A

PROJECT REPORT
ON

“A STUDY ON DIGITAL BANKING SERVICES AT HDFC BANK”

A Summer Internship Report submitted to Hyderabad Business School in
partial fulfilment of the requirement for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
MBA III TRIMISTER
Submitted by:
AKHIL MACHUPALLI
221823602018
Under the guidance of
Dr. SUMAN BABU
ASSISTANT PROFESSOR

GITAM UNIVERSITY
(DEEMED TO BE UNIVERSITY)
Rudraram, Patancheru (M), Sangareddy, Telangana

1
 DECLARATION

I hereby declare that this Summer Internship Report titled “A STUDY ON DIGITAL

BANKING SERVICES AT HDFC BANK” Submitted to the Hyderabad Business School,

GITAM, Hyderabad, isa bonafide work undertaken by me and it is not submitted to any other

University or Institution for the award of any degree diploma /certificate or published any

time before.

Name of the Student Signature of the Student

AKHIL MACHUPALLI

Roll Number of the Student

221823602018

2
 CERTIFICATE

This is to certify that the Summer Internship Report titled“A STUDY ON DIGITAL

BANKING SERVICES AT HDFC BANK”. Submitted in partial fulfilment for the award

of MBA Programme ofHyderabad Business School, GITAM, Hyderabad, was carried out by

AKHIL MACHUPALLI under my guidance. This has not been submitted to any

otherUniversity or Institution for the award of any degree/diploma/certificate.

Name and Designation of the Guide Signature of the Guide

Dr. Suman Babu

Assistant Professor,
GITAM Hyderabad Business School

3
 ACKNOWLEDGEMENTS

It is really a matter of pleasure for me to get an opportunity to thank all the persons who
contributed directly or indirectly for the successful completion of the project report, “A
STUDY ON DIGITAL BANKING SERVICES AT HDFC BANK”.
I would like to express my gratitude to the Cluster Head Thokala Venkata Subbarao and
Branch Manager Venkata Karthikeya of HDFC, Alkapur Township Branch for giving
great opportunity to be a part of their esteem organisation and enhance my knowledge by
granting permission to do a project report.

I am extremely thankful and pay my gratitude to my faculty Prof. Suman Babu for his
valuable guidance and support on completion of this project in his presence.

I extend my gratitude to GITAM - HYDERABAD BUSINESS SCHOOL for giving me

this opportunity.

Thanking You,

AKHIL MACHUPALLI
ROLL NO: 221823602018

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 TABLE OF CONTENTS

S.NO CONTENTS PAGE NO

1 Introduction 7 - 11

2 Industry Profile 13 - 22

3 Company Profile 24 - 32

4 Internship Profile 34 - 39

5 Key Learning’s 41 - 46

6 Findings 48

7 Suggestions 50

8 Conclusions And Recommendations 52 - 54

9 References 55

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 CHAPTER 1
INTRODUCTION

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 BANKING: Bank is a lawful organization an establishment authorized by the government
to accept deposits that can be withdrawn on demand, pay interest, clear checks, take loans,
act as an intermediary in financial transactions, that creates money by lending to a borrower,
thereby creating a corresponding deposit on the bank’s balance sheet and provide other
financial services to its customers.

TYPES OF BANKS
Banks provide a multitude of financial services beyond the traditional practices of holding
deposits and lending money. Commercial, retail, and central banks are three main types.

Commercial Banks:

Provide familiar services such as checking and savings accounts, credit cards, investment
services, and others. Historically, offered their services only to businesses, including credit and
debit cards, bank accounts, deposits and loans, and secured and unsecured loans. Due to
deregulation, commercial banks are also competing more with investment banks in money
market operations, bond underwriting, and financial advisory work.

Retail Banks:

Developed to help individuals not served by commercial banks. Provide basic banking services
to individual consumers. These institutions help customers save money, acquire loans, and
invest. They also offer a wide range of financial services to a broad customer base. Examples
include savings banks, savings and loan associations, and credit unions and examples of
products and services include safe deposit boxes, checking and savings accounting, certificates
of deposit (CDs), mortgages, and car loans.

Central Banks:

Banks formed, owned and regulated by the government to manage, regulate, and protect both the
money supply and the other banking institutions. Guarantee stable monetary and financial policy
from country to country. Typical functions include implementing monetary policy, managing
foreign exchange and gold reserves, making decisions regarding official interest rates, acting as
banker to the government and other banks, and regulating and supervising the banking industry.
Central banks serve as the government's banker. Central banks issue currency and conduct
monetary policy.

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TRADITIONAL BANKING: Traditional banking means performing banking
transactions in a brick and mortar structure. The customer has to visit the branch of the bank

in person to perform the basic banking operations such as account enquiry, funds transfer,

cash withdrawals, applying for loans etc. Hence, physically visiting the bank is essential for a

customer to avail the banking service as there is no use of information technology in carrying

out the banking transactions.

Some of the traditional banking activities are as follows:

 Opening an account

 Creating of deposits

 Renew of fixed deposits

 Withdrawals

 Apply for loans

 Transfer funds between accounts within the banks.

IMPACT OF TECHNOLOGY IN BANKING SECTOR:

Technology has a positive impact on banking sector :-

 The biggest revolution came in banks is Digitization.

 Banking process is faster than before and more reliable. Maintenance and retrieval of
documents and records have become much faster and easier.

 Computerized banking also improves the core banking system. With CBS (core
banking system) all branches have access to common centralized data and are
interconnected.
 With the innovation of MICR cheque processing system, the processing of cheques
becomes faster and more efficient h than before.

 USSD (Unstructured supplementary service data) was launched by Government, so

people with no internet-connectivity too can access their bank accounts without
visiting the branch.

 With increasing internet reach, Internet Banking was developed and now offered by
almost every bank. Through this, every transaction details and inquiries can be
performed online without visiting the bank.
 It offered more transparency in transactions.

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  The scope of frauds in banks is being minimized through the use of passwords, double
authentication in online banking.
 Technology also leads to competition among the banks which eventually provides
better services to people.
 With introduction of mobile banking, one can access their bank from anywhere-
anytime. Everything is one quick tap away.
 To facilitates better services, Banks have introduced Automated Banking Services
Solution like Cash Deposit Machine, Cheque Deposit Machine, Passbook Printing
Machine through these service have become easier.


SHIFT FROM TRADITIONAL BANKING TO MODERN BANKING:

The Banking sector in India has experienced a rapid transformation. Just about a decade back
this sector was limited to the sarkari (read nationalized) and co-operative banks. Then came
the multi-national banks, but these were confined to serving an elite few. The opening up of
the Indian banking sector to private players acted as 'the tipping point' for this transformation.
The deregulatory efforts prompted many financial institutions (like HDFC and ICICI) and
nonfinancial institutions enter the banking arena. With the entry of

Private players into retail banking and with multi nationals focusing on the individual
consumer in a big way, the banking system underwent a phenomenal change. Multi-channel
banking gained prominence. For the first time consumers got the choice of conducting
transactions either the traditional way (through bank branch), through ATMs, the telephone
or through the Net. Technology played a key role in providing this multi-service platform.
The entry of private players combined with new RBI guidelines forced nationalized banks to
redefine the core banking strategy and technology was central to this change.

TRANSFORMATION TO DIGITAL BANKING:

E-Banking started with the introduction of Computers and ATM in 1970’s. The addition of
internet and mobile banking has revolutionized banking services. Banks use E-Banking
facilities to offer a wide range of products and services.

DIGITAL BANKING:

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Online banking, also known as internet banking, e-banking or virtual banking, is an electronic
payment system that enables customers of a bank or other financial institution to conduct a
range of financial transactions through the financial institution's website. E-banking includes
the systems that enable financial institution customers, individuals or businesses, to access
accounts, transact business, or obtain information on financial products and services through
a public or private network, including the Internet. Customers access e-banking services
using an intelligent electronic device, such as a personal computer (PC), personal digital
assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone. While
the risks and controls are similar for the various e-banking access channels, this booklet
focuses Specifically on Internet-based services due to the Internet's widely accessible public
network. Accordingly, this booklet begins with a discussion of the two primary types of
Internet websites: informational and transactional

Some of the modes of E-Banking are:

a) Automated Teller Machines

b) Internet Banking

c) Mobile Banking

d) Phone Banking

e) SMS Banking etc.

FEATURES OF DIGITAL BANKING:

A) bank customer can perform non-transactional tasks through online banking, including –

1. Viewing account balances

2. Viewing recent transactions

3. Downloading bank statements, (for example in PDF format)

4. Viewing images of paid cheques.

5. Ordering cheque books

6. Download periodic account statements

B) Bank customers can transact banking tasks through online banking, including –

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1. Funds transfers between the customer's linked accounts

2. Paying third parties, including bill payments (see, e.g., BPAY) and third party fund transfers (see,
e.g.,

FAST)

3. Investment purchase or sale

4. Loan applications and transactions, such as repayments of enrolments

5. Credit card applications

6. Register utility billers and make bill payments

7. Financial institution administration

8. Management of multiple users having varying levels of authority

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 CHAPTER 2
INDUSTRY PROFILE

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INDIAN BANKING INDUSTRY

Banking can be defined as the business activity of accepting and safeguarding money owned
by the other individuals and entities, and then lending out this money in order to earn profit.
According to Banking Regulation Act, “Banking means the accepting for the purpose of
lending or investment of deposits of money from the public, repayable on demand or
otherwise and withdrawal by cheque, draft and an order or otherwise”
The banking sector is the lifeline of any modern economy. It is one of the important financial
pillars of the financial sector, which plays a vital role in the functioning of an economy.
The banking industry in India has a huge canvas of history, which covers the traditional
banking practices from the time of Britishers to the reforms period, nationalization to
privatization of banks and now increasing numbers of foreign banks in India. Therefore,
Banking in India has been through a long journey.

HISTORY

Bank of Hindustan was set up in 1870. It was the earliest Indian Bank. Later, three
presidency banks i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras were set up,
which laid foundation for modern banking in India. In 1921, all presidency banks were
amalgated to form the Imperial Bank of India. Imperial Bank carried out limited number of
central banking functions prior to establishment of RBI. It engaged in all types of commercial
banking business except dealing in foreign exchange.
Reserve Bank of India Act was passed in 1934 and Reserve Bank of India(RBI) was
constituted as an apex body without major government ownership. Banking Regulation Act
was passed in 1949. This regulation brought RBI under government control. Under the act,
RBI got wide ranging powers for supervision and control of banks. The Act also vested
licensing powers and the authority to conduct inspections in RBI.
In 1955, RBI acquired control of the Imperial Bank of India, which was named as renamed as
State Bank of India. In 1959, SBI took over control of eight private banks floated in the
erstwhile princely states, making them as its 100% subsidiaries.
In July 1969, government nationalised 14 banks having deposits of Rs. 50 crores and above.
In 1980, government acquired 6 more banks with deposits of more than Rs. 200 crores.
The amendment of Banking Regulation Act in 1993 saw the entry of new private sector
banks.

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STRUCTURE OF INDIAN BANKING INDUSTRY

Reserve Bank of India

The central bank plays an important role in the monetary and banking structure of nation. It
supervises controls and regulates the activities of the banking sector. It has been assigned to
handle and control the currency and credit of a country.

Scheduled & Non –scheduled Banks

A scheduled bank is a bank that is listed under the second schedule of the RBI Act, 1934. In
order to be included under this schedule of the RBI Act, banks have to fulfil certain
conditions such as having a paid up capital and reserves of at least 0.5 million and satisfying
the Reserve Bank that its affairs are not being conducted in a manner prejudicial to the
interests of its depositors. Scheduled banks are further classified into commercial and
cooperative banks. Non- scheduled banks are those which are not included in the second
schedule of the RBI Act, 1934. At present these are only three such banks in the country.

Commercial Banks

Commercial banks may be defined as, any banking organization that deals with
the deposits and loans of business organizations. Commercial banks issue bank
checks and drafts, as well as accept money on term deposits. Commercial
banks also act as moneylenders, by way of instalment loans and overdrafts.
Commercial banks also allow for a variety of deposit accounts.

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Types of Commercial Banks

Public Sector Banks

These are banks where majority stake is held by the Government of India.
Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc.

Private Sector Banks

These are banks majority of share capital of the bank is held by private individuals. These
banks are registered as companies with limited liability. Examples of private sector banks are:
ICICI Bank, Axis bank, HDFC, etc.

Foreign Banks

These banks are registered and have their headquarters in a foreign country but operate their
branches in our country. Examples of foreign banks in India are: HSBC, Citibank, Standard
Chartered Bank, etc

Regional Rural Banks

Regional Rural Banks were established under the provisions of an Ordinance promulgated on
the 26th September 1975 and the RRB Act, 1976 with an objective to ensure sufficient
institutional credit for agriculture and other rural sectors. The area of operation of RRBs is
limited to the area as notified by Government of India covering one or more districts in the
State.

RRBs are jointly owned by Government of India, the concerned State Government and
Sponsor Banks (27 scheduled commercial banks and one State Cooperative Bank).The issued
capital of a RRB is shared by the owners in the proportion of 50%, 15% and 35%
respectively.

Type of Commercial Banks Major Shareholders Major Players

State Bank of India, Punjab

Public Sector Banks Government of India National Bank. Bank of
Baroda, Bank of India, etc

ICICI Bank, HDFC Bank,

Private Sector Banks Private Individuals
Axis Bank, Yes Bank, etc

Foreign Banks Foreign Entity Standard Chartered Bank

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Cooperative Banks

A co-operative bank is a financial entity which belongs to its members, who are at the same
time the owners and the customers of their bank. Co-operative banks are often created by
persons belonging to the same local or professional community or sharing a common interest.
Co-operative banks generally provide their members with a wide range of banking and
financial services (loans, deposits, banking accounts, etc).

They provide limited banking products and are specialists in agriculture-related products.

Cooperative banks are the primary financiers of agricultural activities, some small-scale
industries and self-employed workers.

Co-operative banks function on the basis of “no-profit no-loss”. Co-operative Bank Limited
(ACBL) is the first co-operative bank in India located in the city of Vadodara in Gujarat.

MARKET SIZE

 The Indian banking system consists of:

 27 public sector banks
 21 private sector banks
 49 foreign banks
 56 regional rural banks
 1,562 urban cooperative banks
 94,384 rural cooperative banks

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FUNCTIONS OF INDIAN BANKING INDUSTRY

A. Primary Functions of Banks

The primary functions of a bank are also known as banking functions. They are the main
functions of a bank.
These primary functions of banks are explained below.

1. Accepting Deposits
The bank collects deposits from the public. These deposits can be of different types, such as
:-
a) Saving Deposits
b) Fixed Deposits
c) Current Deposits
d) Recurring Deposits

a. Saving Deposits
This type of deposits encourages saving habit among the public. The rate of interest is low.
At present it is about 4% p.a. Withdrawals of deposits are allowed subject to certain
restrictions. This account is suitable to salary and wage earners. This account can be opened
in single name or in joint names.

b. Fixed Deposits
Lump sum amount is deposited at one time for a specific period. Higher rate of interest is
paid, which varies with the period of deposit. Withdrawals are not allowed before the expiry
of the period. Those who have surplus funds go for fixed deposit.

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c. Current Deposits
This type of account is operated by businessmen. Withdrawals are freely
allowed. No interest is paid. In fact, there are service charges. The account
holders can get the benefit of overdraft facility.

d. Recurring Deposits
This type of account is operated by salaried persons and petty traders. A certain
sum of money is periodically deposited into the bank. Withdrawals are
permitted only after the expiry of certain period. A higher rate of interest is
paid.

2. Granting of Loans and Advances

The bank advances loans to the business community and other members of the
public. The rate charged is higher than what it pays on deposits. The difference
in the interest rates (lending rate and the deposit rate) is its profit.
The types of bank loans and advances are:-

a) Overdraft
b) Cash Credits
c) Loans
d) Discounting of Bill of Exchange

a. Overdraft
This type of advances is given to current account holders. No separate account
is maintained. All entries are made in the current account. A certain amount is
sanctioned as overdrafts which can be withdrawn within a certain period of time
say three months or so. Interest is charged on actual amount withdrawn. An
overdraft facility is granted against a collateral security. It is sanctioned to
businessman and firms.

b. Cash Credits
The client is allowed cash credit up to a specific limit fixed in advance. It can be
given to current account holders as well as to others who do not have an account
with bank. Separate cash credit account is maintained. Interest is charged on the
amount withdrawn in excess of limit. The cash credit is given against the
security of tangible assets and / or guarantees. The advance is given for a longer
period and a larger amount of loan is sanctioned than that of overdraft .

c. Loans
It is normally for short term say a period of one year or medium term say a
period of five years. Now-a-days, banks do lend money for long term.
Repayment of money can be in the form of installments spread over a period of
time or in a lump sum amount. Interest is charged on the actual amount
18
sanctioned, whether withdrawn or not. The rate of interest may be slightly lower
than what is charged on overdrafts and cash credits. Loans are normally secured against
tangible assets of the company.

d. Discounting of bill of exchange

The bank can advance money by discounting or by purchasing bills of exchange both
domestic and foreign bills. The bank pays the bill amount to the drawer or the beneficiary of
the bill by deducting usual discount charges. On maturity, the bill is presented to the drawee
or acceptor of the bill and the amount is collected.

B. Secondary Functions of Banks

The bank performs a number of secondary functions, also called as non-banking functions.
These important secondary functions of banks are explained below.

1. Agency Functions
The bank acts as an agent of its customers. The bank performs a number of agency functions
which includes

a) Transfer of Funds
b) Collection of Cheques
c) Periodic Payments
d) Portfolio Management
e) Periodic Collections

a. Transfer of Funds
The bank transfer funds from one branch to another or from one place to another.

b. Collection of Cheques
The bank collects the money of the cheques through clearing section of its customers. The
bank also collects money of the bills of exchange.

c. Periodic Payments
On standing instructions of the client, the bank makes periodic payments in respect of
electricity bills, rent, etc.

d. Portfolio Management
The banks also undertake to purchase and sell the shares and debentures on behalf of the
clients and accordingly debits or credits the account. This facility is called portfolio
management.

e. Periodic Collections
The bank collects salary, pension, dividend and such other periodic collections
on behalf of the client.

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2. General Utility Functions

The bank also performs general utility functions, such as :-

 Issue of Drafts, Letter of Credits, etc.
 Locker Facility
 Underwriting of Shares
 Dealing in Foreign Exchange

a. Issue of Drafts and Letter of Credits

Banks issue drafts for transferring money from one place to another. It also issues letter of
credit, especially in case of, import trade. It also issues travellers' cheques.

b. Locker Facility
The bank provides a locker facility for the safe custody of valuable documents, gold
ornaments and other valuables.

c. Underwriting of Shares
The bank underwrites shares and debentures through its merchant banking division.

d. Dealing in Foreign Exchange

The commercial banks are allowed by RBI to deal in foreign exchange.

PESTLE Analysis for the Banking Industry

Political factors: A tool for the big guys
The banking sector looks all powerful — but it’s susceptible to a bigger giant: the
government.

Government laws affect the state of the banking sector. The government can intervene in the
matters of banking whenever, leaving the industry susceptible to political influence. This
includes corruption amongst political parties, or specific legislative laws such as labour
laws, trade restrictions, tariffs, and political stability.

20
Economic factors: Easily influenced
The banking industry and the economy are tied. How income flows, whether the economy is
prospering or barely surviving during times of recession, affects how much capital banks can
access. Spending habits, and the reasons behind them, affect when customers borrow or
spend funds at banks.

Additionally, when inflation skyrockets, the bank experiences the backlash. Inflation affects
currency and its value and causes instability. Foreign investors think twice before providing
their funds when a particular country’s currency value is high.

Exchange rates also affect banks globally — stable currencies such as the US dollar impact
other currencies, spending habits, and inflation rates in other countries.

Sociocultural factors: Consumers want ease

Cultural influences, such as buying behaviors and necessities, affect how people see and use
banking options. People turn to banks for advice and assistance for loans related to business,
home, and academics. Consumers seek knowledge from bank tellers regarding saving
accounts, bank related credit cards, investments, and more.

Consumers desire a seamless banking experience. And technology is developing to allow

consumers to buy products easier, without requiring assistance directly from banks.

Technological factors: Smartphones to the rescue

Once, it was expected to visit the local bank to make changes to financial accounts. But not
anymore.

Technology is changing how consumers handle their funds. Many banks offer a mobile app
to witness accounts, transfer funds, and pay bills on smartphones.

Smartphones can scan cheques, and the bank can process it from their end, at their location.
This change helps to save paper and the need to drive directly to the branch to handle these
affairs.

Debit cards are also changing. Chips have been implemented, requiring users to insert their
card into debit machines rather than swiping them. Other countries, such as Canada, have
implemented a “tap” option — tapping the debit card onto the device, requiring no pin, for a
transaction to complete. These changes make it easier on the user to make purchases without
required intrusion from banks.

Even banks themselves are utilizing technology within the workplace. Telecommunicating
through virtual meetings is being embraced. It replaces the need for in-person meetings.

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Legal factors: Strict guidelines
The banking industry follows strict laws regarding privacy, consumer laws, and
trade structures to confirm frameworks within the industry. Such structures are required for
customers in the allocated country and for international users.

Environmental: Reduced footprint

With the use of technology — particularly with mobile banking apps — the use for paper is
being reduced. Additionally, the need to drive directly to a branch to handle affairs is
minimized as well.

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 CHAPTER 3
COMPANY PROFILE

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 We understand your world

ABOUT HOUSING DEVELOPMENT CORPORATION (HDFC) BANK

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 Schedule
Commercial Bank in January 1995.
The Bank was founded by Hasmukh Bhai Parakh in1977.
Dr. Manmohan Singh, our then Finance Minister, inaugurated HDFC Bank’s full-service
branch and first corporate office at Sandoz House, Worli.

VISION OF HDFC BANK

The vision statement of HDFC BANK is, “To be customer driven best managed enterprise
that enjoys market leadership I providing housing related finance”.

MISSION OF HDFC BANK

HDFC Banks mission is to be “a World Class Indian Bank”, benchmarking themselves
against international standards and best practices in terms of product offerings, technology,
service levels, risk management and audit and compliance.

HDFC BANKING PRODUCTS AND SERVICES

HDFC Bank offers the following products and services:
 Accounts and Deposits
 Loans
 Cards
 Demat
 Investments
 Insurance
 Forex Cards

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 OVERALL LOOK ON HDFC BANK

Type Private
BSE: 500180
NSE: HDFCBANK
Traded as NYSE: HDB
BSE SENSEX Constituent
CNX Nifty Constituent
Industry Banking, Financial Services

Founded August 1994; 24 years ago

Headquarters Mumbai, Maharashtra, India

Area Served India

Shyamala Gopinath (Non-Exe Chairman)
Key people
Aditya Puri (Managing Director)
Credit cards, consumer
banking, banking, finance and
Products insurance, investment banking, mortgage
loans, private banking, private
equity, wealth management
Revenue ₹95,461 crore(US$14 billion) (2018)

Operating income ₹25,732 crore(US$3.7 billion) (2018)

Net income ₹17,486crore(US$2.5 billion) (2018)

Total assets ₹1,018,170crore(US$150 billion) (2018)

Employees 98,061 (March 31, 2019)

25
MANAGEMENT AT HDFC

S No. Name of Director Designation

Part Time Non- Executive Chairperson and

1 Mrs Shyamala Gopinath
Independent Director

2 Mr Malay Patel Independent Director

Mr Umesh Chandra
3 Independent Director
Sarangi

4 Mr Keki Mistry Non Executive Director

5 Mr Srikanth Nadhamuni Non-Executive Director

6 Mr Sanjiv Sachar Additional Independent Director

7 Mr Sandeep Parekh Additional Independent Director

8 Mr MD Ranganath Additional Independent Director

9 Mr Aditya Puri Managing Director

10 Mr Kaizad Bharucha Executive Director

26
BOARD OF DIRECTORS:
The above shown list of Board of Directors can be seen as fallows.

Mrs Shyamala Gopinath

(Part-time Non- Executive Chairperson and Independent Director)

Mr Malay Patel
(Independent Director)

Mr Umesh Chandra Sarangi

(Independent Director)

27
Mr Keki Mistry
(Non-Executive Director)

Mr Sanjiv Sachar
(Additional Independent Director)

Mr Sandeep Parekh
(Additional Independent Director)

28
 Mr MD Ranganath
(Additional Independent Director)

Mr Aditya Puri
(Managing Director)

Mr Kaizad Bharucha (Executive Director)

29
SWOT ANALYSIS OF HDFC BANK

SWOT Analysis is a strategic planning technique used to help a person or organization

identify strengths, weaknesses, opportunities, and threats related to business competition or
project planning. It is intended to specify the objectives of the business venture or project
and identify the internal and external factors that are favourable and unfavourable to
achieving those objectives. Users of a SWOT analysis often ask and answer questions to
generate meaningful information for each category to make the tool useful and identify their
competitive advantage. SWOT has been described as the tried-and-true tool of strategic
analysis,but has also been criticized for its limitations.

Strengths:

• HDFC Bank is one of the leading new age private sector banks.
• It has a huge employee base of 100000 employees.
• It has a large collaboration with corporate for employee salary account under age
group 30 to 35 years.
• HDFC Bank has over 1700 branches and over 5000 ATMs in 780 cities in India.
• The attrition rate in HDFC is low and it is one of the best places to work in private
banking sector.
• HDFC has lots of awards and recognition, it has received ‘Best Bank’ award from
various financial rating institutions like Dun and Bradstreet, Financial express, Euro
money awards for excellence, Finance Asia country awards etc
• HDFC has good financial advisors in terms of guiding customers towards right
investments.

Weakness:
 HDFC bank doesn’t have strong presence in Rural areas, where as ICICI bank its direct
competitor is expanding in rural market
 HDFC cannot enjoy first mover advantage in rural areas. Rural people are hard core
loyal in terms of banking services.
 HDFC lacks in aggressive marketing strategies like ICICI
 The bank focuses mostly on high end clients
 Some of the bank’s product categories lack in performance and doesn’t have reach in
the market.
 The share prices of HDFC are often fluctuating causing uncertainty for the
investors

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Opportunities:

 HDFC bank has better asset quality parameters over government banks; hence the
profit growth is likely to increase.
 The companies in large and SME are growing at very fast pace. HDFC has good
reputation in terms of maintaining corporate salary accounts.
 HDFC bank has improved its bad debts portfolio and the recovery of bad debts is high
when compared to government banks.
 HDFC has very good opportunities in abroad.
 Greater scope for acquisitions and strategic alliances due to strong financial position.

Threats:

 HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%. Though it is a

slight variation it’s not a good sign for the financial health of the bank.
 The non banking financial companies and new age banks are increasing in India.
 The HDFC is not able to expand its market share as ICICI imposes major threat.
 The government banks are trying to modernize to compete with private banks.
 RBI has opened up to 74% for foreign banks to invest in Indian market.

FIVE CORE VALUES OF HDFC BANK:

1. SUSTAINABILTY

2. OPERATIONAL EXCELLENCE

3. PRODUCT LEADERSHIP

4. CUSTOMER FOCUS

5. PEOPLE

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PORTERS FIVE FORCES ON HDFCBANK:

Porters Five Forces Low/Medium/High Remarks

Permission should be granted

from RBI which is not easy
Threat of New Entrance Low
and the early investment will
be high.

Switching cost is low but

customer’s know that every
Bargaining power of bank provide similarly the
High
customers same service. And HDFC
maintains good customer
service.

Bargaining power of
In banking industry there is
suppliers Low
no such suppliers

Threat of substitute With other competitors like

Medium
ICICI, Axis and Kotak Bank.

Degree of Rivalry NDFC, Financial and Non-

High
Financial Institution

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 CHAPTER 4
INTERNSHIP PROFILE

33
 Internship Profile at HDFC BANK

Scope Of The Study:

The area where the study has been conducted was Alkapuri, Hyderabad

ObjectiveOf The Study:

 To analyse awareness among customers using digital services of HDFC Bank.

 To know the different type of digital services provided by the bank
 To know the cause why customers are using or not using digital services.
 To study the popularity of digital services among the customers of the HDFC Bank.

NEED FOR STUDY:

 This study will be helpful for employees to know their current

digitally activated customers.

 This study gives insights to employees about customer

requirements.

What is Digital Banking?

Digitalisation:
Digitalisation is the process of converting data into digital format.It means adoption of
technology.
Digital banking, also known as internet banking, e-banking or virtual banking, is an electronic
payment system that enables customers of a bank or other financial institution to conduct a range
of financial transactions through the financial institution’s website.
E-banking includes the systems that enable financial institution customers, individuals to access
accounts, transact business, and obtain information on financial products through a public or
private network of internet
Features of Digital Banking:

A bank customer can perform non transactional tasks through online banking, including:
1. Viewing account balances.

2. Viewing recent transactions.

3. Downloading bank statements etc.

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 Bank customers can transact banking tasks through online banking including. Funds transfers
between the customer’s linked accounts
1. Investment purchase or sale.

2. Credit card applications

3. Activating third party rights like fund transfers, bill payments etc.

Advantages and Disadvantage of Digital Banking:

Advantages
 24*7 access to your account
 Transaction made easy
 Settlement of transaction in no time
 Eco-friendly
 Saving time
Disadvantage
 Personal relationship with the bank is not established
 Issues with transaction
 Security issues
 Site disruption

DIGITAL SERVICES

Internet banking:
Online banking, also known as internet banking, is an electronic payment system that enables
Customers of a bank or other financial institution to conduct a range of financial
transactions through the financial institution's website. The online banking system will
typically connect to or be
Part of the core banking system operated by a bank and is in contrast to branch
banking which was the traditional way customers accessed banking services.
Some banks operate as a "direct bank" (or “virtual bank”), where they rely completely on
InternetBanking. Internet banking software provides personal and corporate banking services
offering features such as viewing account balances, obtaining statements, checking recent
transaction and making payments.

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 Mobile Banking:
Mobile banking refers to the use of a Smartphone or other cellular device to perform online
banking tasks while away from your home computer, such as monitoring account balances
transferring funds between accounts, bill payment and locating an ATM.

Missed Call Banking:

Missed call Banking is a free service from the Bank where in you can get your Account Balance,
Mini Statement and more just by giving a Missed Call or sending an SMS with pre-defined
keywords to pre-defined mobile numbers from your registered mobile number..Examples for
missed call banking are:
 Account Balance (1800-270-3333)
 Mini Statement (1800-270-3355)
 Cheque Book (1800-270-3366)
 Account Statement (1800-270-3377)

DIGITAL BANKING:

 HDFC Bank, one of the leading private sector lenders in India has launched a
new initiative ‘Bank Aap Ki Muthi Mein’ as part of their “Go Digital
Campaign” to turn a Smartphone into a bank branch.
 With ‘Bank App ki Muthi Mein’ we can do everything other than access
locker, deposit or withdraw cash.
 HDFC Bank app allows over 75 transactions apart from essential transactions
such as: booking of FDS, RDS, bill and tax payments, buying insurance etc.
the app allows customers to buy all kinds of loans instantly.
 HDFC also provides customized location specific promotions as well as
offers and deals on shopping, dining, movies, entertainment.

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  HDFC’s ‘Bank App Ki Muthi Mein’ is a technology agnostic initiative with
apps on three popular smart phone platforms IOS, android, and windows
phone
 Initiative of HDFC also extends to basic feature phone users with SMS and
missed call banking.
 The SMS banking service is also available in “HINDI” for a broader
demographic.

DIGITAL INITIATIVES

Private Sector Leader HDFC BANK Launched Nationwide Campaign to possible itself as a
premier digital bank. Integrated, Nationwide Brand Campaign “Har Zaroorat Poori Ho
Chutki Mein, Bank Aapki Mutthi Mein. The Campaign will reinforce bank’s position as
India’s premier “Digital bank”.

Some Initiatives are as fallow:

Payzapp: A Complete Solution For all your needs.

Payzapp is a payments application solution for HDFC Bank customers. It allows instant
payments access to great deals all in one place instant money transfer and much more with
just a single click on your registered mobile device Features are,
• Saves the hassle of entering your card credentials repeatedly

• Link multiple Debit and Credit cards

• No need to remember multiple passwords- one password to be used for all

payments across linked cards.

Smart Buy:
Smart Buy is an HDFC bank e-commerce venture specially designed and initiated to give all
its customers a friendly and exclusive platform to get smartest and best transaction in town.
Smart Buy products and services-Shopping, Travel, Entertainment, Bill payment and mobile
recharge etc.
Features Of Smart Buy:
 Shopping, Deals, Travel and other Digital products, Call centre support,
Reward 360

37
  One of the other major facilities is IMPS that is Immediate Payment Service.

Chillr:
Chillr is a revolutionary new app that lets you to send money immediately to anyone in your
phonebook, 24 hours a day, and 7 days a week. We can request money, slip bills amongst
friends and can also recharge mobile phone, DTH and data cards.
Features:
 Transfer money between your bank accounts
 Available 24*7 including weekends and bank holidays
 Split bills easily among friends and colleagues

METHODOLOGY OF STUDY:
 Sample size: The sample size chosen for the survey is 100

Method of collection of data:

 Primary data:
The data is collected through self –designed Questionnaire that consists of
questions that have been designed for the study.
 Secondary data:
The secondary data is collected from internet, company website, Records etc.
 Data Analysis:
The data is analysed using the Statistical techniques. In this project pie charts
have been used to analyse the outcomes of the project.
 Duration:
The duration of the study is Days

38
Activities Done in SIP at HDFC Bank:

• Opening smart savings accounts, salary & individual current accounts as per
customer interest.

• Activating Net Banking, Mobile banking to the customers and also creating
interest among customers to use payzapp where the customer would save an
maximum amount of Rs 3000.

• Convincing customers to make fixed & recurring deposits and also mutual
funds and insurances etc. if any interest

• Attending out bound visits and out bound calls to know how to deal with
customers at their respective places.

• Activating non-banking financial transactions (NB FIN) for activating third

party rights for making fund transfers (RTGS, NEFT, IMPS etc.)

• Solving customer queries regarding form fillings, debit & credit cards.

39
 CHAPTER 5

KEY LEARNINGS

40
Learning’s:

 Net Banking Services:

• Net banking Activation

• Opening FD/RD accounts
• Debit card and credit card pin generation
• Upgrading debit card
• Third Party Fund Transfer registration.

 Lobby Management

• Approaching the customers

• Knowing the customer’s needs.
• Directing them to concern officials.

 Digital activation

• Mobile banking activation and installing the bank products.

• Applying Debit cards, Credit cards, FD’S. RD,s and cheque book request and
also activation of NB fin and bill pay rights through net banking cards.

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DATA ANALYIS AND INTREPRETATION:

Q1)

Interpretation:
96.6% of the respondents fall under the age group of 20 to 30 years. This means that
majority of the youth prefer to have account with HDFC Bank.

Q2)

Interpretation:
Out of 100 respondents that I have taken for my survey 51.7% respondents have
savings accounts, 17.2% have salary account, 24.1% current account and 7.5%
respondents have other accounts which include NRI and fixed deposits account in
the bank.

42
Q3)

Interpretation:
As per my survey, 65.5% of the customers prefer digital banking (net banking,
mobile banking or payzapp) than coming to bank and doing their transactions.

Q4)

Intrepretation:
As per my survey, almost 61.1% of respondents use net banking for the purpose of
transferring funds to others.

43
Q5)

Intrepretation:
As per my survey, almost 75.9% of respondents use payzapp for recharge of their
phones and bill payment of electricity or DTC, water, etc.

Q6)

Intrepretation:
As per my survey, 24.1% of respondent believes that offers provided are good,
where as 3.41% of respondent says the cash back offers are not satisfied or not good.

44
Q7)

Intrepretation:
As per the survey, 10.3% of respondent believe that they did not face any challenges
while using net banking. While others says that the main problem they face is server
problem, logs out frequently, it is convenient and confusing.

Q8)

Intrepretation:
As per the survey, 82.8% of the respondent said that they would suggest others to
open account in HDFC Bank.

45
Q9)

Intrepretation:
As per the survey, 32% of the respondentsrated 9 out of 10, about their experience
with HDFC Bank.

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CHAPTER 6

FINDINGS

47
FINDINGS:

 Customers use digital banking services at HDFC bank mostly for money transfer, to
pay bill, for recharge, online shopping. HDFC bank provides very quick services to
its customers.
 Most of the respondents who are not using the digital initiatives of the bank, it is
because they are not much aware about the initiatives of the bank.
 According to the response of the respondents it shows that digitalization improved the
banking services very much for the customers.
 The response of the respondents indicate that digitalization has a good and positive
impact on the Banking services.
 Most of respondent who are using the digital banking services are satisfied with the
service of the bank for the particular digital banking service.
 The response of the respondents indicates that digitalization has a good and positive
impact on the banking services.
 Most of the respondents who are not using the digital initiatives of the bank, it is
because they are not much aware about the initiatives of the bank.

48
 CHAPTER 7
SUGGESTIONS

49
SUGGESTIONS:

 Through the Digital Banking is an effective tool but many of the customers are not
using it due to the awareness of the particular digital banking services. Now the
responsibility lies with the bank to make them aware about various Digital Banking
services through publicity and advertisement.
 Bank should educate the customers about the usage of Digital Banking and also about
their advantages. This would prompt the customers to shift from traditional brick and
mortar channel.
 It has been observed that even the customers who know about digital banking
services are not using the facility due to misconception and lack of information.
These customers should target by the bank and must be convinced to use the same.
 The result of the study show that customers are using only few services of the various
Digital banking services-for examples ATM for view balance and cash withdrawal
etc. though digital banking provides a full gamut of various services. Customer
should be made aware of these services and must be encouraged to use the same.
 The ban my improve existing facilities in rural areas though advertising, spread
awareness about computer and internet banking.
 The best way to motivate the customers to use digital banking is more efficient
customer care service

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 CHAPTER 8

CONCLUSIONS AND RECOMMENDATIONS

51
CONCLUSIONS:

Electronic banking, which is the modern technology which is offered by the banks to
their customers so that they can conveniently conduct their banking transactions at a
time that suits them and can access their bank account for 24 hours a day and 7 days
a week. Latest and better ways of customer services are essential for the growth of
the bank and for the banking system as a whole. The effect of e-banking on
worldwide banking system is to augment or facilitate existing banking and payment
mechanisms, primarily by making many transactions cheaper, faster, more secure,
and more convenient. Moreover, the growth of information technologies in the world
has been phenomenal as well. Because of these technologies, banks are being able to
reach their customers anywhere at any time. Compared to banks abroad, Indian
banks offering online services still have a long way to go. For online banking to
reach a critical mass, there has to be sufficient number of users and the sufficient
infrastructure in place so as to develop the concept of digital banking in the Indian
market, which is gradually being accepted by the people of the country as a whole.
Even, in a country like India, there is a need for providing better and customized
services to the customers. Banks must be concerned about the attitudes of customers
with regard to acceptance of online banking. The importance of security and privacy
for the acceptance of internet banking is a very important issue and it was found that
people have weak understanding of internet banking, although they are aware about
risk. The present study shows that customers are more reluctant to join new
technologies or methods that might contain little risk. Hence, banks should design
the website to address security and trust issues as well. In case of the financial
institutions which have already deployed the E-banking, according to them there is a
need of paradigm shift in terms of perception by the public. The mindset of people in
India is urging of changing. It was until very recently that mobile banking and phone
banking were not being widely accepted, but then they became the killer applications
of E- commerce. In this way E-banking would overcome the traditional business
model of retail banking and dramatically reduce the processing and traditional cost.
To sum up, opportunities in e-banking are immense but he only need is to explore
them. The nature of banking services may still be the same but the way in which they

52
are being offered has been changed dramatically. Banks must realize the seriousness
of challenges ahead and develop a strategy that will enable them to leverage the
opportunities presented by e-banking. E-banks need to shift now from product
centric to customer centric i.e. to design services according to the needs dreams and
expectations of the customers. Opportunities and challenges offered by e-banking
can only be met fruitfully if banks assemble different dimensions services including
banking, broking, insurance, channel delivery, sales culture, back office processes
and knowledge management under one corporate name.

Most of the market is still untapped in India especially in rural areas. There is a lot of
scope for banking institution to expand their e-banking services to have a more
sophisticated customer base. ICT infrastructure facilities are also not well developed
and the banks are unable to extend the e- banking services, therefore, good
infrastructure need to be developed.

RECOMMENDATIONS:

Embracing a fully digital strategy requires banks to modernize end-to-end, and to

adopt a customer centric approach. The following recommendations can help banks
in general and specifically HDFC Bank to ensure that their move to digital banking
will result in greater customer satisfaction and long-term profitability and business.

 Manage and master the information that’s vital to digital banking. For
banks to create new sources of value, they need to understand the data
that makes up their customers’ Code Halos, each individual’s unique
virtual identity.
 They should act strategically. Providing a cohesive, cross-channel
experience requires an enterprise-wide approach.
 Calculate the cost of not adopting digital banking: Lost opportunity,
customer attrition, and stagnation in new-customer growth and
product sales.
 Evaluate options carefully. Digital banking isn’t one-size-fits-all.
Banks need to select the options that best fit their organisation and
strategy.

53
 Create an enterprise roadmap. A roadmap is a key prerequisite for
implementing a digital banking program.
 Banks should also ensure that online banking is safe and secure for
financial transaction similar to the traditional banking.
 Banks should organize seminar and conference to educate the
customer regarding uses of online banking as well as security and
privacy of their accounts.
 Some customers are hindered by lack of computer skills. They need to
be educated on basic skills required to conduct online banking.
 Banks must emphasize the convenience that online banking can
provide to people, such as avoiding long queue, in order to motivate
them to use it.
 Banks must emphasize the cost saving that online can provide to the
people, such as reduce transaction cost by use of online banking.

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 CHAPTER 9

REFERENCES

 WWW.HDFCBANK.COM
 WWW.SLIDESHARE.COM
 WWW.SCRIBD.COM
 WIKIPEDIA.ORG

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