Mobile
Phone with this service.

Bill Pay

36

Pay your telephone, electricity and mobile phone bills at your convenience. Through
the Internet, ATMs, your mobile phone and telephone - with Bill Pay, our
comprehensive bill payments solution.

Visa Bill Pay

Pay your utility bills from the comfort of your home! Pay using your HDFC Bank
Visa credit card and forget long queue and late payments forever

Pay Now
Use your HDFC Bank Credit Card to pay your utility bills online, make subscriptions
and donations; no registration required. Enjoy credit free period and reward points as
per your credit card features.

Insta Pay
Pay your bills, make donations and subscribe to magazines without going through the
hassles of any registration.

Direct Pay
Shop or Pay bills online without cash or card. Debit your account directly with our
Direct Pay service!

Visa Money Transfer

Transfer funds to any Visa Card (debit or credit) within India at your own
convenience through HDFC Bank's Net Banking facility.
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e-Monies National Electronic Funds Transfer

Transfer funds from your account to other Bank accounts across India - FREE of
cost.
Online Payment of Excise & Service Tax
Make your Excise and Service Tax payments at your own convenience through HDFC
Bank's Net Banking facility.
Religious Offerings
Now donate to your favorite temple easily and securely using HDFC BANK's Net
Banking.

IMPERIA/PREFERRED/CLASSIC BANKING
As a special customer bank providing a TAJ to customer with name imperia/preferred
customer. For that bank provide a special service to their customer. HDFC Bank's
preferred/imperia Programme is the royal decree that enhances the exclusivity that
you are accustomed to. It makes you feel special at every step, pampering with
services those others can only dream about. This service goes beyond the obvious,
rises above the expected, so that the whole world can see, that even today, the
grandeur and magnificence of royalty is alive and well.

Thus as retail banking service bank providing really good and beneficial services to
their customer and as family member they are providing good services to every
customer either they are came business related or anything. So for this reason HDFC
bank playing a good role in the customers life for their monitory transaction.

NRI BANKING

38

With a view to attract the savings and other remittance into India through banking
channels from the person of Indian Nationality / Origin who are residing abroad and
bolster the balance of payment position, the Government of India introduced in 1970
Non-Resident(External) Account Rules which are governed by the Exchange Control
Regulations.

The funds held in Non-Resident (External) Accounts (NRE Accounts) qualify for
certain benefits like exemptions from taxes in India, free repatriations facilities, etc.
Deposit types
NRI-Banking facilitates the NRI customer to open the following account types.
NRE (Non Resident External Accounts)
It can be in the form of Savings, Current or fixed deposits in Indian rupees. The funds
in this account are fully repatriable.
NRO (Non Resident Ordinary Accounts)
It can be in the form of Savings, Current or Fixed Deposits in Indian Rupees. The
funds in this account are not repatriable (only interest accrued is repatriable).
FCNR (Foreign Currency Non Resident Accounts)
It can be in the form of fixed Deposits only, in the five major currencies, namely US
Dollars, GBP, DM, Euro, and Japanese Yen. The funds in this account are fully
repatriable

WHOLESALE BANKING
Wholesale banking is the provision of services by banks to the like of large corporate
clients, mid-sized companies, real estate developers and investors, international trade
finance businesses and institutional customers, such as pension funds and government
entities/agencies. Also included is banking services offered to other financial
institutions. In essence, wholesale banking services usually involve high value

39

transactions. Wholesale banking compares with retail banking, which is the provision
of banking services to individuals.

Wholesale banking services

Corporate service
Corporate Banking reflects HDFC Bank's strengths in providing our corporate clients
in India, a wide array of commercial, transactional and electronic banking products.
We achieve this through innovative product development and a well-integrated
approach to relationship management.
Large Corporate
Supply Chain Partners
Agricultural Lending
Small & medium term enterprises
HDFC Bank understands how much of hard work goes into establishing a successful
SME. Bank also understands that business is anything but "small" and as demanding
as ever. And as business expands and enters new territories and markets, person need
to keep pace with the growing requests that come in, which may lead to purchasing
new, or updating existing plant and equipment, or employing new staff to cope with
the demand. That's why HDFC Bank has assembled products, services, resources and
expert advice to help ensure that your business excels.

40

The following links will help identify individual needs.

Funded Services.
Non-Funded Services.
Specialized Services.
Value Added Services.
Internet Banking.

Financial institutions & trusts

Banks.
Financial Institutions.
Mutual Funds.
Stock Brokers.
Insurance Companies.
Commodity Businesses.
Trusts.

Government sector
HDFC Bank acts as an active medium between the government and the customers
by means of various services. These services include:
Tax Collection wherein customers can directly pay their taxes like Direct taxes,
Indirect taxes and Sales Tax collections at their local HDFC Bank.
41

E-Ticketing - Helps the customer by providing him a direct access to book a Railway
Ticket online and get it home delivered.
Opening of L/C's is done by the bank on behalf of Government of India, Mints and
Presses, thus facilitating imports for the Government.
Collection of levies and taxes on behalf of Municipal Corporations i.e. Kalyan
-Dombivli Municipal Corporation, is undertaken by the Bank.
Collection of stamp duty is done via franking mode in the state's of Maharashtra &
Gujarat.
The Stamp Duty Franking Facility is available at following branches in Maharashtra
Fort, Chembur, Lower Parel, Mira Road, Thane (Talao Pali), Panvel, Ratnagiri,
Pune(FC Road), Kolhapur, Nagpur, Pimpri.
The Stamp Duty Franking Facility is available at following branches in Gujarat
Disbursement of Pension to retired Employees of Central Govt and Defence is
directly done by HDFC Bank along with the disbursement of pension to the members
of EPFO (Employees Provident Fund Organisation).
Electronic Collection of fees on behalf of DGFT is done by the bank too.

HUMAN RESOURCE DEPARTMENT

Human Resource Management function that helps managers recruit, select, train and
develop members for an organization. Obviously, HRM is concerned with the
peoples dimension in organizations.
Work force of an Organization is one of the most important inputs of components. It
is said that people are our single most important assets. Because of the unique
42

importance of HUMAN RESOURCE and its complexity due to ever changing

psychology, behavior and attitudes of men and women at work, in all business
concerns, there is one common element. I.e. Human personnel function, i.e.,
manpower management function is becoming increasingly specialized. The personnel
function or system can be broadly defined as the management of people at workmanagement of managers and management of workers. Personnel function is
particularly interested in personnel relationship and interaction of employees-human
relations.
In a sense, management is personnel administration. Management is the development
of people, and not mere direction of material resources. Human capital is the greatest
asset of a business enterprise. The essential ingredient of management is the
leadership and direction of people. Each manager of people has to be his own
personnel man. Personnel management is not something you really turn over to
personnel department staff.

Responsibilities of Human Resource Department.

HRD maintain daily attendance record through branch manager via E-mail.
Take decisions for approval regarding leave notes.
He takes the decision related to the recruitment, selection and training of the
candidates. He talks to the consultant related to the recruitment of the qualified
candidates. He also does screening of the candidates, shortlist the candidate and
takes the first round of the interview.
He maintains the database of the candidates to come for an interview. He also
maintains personal file of each employee. He also completes the joining
formalities of each new employee.
They are taking surprising visit in every branch and collect information about
employees.
He is responsible for the monthly salary of the employees as per their attendants
and passing to the Branch Manager.

43

Human Resource planning

This is handled by doing the planning at the beginning of every year. At the end of the
year, the Human Resource department from each Branch receives the requirement for
the person for whole year. Then the planning of recruitment and training is done by
training manager and recruiting manager which is approved from Head of HR
Department.

. Recruitment
Recruitment is a process of searching for prospective candidates for the given job in
the industry. As we know it is very important for an industrial concerns to have
efficient and effective personnel with right quality and at right time and at right place
available whenever they are needed. Every organization needs employee time by time
because of promotion or retirement of an employee. For this purpose an organization
need to search for the right candidate. And so it needs to encourage this type of right
candidates whenever they require.

Sources of Recruitment
Personal data of candidates and data bank maintain by the HR.
department
Campus Recruitment.
Companys own website.
Placement consultants.
Advertisement in the news papers like Times of India, Gujarat
Samachar.
Employee reference.

Recruitment Process

44

Selection
Selection is the process of taking individuals out of the pool of job applicants with
requisite qualifications and competence to fill jobs in the organization. It is define
as the process of differentiating between applicants in order to identify and hire
those with a greater likelihood of success in a job.
Selection is based on probation base, they are taking experienced person for 6
months probation and for fresher the probation period is 1 year.
While the selection of the senior level post, is taken by head office at Mumbai.

Training and Development

Training aims at increasing the aptitudes, skills and abilities of workers to perform
specific job. It makes employees more effective and skillful. In present dynamic
world of business training is more important there is an ever present need for
training men. So that new and changed techniques may be adopted. A new and
changed technique may be taken as an advantages and improvement affected in
the old methods.
Training is learning experience that seeks relatively permanent change in an
individual that will improve his/her ability to perform on the job.
They provide on the job training to their employees in the branch as they select
these employees for selling various products of bank by direct marketing.
Whenever they select new candidates for any post, they use to give them on the
job work.
In case of sales persons to distribute their various products, in the beginning the
person has to work under the observation of his senior then the have to go in
market to have their own experience.

45

 The time for training program for the candidate is depends up on the relevant
position of his work area. They also provide training related to customer care and
communication.

Performance Appraisal
An organizations goals can be achieve only when people put in their best efforts.
Performance appraisal may be understood as the assessment of an individuals
performance in a systematic way. It is define as the systematic evaluation of the
individual with respect to his/her performance on the job and his/her potential for
development.
To appraise the performance of the employee they have developed a credit system
on the basis of the given target to the employee. After appraising the performance
of the employee they put the grade of each employee in the following grade
criteria.

Employee Remuneration and Incentive Payments

Remuneration is the compensation an employee receives in return for his/her
contribution to the organization. Remuneration occupies an important place in the
life of an employee.

At HDFC, remuneration of an employee comprises wages and salary, incentives.

46

 Wages and Salary

A part from various incentives and benefits, the personnel are compensated only
in terms of wages and salaries. A proper compensation in terms of this is
necessary for motivation employees for their continuous

improved performance. For all this, it is required that wages and salaries

are

provided well by organization.

Wages and salary refers to the establishment and implementation of sound policies
and practices of employees compensation. A wage and salary is the remuneration
paid for the service of labor in production periodically to an employee. The bank
is in service industry so the salary is given on monthly basis. They use to hire
certain salesman on commission base and they are provided their salaries on
commission base. While other permanent staff are being given monthly salaries.
As HDFC bank is reputed bank in market the pay scale are as per the standard.
Sales executives (coax) are being given salary of 6000 to 8000 per month. While
sales officers salary ranges from 15000 to 18000 per month. HDFC bank is also
giving attractive incentives as per the target. The salary of branch manager is
around 35000 per month.

Incentive
In HDFC, employees get incentives on the basis of the target given to each
employee and their area of work. They have developed the incentive structure for
the employees on the basis of point system. All the employees get the incentive in
the form cash reward.

47

. Employees benefit
The employees of HDFC automatically become HDFC bank salary account
Holders with special benefit and privileges and receive instant salary credit. The
benefit include international debit card, corporate card with individual liability
(CCIL), access to phone banking and internet banking, demat accounts, and host
of other services to complement their savings account. Here are some of the
features of HDFC Banks salary account.

Motivation
Motivation is willingness to do something conditioned by this actions ability to
satisfy some need. Motivation is given by the responsible person, like branch manager
or team manager for better performance in the department.

Disputes and their resolution

Disputes are common in organization. In practice, disputes mainly relate to the target
only because if any employee is not achieving target he/she will not eligible for
incentive which creates frustration among them.
Every employee is free to talk to the head of the particular department if they have
any problem related to the job. Firstly, the problem is solved by the head of the
particular department and if the problem does not solved by the head of that
department then it is addressed to the HR Manager.

Marketing Management
The activities of a company associated with buying and selling a product or service.
It includes advertising, selling and delivering products to people. People who work in
marketing departments of companies try to get the attention of target audiences by
using slogans, packaging design, celebrity endorsements and general media exposure.
Ajay Kelkar, Head, Marketing, HDFC Bank, said that these initiatives are especially
targeted at those consumers who are not aware about the bank's various value added
services such as direct banking facilities.
48

"We are going to demonstrate the advantages of net banking and mobile banking, as
these concepts are relatively new to people living in smaller towns and cities," said
Kelkar. The bank has also launched another initiative called Business Ki Baten, which
is targeted at areas where the bulk of the population comprises small businessmen.
Kelkar said that the bank would get experts to talk on a number of issues such as
value-add tax and sales tax. Bank can measure the result of a campaign through the
sales that they generate and the customers that are added. There is a clear return on
investment, which from a functional point of view gives the team a stronger voice.
Bank has also been able to reduce their ad spends by about 10-15 per cent and has
also reduced the cost of acquisition Bank's focus in future would be to enhance its
database marketing initiatives. Bank plan to invest close to Rs 12 crore to create the
environment that is required to support customer intelligence that leads to data based
marketing.
HDFC has chartered an extensive Customer Lifecycle based marketing campaign
calendar for this and the forthcoming fiscal. Fractal, which specialises in predicting
the behavior of the customers in the areas of risk and marketing, would be partnering
HDFC Bank's marketing team in various initiatives of growing the retail business
quickly and cost effectively.
HDFC has been using analytics for taking informed marketing decisions. Fractal will
help the bank use information to reach new customers and to build, nurture and
maximize lasting customer relationships. Fractal will also help the bank solve the
problem of ever-increasing customer acquisition costs and reducing customer loyalty.
The marketing programmes would involve acquisition of customers profitably by
reducing campaign costs, cross selling various asset and liability products to the
existing customers, thereby, leveraging the existing relationships and proactively
retaining existing customers. Fractal's analytics-based marketing solutions span which
the entire lifecycle of customer relationship right from customer acquisition to
customer retention to customer value management, is expected to give HDFC an
upper hand in understanding the needs and circumstances of their customers.

Marketing Initiatives Taking By The Bank

49

HDFC Bank is possibly the only bank in India, and one of the very few in Asia, to
have embarked on a data-led marketing analytics campaigns initiative, using
marketing automation technology provided by Unica. Unica has been recognised by
Gartner as the leading player in this field. Through this tool, we have been able to
intelligently use the 4-5 terabytes of customer data available in its warehouse. We
have set up a team to conduct marketing campaigns in a scientific manner using
customer data, usage patterns, preferences, lifecycle, etc, the bank also conducts
event-based marketing
.
These initiatives also complement our media-based marketing as well as on-theground marketing activities, which remain important in the bigger scheme of things.
However, the marketing analytics initiative enables us to measure the efficacy of the
campaigns, testing every campaign every step of the way, experimenting with
creatives, messages, media, etc. There are learnings that can immediately be absorbed
and incorporated in the next campaigns, and these campaigns in a way provide us
with information about customer choices and preferences that can be used for mass
media communication, making those more effective

Media Vehicles Used For Send Message To Reach Target Audience

HDFC Bank has been predominantly using direct mailers, e-mails, and SMS for
communicating our message to our target audience as they are the most cost-effective
routes of addressing our core target audiences with maximum degree of customization
possible

Market Segmentation
Market Segmentation is defined as the process of splitting customers, or potential
customers, in a market into different groups, or segments, within which the customers
share a similar level of interest in the same or comparable sets of needs satisfied by a
distinct marketing proposition; it is also explained as a marketing technique that
targets a group of customers with specific characteristics, i.e. a particular group that
has its own distinct customer profile and buyer characteristics so that for marketing
purposes, it can be targeted separately from other segments of the market.

50

It is a key ingredient for successful marketing as it simplifies the targeting,

positioning and the planning process.
A true Market Segment meets all of the following criteria: it is distinct from other
segments (heterogeneity across segments), it is homogenous within the segments
(exhibits common attributes), it responds similarly to a market stimulus and it can be
reached by a market intervention. Market Segmentation simplifies the firms product,
pricing, promotion and distribution strategies and also facilitates planning and
organizing function of management more easily and cost effectively; but it requires a
thorough understanding of the customers needs. It is referred as a tool for defining
markets and thereby allocating resources; it uses statistical techniques called factor
analysis and cluster analysis to combine attitudinal and demographic data to develop
segments that are easier to target.
Market Segmentation can be done on the basis of the location (Geographic
Segmentation); on the basis of age, income, gender and other measurable factors
(Demographic Segmentation); on the basis of lifestyle, likes, dislikes, taste and
preferences (Psychological Segmentation); and according to the history, loyalty and
responsiveness (Behavioral Segmentation).
A business must analyze the different needs of the market segments; their internal
strengths and weaknesses; external opportunities and threats; and various others
factors like the mission, vision, values, beliefs, attitudes, norms and standards of the
organization; as well as the competitors strategy, social and cultural factors, economic
environment, global perspective, demographic environment, technological and
political / legal aspects before deciding their own niche.
Philip Kotler mentioned five criteria for an effective segmentation which states that
Segmentation should be: 1. Measurable: - it should be possible to determine the values of the variable used for
the segmentation.
2. Relevant: - it should justify the expected profits and the growth potential.

51

3. Accessible: - the target customers must be reachable and servable for the
organization.
4. Distinguishable: - the target audiences must be diverse and able to show different
reactions to different marketing mix.
5. Feasible: - the firm must have an ability to draw an effective marketing program
for its customers.
Market segmentation is an effort to increase a companys precision marketing. A
market segment consists of large identifiable group within a market with similar
wants, purchasing power, buying attitudes or buying habits. As HDFC bank is a
service sector industry they introduce different schemes for different people. Each
person is different in nature and each have differ criteria for investment like risk
factor, return, liquidity, tax benefits etc.

Target Marketing
Market Specialization is a business term meaning the market segment to which a
particular good or service is marketed. It is mainly defined by age, gender, geography,
socio-economic grouping, or any other combination of demographics.
It is generally studied and mapped by the organization through list and reports
containing demographic information that may have an effect on the marketing of key
products / services.
A product focusing on a specific target market contrasts sharply with one, following
the market strategy of mass marketing.

Targeting can be done by the firms by adopting a logical and systematic

methodology / steps. Which are as follows: STEP 1: - Identify the potential buyers: - Through proper market research and
market segmentation (it is the process of pulling apart the entire market as a whole
and separating it into manageable disparate units based on various demographic,
52

political, economic and social factors; it can also be customer / product / competition
related segmentation).
STEP 2: - Select the target audiences: - The factors that influence Targeting are the
Internal and External Environment. Internal environment includes the mission, vision,
values and objectives of the firm; whereas; External factors are the social, cultural,
economic, global, demographic, natural, task, technological, political and legal
environment. Through appropriately compiling the customers profile to decide the 4
Ps Product, Price, Place and Promotion and obtain the demographic, psychological,
geographic and behavioral information of the buyer. Targeting is deciding the
potential buyers, products to be offered and appropriately positioning each product to
the segment.
STEP 3: - Proper positioning of the Product: - After developing an appropriate
segmentation and target strategy; positioning strategy can be worked out effectively.
Positioning enables the firm to create a positive image, gain competitive advantage
and place the brand in the customers mind to enhance their goodwill and become the
most preferred brand.
Positioning can be in the form of product, price, promotion, service, distribution
channel, image, people, advertising, publicity, public relation or selling
differentiation.

53

Positioning Strategy
Positioning is the act of designing the companys offering and image to occupy a
distinctive place in the target markets mind.
Positioning starts with a product. A piece of merchandise, a service, a company, an
institution, or even a person. But positioning is not what you do to a product.
Positioning is what you do the mind of the prospect. That is, you position the product
in the mind of prospect. A companys differentiating and positioning strategy must
change as the product, market, and competitors change over time. Once the company
has developed a clear positioning strategy, it must communicate that positioning
effectively.
HDFC bank have positioning strategy of Continuing a Tradition of Trust. It is
accurate positioning strategy because it signifies a trust with its clients. Here is special
Relationship Manager dedicated towards customer service and satisfaction and give
them guidance about various schemes which helps them to get right scheme which
suit their needs. In this way it continues to maintain a trust with its clients.

INTRODUCTION OF FINANCE DEPARTMENT

In this modern era it is very easy to know how much important the finance is in the
business. As current position of the market is totally different from ancient where it
was very easy to get the finance. But now a days it is not so, it is very difficult task to
raise funds from market. As today people are facing lot of problem and have less
confidence on the market so it is difficult to raise fund without proper planning.

For the bank as it is a Financial Institution we can consider finance as lifeblood of this
business. The company should manage to get sufficient finance. The company
should use to keep proper planning for the finance of its own and also of the large no.
of depositors who are there with the bank. We can define financial management as a
task of acquisition and utilization of funds needed in the business in a manner so that
organizations goal can be achieved. In HDFC Bank, its chief Financial Officer and

54

Treasurer manage the finance. Due to proper policies and separate management the
company can have proper operation of finance.

ORGANIZATION OF FINANCIAL ACTIVITIES OF BANK

For the bank finance itself is the product now it is not an easy task to manage this
finance. As bank has to keep watch on the deposits of its millions of customers and
also it has to manage its own large financial base. As in recent it is popular No
finance no business, for the bank Finance itself is business. There are different
types of organizational structure such as group organization, line organization, line
and staff organization. HDFC Bank has line of authority and line of authority is
vertical i.e. authority passes from top to bottom and responsibility passes from bottom
to top level management.
As HDFC Bank is very big company and it has large cliental base so it is very
difficult and complicated to manage its finance in proper way. There we need of
concrete and proper policies to have proper management of it. Because of big size of
the bank one cannot manage all the accounts of it alone. So, company has to appoint
many different persons so that there is proper maintenance of the funds of different
persons is possible.

55

CHAPTER- 2

Literature Review

CHAPTER- 2
Literature Review
Section-A Review of Literature
Before giving details regarding the research methodology used in the study, it
is appropriate to present a brief overview of the research articles, case studies, and
books
written on this particular topic. The area of study may be within the country or outside
56

the country. Review of literature helps a researcher to get acquainted with his/her
selected
research problem and also may provide some guidelines in selecting a proper research
methodology. It is also helpful in finding out the research gaps in the existing
literature.
This will help the researcher in fine-tuning his/her research problem and
methodology.
Another advantage of reviewing in the existing literature is that in cases where the
research problems are similar, the conclusions and findings may be easily compared.
This
will help the researcher in determining whether his/her findings are possible or not.
The literature under review may be of two types: (i) concerning the conceptual
and theoretical framework. (ii) the empirical literature dealing with the studies made
in
the past which are similar to the one that the researcher intended to undertake. The
basic
outcomes of such review will be the knowledge as to what data are available for
analytical purposes, which will help the researcher to specify his/her own research
problem in a more meaningful way. Thus, review of literature is helpful in
formulating
the research problem and also helps the researcher in deciding about the most
appropriate
methodology to be used. While comparing the results of the earlier studies with
his/her
own results, care must be taken to verify whether the objectives and methodology are
similar. While reviewing the earlier studies a researcher has to state the objectives of
the
study, describe the concepts and definitions used, the methodology employed and the
important findings and conclusions of the study. The researcher is supposed to make a
critical review of methodology used by the earlier researcher of the methodology if
any.
The researcher should improve his methodology in light of this.
In the following paragraphs several similar studies undertaken earlier are

57

reviewed keeping in mind, the following aspects: 1) The objectives, 2) Area of study
with
reference year, 3) Research methodology used and 4) Major findings and conclusions.

A Research Article entitled Housing Credit Situation in Eighties by

Lall Vinay(1984)
He has focused attention upon formal factor (Permanent Construction) which
served mainly to the HIG and MIG, the loan meets only 47% of the price of the
house,
forcing the borrowers to make very large down payments. Also the price of a typical
house was above 3 times the annual families income of the borrowers. In spite of, the
entire system of housing allocation and credit the supply of affordable funds was
much
smaller than demand. Thus, large growth in urban population and the historically low
priority given to housing, supply falls very short of demand and need. Therefore, not
only
that the volume of saving and investments should increase but also larger volumes of
capital should flow into housing. Also, accessibility and terms and condition of
housing
credit will determine the long term redistribution performance in housing.

The Research Study entitled Housing in the New Millennium: A

Home Without Equity is Just a Rental with Debt by Joshua Rosner
(2001)
He studied the prospects of the U.S. housing / mortgage sector over the next
several years. Based on his analysis, he believes that, there are elements in place for
the

58

housing sector to continue to experience growth well above GDP. However, he

believes
that there are risks that can materially distort the growth prospects of the sector.
Specifically, it appears that a large portion of the housing sectors growth in the
1990s
came from the easing of the credit underwriting process. Such easing includes:
The drastic reduction of minimum down payment levels from 20% to 0%.
A focused effort to target the low income borrower.
The reduction in private mortgage insurance requirements on high loan to value
mortgages.
The increasing use of software to streamline the origination process and modify /
recast delinquent loans in order to keep them classified as current.
Changes in the appraisal process which has led to widespread overappraisal /
overvaluation problems.
If these trends remain in place, it is likely that the home purchase boom of the
past decade will continue unabated. Despite the increasingly more difficult economic
environment, it may be possible for lenders to further ease credit standards and more
fully exploit less penetrated markets. Recently, targeted populations that have
historically
been denied homeownership opportunities have offered the mortgage industry novel
hurdles to overcome. Industry participants in combination with eased regulatory
standards and the support of the GSEs (Government Sponsored Enterprises) have
overcome many of them. If there is an economic disruption that causes a marked rise
in
unemployment, the negative impact on the housing market could be quite large. These
impacts come in several forms. They include a reduction in the demand for
homeownership, a decline in real estate prices and increased foreclosure expenses.
These
impacts would be exacerbated by the increasing debt burden of the U.S. consumer and
the reduction of home equity available in the home. Although we have yet to see any
materially negative consequences of the relaxation of credit standards, we believe the
risk
of credit relaxation and leverage cant be ignored. Importantly, a relatively new
method
59

of loan forgiveness can temporarily alter the perception of credit health in the housing
sector. In an effort to keep homeowners in the home and reduce foreclosure expenses,
holders of mortgage assets are currently recasting or modifying troubled loans. Such
policy initiatives may for a time distort the relevancy of delinquency and foreclosure
statistics. However, a protracted housing slowdown could eventually cause
modifications
to become uneconomic and, thus, credit quality statistics would likely become
relevant
once again. The virtuous circle of increasing homeownership due to greater leverage
has
the potential to become a vicious cycle of lower home prices due to an accelerating
rate
of foreclosures.

A research article entitled Home Ownership Risk Beyond a

Subprime Crisis: The Role of Delinquency Management by Jaco
Melissa B. (2002)
She concluded that public investment in and promotion of homeownership and
the home mortgage market often relies on three justifications to supplement shelter
goals:
to build household wealth and economic self-sufficiency, to generate positive
socialpsychological states, and to develop stable neighborhoods and communities.
Home
ownership and mortgage obligations do not inherently further these objectives,
however
and sometimes undermine them. The most visible triggers of the recent surge in
subprime

60

delinquency have produced calls for emergency foreclosure avoidance interventions

(as
well as front-end regulatory fixes). Whatever their merit, she contend that a system of
mortgage delinquency management should be an enduring component of housing
policy.
Furtherance of housing and household policy objectives hinges in part. On the
conditions
under which homeownership is obtained, maintained, leveraged, and in some
situations
exited. Given that high leverage or trigger events such as job loss and medical
problems
play significant roles in mortgage delinquency independent of loan terms, better
origination practices cannot eliminate the need for delinquency management. In terms
of
analyzing this framework, it is tempting to focus on its impact on mortgage credit cost
and access or on the absolute number of homes temporarily saved, but her proposed
analysis is based on whether the system honors and furthers the goals of wealth
building,
positive social psychological states, and community development. Because those ends
are
not inexorably linked to ownership generally or owning a particular home, a system of
delinquency management that honors these objectives should strive to provide fair,
transparent, humane, and predictable strategies for home exit as well as for home
retention.

A research article entitled Housing Problem and Public Action:

Continued Incompatibility Experience from a South Indian State by
M. Mahadeva (2004).
In this article, the author has analysed the nature and distribution of the housing
problem in Karnataka and examined how the state has addressed this issue. In
particular,
it considers the strategies adopted during the 90s and identifies a number of failures
61

including the task force on housing. Some of the major weaknesses, pertaining to
incidence by type and by rural-urban areas, on approaches, on financial requirements
and
issue of development and redevelopment are examined to propose alternative policy
strategies to effectively address the housing problem in the state. From the analysis it
is
found that Karnataka is not an exception to the general rule that housing strategies,
which
were evolved over decades, have not taken the direction expected. By and large, the
sectoral policies pursued were only ad hoc without a clear focus. Lack of
comprehensive
policy to guide housing development on equity principle together with ad hoc
approaches, have failed to deliver housing benefits and develop critical housing inputs
on
a sound footing with equal opportunities for all need based policy interventions
hasslefree
input delivery mechanism existing housing shortage and rural-urban disparities
substantially. Unfortunately, this did not happen. Thus, policy issues like what policies
are needed for the state of Karnataka to guide housing development, increasing the
housing supply to the poorer and marginalized sections, mobilizing the needed
financial
resources and a host of other issues in addressing the housing problem emerge.

A study entitled Performance of Housing Finance Companies by

Brar
Jasmindeep et.al. (2005)
The objectives of this study were: to study the operational performance, and the
financial performance of the selected institutions.
The study covers three institutions viz. HDFC, LIC & PNB. The study is based on
secondary data that have been collected from the annual reports and web sites of the
institutions selected under study. It covers the period from 1990-91 to 2002-03. The

62

performance of the selected institutions has been studied by using percentages,

compound
growths rates and various ratios.
Findings of the study are: HDFC comes at the top among all the institutions as far as loan sanctioned,
disbursements and the loan outstanding are concerned, PNB has the last rank for
both loans sanctioned and disbursed. However, the compound growth rate for the
loan sanctioned, disbursement and outstanding has been highest in the case of
LICHF. It stood at 26.49%, 30.89%, 36.16%. Against PNB showed the lowest
compound growth rates of 18.62% and 19.90%, for the loan sanctioned and
disbursement over the same period. However, the compound growth rate of the
loan outstanding in the case of PNBHF was higher than the growth rate of HDFC.
The ratio of loan disbursed to loan sanctioned shows that the ratio of PNBHF
showed the highest variations from 53.37% to 96.52 % over the given period,
followed by LICHF for which the ratio varied from 56.88% to 95.65%. On the
other hand, the ratio for HDFC showed the lowest range of variation from 81.07%
to 88.19 in the same period.
Number of housing units assisted by the selected institutions and its percentage to
the total units financed during the year showed that HDFC and PNBHF financed
more than 64% and less than 3% of the total units financed during the entire
period of the study, respectively.
HDFC has provided the highest proportion of loans to individuals. The highest
variation in the composition of loan outstanding has been in the PNBHF. The loan
outstanding to individuals in the case of HDFC ranged from 66.89% to 81.99%
whereas it ranged from 89.58% to 100% for LICHF for the same period.
HDFC has been a major market share holder among the HFIs selected under
study. PNBHF has disbursed less than 4% of the total loan disbursed by HFIs.
It is found that during almost all the years under study, all the HFCs earned more
than 80% of their interest income from the interest on housing loans.
LICHF earned the maximum proportion of total income from the interest on
housing loans. It was followed by PNBHF and HDFC.
As far as ratio of interest expense to total expenses is concerned, it ranged from
89.15% to 93.13% for HDFC over the period 1990-91 to 2002-03. It ranged from
65.74% to 92.45% for PNBHF and from 83.39% to 94.31% in case of LICHF
63

over the same period.

PNBHF spent in the range of 0.63% to 4.57% of the total expense on
establishment over the period of the study which was the highest among all the
institutions. LICHF spent the lowest proportion ranging from 0.42% to 0.89% on
establishment expenses during the same period and the ratio showed a declining trend
in the case of HDFC cover the same period. The interest paid to loans funds showed
much variation in the case of PNBHF. The ratio for HDFC increased in the initial
period but decreased later on. Among all the institutions under study PNBHF paid the
highest cost for raising loan funds. The assets of LICHF constituted the highest
proportion of outstanding housing loans followed by PNBHF and HDFC. During the
period, investments comprised less than 25% of the total assets for all the institutions.
LICHF has a comparatively low ratio of investments to the total assets the ratio of
HDFC has been the highest over the same period. PNBHF showed a considerably
increasing trend in the earlier years but it declined in the later years. The net profit
margin of PNB was higher than that of LICHF in the initial years, but the ratio of
LICHF shows improvement over PNBHF in the later period. In the case of HDFC the
net profit margin was in the range of 11.32% to 23.20% over the period of study.
Return on net worth: - The ratio had considerable variation in the case of PNBHF
from 49.23% to 40.26%. The ratio also showed a comparatively little variation and
was at a reasonable level for both HDFC and LICHF during the period of the study

64

A Paper entitled Retail Banking Emerging Issue in Home Loan

by Rao K. N.et.al. (2005)
In this paper the authors revealed that during 2002-03 housing loans by banks grew at
a hefty growth rate of more than 100%. The factors that contributed to this aggressive
growth in the portfolio of housing loans of banks and HFC are: Tax intensives on
repayment of principal and interest, rising income level of middle class, falling
interest rate, stable real estate prices, easy availability of housing loans, low returns on
the investment opportunities available in the market. They also concluded that
although there is strong growth in housing loans by financial situations in India, we
are still behind the developed countries in terms of housing loans to GDP ratio. In
India it is around 2.5% compared to 57% in the UK and 54% in the US. It shows that
there is a vast scope for housing loans in India. One economist has argued that every
rupee spent on the housing sector will increase the GDP by more than 75 paise. It also
creates a labour intensive. Despite the immense growth in housing loans there are
certain challenges that the banks might face in the time to come, e.g. falling rate of
interest, rising mismatch in the assets and liabilities of the bank, rising NPA in the
housing loan portfolio, etc.

A Research Article entitled Housing Loan Frauds in Banks: Some

Precautionary Measures by Phogat M. (2006)
This article gives the measures for the housing loan frauds in banks. The author
concluded that housing for all envisaged 2 million houses every year out of which 0.7
million are in the urban sector. Government provided certain relief under Income Tax
Act. It motivated many people to avail housing loan. The author thinks that different
frauds committed on various banks can be divided into the following two categories.
i.e. Pre sanction and Post Sanction. KYC related due weakness in pre inspection,
Benami A/c, forged title deeds, by selling same flat to different people, inflated salary
certificate, filing of IT return for the last three years in one lot and particularly by
paying a nominal amount of tax, valuation of the property is manipulated to manage
margin money are post sanction fraud. The precautions may be taken at the bank level
65

to avoid the assurance of fraud i.e. KYC norms be followed, main salary A/c should
be verified, loan should be granted against the flat / houses built by reputed builders
only. An undertaking from the builders for not been sold to any other person, search
report of property to be conducted by the advocate, original title deeds, property tax,
electricity bill, kept on records. Disbursement of loan should be made after spot
verification, title deed should be scanned through ultra violet ray machines before
mortgage and bank should independently verify the report and no middle man should
be involved in the process and entire KYC. So the author points out that above
mentioned precautions will enable the bankers to curb frauds and public money can
be saved.

A Paper entitled Housing Finance A Global Perspective by Rao

K.N. (2006)
According to Rao, housing finance is a long term proposition involving many risks for
the lenders, borrowers and even for the economy in general. As housing finance is a
long term game, it requires proper asset-liability management strategy, the borrowers
also face interest rate risk, especially when they are locked in fixed rates when interest
rates are falling and floating rates are rising. The author mentions in this article that
home loans have been registering exponential growth in India during the last six
years. Easy liquidity conditions, low interest rates, availability of tax shelters on
repayment of principal and interest surging demand from middle income group
borrowers, lower regulatory capital, the comfort of tangible security have all
collectivity contributed to the spurt in home loans. HDFC, ICICI and SBI are the
major players in disbursement of home loans. These banks sanction upto 85% of the
cost of the property as home loan for a maximum period of 20 to 30 years. In US,
GSE that are instrumental in the high percentage of home ownership. These two
enterprises enjoy implicit government guarantee and consequently raise long term
funds globally at low interest. Consequently, the interest rates on home mortgage
loans have become relatively cheaper and affordable for middle and low income
groups. Europe has a very advanced mortgage market. In Italy foreclosure will
fructify in 120 months whereas it takes just 6 months in Sweden and 9 months in the
Netherland. Securitization route is employed by banks essentially to raise finance
66

securitization process have given tremendous thrust to housing finance in countries

like the US and Europe. It is a process of selling homogeneous loans for cash by the
financing banks, to a special purpose vehicle. The SPV in turn collects money by
selling bonds, which have the security backing in the form of home mortgages.
Chinese banks do not have any significant exposure to housing loans. The Latin
American countries do not have an efficient institutional mechanism for disbursing
housing loans.

A Paper entitled Is Housing Finance Safe as House? Or Delinquency

in Housing Finance Authored by Srinivas S.P. (2006)
The study revealed that disbursement of home loan increased at increasing growth
rate during the growth rate of disbursement in 2000-01 compared to the earlier year
was 13.7% which increased up to 76% in 2002-03. The reasons behind the growth in
housing loans are,
(i) Easy availability of housing loans
(ii) Growing population
(iii) Nuclear family system
(iv) Newer segments for finance
(v) Urbanization of Indian economy
(vi) Shortage of dwelling units
(vii) Declining of cost of house to income ratio etc and,
(viii) Tax benefits.
The study revealed that banks have also concentrated on housing loans because the
housing loans are totally secured as the mortgage on the property securities the loan.
Also the capital adequacy requirement for general lending is at 100% for housing
loans. The processing and documentation of housing loan is very easy due to
extensive utilization of technology. But there are also some common frauds occurring
in housing finance like an individuals inflate their income statement, manipulate the
income tax returns, inflate the value property, lack of appraisal & follow up etc. The
researcher has also explained the new concept of NPL (Non-performing loan). The
housing finance has been associated very low risk. But empirical evidence suggest
67

that non-performing loan in the Indian housing finance sector are much higher than in
a developed market. NPL rise in India because of willing defaulters and an emerging
population of fraudsters. This is also a reflection of industrys aggressive marketing
and some inadequacies in appraisal standards and system. Such high NPL have twofold impact i.e. they depress yield and entail a credit cost in the form of provisioning
and write-off. The researcher also found that the NPL of housing finance companies
are higher than the banks. The suggestion given by researcher is that if the banks have
not taken the prudential norms for housing loans they have to conduct recovery mela
instead of present loan mela.

A Research Article entitled Housing Finance in India A Case

Study of LICHousing Finance Limited by Singh Fulbag et.al. (2006)
In this paper, the authors have studied the housing finance in India. Housing, as one of
the three basic needs of life, always remains on the top priority of any person,
economy, government and society at large. In India, majority of the population lives
in slums and shabby shelters in rural areas. From the last decade, the Government of
India has been continuously trying to strengthen the housing sector by introducing
various housing loan schemes for rural and urban population. The first attempt in this
regard was the National Housing Policy (NHP), which was introduced in 1988. The
National Housing Bank (NHB) was set up in 1988 as an apex institution for housing
finance and a wholly-owned subsidiary of Reserve Bank of India (RBI). The main
objective of the bank is to promote and establish the housing financial institutions in
the country as well as to provide refinance facilities to housing finance corporations
and scheduled commercial banks. Moreover, for the salaried section, the tax rebates
on housing loans have been introduced. The paper is based on the case study of LIC
Housing Finance Ltd., which analyzes region-wise disbursements of individual house
loans their portfolio amounts and the defaults for the last ten years, i.e., from 1995-96
to 2004-05 by working out relevant ratios in terms of percentage and the compound
annual growth rates.

68

The Study entitled Housing Finance in India Problems and Prospects

Authored by Chaubey M. (2009)
The objectives of the study were:
(i) To Study the customers views on housing finance offered by HDFC in
Varanasi, and
(ii) To know about the relative performance of HDFC in providing housing
loans in city.
The sample of the study was selected on the basis of random sampling techniques. For
analyzing the perception of the borrowers, Likert scaling test was used. The study
reveals that, 42%, 32%, 22% and 4%, opted for loans because of low interest rate,
easy installment scheme, simple procedure and other reasons respectively. 26%, 34%,
38%, and 2% respondents have borrowed loans for purchase of flats, purchase of
house, construction of house and other reasons respectively. 100% respondents made
the repayment in equated monthly installments. 43% respondents knew about the
interest rate. 92% respondents preferred floating interest rates and 8% respondent
preferred fixed interest rates. 72%, 18% and 10% respondents came to know about
bank

through

print

and

electronic

media,

friends

and

relatives

and

Builders/Developers respectively. 50%, 24%, 20% and 86% respondents have

reported of mortgage of finance through property, gold and others insurance policy
equal to the loan sanctioned, deposit for the title deed and additional collateral
security respectively. 58%, 28% and 14% respondents opted for more than 15 years, 5
years and 10 year as the term of loan, respectively. 40%, 38% and 18% respondents
repaid their loan amount through postdated cheques, through ECS and through salary
deduction and 4% were paying directly to the bank. 70% respondents agreed that
there is a delay of loan approval that there is a delay of loan approval and
disbursement. The researcher suggested that, Option of repayment of EMI in monthly,
quarterly or half yearly basis should be given. To win the confidence of customers and
bring transparency in all the transactions, it is necessary that the details of their loans
accounts should be available online. Most of the customers suggested that the loan
processing / sanctioning time should be reduced. Customers suggested that the bank
should provide online approval of application. As far as the opinion of respondents
about various facilities and policies of the bank is concerned, it is found that:- - 72%
of the respondents opined that the government is encouraging the housing sector
69

Only 50% said that the officials of the institutions were helpful. Only 28% of them
reported that they were getting entire cost of flat as a loan. - Only 40% of the
respondents felt that rate of interest changed by the institutions is reasonable. Only
42% of them were satisfied with the existing facilities for obtaining loan. Above half
of them (52%) stated that the loan also covered life or fire insurance benefit. - Only
42% reported that repayment period is adequate. 48% respondents stated that they
were regular in making prompt payments. Thus, by and large, opinion of the
respondent is not very much in favor of the institutions, because except in two cases
in all the remaining cases a favorable opinion was expressed by less than 50%.
Similarly, regarding various problems faced by the customers, it was found that more
than half of the respondents either strongly agreed or agreed with the statements about
delay in approval and disbursement, inadequate guidelines, tedious procedure lack of
interest on part of officials, difficulty in getting security, inconvenience in paying
EMI, irrelevant securitization, illogical approach and insufficient amount sanctioned.
Thus, majority of the respondents face most of the problems listed above.

A Research Paper entitled Prospects and Problems of Housing

Microfinance in India: Evidence from Bhavanashree Project in
Kerala State Authored by Manoj P.K. (2010)
He has examined the exact nature of housing microfinance in India, its problems and
prospects and particularly deterrents to its growth, with a view to suggesting suitable
remedial strategies for its faster development; based on an empirical study of
Bhavanshree. The Objectives of this study were: To make an overall study of the
housing microfinance initiatives the world over their performance track record, trends
and patterns. To critically study the extent and nature of housing problem in India, and
to examine the need for alternative financing models. To make an empirical study of
activities of Bhavanshree. To identify the major problems of existing
Bhavanshree Schemes and also suggest suitable strategies for its fast and healthier
growth. The study is based on primary and secondary data. Primary data were
collected using two separate interview schedule viz. for the Bhavanashree
70

beneficiary and respective bankers for the Bhavanashree unit concerned. Secondary
data were collected from various publications. This study concluded that in spite of
various shortcomings of the housing microfinance scheme Bhavanashree sponsored
by the Government of Kerala, has got immense potential to come up if suitable
strategies are adopted. Due to the wide range of microfinance activities currently
being undertaken by Kudumbashree and the excellent nexus with banks, initiating
productive housing scheme and obtaining better terms from banks like fixed rate loans
appear to be quite feasible.

A Research Study entitled A Study on Customers Preference and

Satisfaction of Four Basic Banking Services in Coimbatore and
Erode Authored by Vetrivel T. (2010)
The objectives of the study were: To know the overall satisfaction and dissatisfaction
levels of bank customers with respect to four-dimensional banking services Loan
services, deposit scheme services, Insurance services and value added services. To
know the customers opinion and preferences about various supporting factors of four
dimensional banking services. For this purpose, 300 customers of two major cities of
Coimbatore and Erode were selected at random and the study period was for nine
months. (August 2009 to April (2010). Chi-square test was used to analyze the data.
The important findings of the studies were: - As far as overall satisfaction is
concerned out of the 172 bank loan customers i.e. 50% of customers were satisfied
and the remaining 50% dissatisfied due to poor services, penalties for late payment,
fear of threats, interest rate confusion, hidden cost, unknown deduction etc. - Overall
satisfaction on bank deposit schemes resulted positively. - Banking insurance services
still need to be given attention by focusing on customer issues. The study reveals that
new innovative schemes, strategies to cater to non-users of insurance services have to
be adopted, in value-added services. Customers preference for net banking was least
ranked and if the bankers wish to increase net banking traffic, bankers should take
maximum efforts to educate the consumers by offering online training instead of
handing out instruction manuals. The researchers suggest that if the banks want to

71

sustain customers on a long-term basis, bankers should work towards 100%

customers satisfaction.

72

CHAPTER- 3
Research
Methodolo

73

CHAPTER- 3
Research Methodoloy

Importance of the Study

This section explains the research methods, procedures and analytical frame work of
the present study. The research methods have been designed to fit the main objectives
of the study. Since not much research work has been done in the area of housing inane
provided by various types of bank from the customers point of view, it was decided
to undertake one such study in Surat city which is the fastest growing city in India, as
per the latest census data. It was decided to select one nationalized bank namely;
Bank of Baroda and Co-operative bank namely The Surat Peoples Co-operative Bank
Ltd., so that a comparative analysis can be undertaken.
Sources of Data
The study is based on primary as well as secondary data.

a) Collecting Primary Data

Primary data are collected through the responses of the customers through
questionnaires which were specially prepared for this study. The questionnaire
contained questions regarding the general and socio-economic characteristics of the
respondents such as age, religion, educational qualification, etc. and also about their
reason for taking home loan, term, rate of interest, procedure etc. I conducted the pilot
study by selecting five respondents each banks including HDFC bank. On the basis of
their responses, some questions were modified and the modified questionnaire was
finally canvassed among the 100 selected respondents. A sample size of 100
espondents is taken for detailed study because it is not possible to cover the whole
universe consisting of all the customers. Among these 100 respondents 50 respondents
were selected from the Bank of Baroda and another 50 respondents were selected
from The Surat Peoples Co-operative Bank Ltd. Primary data also included

74

information collected by personal interview with managers of Bank of Baroda and

The Surat Peoples Co-operative Bank Ltd.
Sampling Technique
The sample was selected using a convenient sampling.

b) Collecting Secondary Data

There was extensive use of secondary information in the form of books, articles
published in magazines, journals, newspaper, reports of Bank of Baroda and The
Surat peoples co-op Bank Ltd., websites, circulars, pamphlets of the banks, clippings
etc.

Period of study
The questionnaires were filled up during the period of September 2009 to February
2010.
Statistical Techniques
The collected data were scrutinized and edited. The edited data were analyzed using
the software Statistical Package for Social Sciences (SPSS) and meaningful
conclusion were arrived by constructing simple and two-way tables and by using
statistical techniques like chi-square test. Simple table were constructed for analysing
the general information of the sample. Two-Way table were constructed for the
comparative analysis and to know the relationship between two factors. At last the
associations between different variables were tested by using the chi-square test.

Objectives of the Study

Objectives of the study are as under:
1) To study the concept of Home Loan /Housing Finance in todays scenario.
75

2) To examine types of retail loan in India.

3) To study government policy regarding to the Housing Finance in India.
4) To examine the procedure of Housing Loan.
5) To know the reasons for taking the home loan in Surat city.
6) To study the customers` satisfaction levels towards banks in Surat city.
7) To understand why customers preferred the BOB/SPB for home loan in Surat
city.
8) To conduct a Comparative study of the Bank of Baroda and the Surat Peoples
Co-op Bank Ltd in respect of the various aspects of the home loans in Surat.
9) To understand about polices and practices of banks for home loan.

Hypotheses
Some of the Hypotheses that are tested in this study are as follows:
1) There is no association between Age, Educational Qualification, Profession,
Yearly Income, Type of Banks and Various Reasons for Home Loan.
2) There is no association between Age, Yearly Income, Type of Banks and
Amount of Loan Sanctioned.
3) There is no association between Utilization of Various types of Bank Services,
Age, Mode of Repayment and Type of Banks.
4) There is no association between Education, Profession of the Respondents and
Mode of Repayment.
5) There is no association between Reason for Selecting Bank and the Type of
Banks.
6) There is no association between Type of Banks (Nationalized or NonNationalized) to which respondents would like to switchover, if he is asked to
do so and Type of Banks.
7) There is no association between Age, Educational Qualification, Profession,
Yearly Income of Respondents and the Amount of Loan Applied for.
8) There is no association between the Age, Yearly Income, Profession,
Educational Qualification of Respondents and Sanctioned Loan Amount.
9) There is no association between Days taken for Sanctioned Loan and Type of
Banks.
76

Limitations of the study

This research study was time bound and due to this only a few aspects of the
problem were taken up for study.
This research study was taken in a limited area only (i.e. Surat city) and
findings may vary if the area of study is changed.
Some of the respondents might have been biased in their responses and as
such the analysis and conclusion based on it could vary to some extent.
Some of the conclusions also depend upon secondary data. To the extent these
data are reliable, the conclusion derived from them are valid.
This research study was limited only to nationalized and co-operative banks
due to non-availability of data on private banks.

77

CHAPTER- 4

Data Analysis &

Interpretation

CHAPTER- 4
Data Analysis & Interpretation

78

SWOT ANALYSIS
STRENGTH

WEAKNESSES

Right strategy
for the right
products.

Some gaps in
range for certain
sectors.

Superior
customer service
vs. competitors.

Customer
service staff need
training.

Great Brand
Image

Processes and
systems, etc

Products have
required
accreditations.

Management
cover insufficient.

High degree of
customer
satisfaction.
Good place to
work
Lower response
time with efficient
and effective
service.

Sectoral growth
is
constrained by low
unemployment
levels and
competition for
staff

Dedicated
workforce aiming
at making a longterm career in
the field.

79

Opportunities

Threats

Profit margins
will be good.

Legislation
could impact.

Could extend to
overseas broadly.

Great risk
involved

New specialist
applications.

Very high
competition
prevailing in the
industry.

Could seek
better customer
deals.
Fast-track
career
development
opportunities on an
industry-wide
basis.
An applied
research centre to
create
opportunities for
developing
techniques to
provide addedvalue services.

Vulnerable to
reactive
attack by major
competitors
Lack of
infrastructure in
rural areas could
constrain
investment.
High
volume/low cost
market is intensely
competitive.

SWOT ANALAYSIS OF HDFC BANK

STRENGTH
Right strategy for the right products.
Superior customer service vs. competitors.
Great Brand Image
Products have required accreditations.
High degree of customer satisfaction.
Good place to work
80

 Lower response time with efficient and effective service.

Dedicated workforce aiming at making a long-term career in the field.

WEAKNESSES
Some gaps in range for certain sectors.
Customer service staff need training.
Processes and systems, etc
Management cover insufficient.
Sectoral

growth

is constrained by low unemployment levels and

competition for staff

OPPORTUNITIES
Profit margins will be good.
Could extend to overseas broadly.
New specialist applications.
Could seek better customer deals.
Fast-track career development opportunities on an industry-wide basis.
An applied research centre to create opportunities for developing techniques to
provide added-value services.

THREATS
Legislation could impact.
Great risk involved
Very high competition prevailing in the industry.
Vulnerable to reactive
attack by major competitors
Lack of infrastructure in rural areas could constrain investment.
High volume/low cost market is intensely competitive.

81

KEY POINT
SWOT Analysis is a simple but powerful framework for analyzing

company's

Strengths and Weaknesses, and the Opportunities and Threats you face. This helps
you to focus on your strengths, minimize threats, and take the greatest possible
advantage of opportunities available to you

TABLE 4.1
20001

2005

Branches

43

17

ATM

40

45

Phone banking

14

12

Intrernet

25
82

Mobile

83

Chart-4.1

2001
Branches

ATM

Phone Banking

Internet

Mobile

2% 1%
14%
43%
40%

Chart-4.1.1

2005
Branches

ATM

Phone Banking

1%
25%

Internet

Mobile

17%

12%
45%

Interpretation:
HDFC BANK bater then every ear and the banking sistem very
progreshiv.
TOTAL LIABILITIES

TABLE4.2
84

2010

222,458.56

2011

277,352.60

2012

337,909.51

2013

400,331.89

2014

491,599.50
Chart-4.2

Total Liabilities Rs(Cr)

500,000.00
450,000.00
400,000.00
350,000.00
300,000.00

Total Liabilities Rs(Cr)

250,000.00
200,000.00
150,000.00
100,000.00
50,000.00
0.00
2010

2011

2012

2013

2014

Interpretation:
Total liabilitie very good and beter then every year this for good shine.

85

Income

TABAL4.3

2010

16,172.90

2011

19,928.21

2012

27,286.35

2013

35,064.87

2014

41,135.53
Chart-4.3

Income Rs (Cr)
45,000.00
40,000.00
35,000.00
30,000.00
Income Rs (Cr)

25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
2010

2011

2012

2013

2014

Interpretation:
Consistent rise in income that shows overall growth in income.

86

Net Profit Before Tax

TABLE4.4

2010

4289.14

2011

5818.66

2012

7513.17

2013

9750.63

2014

12772.05
Chart-4.4

Net Profit Before Tax Rs (Cr)

14000
12000
10000
Net Profit Before Tax Rs (Cr)

8000
6000
4000
2000
0
2010

2011

2012

2013

2014

Interpretation:
Net profit befor tax It shows positive volume value growth in all the years. There is a

no pressure on margins.

87

Earning Per Share (Rs)

TABLE4.5

2010

64.42

2011

84.40

2012

22.02

2013

28.27

2014

35.34
Chart-4.5

Earning Per Share (Rs)

90
80
70
60
Earning Per Share (Rs)

50
40
30
20
10
0
2010

2011

2012

2013

2014

Interpretation:
Earning per share It shows positive volume value growth in all the years.
There is a no pressure on margins.

88

Equity Dividend (%)

TABLE4.6

2010

120.00

2011

165.00

2012

215.00

2013

275.00

2014

342.50
Chart-4.6

Equity Dividend (%)

350
300
250
Equity Dividend (%)

200
150
100
50
0
2010

2011

2012

2013

2014

Interpretation:
Equity dividend It shows positive volume value growth in all the years.
There is a no pressure on margins.

89

Assets

TABLE4.7

2010

15,483.28

2011

25,100.82

2012

14,991.09

2013

14,627.40

2014

25,345.63
Chart-4.7

Assets
30,000.00

25,000.00

20,000.00
Assets
15,000.00

10,000.00

5,000.00

0.00
2010

2011

2012

2013

2014

Interpretation:
1. Consistent rise in assets that shows overall growth in assets.
2. It shows positive volume value growth in all the years. There is a no pressure on
margins.

90

Total Expenses

TABLE4.8

2010

17,034.82

2011

20,336.96

2012

27,362.97

2013

35,191.21

2014

40,576.80
Chart-4.8

Total Expenses
45,000.00
40,000.00
35,000.00
30,000.00
Total Expenses

25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
2010

2011

2012

2013

2014

Interpretation:
Hdfc bank every year total expenses hay 2014 is hayast

91

Net Profit for the Year

TABEL4.9

2010

2,948.70

2011

3,926.40

2012

5,167.09

2013

6,726.28

2014

8,478.38
Chart-4.9

Net Profit for the Year Rs(Cr)

9,000.00
8,000.00
7,000.00
6,000.00
Net Profit for the Year Rs(Cr)

5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
0.00
2010

2011

2012

2013

2014

Interpretation:
1. Consistent rise in net profit that shows overall growth in profit.
2. It shows positive volume value growth in all the years. There is a no
pressure on margins.

92

Advances

TABEL-4.10

2010

125,830.59

2011

159,982.67

2012

195,420.03

2013

239,720.64

2014

303,000.27
Chart-4.10

Advances
2010

2011

2012

2013

2014

12%
30%
16%

23%

19%

Interpretation:
advances It shows positive volume value growth in all the years. There is a
no pressure on margins.

93

Investments

TABEL-4.11

2010

58,607.62

2011

70,929.37

2012

97,482.91

2013

111,613.60

2014

120,951.07
Chart-4.11

Investments
Investments

97,482.91
58,607.62

2010

111,613.60

120,951.07

70,929.37

2011

2012

2013

2014

Interpretation:
1. Consistent rise in investment that shows overall growth in investment.
2. It shows positive volume value growth in all the years. There is a no
pressure on margins.

Opening Cash & Cash Equivalents TABEL-4.12

2010

17506.62
94

2011

29942.40

2012

29668.83

2013

20937.73

2014

27280.17
Chart-4.12

Opening Cash & Cash Equivalents

Opening Cash & Cash Equivalents

29942.4

29668.83

27280.17
20937.73

17506.62

2010

2011

2012

2013

2014

Interpretation:
It shows positive volume value growth in all the years. There is a no
pressure on margins.

95

Balance Balance Sheet c/f to

TABEL-4.13

2010

4,532.79

2011

6,174.24

2012

8,399.65

2013

11,132.18

2014

14,654.15
Chart-4.13

Balance c/f to Balance Sheet

16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00

2010

2011

2012

2013

2014

Balance c/f to Balance Sheet

Interpretation:
1. Consistent rise in Balance Balance Sheet c/f to that shows overall growth .
2. It shows positive volume value growth in all the years. There is a no
pressure on margins.

96

CHAPTER: 5

CONCLUSION
AND
FINDINGS

97

CHAPTER: 5
CONCLUSION AND FINDINGS
5.1 CONCLUSION OF TREND ANALASIS:

1) Margin not under pressure, High fixed Assets efficiency.

2) Large amounts locked up in working capital due to higher net current assets growth.

3) High Dividend only due to small capital base & no bonus issue.

4) Production & Sales both are consistently rising throughout the year.

5.2 CONCLUSION OF HORIZONTAL ANALYSIS:

1) PAT growth is higher than sales growth. It shows margins are under control.

2) Need to contain material cost.

3) Very efficient fixed asset utilization.

4) Investment higher than the net worth, which means operations are being
funded by Current liabilities & some loans.

5) Extremely strong financial position.

5.3 CONCLUSION OF CASH FLOW STSTEMENT ANALYSIS:

98

1) Operating activities indicates a very strong cash position.

2) It also indicates an efficient management of banking

3) Investment activities are an indication of an expanding business.

4) Financing activities indicates that the management has aggressive growth plans.

5.4 CONCLUSION OF ANALYSIS:

1) By analyzing the results we conclude that the HDFC is able to reduce the
liquidity, and then the HDFC is efficient in managing their profitability.

2) We found Moderate negative relationship between the measures the liquidity

with corporate profitability.

3) HDFCis maintaining 30 to 40 percentage liquidity from other sources not

from profit.

4) The Liquidity & ate Profitability Negative Correct have lotion Model is
dependent on Profitability.

99

BIBLIOGRAPHY

BOOKS REFFERED:

Philip Kotler (Eight Edition), Marketing Management

T.N Chhabra , Human Resource Management

WEBSITES REFFERED:

www.wikipedia.com
www.hdfcbank.com
www.google.co.in

100

RATIO

14
Investment Valuation Ratios
Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share
(Rs)
Free Reserves Per Share (Rs)
Bonus in Equity Capital
Profitability Ratios
Interest Spread
Adjusted Cash Margin(%)
Net Profit Margin
Return on Long Term Fund(%)
Return on Net Worth(%)
Adjusted Return on Net
Worth(%)
Return on Assets Excluding
Revaluations
Return on Assets Including
Revaluations
Management Efficiency Ratios
Interest Income / Total Funds
Net Interest Income / Total Funds
Non Interest Income / Total
Funds
Interest Expended / Total Funds
Operating Expense / Total Funds
Profit Before Provisions / Total
Funds
Net Profit / Total Funds
Loans Turnover
Total Income / Capital
Employed(%)
Interest Expended / Capital
Employed(%)

13

12

11

10

2.00
6.85
29.65

2.00
5.50
21.97

2.00
4.30
18.11

10.00
16.50
83.56

10.00
12.00
106.25

171.47

147.37

116.28

428.36

436.03

---

---

---

---

363.55
--

8.01
18.65
17.28
81.47
19.50

8.78
17.60
16.04
80.09
18.57

8.42
17.55
15.88
75.20
17.26

8.25
18.23
16.18
59.91
15.47

5.89
16.71
14.76
56.08
13.70

19.50

18.57

17.26

15.47

13.68

181.23

152.20

127.52

545.46

470.19

181.23

152.20

127.52

545.46

470.19

9.22
4.14

9.50
4.28

8.87
4.00

7.97
4.22

9.84
6.00

1.78

1.86

1.70

1.73

0.01

5.08
2.55

5.22
2.87

4.87
2.62

3.76
2.66

3.84
3.60

3.22

3.10

2.91

3.09

2.21

1.90
0.27

1.82
0.36

1.68
0.15

1.57
0.14

1.45
0.18

11.00

11.36

10.57

9.71

9.85

5.08

5.22

4.87

3.76

3.84
101

Total Assets Turnover Ratios

Asset Turnover Ratio
Profit And Loss Account Ratios
Interest Expended / Interest
Earned
Other Income / Total Income
Operating Expense / Total
Income
Selling Distribution Cost
Composition
Balance Sheet Ratios
Capital Adequacy Ratio
Advances / Loans Funds(%)
Debt Coverage Ratios
Credit Deposit Ratio
Investment Deposit Ratio
Cash Deposit Ratio
Total Debt to Owners Fund
Financial Charges Coverage
Ratio
Financial Charges Coverage
Ratio Post Tax
Leverage Ratios
Current Ratio
Quick Ratio
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash
Profit
Earning Retention Ratio
Cash Earning Retention Ratio
AdjustedCash Flow Times

0.09
0.10

0.10
0.11

0.09
0.10

0.08
0.09

0.10
0.11

55.07

54.91

54.93

47.09

48.14

16.14

16.35

16.12

17.87

0.09

23.18

25.25

24.74

27.43

36.59

--

--

--

--

0.41

16.07
82.33

16.80
--

16.52
79.19

16.22
79.34

17.44
77.24

45.66
35.05
6.02
8.45

-38.51
5.46
8.18

78.06
36.99
8.81
8.24

76.02
34.45
10.79
8.22

72.44
37.85
9.35
7.78

0.66

0.63

0.63

0.88

0.63

1.40

1.38

1.38

1.47

1.43

0.06
8.55

0.06
7.84

0.08
6.20

0.06
6.89

0.03
7.14

19.38

19.46

19.52

19.55

18.62

17.96

17.74

17.67

17.35

16.43

80.62
82.04
40.15

80.54
82.26
40.15

80.48
82.33
43.21

80.45
82.65
47.15

81.35
83.55
50.14

Mar '13

Mar '12

Mar '11

Mar '10

28.27
152.20

22.02
127.52

84.40
545.46

64.42
470.19

Mar
'14
Earnings Per Share
Book Value

35.34
181.23

102

Balance Sheet of HDFC Bank

------------------- in Rs. Cr. ------------------Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

Capital and Liabilities:

Total Share Capital

479.81

475.88

469.34

465.23

457.74

Equity Share Capital

479.81

475.88

469.34

465.23

457.74

Share Application Money

0.00

0.00

0.30

2.91

0.00

Preference Share Capital

0.00

0.00

0.00

0.00

0.00

Reserves

42,998.82

35,738.26

29,455.04

24,911.13

21,064.75

Net Worth

43,478.63

36,214.14

29,924.68

25,379.27

21,522.49

367,337.48

296,246.98

246,706.45

208,586.41

167,404.44

Deposits
Borrowings

39,438.99

33,006.60

23,846.51

14,394.06

12,915.69

Total Debt

406,776.47

329,253.58

270,552.96

222,980.47

180,320.13

Other Liabilities & Provisions

41,344.40

34,864.17

37,431.87

28,992.86

20,615.94

491,599.50

400,331.89

337,909.51

277,352.60

222,458.56

Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

Cash & Balances with RBI

25,345.63

14,627.40

14,991.09

25,100.82

15,483.28

Balance with Banks, Money at Call

14,238.01

12,652.77

5,946.63

4,568.02

14,459.11

Advances

303,000.27

239,720.64

195,420.03

159,982.67

125,830.59

Investments

120,951.07

111,613.60

97,482.91

70,929.37

58,607.62

Gross Block

2,939.92

2,703.08

2,347.19

2,170.65

4,707.97

0.00

0.00

0.00

0.00

0.00

Total Liabilities

Assets

Revaluation Reserves
Accumulated Depreciation
Net Block

0.00

0.00

0.00

0.00

2,585.16

2,939.92

2,703.08

2,347.19

2,170.65

2,122.81

Capital Work In Progress

0.00

0.00

0.00

0.00

0.00

Other Assets

25,124.60

19,014.41

21,721.64

14,601.08

5,955.15

Total Assets

491,599.50

400,331.90

337,909.49

277,352.61

222,458.56

Contingent Liabilities

744,097.98

746,226.39

883,985.32

588,550.98

466,236.24

0.00

0.00

0.00

0.00

20,940.13

181.23

152.20

127.52

545.46

470.19

Bills for collection

Book Value (Rs)

Profit & Loss account of HDFC

------------------- in Rs. Cr. ------------------103

Bank

Income
Interest Earned
Other Income
Total Income
Expenditure
Interest expended
Employee Cost
Selling, Admin & Misc Expenses
Depreciation
Preoperative Exp Capitalised
Operating Expenses
Provisions & Contingencies
Total Expenses

Mar '14

Mar '13

Mar '12

Mar '11

Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

41,135.53 35,064.87 27,286.35 19,928.21 16,172.90

7,919.64 6,852.62 5,243.69 4,335.15 3,810.62
49,055.17 41,917.49 32,530.04 24,263.36 19,983.52
22,652.90
4,178.98
13,073.31
671.61
0.00
12,042.20
5,881.70
40,576.80
Mar '14
12 mths

Net Profit for the Year

Extraordinary Items
Profit brought forward
Total
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
Appropriations
Transfer to Statutory Reserves
Transfer to Other Reserves
Proposed Dividend/Transfer to
Govt
Balance c/f to Balance Sheet
Total

19,253.75 14,989.58 9,385.08 7,786.30

3,965.38 3,399.91 2,836.04 2,289.18
11,320.41 8,430.96 7,618.43 6,564.95
651.67
542.52
497.41
394.39
0.00
0.00
0.00
0.00
11,236.12 8,590.07 7,152.91 7,703.41
4,701.34 3,783.32 3,798.97 1,545.11
35,191.21 27,362.97 20,336.96 17,034.82
Mar '13 Mar '12 Mar '11 Mar '10
12 mths

12 mths

12 mths

12 mths

8,478.38 6,726.28 5,167.09

0.00
0.00
0.00
11,132.18 8,399.65 6,174.24
19,610.56 15,125.93 11,341.33
0.00
0.00
0.00
1,643.35 1,309.08 1,009.08
279.29
222.48
163.70

3,926.40
0.00
4,532.79
8,459.19
0.00
767.62
124.53

2,948.70
-0.93
3,455.57
6,403.34
0.00
549.29
91.23

35.34
342.50
181.23

28.27
275.00
152.20

22.02
215.00
127.52

84.40
165.00
545.46

64.42
120.00
470.19

2,185.93
847.84

1,789.56
672.63

1,252.20
516.71

1,000.16
392.64

935.15
294.87

1,922.64

1,531.56

1,172.78

892.15

640.52

14,654.15 11,132.18 8,399.65

19,610.56 15,125.93 11,341.34

6,174.24
8,459.19

4,532.79
6,403.33

104

Cash Flow of HDFC Bank

Net Profit Before Tax

Net Cash From Operating Activities
Net Cash (used in)/from
Investing Activities
Net Cash (used in)/from Financing
Activities
Net (decrease)/increase In Cash
and Cash Equivalents
Opening Cash & Cash Equivalents
Closing Cash & Cash Equivalents

------------------- in Rs. Cr. ------------------Mar '14 Mar '13

Mar '12 Mar '11 Mar '10

12 mths 12 mths

12 mths 12 mths 12 mths

12772.05 9750.63 7513.17 5818.66 4289.14

8363.60 -1868.78 -11355.61 -375.83 9389.89
-1591.26

-858.88

5562.98 9065.84

-686.85 -1122.74

-551.51

3286.19 1227.99 3598.91

12303.47 6342.44 -8731.11

-273.56 12435.78

27280.17 20937.73 29668.83 29942.40 17506.62

39583.64 27280.17 20937.73 29668.83 29942.40

105