Market scoping increasing retail banking reach

A
PROJECT REPORT ON
Market Scoping-
Increasing Retail Banking Reach

BY

YASH KHAKHAR

(HRD1714399)
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF PGDM
PROGRAM OF BIMHRD, PUNE

DECLARATION

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Market scoping increasing retail banking reach

I hereby declare that the following project report titled “MARKET SCOPING- INCREASING
RETAIL BANKING REACH“is an authentic work done by me. It is to the best of my knowledge
and belief.

This is to declare that all my work indulged in the completion of this Project Report such
as research, analysis and lead generation is a profound and honest work of mine.

YASH KHAKHAR

(HRD1714399)

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Market scoping increasing retail banking reach

ACKNOWLEDGEMENT

I would like to express my special gratitude to my mentor Mr. Chetash Mehta (Branch Manager) as well as
Mr. Devarshi Trivedi (Assistant Branch Manager) who gave me the great opportunity to do this project on the
topic, which also helped me in doing a lot of Research and I came to know about so many new things new
things, I am really thankful to them.

Along with them I would like to thank our director Dr, G Gopalakrishnan and teacher Mr. Shrikant Ratley for
the constant support and help.

Yash khakhar
(HRD1714399)

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Market scoping increasing retail banking reach

PROJECT COMPLETION CERFICATE

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Market scoping increasing retail banking reach

1. TITLE OF PROJECT:

“MARKET SCOPING – INCREASING RETAIL BANKING REACH”

2. OBJECTIVE OF STUDY

PRIMARY OBJECTIVE:

 To study the role of technology in banking .

SECONDARY OBJECTIVE:

  To understand the Retail Branch Banking of HDFC Bank


 To analyse scope of Digitalization.

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Market scoping increasing retail banking reach
3. INDUSTRY SCENARIO:

INDIAN BANKING SYSTEM

The Indian banking system consists of 26 public sector banks, 20 private sector banks, 43
foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural
cooperative banks, in addition to cooperative credit institutions.
As on September 2016, the outstanding credit to NBFCs stood at US$ 55.27 billion, growing at 25
per cent on year-on-year basis. Bank credit to non-banking finance companies (NBFCs) has
touched the highest in three years.

Indian banks are increasingly focusing on adopting integrated approach to risk management.
Banks have already embraced the international banking supervision accord of Basel II. According
to RBI, majority of the banks already meet capital requirements of Basel III, which has a deadline
of March 31, 2019. Most of the banks have put in place the framework for asset-liability match,
credit and derivatives risk management
4. MARKET SCENARIO:

1. State Bank of India: SBI undoubtedly is the leading bank in India when it comes to number o
branches, ATM’s, net profits, total assets managed, etc. With an employee base of close to 3 lakh
people SBI commands 20% (approx) of the Indian banking sector. The bank has over 17,000
branches with more than 27,000 ATM’s. The bank manages assets worth more than 390 billion USD.
2. Corporation bank: The Bank’s total service outlets crossed 6600 mark during the year ending 31st
March 2013 to reach 6677 service outlets, comprising of 1707 branches, 1425 ATMs and 3545
Branchless Banking Units across the country. Out of these 207 branches, 151 ATMs and 155
Branchless banking Units were opened during the year. The Bank is also having its representative
offices at Hong-Kong and Dubai.
3. ICICI Bank: ICICI is the second in the list when it comes to quantity of assets managed by the
Bank. According to the current market cap ICICI is ahead of SBI but behind HDFC. ICICI Bank has
about 3540 branches, 11200 ATM’s and over 82000 employees. The bank manages assets worth 99
billion USD.
4. Punjab National Bank: PNB is the third largest bank in India. The market capitalization of the bank
is very low compared to the assets it manages. The bank has over 5800 branches, 6000+ ATM’s. It
manages assets worth 90.9 billion USD.
5. Bank of Baroda: BOB is the forth largest bank in India when it comes to managing assets.
According to market cap the bank is undervalued/priced. The bank has over 4200 branches and has a
net profit of 840 million USD. The assets managed by this bank are valued at 73 billion USD.
6. HDFC Bank: If we prepared this list according to the market cap then HDFC would have been the
number one bank in this list. Well according to assets managed the bank is at the 5th position. The
bank has over 3200 branches, 12000+ ATM’s, Net Profit of 1.1 billion USD. The assets managed by
this bank are valued at 66.7 billion USD.
7. Canara Bank: The bank has about 3200 branches with over 4000 ATM’s. The bank employees
about 44,000 people. Assets managed by the bank are valued at 61 billion USD.
8. Axis Bank: Axis bank comes 7th in the list and 3rd in the list of private sector bank. The bank has
2225 branches, 12000+ ATM’s, 40200 employees . The bank manages assets worth 54 billion USD.
The bank’s net profit is 1.5 billion USD.
9. Bank of India: BOI has over 4500 branches and makes a profit of 400 million USD.
10. IDBI Bank: The bank has about 1150 branches with about 2000 ATM’s. The bank employees about
15000 people. It manages assets worth 42 billion USD.
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5. BRIEF INTRODUCTION TO THE COMPANY:

ABOUT COMPANY:

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in
principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of
RBI's liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in
the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995.

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 Bank’s 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.

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BUSINESS STRATEGY

I. Increasing market share in India’s expanding banking

II. Delivering high quality customer service
III. 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.

AWARDS AND RECOGNITIONS:

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian Bank". We
realised that only a single-minded focus on product quality and service excellence would help us get there.
Today, we are proud to say that we are well on our way towards that goal.

It is extremely gratifying that our efforts towards providing customer convenience have been appreciated
both nationally and internationally.

2017

Asiamoney Best Brands in Finance Survey 2017 Best Banking Brand in India - HDFC Bank

Businessworld India's Best Banks' survey 2016 1. Best Bank - Overall

2. Fastest Growing Large Bank

Dun & Bradstreet Corporate Award 2017 India's Leading Bank - Private Sector

12th BML Munjal Awards 2017 Sustained Excellence in Learning &

Development

The Financial Express India's Best Banks 2016 - Profitability: Rank 1

- Strength & Soundness: Rank 1
Bank of the Year

Finance Asia poll on Asia's Best Companies 2016 Best CEO- Aditya Puri
Best at Investor Relations- Rank 1
Most Committed to Corporate Governance-
Rank 1
Best Managed Company - Rank 2
Best at CSR - Rank 8
Bank of the Year

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Market scoping increasing retail banking reach
National Payments Excellence Awards 2016 Best Bank in Cheque Truncation System
(CTS)
Best Bank in National Automated Clearing
House (NACH)
Best Bank in National Financial Switch
(NFS)
Runner up in Rupay Cards

Asiamoney India Banking Awards 2017 Best Domestic Bank - India

Business Standard Annual Awards 2016 Banker of the year - Mr. Aditya Puri

IBA Banking Technology Awards 2017 Best IT Risk and Cyber Security Initiatives

Dun & Bradstreet - India's Leading BFSI Companies India's Leading Banks - Private Sector
& Awards 2017

Outlook Money Awards 2016 Bank of the year

Business Today - KPMG India's Best Banks 2016 Bank Of The Year (Private Sector)

Best Large Size Bank

Fastest Growing Large Bank

The Asset Triple A Country Awards 2016 1. Best IPO, India

2. Best QIP, India

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Market scoping increasing retail banking reach

INTEGRATED FINANCIAL SERVICES

SECURITISATION

HDFC CHUBB GENERAL

INSURANCE CO. LTD.

Future Activities

DISTRIBUTION

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Business Segmentation

HDFC Bank offers a wide range of commercials and transactional

banking services and treasury products to wholesale the bank has four key
segments are as follows :-

Retail banking

Wholesale Banking

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 Treasury operations

Other banking
operations

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Retail Banking

The objective of Retail Bank is to provide its target market customers a full range of
financial products and banking service, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world class service and
delivered to the customer through the growing branch network, as well as through
alternative delivery channels like ATM‟s, Mobile Banking and Net Banking.

Wholesale Banking-

The Banks target market ranges from large, blue-chip manufacturing companies in
the Indian corporate to small and mid-sized corporates and agri-based business.
For these customers, the bank provide a wide range of commercial and
transactional services:
  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 distributors finance for facilitating superior
supply chain management for its corporate customer. Based on its superior product
and delivery/ service levels and strong customer orientation, the Bank made
significant inroads into the banking consortia of a number of leading Indian
corporates including multinationals, companies from the domestic business houses
and prime public sector companies. It is recognized as a 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 transactional banking solutions to corporate customers, mutual
funds, stock exchange and banks.

Treasury:

Within this business, the bank has three main product area:

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  Foreign Exchange


  
Derivatives
 
Local Currency Money Market & Debt Securities & 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 and provide 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

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responsible for managing the returns an market risk is on this investment portfolio.

Other Banking Services

This is considered as a residual category which includes all those businesses of banks
that do not fall under any of the aforesaid categories. This category includes para
banking activities like hire purchase activities, leasing business, merchant banking,
factoring activities etc.

TECHNOLOGY USED:

HDFC Bank operates in a highly automated environment in terms of information technology and
communication systems. All the bank’s branches have online connectivity, which enables the bank to
offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail
customers through the branch network and Automated Teller Machines (ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology available
internationally, to build the infrastructure for a world class bank. In terms of core banking software,
the Corporate Banking business is supported by Oracle Flexcube, while the Retail Banking business
by Finware, both from i-flex Solutions Ltd. The systems are open, scalable and web-enabled.

The Bank has prioritized its engagement in technology and the internet as one of its key goals and has
already made significant progress in web-enabling its core businesses. In each of its businesses, the
Bank has succeeded in leveraging its market position, expertise and technology to create a
competitive advantage and build market share.
 RETAIL BANKING – OVERVIEW:

HDFC Bank is a leading Indian retail bank. Innovative products and smart banking solutions
make us the banker of choice for millions of users each day. HDFC Bank currently has
nationwide network of 3,251+ Branches and 11,177 ATM's in 2,022 Indian towns and cities and
all branches of the bank are linked on an online real-time basis. The bank commenced operations
as a Scheduled Commercial Bank in January 1995.Personal banking solutions from HDFC Bank
offer smart features and benefits to ensure that you make the most of your relationship with us.
Our retail banking products and services are designed to meet the end-to-end needs of all types of
users. From zero balance savings accounts to customized salary accounts, flexible home and
personal loans to 360 NRI Banking services, HDFC Bank is for everybody.

HDFC Bank is preferred because it offers the entire banking experience under one roof. Amazing
offers, customized solutions, minimum paperwork and quick turnaround times are some of the
hallmarks of HDFC Bank that has made it the banker of choice in India.

INTRODUCTION

Globally, the banks are recognizing the need to embrace technology in the area of products and services to
compete successfully in the years ahead. In fact, the commercial banks, the world over, are among the largest
consumers of information technology. The banks perceive the future of the financial services industry as
becoming heavily dependent on electronic delivery mechanism and are working towards bringing banking right
into their customer’s homes. Information technology is one of the most important facilitators for the
transformation of the Indian banking industry in terms of its transactions processing as well as for various other

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internal systems and processes. The various technological platforms used by banks for the conduct of their day to
day operations, their manner of reporting and the way in which interbank transactions and clearing is affected has
evolved substantially over the years. Indian banking industry has witnessed a remarkable development in the
Informational Technology (IT) in last few years. Banking transactions have become easier and customer friendly
due to the technological improvements. To play a supportive and key role, banks are providing with lots of
services which are the combination of electronics and information technology, like, Computerization and
networking, Core banking, Automatic Teller Machines (ATMs), Plastic money i.e. credit card, debit card and
smart cards, Phone banking, Mobile banking, e- banking or net-banking, EFT, NEFT, RTGS etc. ATMs have
emerged as the most favoured channel for offering banking services to the customers in the world. Reserve Bank
of India has also adopted IT in endorsing the payment system's functionality and modernization on an ongoing
basis to improve the efficiency of banking sector. There is a noticeable improvement in the performance of
financial institutions and the service sector by incorporating IT into their functionality. It shows an increasing
share, enhanced competitiveness at the global surface because of adopting IT culture. Globally, the banks are
poised to use technology that will gradually give new dimensions to the banking products, services and delivery
systems. Computers are getting more sophisticated. The changes that new technologies have brought to banking
are enormous in their impact on officers, employees, and customers of banks. Advances in technology are
allowing for delivery of banking products and services more conveniently and effectively than ever before - thus
creating new bases of competition. Rapid access to critical information and the ability to act quickly and
effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by
having a direct marketing and accountable customer service environment and new, streamlined business
processes.

Banking Services Through Technology Banks are aware of customer's need for new services and plan to make
them available. IT has increased the level of competition and forced them to integrate the new technologies in
order to satisfy their customers. They have already developed and implemented a certain number of solutions.
Important among them are:
Self-inquiry facility: Instead of customers lining up or going to the help desk, banks have provided simple self-
inquiry systems on all branches. A customer can use their ATM card to know their account balance, or to get
their bank statement. This saves time on both the sides.
Remote banking: Remote terminals at the customer site connected to the respective branch through a modem,
enabling the customer to make inquiries regarding his accounts, on-line, without having to move from his office.
This facility has also enabled anytime banking, because customers can use ATM machines to deposit money on
their accounts. Remote Banking has helped people in rural areas to improve on their culture of saving money.
Anytime banking - Anywhere banking: Installation of ATMs which offer non-stop cash withdrawal, remittances
and inquiry facilities. Networking of computerized branches inter-city and intra- city, will permit customers of
these branches, when interconnected, to transact from any of these branches.
Telebanking: A 24-hour service through which inquiries regarding balances and transactions in the account can
be made over the phone.
Electronic Banking: This enables the bank to provide corporate or high value customers with Graphical User
Interface (GUI) software on a PC, to inquire about their financial transactions and accounts, cash transfers,
cheque book issue and inquiry on rates without visiting the bank. The technology used to provide this service is

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called Electronic Data Interchange (EDI). It is used to transmit business transactions in computer-readable form
between organizations and individuals in a standard format.
Rural Banking: Unlike in the past when banking was centralized in urban areas, now a day’s technology has
made it simple to set up banking facilities in rural areas. For example: In Africa, they have introduced Mobile
money banking facilities. In this case a user in a rural area will have an account with a mobile company which is
opened for free. They can then deposit money on that account via a nearby mobile money operating center. This
money can be withdrawn at any time anywhere in that area and they can also receive or send money using the
same system.
Centralised information results to quick services: This enables banks to transfer information from one branch
to another at ease. For example, if customers registered their account with a rural branch, they can still get details
of their account while at the main branch in an urban area.
Automated Teller Machine (ATM): ATMs were introduced to the Indian banking industry in the early 1990s
initiated by foreign banks. Most foreign banks and some private sector players suffered from a serious handicap
at that time- lack of a strong branch network. ATM technology was used as a means to partially overcome this
handicap by reaching out to the customers at a lower initial and transaction costs and offering hassle free
services. Since then, innovations in ATM technology have come a long way and customer receptiveness has also
increased manifold. Public sector banks have also now entered the race for expansion of ATM networks.
Development of ATM networks is not only leveraged for lowering the transaction costs, but also as an effective
marketing channel resource.
Biometrics: Banks across the country have started the process of setting up ATMs enabled with biometric
technology to tap the potential of rural markets. Biometric Card provides automated methods of identifying or
authenticating the identity of a living person based on unique physiological characteristics and recognition of the
face, fingerprints, eyes or voice. This technology is a boon for millions of illiterates who have remained outside
of banking ambit due to their illiteracy. This may prove helpful for old-age customers also who can be identified
as a genuine beneficiary of various schemes run by Centre or State governments meant to improve their standard
of living.
Multilingual ATMs: Installation of multilingual ATMs has also entered pilot implementation stage for many
large banks in the country. This technological innovation is also aimed at the rural banking business believed to
have large untapped potential. The language diversity of India has proved to be a major impediment to the active
adoption of new technology, restrained by the lack of knowledge of English.
Multifunctional ATMs: Multifunctional ATMs are yet to be introduced by most banks in India, but have already
been recognized as a very effective means to access other banking services. Multifunctional ATMs are equipped
to perform other functions, besides dispensing cash and providing account information. Mobile recharges,
ticketing, bill payment, and advertising are relatively new areas that are being explored via multifunctional
ATMs, which have the potential to become revenue generators for the banks by effecting sales, besides acting as
delivery channels.
ATM Network Switches: ATM switches are used to connect the ATMs to the accounting platforms of the
respective banks. In order to connect the ATM networks of different banks, apex level switches are required that
connect the various switches of individual banks. Through this technology, ATM cards of one bank can be used
at the ATMs of other banks, facilitating better customer convenience. Under the current mechanism, banks
owning the ATM charge a fee for allowing the customers of some other bank to access its ATM. Among the

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various ATM network switches are Cash Tree, BANCS, and National Financial Switch. Most ATM switches are
also linked to Visa or MasterCard gateways.
Talking ATM: Talking ATM has been introduced recently. This ATM is specifically designed for visually
impaired persons in order to perform the financial transactions of their own. The ATM would provide audio
commands through a head phone connected with the ATM Machine. The screen would turn blank during the
operation so that no one does shoulder surfing. The ATMs are so designed that a person on wheel chair can enter
the ATM room conveniently. This is an attempt to ensure that no one should be left out in reaping the benefits of
the digital banking.
Debit Card: Debit card is a plastic card which provides an alternative payment method to cash when making
purchase of goods and services. The card holder’s bank account is debited for the payments made by him up to
credit balance which exists in his bank account. One difficulty in using online debit card is the necessity of an
electronic authorization device. Overall the online debit card is generally viewed as superior to the off line debit
card because of its more secure authentication system and live status. There is no need to carry cash and it can be
used to withdraw cash. It makes the transaction quicker and less intrusive.
Credit Card: Credit card is a device, which reduces the cash component of business and bank transactions. It
will enable the credit card holders to purchase goods or services from authorized retail outlets up to certain
predetermined limit without immediate cash payment. The member establishments subsequently collect amounts
from the bank, which in turn collects the dues from cardholders. Thus, the credit card enables its users to avoid
the risk of carrying large amount of cash for shopping, buying travel tickets and making other payments. Credit
card is convenient method for payment of goods and services and provides advantage of credit extension to the
customers.
Tele-Banking: The Tele-banking system enables banking transactions to be carried out by means of a
telecommunications network, most commonly achieved through an Interactive Voice Response System (IVRS)
or tele banking executives of the banks. The customers can also choose between English and Hindi for guidance
through IVRS menu of services at the time of calling the bank. Tele-banking aims to satisfy ever-increasing
customer needs for information. This communication service helps customers seek account and other related
information from the bank using the telephone as the medium. The transactions are limited to balance enquiries,
last five transactions enquiries, stop payment instruction on cheques and fund transfer of small amounts amongst
linked account, cheque book request and interest /exchange rates inquiry and report loss of ATM/Debit Card.
Internet Banking: Internet Banking is another such channel which has evolved over last decade and has taken
the industry by storm. It has facilitated the banks to make in-roads directly to the customer’s home. It has helped
the scalability of banks and served customers to maintain and manage their accounts without a need to visit the
bank. Customers can now process diverse transactions with internet banking. They can view transaction details,
transfer funds, pay bills as well as make purchases. Internet banking has further reduced the costs per transactions
of banks and is even lower than the cost per transaction done at ATMs.
Mobile Banking: A new revolution in the realm of e-banking is the emergence of mobile banking. Online
banking is now moving to the mobile world, giving everybody with a mobile phone access to real-time banking
services, regardless of their location. But there is much more to mobile banking than just on-line banking. It
presents a new way to pick up information and interact with the bankers, to carry out the relevant banking
business. According to this system, customer can access account details on mobile using the Short Messaging
System (SMS) technology where selected data is pushed to the mobile device. The wireless application protocol
(WAP) technology, which will allow user to surf the net on their mobiles to access anything and everything.

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SMS Banking: SMS Banking is the next good thing which has evolved along with the mobile banking.
Transactions using GPRS-enabled mobile phones and SMS alerts are the latest innovations in the delivery
channels. OTP (One Time Password) is one of the recent additions which have made SMS a handy tool to
communicate with the customer wherever they are. This has eliminated skepticism to a great extent among the
users regarding the online transaction. SMS alerts are sent to customers for all transactions made by them above
the specified value. Customers can also request to know their balances and the last few transaction details by
sending an SMS. Since any high end smart phone or an i-pad or a high speed internet is not required to avail the
benefits of SMS banking it has the potential to take digital banking to the farthest corner of our country and
among the masses.
Core Banking Solution (CBS): Core banking or Centralised Online Real Time Environment banking enables
anywhere banking. “Core Banking” is a service provided by a group of networked bank branches. Bank
customers can access their funds and other simple transactions from any of the member branch offices in real-
time. Under the CBS architecture, there are remote server (called data centres) and client (called Service outlet)
branches which include a centralized branch computerization where branches are connected to a central host.
Smart Card: These are plastic cards that are in size of visiting cards. They look like any other credit card. There
is a chip embedded in it the reverse below the magnetic stripe. Smart cards can be stored cards, Magnetic stripe
cards Re- loaded disposable cards or contactless smartcards which do not have contact pad, inductive coupling,
and optical coupling while surface acoustic coupling can be used to power the contactless card. This can be used
for number of applications like paying telephone bills or booking bus tickets. They are becoming more popular
with transport companies. It looks like traditional credit card with one tiny microprocessor chip and is offered to
the customer for small purchase. It can be used as prepaid telephone card and uses sophisticated encryption to
protect value as it passes from one card to another.
Virtual Banking: Virtual Banking is Multimedia technology that has been quite effective in bringing banking
services to the doorstep of its customers. The customer-activated terminal (CAT) or self –banking kiosk provides
an interactive multimedia display unit, housed in small enclosure, which typically consists of a computer
workstation, monitor, video disk player and a card reader.
Satellite Banking: Satellite banking is also an upcoming technological innovation in the Indian banking
industry, which is expected to help in solving the problem of weak terrestrial communication links in many parts
of the country. The use of satellites for establishing connectivity between branches will help banks to reach rural
and hilly areas in a better way, and offer better facilities, particularly in relation to electronic funds transfers.
However, this involves very high costs to the banks. Hence, under the proposal made by RBI, it would be bearing
a part of the leased rentals for satellite connectivity, if the banks use it for connecting the north eastern states and
the under banked districts.
Interbank Mobile Payment Service (IMPS): IMPS initiated by National Payment Corporation of India (NPCI)
are going to transform the way financial transactions are done in India. IMPS are a game changer for an emerging
and knowledge based economy like ours. In India most of electronic transactions are P2P or peer to peer, now
days some banks have started offering P2M or person to merchant facility as well. IMPS have also enabled real-
time transfer of funds through the medium of the mobile phone between the accounts in different banks, 24X7
and 365 days of the year.
Cheque Truncation System (CTS): The cheque truncation system was launched on a pilot basis in the National
Capital Region of New Delhi on February 1, 2008, with the participation of 10 banks. Truncation is the process
of stopping the movement of the physical cheque which is to be truncated at some point en-route to the drawee

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branch and an electronic image of the cheque would be sent to the drawee branch along with the relevant
information like the MICR fields, date of presentation, presenting banks etc. Thus, the CTS reduce the
probability of frauds, reconciliation problems, logistics problems and the cost of collection
Electronic Clearing Service (ECS): The Electronic Clearing Service (ECS) introduced by the RBI in 1995, is
akin to the Automated Clearing House system that is operational in certain other countries like the US. ECS has
two variants- ECS debit clearing and ECS credit clearing service. ECS credit clearing operates on the principle of
‘single debit multiple credits’ and is used for transactions like payment of salary, dividend, pension, interest etc.
ECS debit clearing service operates on the principle of ‘single credit multiple debits’ and is used by utility service
providers for collection of electricity bills, telephone bills and other charges and also by banks for collections of
principal and interest repayments.
Card-less Cash: Card-less cash is one such technological initiative which has the potential to leapfrog the scope
of Digital Banking in India. This facility allows its customers to withdraw cash from ATMs without using their
ATMs/Debit Cards. The customers will be required to download the bank’s free application onto their mobile
phones for this purpose. Through this application a one-time password would be generated and requisite amount
can be withdrawn using the password. The withdrawal code would pop up only after the user taps the screen.
This prevents shoulder surfing and make such transactions safe.
Image Processing: Image processing as financial services, including capital markets and banking, are highly
document intensive, image processing technology can have a far-reaching impact for such applications for its
less-paper characteristics. Image technology in banks can be used for automatic identification or character
recognition to read text and diagram wherein the cheques or documents can be scanned.
Digital Wallet: A digital wallet also known as e-wallet allows users to make electronic commerce transactions
quickly and securely. It was first conceived as a method of storing various forms of electronic money (e-cash),
but with little popularity of such e-cash services, the digital wallet has evolved into a service that provides
internet users with a convenient way to store and use online shopping information. The term ‘digital wallet’ is
also increasingly being used to describe mobile phones, especially smart phones that store an individual’s
credentials and utilize wireless technologies to carry out financial transaction.
Shared Payment Network System (SPNS): SPNS is a large network of ATM’s spread in the city of Mumbai,
Vashi and Thane. SPNS has been established at the behest of the Indian Banks Association (IBA) by India
Switch Company Pvt Ltd. The participating banks issue universal cards to the customers for transacting on this
network. The objective is to provide anytime and anywhere electronic banking service to the customers in the city
of Mumbai, Vashi and Thane through the state of the art electronic funds transfer system to be shared by different
participating banks.
Real Time Gross Settlement System (RTGS): RTGS is an electronic payment environment where Payment
instructions processed on a ‘continuous’ or ‘REAL-TIME’ basis; and settlement in “real time” means payment
transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed.
“Gross settlement” means the transaction is settled on one to one basis without bunching or netting with any
other transaction. Once processed, payments are final, immediate and irrevocable. Each bank branch participating
in the RTGS is identified by a unique Indian Financial System Code (IFSC).
Society for Worldwide Inter-bank Financial Telecommunications (SWIFTs): SWIFTs was founded in 1973
by 239 banks spread over 15 countries with an objective of creating a unified international transaction processing
and transmission system to meet the ever growing telecommunication requirement of the banking industry. Swift

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is basically a message transmission system. All transactions are processed without the exchange of paper, bank
note, cheque, draft etc., and as such is a true epitome of paperless banking.
Electronic Fund Transfer (EFT): For years, banks have been affecting inter-city transfer of money for their
customers through Demand Drafts, Mail Transfers and Telegraphic Transfers. As each of these mode impose
some limitations, the Reserve Bank of India devised an Electronic Fund Transfer (EFT) system to facilitate
speedier transfer of funds electronically. EFT facilitates transfer of funds from any branch to other branch within
24 hours. In this system the sender and the receiver of funds may be located in different cities and may even bank
with different banks. Fund transfer within same day is also permitted.
National Electronic Fund Transfer (NEFT): The National Electronic Fund Transfer (NEFT) system is a
nation-wide system that facilitates individuals, firms and corporate to electronically transfer funds from any bank
branch to any individual, firm or corporate having an account with any other bank branch in the country. For
being part of the NEFT funds transfer network, a bank branch has to be NEFT-enabled. IFSC or Indian financial
system code is required to perform a transaction using NEFT or RTGS. IFSC code identifies a specific branch of
a bank. IFSC code can be found out on RBI website. These codes are also known from your bank branch, and it
is best to confirm the IFSC code, before going for any transaction.
Bankers Automated Clearing System (BACS): This system was developed jointly by the main banks to allow
customer data to be taken directly on to bank machines, in order to avoid doing it manually. First it was used by
the local authorities to pay wages and salaries and to make payment to their suppliers. The banks also use it to
handle the large number of standing order that they pay every month.
Clearing House Automated Payment System (CHAPS): Under this CHAPS scheme large payment can be
done. Under this system local transfer of funds will be cleared on the same day and this allowed the customers to
treat amounts to be transferred to them as available cash. It is an electronic messaging system within which all
transaction are transmitted in code that help to reduce the risk of fraud.
Virtual Payment System: A virtual credit card is a way for people to make purchases online without risking
themselves with frauds. The card enables the cardholder to avoid giving details of an active credit card online
(credit card number, billing address, shipping address etc). Its main advantages are: the cardholder can buy
anywhere online, there is no monthly fee to the credit card company, it can be used to pay online tuition for
academic institutes, it is good for purchases worldwide, and the cardholder doesn’t have to have a bank account.
PayPal: PayPal is an e-commerce business allowing payments and money transfers to be made through the
Internet. It serves as an electronic alternative to traditional paper methods such as cheques and money orders. It
performs payment processing for online vendors, auction sites, and other corporate users, for which it charges a
fee. It operates in 103 markets and manages over 133 million accounts. It allows customers to send, receive and
hold funds in 17 currencies worldwide.

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 Digitalization

The ultimate objective is to digitize every process that does not statutorily require a wet signature and convert
all ground staff into enablers for helping customers use the digital self-service channels. The HDFC bank
introduces many apps to make the life easier for customers.

11. Net Banking

o HDFC Bank offers you a comprehensive range of transactions across multiple products through its
NetBanking channel. So just log in to NetBanking and conduct 175 + transactions

from the comfort of your home or office.

o You can check your Account Balance, book Fixed and Recurring Deposits, Download A/c
Statement up to 5 years, pay your Bills, Recharge your Mobile/ DTH connection, and much
more in a secure environment.

2. Chillr App

o Chillr is a revolutionary new app that lets you send money immediately to anyone in your
phone book, 24 hours a day, 7 days a week. No more hassles of adding beneficiaries!
o You can request money, split bills amongst friends and can also recharge your mobile,

DTH& data cards. Soon you will be able to pay at online or offline stores using Chillr.

o Chillr is launching first for HDFC Bank and is available exclusively for customers of HDFC
Bank. As an HDFC Bank customer, you can also transfer money to your contacts having other
bank accounts.

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 3.Payzapp

HDFC Bank PayZapp, a complete payment solution, giving you the power to pay in just One
Click

With PayZapp, you can shop on your mobile at partner apps, buy movie tickets, music and
groceries, compare and book flight tickets and hotels, shop online and get great discounts at
SmartBuy, send money to anyone in your contact list, pay bills and recharge your mobile, DTH
and data card.

4.Mobile banking

Mobile banking is a term used to refer to systems that allows customers of a financial institution to
conduct a number of financial transactions through a mobile device such as a mobile phone or tablet.

HDFC Bank's MobileBanking is the most Convenient and easy way to stay connected to your

bank always! You can do over 75 plus transactions on your smart phone through our

MobileBanking App or mobile browser.

Go Digital - Bank Aapki M

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 5. ATMS

 'Automated Teller Machine - ATM' an electronic banking outlet, which allows customers to complete basic
transactions without the aid of a branch representative or teller. There are two primary types of automated teller
 machines,

  Our wide range of ATMs across the country ensures that you are never too far from your money.

 You can do a wide range of banking transactions like withdraw cash, make HDFC Bank Credit Card
payments, check account balance, order cheque book or refill your prepaid mobile.

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 FINDINGS
 A large number of customers prefer E-banking in the study region.
 All the customers use ATM cards in the study region.
 A large number of customers are benefited because of any time withdrawal by using the ATM Cards.
 Majority of the customers are satisfied with the ATM facilities provided by the Bank.
 Maximum number of customers are not using Credit card in the study region.
 The customers are benefited by getting credit facility by having credit Cards.
 A large number of customers are satisfied with the use of credit cards.
 Majority of the customers do not use tele banking in the study region.
 A large number of customers are benefited to make payment of utility bills using tele banking.
 Maximum numbers of customers are satisfied in the study region with tele banking.
A huge number of customers use internet banking in the study region.
 A large number of customers are benefited by using internet banking because of home banking. A big
number of customers using internet banking are satisfied in the study region.
 Majority of customers use mobile banking in the study region.
 A large number of customers use mobile banking for balance enquiry and to know latest interest rates in
the study region.
 Maximum numbers of customers are satisfied with the mobile banking in the study region.
o A big number of customers rate the technology oriented service of the bank as good in the study
region.
 Majority of the customers have opined that bank’s operation is efficient after the introduction of
computers in the banks.
 A large number of customers are satisfied with the level of security provided by the bank for e-banking
services.

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With the Digital Transformation and Mobility Banking (DTMB) team at the forefront, HDFC Bank has launched
a host of highly successful digital banking products. These include 30-minute paper-less Auto Loans using
Biometric technology, 10-second Personal Loan on NetBanking, PayZapp, Chillr, LITE App, Missed Call
Recharge, Instant loans at ATM and the recently introduced Robotic Assistant (IRA) at HDFC Bank branches.
This is in addition to HDFC Bank’s powerful NetBanking portal and MobileBanking app which allow customers
to perform over 205 and 90 different types of transactions respectively. These innovations were recently recognized
at the prestigious IBA Banking Technology Awards.

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