HDFC Bank

Summer Internship Report

Digital Migration – Retail Branch Banking

By
Ritesh
18PGP156

Under Guidance of:

Faculty Mentor Industry Mentor
Prof. M Kannadhasan Paramveer Singh
 Acknowledgement
The happiness and satisfaction that comes along with the successful completion of the internship would
be incomplete if I don’t thank those who have contributed to my learnings here. I take this opportunity
to thank Mr. Paramveer Mann, Branch Manager, HDFC Bank Ltd for giving me this project and
guiding me throughout its course, and Mr. Bharat Bhushan, Relationship Manager, HDFC Bank Ltd.
for mentoring me during this period.

I would like to express my sincere gratitude to every employee of HDFC Bank Ltd. who has been kind
and generous with me during my time here, taken time off their schedule to explain processes and
procedures to me and help me bloom as a professional.

Special thanks to my Faculty mentor Prof. M Kannadhasan who gave me invaluable guidance and
advice to help me complete this report in a satisfactory manner.

________________________

Ritesh Garg

18PGP156 | IIM RAIPUR

Chapter 1: ABSTRACT
As digitalization is bringing disruption in every field of work. And with the advent of artificial
intelligence, machine learning etc., every aspect of business is game changer for any company.

This project studies the retail branch banking operations of banking industry and analyses HDFC
Bank on various parameters. Parameters being the various products being offered by banks to its
customers, customer relationship management, day to day operations of the bank and the digital
platforms for its customers and employees.

‘Digital Migration – Retail Branch Banking’ being the project topic, it is more focussed towards how
the digital platform can be leveraged by HDFC bank for its customers, employees and top
management. With respect to HDFC bank, the project starts with researching about its customers for a
‘Semi-Urban’ branch located at Fatehabad, Haryana. It is used to gauge the usage of HDFC’s features
such as Net Banking, ATM facilities etc. by users based on their demographics and the campaigns
were suggested and designed based on the results.

Following things has been done for the completion of this project:

1.) To do the industry analysis of the banking industry as a whole

2.) To do the company analysis of HDFC Bank
3.) Analysis of day-to-day banking operations of the HDFC Bank
4.) Analysis of the digital Platforms available to the bank
5.) Analysing customers’ usage of Net Banking and ATM facilities.
6.) Financial Analysis of the operations at retail branch and the time & cost saving by converting
even 10% of the customers to digital platform
7.) Mini project on innovations in the digital world which can bring time saving and effective
customer satisfaction
Contents
List of Figures........................................................................................................................................ 5
Chapter 2: Introduction ....................................................................................................................... 7
2.1 Company Introduction: .............................................................................................................. 7
2.2 Problem Statement...................................................................................................................... 8
2.3 HDFC Bank, Fatehabad, Haryana – A Semi-Urban Branch (Info and location) ................. 8
2.4 Internship Goals .................................................................................................................... 9
Chapter 3: Description of the Organization ..................................................................................... 10
3.1 Snapshot of the banking industry: .......................................................................................... 10
3.2: CASA Ratio and NIM of the HDFC Bank: ........................................................................... 11
3.3 Growth Rate in banking outlets: ............................................................................................. 11
3.4: Branch Classification .............................................................................................................. 12
3.5 Product Portfolio: ..................................................................................................................... 14
Chapter 4: Company description at the retail level:........................................................................ 17
4. 2 Day to Day Operations at HDFC Bank: ................................................................................ 17
4.3 Who is hired for what purpose? .............................................................................................. 17
Key Digital Offerings of HDFC Bank: .............................................................................................. 18
Chapter 5: Project Details .................................................................................................................. 19
5.1 Objectives................................................................................................................................... 19
5.2 Scope of the Project .................................................................................................................. 19
5.3 Problem Statement.................................................................................................................... 19
Chapter 6: Analysis of Data ............................................................................................................... 20
6.1 Primary Research ..................................................................................................................... 20
Chapter 7: Results, discussion and conclusions ............................................................................... 24
7.1 Key Observations from the Primary Research: ..................................................................... 24
7.2 Key steps taken to migrate the customers from traditional banking to net banking: ........ 24
7.3 Key Impact areas of Migrating customers to digital platform and financial analysis: ...... 26
Other day-to-day activities at HDFC Bank: ..................................................................................... 27
Cross Selling and Customer Relationship Management: ............................................................ 27
Chapter 8: Recommendations and Suggestions based on Primary Research: .............................. 28
Benefits of the project to the company and the intern ..................................................................... 29
To the company ............................................................................................................................... 29
To the Intern.................................................................................................................................... 29
List of Figures

Fig. 2.1: HDFC Bank Deposits over the past 3

Years……………………………………………………………6
Fig. 2.2: HDFC Bank Gross Advances over the past 3
Years………………………………………………….6
Fig. 3.1: CASA Ratio of the HDFC Bank over the past 3
years………………………………………..…...9
Fig. 3.2: Net Interest Margin of the HDFC Bank over the past 3
years………………………………..9
Fig. 3.3: Growth in number of branches over the past 4 years
……………………………….…………9

Fig. 3.4: Branch

Classification………………………………………………………………………………………….1
0

Fig. 3.5: HDFC Banking Outlets across

India…………………………………………………………………….11

Fig. 3.6: NPA Ratio of the HDFC Bank over the past 3
years……………………….…………………..12

Fig. 4.1: Hierarchy in a retail Branch of HDFC

Bank…………………………………………………………13

Fig. 6.1: Gender ratio of the customers

Surveyed…………………………………………………………..16

Fig 6.2: Education Level of the customers

Surveyed……………………………………………………….16

Fig. 6.3: Customers surveyed based on

age…………………………………………………………………….17

Fig 6.4: Customer surveyed based on

profession…………………………………………………………...17

Fig 6.5: No. of customers who use net

banking……………………………………………………………...18

Fig. 6.6 No. of customers who use

ATM………………………………………………………………………….18

Fig. 6.7 Main Reasons for not using Net

Banking……………………………………………………………18

Fig. 6.8: Functions for customers have know-how who use net banking…………………………18

Fig. 6.9: Payment Apps use by

customers………………………………………………………………………19
Table 2.1: Approximate Cost structure of a Semi-urban
branch…………………………………….7

Table 3.1 Revenue Based

Ranking………………………………………………………………………………..8
Table 3.2 Net Profit Based
Ranking………….…………………………………………………………………..8
Table 3.3 Total Assets Based
Ranking…………………………………………………………………………..8
Table 3.4: Product portfolio of the HDFC
Bank…………………………………………………………...12
Chapter 2: Introduction
2.1 Company Introduction:
HDFC Bank Limited (Housing Development Finance Corporation) is Indian banking and
financial services company being headquartered in Mumbai, Maharashtra. Other than India, it has
a presence in Bahrain, Hong Kong and Dubai. HDFC Bank, currently is the India’s largest private
sector lender in terms of assets and revenue. It is the largest bank in India by market capitalization
as of February 2016. It has been ranked 69th in 2016 BrandZ Top 100 Most Valuable Global
Brands.

As of now, HDFC Bank provides a number of products and services including wholesale banking,
retail banking, treasury, auto loans, two-wheeler loans, personal loans, loans against property,
credit cards, Demat account facility etc. Along with this various digital product are PayZapp and
SmartBUY.

Its promotor company is the HDFC Ltd. and as of today HDFC is the largest Indian private sector
bank in terms of assets.

Deposits as Gross advances of HDFC Bank for previous 3 years are as follows:

Deposits Gross Advances

10000 8000
7000
8000
6000
4076
6137 5000 3639
6000
3249
5638 4000
4000 3000
4983
2000 3525
2000 3352 2785 3119
2023 1000
1013
0 0
2017 2018 2019 2017 2018 2019

Wholesale Retail Wholesale Retail

Fig. 2.1: HDFC Bank Deposits over Fig. 2.2: HDFC Bank Gross Advances
the past 3 Years over the past 3 Years

Deposits in the both wholesale and retail have double digit growth rate which is an extremely
good sign, especially in he wholesale segment wherein, deposits grew by over 200% in FY2018-
19 as compared to deposits in FY2016-17.

Gross advances are also on the rise with over 13% Y-o-Y growth rate for the past 2 consecutive
years in retail segment. Since, retail loans carries higher interest rates, growth in retail loans
means higher net interest margin which means higher profitability.
2.2 Problem Statement

To strategically migrate the HDFC Bank’s customers from traditional banking to digital banking with
minimum efforts and maximum results and hence, assess the impact thereupon

2.3 HDFC Bank, Fatehabad, Haryana – A Semi-Urban Branch (Info and

location)

I was working in the Fatehabad district of Haryana. It is a Semi-Urban town located in western
Haryana. The main occupation of people in Fatehabad region is mainly agriculture and allied
activities, since there are no major industries.

Its population is around 70,000 as per the 2011 census.

HDFC’s Fatehabad Branch is the head branch of its cluster and has other 3 semi-urban and 9 rural
branches.

Cost Analysis of the Fatehabad, Haryana Branch:

S. No. Particulars Amount

1 Rent 132000
2 Electricity 25000
3 Fuel etc. 10000
4 Salary (Avg. 20000*60) 1200000
5 Stationery and miscellaneous 30000
6 Total 13,97,000
Table 2.1: Approximate Cost structure of a Semi-urban branch located at Fatehabad, Haryana

Thus, it does costs over around ₹14,00,000 per month to run a branch in a semi-urban Fatehabad area.
2.4 Internship Goals
1.) To understand the entire retail banking operations of the HDFC Bank
There are various functions which are performed on the daily, fortnightly or monthly basis by
various employees. This internship will help me to learn the core operations in a retail banking
setup and will give me first hand experience in customer service and management.

2.) Ensuring smooth transition of customers from traditional banking to digital banking world
Since, the project is based on the digital migration of customers, the internship will give me first
hand experience on consumer services and management. Thus, it will be focussed on
understanding the customer background through primary research and based upon which
strategically migrate the customers to digital banking platform.

3.) Suggesting innovative and feasible solutions for reaching customers via digital platform
Carrying an industry wide research on what are the various steps taken by other banks in the
industry for catering to their customer needs via digital platform and hence, accordingly
suggesting feasible modes and solutions to HDFC Bank

4.) Carrying an industry wide analysis of the digital platforms offered to customers
This will be conducted with the purpose of having an overview of where the HDFC Bank is
lagging behind and how is it impacting the business of the HDFC Bank.
Chapter 3: Description of the Organization
HDFC Bank Is the leading private sector bank in terms of assets and Revenue and only behind SBI
which is a public sector bank in the Indian Banking Industry. Below is a snapshot of the Indian
Banking Industry.

3.1 Snapshot of the banking industry:

Ran Revenue Total
k Bank (In ₹ Net Profit Bank Assets (In ₹
Name Cr.) Rank Bank Name (In ₹ Cr.) Rank Name Cr.)
1 SBI 220499 1 HDFC 17486 1 SBI 2868721
2 HDFC HDFC
Bank 80241 2 ICICI 6777 2 Bank 858376
3 ICICI
ICICI 54951 3 Yes Bank 4224 3 Bank 693096
4 Kotak
PNB 47955 4 Mahindra 4084 4 PNB 618711
5 Bank
of
Axis Corporatio Barod
Bank 45780 5 n Bank 3950 5 a 573265
6 Bank
of IndusInd Axis
Baroda 43648 6 Bank 3605 6 Bank 571252
7 Canara Bandhan Canara
Bank 41252 7 Bank 2430 7 Bank 516374
8 Bank Bank
of Canara of
India 38071 8 Bank -4222 8 India 477165
9 Union Yes
Bank 32748 9 SBI -6547 9 Bank 261709
10 Kotak
Yes Mahin
Bank 20267 10 PNB -12282 10 dra 226155
Table 3.1 Revenue Based Table 3.2 Net Profit Based Table 3.3 Total Assets
Ranking Ranking Based Ranking

HDFC Bank is among the top 2 positions in the Indian banking

industry when compared on various parameters. The operational efficiency of the HDFC Bank is
evident from the fact that it made a profit of over ₹17,000 cr. with revenues being less than SBI and
even if proportionaltely much higher than other private sector banks such as ICICI, Axis Bank etc.
Even in terms of assets, HDFC is the leading private sector bank with ₹858000 cr. of assets.
3.2: CASA Ratio and NIM of the HDFC Bank:
CASA Ratio Net Interest Margin
60 4.42%
50 4.40%
4.38%
40
4.36%
30
4.34%
20 4.32%
10 4.30%
0 4.28%
2017 2018 2019 4.26%
4.24%
CASA Ratio Saving CASA Ratio Current 2017 2018 2019

Fig. 3.1: CASA Ratio of the HDFC Fig. 3.2: Net Interest Margin of the
Bank over the past 3 years HDFC Bank over the past 3 years

CASA stands for Current Account Saving Account.

How does CASA Ratio affects the banking industry:

Bank can mobilise the deposits from the public in the following ways:

Current Account and Savings Account deposits: No interest is being paid on such current accout
and a meagre interest rate between 3-4% is being given to deposits on saving account.

RD/FD: Generally, above 6.5% is being paid to RD/FD holders.

Since, Current account and saving account deposits cost very low to the bank, hence, more the
current and saving account deposits, higher will be net interest margin.

It is because of the higher ratio of CASA that the net interest margin have been more or less stable
for the previous 3 years.

3.3 Growth Rate in banking outlets:

No. of Banking Outlets and the growth rate
5200 5103 7.00%
6.60%
6.00%
5000
4787 5.00%
4800 47154.31% 4.00%
4600 4520 3.00%
2.00%
4400 1.53%
1.00%
4200 0.00%
16 17 18 19

No. of Outlets 4520 Growth

Fig. 3.3: Growth in number of branches over the past 4 years

3.4: Branch Classification
The no. of banking outlets are rising continuously with deep penetration in the rural areas.

New idea of 3-Men branches in rural areas wherein one is teller authoriser responsible for cash
and non-cash transactions, one is personal banker authoriser who is responsible for sales and
customer relationship management and the third one is branch manager.

A look at the Bank’s current status branches across India:

Branch Classification

28% 22%

19%

31%

Rural Urban Semi-Urban Metro

Fig. 3.4: Branch Classification

Fig. 3.5: HDFC Banking Outlets across India
 NPA Ratio
1.60%
1.40%
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
2017 2018 2019

Net NPA Gross NPA

Fig. 3.6: NPA Ratio of the HDFC Bank over the past 3 years

All the performance indicators have been good for HDFC Bank with at par or above the industry
standards. Due to its low level of NPAs and operational efficiency, it could have registered a
profit of over ₹17000 cr.

3.5 Product Portfolio:

Below is the entire product portfolio of the HDFC Bank:

1.) Accounts and Deposits

A. Saving Accounts

 SavingsMax Account  Government/institutional

 Women’s Saving Account Savings Account
 Regular Savings Account  Basic Saving Bank Deposit
 Senior Citizens Account Account
 DigiSave Youth Account  Govt. Scheme Beneficiary
 Kids Advantage Account Savings Account
 BSBDA Small Account
B. Salary Accounts

 Premium Salary Account

 Regular Salary Account  BSBDA Salary
 Defence Salary Account  Salary Family Account
 Classic Salary Account  Reimbursement Account
C. Current Accounts

 Ultima Current Account  Trade Current Account

 Supreme Current Account  Current Account for
 Apex Current Account Professionals
 EZEE Current Account  Premium Current Account
 Max Current Account  Regular Current Account
 Agri Current Account  Institutional Current Account
 Plus Current Account
  Smart-Up Solution for Start-
Ups
 Ascent Current Account
 RPF Domestic Current
Account
 Exchange earners foreign
currency Account
 E-Comm Current Account
 Saksham Current Account
 Activ Current Account

D. Deposits

 Dream Deposit
 Regular Fixed Deposit
 Recurring Deposit
 5 Year Tax Saving Fixed
Deposit
 Overdraft against Fixed
Deposits
 Sweep-in Facility

E. Safe Deposit Locker

F. Rural Accounts

 BSBDA – Farmers  Kisan Club Savings Account

2.) Loans
A. Personal Loan J. Smartdraft – Overdraft against
B. Home Loan salary
C. EasyEMI K. Gold Loan
D. Car Loans L. Loan Against Assets
E. Two-Wheeler Loans M. Govt. Sponsored Programs
F. Business Loan N. Rural Loans
G. Loan Against Property O. Loan Against Securities
H. Educational Loan P. Loan on Credit Cards
I. Loans for Professionals Q. Concessional Loans

3.) Cards
A. Credit Cards
 Infinia  Business Moneyback
 Regalia  Business Regalia
 Solitaire  Freedom
 Regalia First  Moneyback
 Diners Club Premium  Bharat
 Diners Club Rewardz

B. Debit Cards

 Platinum Debit Card  Imperia Debit Card

 Signature Debit Card  Titanium Debit Card
 Rewards Debit Card  RuPay Debit Card
 Royale Debit Card

C. Prepaid Cards
 GiftPlus  MoneyPlus
 FoodPlus  FASTag
  FleetXpress  GPR Card
 Reward Card

D. ForexPlus Cards

 Ragalia ForexPlus Cards  ISIC Student ForexPlus Cards

 Multicurrency ForexPlus  Hajj Umrah ForexPlus Cards
Cards
4.) Demat Account
5.) Investments
A. InvestTrack
B. Investment Products

 Mutual Funds  IPO Application through

 Equities & Derivatives ASBA
 InvestNow  Savings Bonds
 Capital Gain Bonds
C. Investment Advisory Reports
6.) Insurance
A. Life Insurance

 Protection Plans  Health Plans

 Savings and Investment
Plans
 Children’s Plans
B. Health and Accident Insurance
C. Motor Insurance
D. Two-Wheeler Insurance
 Retirement Plans
 Policy Servicing
E. Travel Insurance
F. Home Insurance

7.) Forex
A. Travel Solutions
B. Remittance Products
C. Forex Help

8.) Premium Banking

A. Prime C. Preferred
B. Classic D. Imperia
9.) Private Banking
Chapter 4: Company description at the retail level:
4. 2 Day to Day Operations at HDFC Bank:
Before looking into retail operations at HDFC Bank, one need to know about the organizational
hierarchy, according to which all the activities and authorities are divided among the employees.

So, basically in a retail branch one starts his/her career with either being a teller/personal banker who
can be put on a job rotation with welcome desk.

Relationship Manager works directly under the Branch Manager.

Fig. 4.1: Hierarchy in a retail Branch of HDFC

4.3 Who is hired for what purpose?
Teller:

Basic job of processing payments like NEFT, RTGS, clearing cheques, customer and cash
transactions etc; tallying various reports, suspense monitoring etc; managing vault limits and its
custodian.

Personal Banker:

Giving best in class banking experience and customer service, maximising sales for portfolio and non-
portfolio customers, attracting new to bank and ensuring overall growth of the portfolio total value.

Teller Authoriser:

Authorising the ₹50,000+ cheques which comes in for clearing and authorizing RTGS above
₹2,00,000. Custodian for vault and managing cash requirement.

Personal Banker Authoriser:

Authorising above ₹5 Lacs amount RTGS & Fund transfers, Deputy Manager (Temporary BM in
absence of branch manager), New account approving, reporting authority for Welcome Desk &
Personal Banker; enforcing adherence to set standards of the bank & handling audit and compliance.

Relationship Manager:

17 | P a g e
Sales (Acquiring, Enhancing, Deepening and Retention), portfolio management, HNW Sales process,
best in class customer services, resolving request and queries, achievement of income plans and other
benchmarks.

Branch Manager:

Directing all operational aspects including distribution, customer service, human resources,
administration and sales in accordance with the bank's objectives and providing training, coaching,
development and motivation for bank personnel.

Welcome Desk:

First touch points for customers, assisting customers and basic customer queries for passbook printing
etc.

Key Digital Offerings of HDFC Bank:

Chillr:

Chillr lets you send money immediately and conveniently to anyone in your phonebook, 24*7. It also
lets the users to send money in the nearby vicinity, without the need of sharing mobile number.
Customers can also recharge their mobiles, DTH and data cards and transfer money between bank
accounts.

SmartBUY:

It is a kind of marketplace which has tied up with various merchants for displaying offers directly by
the merchants to the HDFC bank’s customers. HDFC Bank facilitates the payment by its customers
by providing the payment gateway services.

PayZapp:

PayZapp is the pilot project by HDFC giving a complete payment solution with the power to pay in
just one click. With PayZapp, debit card or credit card of any bank can be linked with, to make
payment and transfers. It is the pilot project of HDFC Bank in the mobile payment sphere with over
10 million downloads on play store.

Mobile Banking Application by HDFC Bank:

The app is developed with the purpose to bring the convenience in using net banking and perform
most common and frequent functions on the app directly like NEFT, RTGS, balance check, cheque
book ordering etc.

18 | P a g e
Chapter 5: Project Details
5.1 Objectives
 To understand the entire retail banking operations of the HDFC Bank
 Analysing the digital banking usage by customers based on their demographics
 Ensuring smooth transition of customers from traditional banking to digital banking world
 Suggesting innovative and feasible solutions for reaching customers via digital platform
 Carrying an industry wide analysis of the digital platforms offered to customers
5.2 Scope of the Project
Digitalization becoming an integral part of every business and is disrupting every aspect of business.
Hence, the project is undertaken with a view to analyse the impact of shifting every customer to
digital banking. The impact can be seen in time and cost saving by reduction in the amount of
manpower, office space, and increase in productivity and efficiency.

Not only this, a mini-project is also undertaken, suggesting HDFC for reaching customer, their
engagement and hence, improving their entire banking experience.

Hence, the scope of the project can be summarized as below:

 Analysing the customer’s profile portfolio based on age, sex, literacy level, and customer’s
profession
 Studying the current scenario of the banking industry and what factors are affecting the
banking industry
 Studying the demand and supply of money in the market depending on the various seasons
like elections, harvesting season, food grain market trading season etc.

5.3 Problem Statement

To strategically migrate the HDFC Bank’s customers from traditional banking to digital banking with
minimum efforts and maximum results and hence, assess the impact thereupon.

19 | P a g e
Chapter 6: Analysis of Data
6.1 Primary Research
The primary research has been conducted with the objectives of:

 Gauging the current scenario of the customers visiting to the branch.

 To know about how to proceed on educating the customers on how to use the net banking and
other digital platforms.

Brief on the type of primary research done:

Gender Ratio Out of all 400 customers

300
surveyed, 250 were
250
200
male and 150 were
150 female. Generally, walk-
100 ins for males to females
50 observed were 8:1
0
Male Female

Fig. 6.1: Gender ratio of the customers Surveyed

Education Level This was done to see

how does the education
Illiterate level impact the digital
Post Graduation
banking usage.

Graduation/Diploma
And, what type of
customers generally use
12th
the net-banking and
10th were most easy to
taught depending on
Below 10th
their education level
0 20 40 60 80 100 120

Fig 6.2: Education Level of the customers Surveyed

20 | P a g e
 Age
People from all the age
categories were chosen
15%
to gauge the digital
20%
banking usage across all
19% age categories.
24%
Most frequent
22%
customers were in age
range of 24-40.

Under 18 18-24 25-35 35-50 50+

Fig. 6.3: Customers surveyed based on age

Profession
120
100
80
60
40
20
0

Fig 6.4: Customer surveyed based on profession

Digital Banking usage among the customers surveyed:

21 | P a g e
 No. of Customers using net ATM Usage by Customers
banking 350
250 300

200 250
200
150
150
100
100
50 50
0 0
Yes No Yes No

Fig 6.5: No. of customers who use net banking Fig. 6.6: No. of customers who use ATM

Reasons for not using Net Banking Since, majority of the

customers who were not
using net banking either
Know but apprehensive to use
didn’t know how to use or
there was an unavailability
Don't know how to use of smartphones. And,
hence lies a lot of
Unavailability of smartphone potential to convert these
customers to net banking
0 50 100 150 200

Fig. 6.7 Main reasons for not using net banking

Functions which customers can do online out of those

who use net banking.

Payment of RD/FD/Credit Card

Checking Loans & Offers

Bank Statements

Adding beneficiary

Online Cheque book ordering

Balance Check

IMPS/NEFT/RTGS

0 20 40 60 80 100 120 140 160 180

Fig. 6.8: Functions for customers have know-how who use net banking

Payment Apps which customers are using online:

22 | P a g e
 Payment Apps Usage by Customers
250

200

150

100

50

0
Paytm Google Pay Bhim PhonePe PayZapp None

Fig. 6.9: Payment Apps use by customers

23 | P a g e
Chapter 7: Results, discussion and conclusions
7.1 Key Observations from the Primary Research:
Digital behaviour of any customer in banking industry is most affected by the education level of
the customer:

Out of all the customers surveyed, customers with graduation and above education level were most
confident about the digital banking initiatives and more than 90% of the graduate and above level
customers were active on digital banking.

Compared to those with literate but with less than mid-school (Standard 8th) were least active. These
generally comprised of farmers, self-help group women, D grade govt. employees etc.

Most number of women didn’t know how to operate an ATM:

More than 80% of women visiting the branch didn’t know how to operate an ATM.

Even the working women also don’t own a debit card.

Most impactful target group is Literate men between age 30-45:

Out of those, who weren’t using digital platforms like ATM, UPI or Net Banking platforms, this age
category was easiest to convert and teach. Since, some these customers were visiting branches even
for small things like balance enquiry, account statement leading to wastage for tellers, if these can be
taught on using ATMs and net banking for small deposits and withdrawals, balance enquiry etc. These
can prove to be lot more effective for the reducing operating costs as there will be less need of tellers
and detailed financial analysis is done later in the report.

7.2 Key steps taken to migrate the customers from traditional banking to
net banking:
Mandatorily getting the digital banking activated whoever is visiting the bank:

For this, except the following customers were asked to get their net banking activated:

 Customers not able to read and write

 Customers only coming for pensions and subsidies

Rest all of were customers were asked to activate their net banking and were asked for the get their
debit cards applied.

Around 70% of the customers were happy to learn net banking but remaining were reluctant. All the
customers coming in for withdrawals were happy to learn on how to use ATM and other things. Either
the card was lying idle or was deactivated due to lack of usage.

Around 450+ debit cards were applied by our efforts. The customers who were worried about the
costs were given a RuPay debit card with an annual charge of only ₹170.

24 | P a g e
Other steps taken for the migrating customers:

Social Campaigns:

We were a team of 7 people who visited 5 places with high potential for financial literacy and
spreading awareness regarding digital banking.

1.) DHBVN (Dakshin Haryana Bijli Vitran Ltd.):

DHBVN in the Fatehabad circle has more than 400+ employees. Out of which around 300 were
contractual employees. Around 40-50 employees were D grade employees like peon, cleaning
staff and many were above 45 years who were reluctant to use digital baking and thus, all were
brought under the umbrella of digital banking.

Thus, DHVBVN was chosen to make the people aware about the various product offerings by the
bank to them and financially literate them and thus, strategically migrating them to digital
platform.

2.) 2 Schools and 1 college:

 S.B.P.D.A.V Public School, Fatehabad
 Apex Public School, Fatehabad
 M.M. College, Fatehabad

Seminar on ‘Easy Banking’ was conducted in the above schools targeting second secondary class
students briefing them on habits of saving from the very beginning and what type of products they
can use from HDFC Bank.

Plus, a separate seminar for the clerical employees, drivers, gatekeepers etc. regarding the
advantage and precautions to be taken while using net-banking.

3.) Panchayat Bhavan – Financial Literacy Campaign

It was targeted to encourage village women to start on their entrepreneurial journey. Success
stories of self-help groups were shared and how these women can start on their own journey if
they have a vision in their mind and how these can be supported by HDFC Bank.

4.) Pad-Yatras:

These were done to target small vendors and shopkeepers to use PayZapp and accept payments
via PayZapp by which payments from customers can be directly received in their bank accounts.

Over 100+ shopkeepers were targeted for the various benefits being offered by PayZapp.

25 | P a g e
7.3 Key Impact areas of Migrating customers to digital platform and
financial analysis:
1. Increase in efficiency of the branch staff:

With a smaller number of customers in the branch for trivial queries like balance enquiry, small
deposits, transfers, withdrawals which can easily be done over an ATM or digital banking, tellers
and other employees can focus much more on their core-work and hence, more time for cross
selling bank’s products which leads to increase in operational efficiency of the employees.

2. Accelerating geographic expansion

A lot of customers who couldn’t get in touch with the bank because of the branch location not
being convenient/far away can be given services in a better way through digital channel. Thus,
with better presence of digital platforms for customers, more geography area can be scaled up.

3. Customer convenience and ease

If a customer doesn’t have to visit branch and most of his queries can be taken through a digital
mode, it leads to the strong relationship with the customer and brings out a loyal relationship.

4. Cheaper platform and cut a lot of costs for the bank:

Using ATM:

Let’s assume for installing an ATM, rent costs around ₹15000 with electricity charges being
₹10000 and other miscellaneous being ₹5000. Thus, total cost comes around to be ₹30,000.

The Bank generally charges ₹20 for swiping other bank cards on its ATM.

Thus, even if 200 customers per day use the ATM, out of which let’s assume 50% of the
customers are from other banks, then 100*20 = ₹2000 of revenue is there from the ATMs and it
does cost only ₹1000/day. Thus, ATMs prove to substantially beneficial for any bank. And
assuming out of those ₹1000, ₹800 are being paid towards other usage of ATMs of other banks by
HDFC customers, it still gives a marginal benefit of ₹200.
Since, 5 transactions by given by the bank for using ATM are given free, it still is considered to
be beneficial given the annual charge deducted by banks for card fee.

Now, if a teller is hired to whom around ₹25000 are being paid can process only 70 to 80
transactions as compared to the ATM seems to be a more expensive option. Given the expenses
for the infrastructure, rent, salary of the employees etc. it is very expensive as compared to ATMs.

Using Net Banking:

As per a report from the Motilal Oswal, digital transactions cost only 1/10th of branch-based
transactions.

26 | P a g e
Other day-to-day activities at HDFC Bank:
Cross Selling and Customer Relationship Management:
For any bank, 4 key focus areas are there to achieve on a daily basis for the smooth running and
growth of the bank:

(Acquiring, Enhancing, Deepening, and Retention)

Acquiring:

It means acquisition of new customers and it was done in following ways:

 Acquiring referrals from existing customers.

 Generating leads with the help of branch staff and personal contacts.

Enhancing:

It means increasing the liabilities size of relationship with the existing customers and which can be
done by following things:

 Acquisition of the Family accounts and their subsequent grouping to unlock various benefits
from HDFC Bank
 Using FD maturity reports to prevent out-flow
 Increasing the liability balance in the existing customer accounts through FD/RD, Investment
plans etc.

Deepening:

 CASA & Term Deposits enhancement and new acquisitions

 To cross sell various products creating assets for the bank such as personal loan, auto loan,
business loan etc.
 To help clients with trade and forex
 Creating a vanilla account by adding various products to the portfolio like insurance, credit
cards, Demat account etc.

Retention:

 Resolving customers queries

 Knowing the customer’s business and proactively provide appropriate product/solution.

Batch Journal Report Checking

Teller Functions
Handling Customer Queries

27 | P a g e
Chapter 8: Recommendations and Suggestions based on
Primary Research:
1.) Investing seven minutes:

To get the net banking activated and teaching customers on how to use net banking does take only
around 7 minutes. Thus, as mentioned earlier in the report that digital transactions cost only
around 1/10th of the branch-based transactions. Along with cross-selling, branch manager should
assign to convert at least 5 customers to digital banking every day.

It will lead to huge cost cutting and operational efficiency for the bank.

2.) Regarding the Customer service:

There was one major problem with the customer service regarding the opening of salary accounts.
Once, an account is processed online, the customer needs to given kit so that he can access his
account and his account is processed completely in bank’s books. But, due to some opportunities
of tie-ups with major corporates/government like DHBVN, Municipal committee etc. with 200+
employees, it creates a shortage of kits in the account as kits are being sent to the bank from
backend. Thus, it creates a chaos in the bank as the ones whose account has been processed online
but not given the kit keep on visiting the bank. And, even sometimes even after enquiring, one is
not given the kit on reaching the bank.

So, I came up with a smart solution to implement FIFO method in the bank. According to this,
whoever got his account processed first, he will be called through an assigned POC from the
client’s organisation.

Thus, no. of customers satisfied improved by over 70%.

3.) Updating the Relationship Manager/Personal Banker mobile no. on the branch locator
section on HDFC Bank:

Many of the customers who want to enquire something about the bank’s products, instead of
visiting the bank, want to enquire through a telephonic conversation. In case, they don’t have any
banker’s mobile number, they refer to the official website where does all the problem starts
because customers don’t find anything there.

28 | P a g e
Benefits of the project to the company and the intern
To the company
 Strategically acquisition of new customers, and retention through customer queries and their
problem solving.
 Reducing workload of teller by migrating a greater number of customers to the digital world
 Deepening and enhancing the portfolio of the existing customers by understanding their needs
and pitching various products to them.
 Increased awareness of the digital platforms offered by HDFC Bank among the customers
 A vast business opportunity for the company is studied, analysed and reported.
 Helped the company diversify its portfolio and increase its presence on the digital platform.
 Helped the firm decrease its risk in the face of increasing threat from payment apps such as
Paytm, Google Pay etc. by promoting the PayZapp and other digital offerings among the
masses.
 It can utilize the data through primary research for taking important strategic business
decisions in the future.
 The company can plan its fund allocation to various segments based on the potential each
segment offers.
 A hiring strategy can be planned based on the expertise required in these areas of potential.

To the Intern
 A great learning opportunity to work on a strategic business project of this scale.
 Opportunity to learn the manpower and resource management
 Opportunity to learn the core of entire retail branch banking and its operations.
 Strategically deepening the relationship with customers by bundling him with various
offers.
 Customer relationship management and strategically retaining them.
 Learnt what different aspects to consider in an expansion plan.
 Learnt how to analyse the data across different sources to make cohesive inferences.
 An opportunity to learn how to convert the numbers from existing data to relevant
information for the company.
 We get to interact and network with different people working in the banking industry and
learn from them.

Thank You.

29 | P a g e