A

PROJECT ON

HOME LOANS
WITH REFRENCE TO

HDFC BANK
WE UNDERSTAND YOUR WORLD

MARKETING STRAT

MADI REDDY SRIVISHNU VARDHAN REDDY

HALL TICKET NO: 1151-17-684-016

Project submitted in partial fulfillment for the award of the Degree of

BACHELOR OF BUSINESS ADMINISTRATION

By

OSMANIA UNIVERSITY, Hyderabad – 500007

OMEGA DEGREE COLLEGE (BBA)

Hubsiguda, Hyderabad – 500007
2017-2020
 DECLARATION

I hereby declare that Project Report titled HOME LOANS submitted by me to

the Department of Business Management, Osmania University (OU)

Hyderabad, is a bonfide 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.

M. SRIVISHNU VARDHAN REDDY

1151-17-684-016
 ABSTRACT

A home loan is a type of loan in which the borrower uses the equity of his or
her home as collateral. The loan amount is determined by the value of the property, and the
value of the property is determined by an appraiser from the lending institution. Home loan
loans are often used to finance major expenses such as home repairs, medical bills, or
college education. A home loan creates a lien against the borrower's house and reduces
actual home loan.

Most home loan loans require good to excellent credit history, reasonable loan-to-value and
combined loan-to-value ratios. Home loan loans come in two types: closed end (traditionally
just called a home-equity loan) and open end (a.k.a. a home-equity line of credit). Both are
usually referred to as second mortgages, because they are secured against the value of the
property, just like a traditional mortgage. Home loan loans and lines of credit are usually,
but not always, for a shorter term than first mortgages. Home loan can be used as a person's
main mortgage in place of a traditional mortgage. However, one cannot purchase a home
using a home loan, one can only use a home loan to refinance. In the United States, in most
cases it is possible to deduct home loan interest on one's personal income taxes.

There is a specific difference between a home loan and a home loan of credit (HLOC). A
HLOC is a line of revolving credit with an adjustable interest rate whereas a home loan is a
onetime lump-sum loan, often with a fixed interest rate. With a HLOC the borrower can
choose when and how often to borrow against the equity in the property, with the lender
setting an initial limit to the credit line based on criteria similar to those used for closed-end
loans. Like the closed-end loan, it may be possible to borrow up to an amount equal to the
value of the home, minus any liens. These lines of credit are available up to 30 years, usually
at a variable interest rate. The minimum monthly payment can be as low as only the interest
that is due. Typically, the interest rate is based on the prime rate plus a margin.
 ACKNOWLEDGEMENT

I take this opportunity to extend my Profound thanks and deep sense of

gratitude to the authorities of ZOMATO for giving me the opportunity to
undertake this project work in their esteemed organization. I profusely thank
Mr. (CLUSTER MANAGER)

My sincere thanks to the Principal Mrs. SRIDEVI, my project guide Miss.

KUNUTHURU SRAVANI ASSISTANT PROFESSOR for the kind
encouragement and constant support extended in completion of this project
work from the bottom of my heart.

I am also thankful to all those who have incidentally helped me, through their
valued guidance, co-operation and unstinted support during the course of my
project.
 LIST OF TABLES

TABLE DESCRIPTION PAGE

NO. NO.
1 LIST OF SHARE HOLDERS 37

2 AWARDS 38

3 REWARDS AND RECOGNITIONS 47

4 OUTSTANDING HOUSING LOAN 59

5 OUTSTANDING NRI HOUSING LOAN 60

6 OUTSTANDING EDUCATION LOAN 61

7 OUTSTANDING VEHICLE LOAN 62

8 OUTSTANDING MORTGAGE LOAN 63

9 TOTAL ADVANCES 64

10 TERM LOANS 65

11 AMOUNT SANCTIONED FOR FAST CREDIT LOANS 66

12 OUTSTANDING AMOUNT SANCTIONED FOR LOANS 67

AGAINST GOLD ORNAMENTS

13 OUTSTANDING AMOUNT SANCTIONED FOR LOANS TO 68

PENSIONERS
 LIST OF FIGURES

FIGUR PAGE

E NO. DESCRIPTION NO.

1 GRAPH ON OUTSTANDING HOUSING LOAN 59

2 GRAPH ON OUTSTANDING NRI HOUSING LOAN 60

3 GRAPH ON OUTSTANDING EDUCATION LOAN 61

4 GRAPH ON OUTSTANDING VEHICLE LOAN 62

5 GRAPH ON OUTSTANDING MORTGAGE LOAN 63

6 GRAPH ON TOTAL ADVANCES 64

7 GRAPH ON TERM LOANS 65

8 GRAPH ON AMOUNT SANCTIONED FOR FAST CREDIT 66

LOANS

9 GRAPH ON OUTSTANDING AMOUNT SANCTIONED FOR 67

LOANS AGAINST GOLD ORNAMENTS

10 GRAPH ON OUTSTANDING AMOUNT SANCTIONED FOR 68

LOANS TO PENSIONERS
 TABLE OF CONTENTS

CHAPTERS TITLES PAGE NUMBERS

CHAPTER-I INTRODUCTION

 NEED OF THE STUDY

 OBJECTIVES OF THE STUDY

1-9
 SCOPE OF THE STUDY

 RESEARCH METHODOLOGY

 LIMITATIONS OF THE STUDY

CHAPTER-II REVIEW OF LITERATURE 10-20

CHAPTER-III INDUSTRY PROFILE

&
21-49
COMPANY PROFILE

CHAPTER-IV DATA ANALYSIS

&
50-68
INTERPRETATION

CHAPTER-V FINDINGS

SUGGESTIONS
69-71
CONCLUSIONS

BIBLIOGRAPHY 72
 CHAPTER – I

INTRODUCTION

[1]
INTRODUCTION

One of the primary functions of the commercial bank is lending. The deposits collected from

the public cannot be kept idle. It has to be utilized in order to derive benefits out of it. The

bank collects deposits with the objective of lending and makes profits out of the interest

received and paid. The banker performs the job of lending within the framework of statutes

governing the banking business, the government policy and guidelines issued by the

authorities of the country (RBI in India). The history of loans can be documented at least

several thousand years back. The modern loan started much later than these ancient times.

Therefore, lending has its origin in much older times.

In 1949, the banking regulation act defines banking as “accepting for the purpose of lending

or investment, of deposits of money from the public, repayable on demand.”

The core function of commercial banks is granting of credit. Although banks offer a wide

spectrum of financial services, lending has traditionally been their main function. Banks

profess experience, expertise and flexibility in lending which gives them a clear competitive

advantage over other financial institution. Lending of funds to businessmen, traders and

industrial enterprises is one of the most important activity of a commercial bank.

The term “LOAN” refers to the amount borrowed by one person from another. The amount is

in the nature of loan and refers to the sum paid to the borrower. Thus, from the point of view

of the borrower it is ‘borrowing’ and for the bank it is ‘lending’. It is a debt for the borrower.

While granting loans, credit is given for a definite purpose and for a predetermined period.

Interest is charged on the loan at agreed rate and intervals of payments.

‘ADVANCE’ is a ‘credit facility’ granted by the bank. Banks grant advances for short term

purposes, such a purchase of goods traded in and meeting other short-term trading liabilities.

There is a sense of debt in loan whereas an advance is a facility being availed of by the

[2]
borrower. Like loans, advances are also repaid. In the present lesson two terms are used

interchangeably.

The credit rating represents an evaluation of a credit rating agency of the qualitative and

quantitative information for the prospective debtor, including information obtained by the

credit rating agency’s analysts.

Sovereign Credit Rating

A sovereign credit rating is the credit rating of a sovereign entity, such as a national

government. The sovereign credit rating indicates the risk level of the investment

environment of a country and is used by investors when looking to invest in particular

jurisdictions, and also takes into account political risk.

Ratings are further broken down into components including political risk, economic risk.

Euro money’s bi-annual country risk index monitors the political and economic stability of

185 sovereign countries.

A.M. Best defines “country risk” as the risk that country-specific factors could adversely

affect an insurer’s ability to meet its financial obligations.

Short and long-term ratings

A rating expresses the likelihood that the rated party will go into default within a given time

horizon. In general, a time horizon of one year or under is considered short-term, and

anything above that is considered long-term.

Corporate Credit Ratings

Main article: Bond credit rating

Credit ratings can address a corporation’s financial instruments i.e. debt security such as a

bond, but also the corporations itself. Ratings are assigned by credit rating agencies, the

largest of which are Standard & Poor’s, Moody’s and Fitch Ratings. They use letter

[3]
designations such as A, B, C. Higher grades are intended to represent a lower probability of

default.

Agencies do not attach a hard number of probabilities of default to each grade, preferring

descriptive definitions such as: “the obligor’s capacity to meet its financial commitment on

the obligation is extremely strong”, or “less vulnerable to non-payment than other speculative

issues”. However, some studies have estimated the average risk and reward of bonds by

rating. One study by Moody’s claimed that over a “5-year time horizon” bonds it gave its

highest rating (Aaa) to had a “cumulative default rate” of 0.18%, the next highest (Aa2)

0.28%, the next (Baa2) 2.11%, 8.82% for the next (Ba2), and 31.24% for the lowest it studied

(B2). (See “Default rate” in “Estimated spreads and default rates by rating grade” table to

right.) Over a longer period, it stated “the order is by and large, but not exactly, preserved”.

S&P, Moody’s, Fitch and DBRS are the only four rating agencies that are recognized by the

European Central Bank (ECB) for determining collateral requirements for banks to borrow

from the central bank. The ECB uses a first, best rule among the four agencies that have the

designated ECAI status, which means that it takes the highest rating among the four agencies

– S&P, Moody’s, Fitch and DBRS – to determine haircuts and collateral requirements for

borrowing.

A.M. Best rates from excellent to poor in the following manner: A++. A+, A, A-, B++, B+,

B, B-, C++, C+, C, C-, D, E, F and S. The CTRISKS ratings system is as follows: CT3A,

CT2A, CT3B, CT2B, CT1B, CT3C, CT2C and CT1C. All these CTRISKS grades are

mapped to one-year probability of default.

[4]
NEED OF THE STUDY

 The main objective of the study of the loans and advances is to understand the lending

policies and the various schemes of financial assistance provided by the bank.

 Introducing new loan products to meet the requirements of the various segments of

the society to know the importance of the retail lending in banks.

 As the country is witnessing globalization, privatization and liberalization wave with

a strong influence in culture and its implication, the need for loan have become

inevitable at present scenario, hence there is a need study the progress and trends.

 It helps to know in detail the Loans and Advances provided by the bank, right from its

inception stage, growth and future prospects.

 The findings of the project may be considered by HDFC BANK while formulating the

policies for increasing the volume of personal lending schemes.

[5]
OBJECTIVES OF THE STUDY

 To analyze banks loans and advances in detail.

 To find out the sources of borrowings and mobilization of loans.

 To know the terms and conditions laid down by the banks for sanction of loans.

 To study about the loan policy, credit evaluation and supervision of loans and

advances at HDFC BANK.

 To study in detail about the different types of personal loans offered by HDFC BANK

in the context of purpose, eligibility, interest, etc.

 To know the disbursement of personal loans for the last five financial years.

[6]
SCOPE OF THE STUDY

The study is undertaken at HDFC BANK. The scope is limited to the extent of details study

of various lending schemes at HDFC BANK. Disbursement analysis is done in case of

important lending schemes for the past 5 years.

 The study is mainly concentrated on the lending practices pattern and influences in

the organization’s performance.

 To know more about the loans and advances which help us to explore future

prospects.

 To study the precautions to be taken while advancing the loans.

 To analyze the profit sources for a bank by providing loans and advances.

 To know and to set its objectives and goals for better performance and growth of the

organization.

[7]
RESEARCH METHODOLOGY

The data collection methods include both primary data and secondary data.

Primary Data

Primary details that data that has not been previously published, i.e. the data is derived from a

new or original study and collected at the source, e.g. in marketing, it is information that is

obtained directly from first-hand sources by means of surveys, observation or

experimentation. This is also called first-hand data.

SOURCES OF PRIMARY DATA

 No primary data was collected while doing this project.

SECONDARY DATA

The secondary data, on the other hand, is basically primary data collected by someone else. It

can be collected directly either from published or unpublished sources. It is collected for

purposes other than the completion of a research project and it is used to gain initial insight

into the research problem.

SOURCES OF SECONDARY DATA

 The data was collected from personal observation of records.

 The pamphlets provided by the bank.

 The brochures and annual records provided by the bank.

 Official website of the company.

[8]
  Shodhganga website.

LIMITATIONS OF THE STUDY

 The study was conducted with the available data and the analysis made on it.

 The study is limited to the personal loan’s schemes under HDFC BANK.

 The project on loans and advances is more like a theoretical project.

 Some of the data vital to the study could not be accessed due to the confidentiality

policies of the bank.

 The study is limited to one branch of HDFC BANK.

[9]
 CHAPTER 2

REVIEW OF LITERATURE

[10]
[11]
TITLE OF THE PAPER : HOUSING CREDIT SITUATIONS IN EIGHTIES

AUTHOUR : Lall Vinay

YEAR : 1984

ABSTRACT

He has focused attention upon ‘formal factor’ (Permanent Construction) which served mainly

to the HIG and MIG, the loan meets only 47% of the price of the house, forcing the

borrowers to make very large down payments. Also, the price of a typical house was above 3

times the annual families’ income of the borrowers. In spite of, the entire system of housing

allocation and credit the supply of affordable funds was much smaller than demand. Thus,

large growth in urban population and the historically low priority given to housing, supply

falls very short of demand and need. Therefore, not only that the volume of saving and

investments should increase but also larger volumes of capital should flow into housing.

Also, accessibility and terms and condition of housing credit will determine the long-term

redistribution performance in housing.

[12]
TITLE OF THE PAPER : HOUSING IN THE NEW MILLENNIUM: A HOME

WITHOUT EQUITY IS JUST A RENTAL WITH DEBT

AUTHOR : Joshua Rosner

YEAR : 2001

ABSTRACT

He studied the prospects of the U.S. housing / mortgage sector over the next several years.

Based on his analysis, he believes that, there are elements in place for the housing sector to

continue to experience growth well above GDP. However, he believes that there are risks that

can materially distort the growth prospects of the sector. Specifically, it appears that a large

portion of the housing sector’s growth in the 1990’s came from the easing of the credit

underwriting process.

[13]
TITLE OF THE PAPER : HOME OWNERSHIP RISK BEYOND A SUBPRIME

CRISIS

AUTHOR : Jaco Melissa

YEAR : 2002

ABSTRACT

She concluded that public investment in and promotion of homeownership and the home

mortgage market often relies on three justifications to supplement shelter goals: to build

household wealth and economic self-sufficiency, to generate positive sociopsychological

states, and to develop stable neighborhoods and communities. Home ownership and mortgage

obligations do not inherently further these objectives, however and sometimes undermine

them. The most visible triggers of the recent surge in subprime delinquency have produced

calls for emergency foreclosure avoidance interventions. Whatever their merit, she contends

that a system of mortgage delinquency management should be an enduring component of

housing policy. Furtherance of housing and household policy objectives hinges in part. On

the conditions under which homeownership is obtained, maintained, leveraged, and in some

situations exited.

[14]
TITLE OF THE PAPER : HOUSING PROBLEM AND PUBLIC ACTION

AUTHOR : M. Mahadeva

YEAR : 2004

ABSTRACT

In this article, the author has analyzed the nature and distribution of the housing problem in

Karnataka and examined how the state has addressed this issue. In particular, it considers the

strategies adopted during the 90s and identifies a number of failures including the task force

on housing. Some of the major weaknesses, pertaining to incidence by type and by rural-

urban areas, on approaches, on financial requirements and issue of development and

redevelopment are examined to propose alternative policy strategies to effectively address the

housing problem in the state. From the analysis it is found that Karnataka is not an exception

to the general rule that housing strategies, which were evolved over decades, have not taken

the direction expected. By and large, the sectoral policies pursued were only ad hoc without a

clear focus.

[15]
TITLE OF THE PAPER : PERFORMANCE OF HOUSING FINANCE

COMPANIES

AUTHOR : Brar Jasmindeep

YEAR : 2005

ABSTRACT

The objectives of this study were: to study the operational performance, and the financial

performance of the selected institutions. The study covers three institutions viz. HDFC, LIC

& PNB. The study is based on secondary data that have been collected from the annual

reports and web sites of the institutions selected under study. It covers the period from 1990-

91 to 2002-03. The performance of the selected institutions has been studied by using

percentages, compound growths rates and various ratios. HDFC comes at the top among all

the institutions as far as loan sanctioned, disbursements and the loan outstanding are

concerned, PNB has the last rank for both loans sanctioned and disbursed. However, the

compound growth rate for the loan sanctioned, disbursement and outstanding has been

highest in the case of LICHF. It stood at 26.49%, 30.89%, 36.16%. Against PNB showed the

lowest compound growth rates of 18.62% and 19.90%, for the loan sanctioned and

disbursement over the same period. However, the compound growth rate of the loan

outstanding in the case of PNBHF was higher than the growth rate of HDFC.

[16]
TITLE OF THE PAPER : RETAIL BANKING – EMERGING ISSUE IN HOME

LOAN

AUTHOR : K. N. Rao

YEAR : 2005

ABSTRACT

In this paper the authors revealed that during 2002-03 housing loans by banks grew at a hefty

growth rate of more than 100%. The factors that contributed to this aggressive growth in the

portfolio of housing loans of banks and HFC are: Tax intensives on repayment of principal

and interest, rising income level of middle class, falling interest rate, stable real estate prices,

easy availability of housing loans, low returns on the investment opportunities available in

the market. They also concluded that although there is strong growth in housing loans by

financial situations in India, we are still behind the developed countries in terms of housing

loans to GDP ratio. In India it is around 2.5% compared to 57% in the UK and 54% in the

US. It shows that there is a vast scope for housing loans in India. One economist has argued

that every rupee spent on the housing sector will increase the GDP by more than 75 paise. It

also creates a labor intensive. Despite the immense growth in housing loans there are certain

challenges that the banks might face in the time to come, e.g. falling rate of interest, rising

mismatch in the assets and liabilities of the bank, rising NPA in the housing loan portfolio,

etc.

[17]
TITLE OF THE PAPER : HOUSING LOAN FRAUDS IN BANKS: SOME

PRECAUTIONARY MEASURES

AUTHOR : Phogat M.

YEAR : 2006

ABSTRACT

This article gives the measures for the housing loan frauds in banks. The author concluded

that housing for all envisaged 2 million houses every year out of which 0.7 million are in the

urban sector. Government provided certain relief under Income Tax Act. It motivated many

people to avail housing loan. The author thinks that different frauds committed on various

banks can be divided into the following two categories. i.e. Pre sanction and Post Sanction.

KYC related due weakness in pre inspection, Benami A/c, forged title deeds, by selling same

flat to different people, inflated salary certificate, filing of IT return for the last three years in

one lot and particularly by paying a nominal amount of tax, valuation of the property is

manipulated to manage margin money are post sanction fraud.

The precautions may be taken at the bank level to avoid the assurance of fraud i.e. KYC

norms be followed, main salary A/c should be verified, loan should be granted against the

flat/ houses built by reputed builders only. An undertaking from the builders for not been sold

to any other person, search report of property to be conducted by the advocate, original title

deeds, property tax, electricity bill, kept on records. Disbursement of loan should be made

after spot verification, title deed should be scanned through ultra violet ray machines before

mortgage and bank should independently verify the report and no middle man should be

[18]
involved in the process and entire KYC. So, the author points out that above mentioned

precautions will enable the bankers to curb frauds and public money can be saved.

TITLE OF THE PAPER : HOUSING FINANCE – A GLOBAL PERSPECTIVE

AUTHOR : Rao K. N.

YEAR : 2006

ABSTRACT

According to Rao, housing finance is a long-term proposition involving many risks for the

lenders, borrowers and even for the economy in general. As housing finance is a long-term

game, it requires proper asset-liability management strategy, the borrowers also face interest

rate risk, especially when they are locked in fixed rates when interest rates are falling and

floating rates are rising. The author mentions in this article that home loans have been

registering exponential growth in India during the last six years. Easy liquidity conditions,

low interest rates, availability of tax shelters on repayment of principal and interest surging

demand from middle income group borrowers, lower regulatory capital, the comfort of

tangible security have all collectivity contributed to the spurt in home loans. HDFC, ICICI

and SBI are the major players in disbursement of home loans. These banks sanction up to

85% of the cost of the property as home loan for a maximum period of 20 to 30 years. In US,

GSE that are instrumental in the high percentage of home ownership. These two enterprises

enjoy implicit government guarantee and consequently raise long term funds globally at low

interest.

[19]
TITLE OF THE PAPER : REVERSE MORTAGE – A NOVEL FINANCIAL

PRODUCT FOR ELDERLY PEOPLE

AUTHOR : Bhattacharjee K.

YEAR : 2007

ABSTRACT

A reverse mortgage is a home equity loan offered to senior citizens that permits them to

convert home equity into cash while they retain ownership. A reverse mortgage works like a

traditional mortgage loan, only in reverse direction. A borrower does not make regular

payments to a lender; instead he/she receives payments from the lender. The first reverse

mortgage loan launched by Dewan housing in 2006. Reverse mortgage product name was

“Saksham”. Then ICICI and NHB launched a new product of reverse mortgage. Reverse

mortgage can provide a valuable income source for seniors who own property but lack liquid

assets. So, it is mainly meant for home-rich senior citizens who are otherwise cash-poor. This

is precisely the scenario where reverse mortgage products can be a boon to senior citizens

and a business for the lenders.

[20]
TITLE OF THE PAPER : HOUSING FINANCE SECTOR IN INDIA

AUTHOR : Sreelaxmi P.

YEAR : 2007

ABSTRACT

The author stated that housing has always been an important agenda for the Government of

India. It generates national income by creating employment and helps the individuals in their

socio – economic development. It gives impetus to the economy by enhancing capacity

utilization of related industries such as steel, cement, transportation, etc. The home loan

sector in India is on a boom. The new class of young buyers, whose affordability is high, is

spending a little more on paying EMI rather than spending huge amounts on the rents,

thereby owning a house. The government is also encouraging this sector by allowing tax

benefits. The housing finance sector shows an exponential growth as compared to the other

areas of credit. The annual growth rates (in %) of direct housing finance disbursals by the

Primary Lending Institution during 2001-02, 2002-03, 2003-04 and 2004-05 were 25,76,29

and 32 respectively. While housing finance is experiencing exponential growths, the menace

of bad loans cannot be ignored. These loans required better monitoring, fair assessment of

property and compliance with end – use principles and because of the Securitizations Act,

banks are now able to overcome the problem of non- performing Assets e.g. In 2004-05,

[21]
percentage of NPA in housing finance was only 1.4 compared to 2.80% in case of banks’

total retail credit.

CHAPTER-III
INDUSTRY PROFILE
&
COMPANY PROFILE

[22]
Managing an account inside the present feeling of the expression is probably followed to

medieval and early Renaissance Italy, to the properly off cities in the north like Florence,

Venice and Sialkot Genoa. The Bardi and Peruzzi households dominated dealing with an

account in fourteenth century Florence, constructing up branches in a extensive range of parts

of Europe. A standout amongst the most clearly understood Italian banks become the Medici

Bank, installation via utilizing Giovanni di Bicci de' Medici in 1597. The most punctual

recognized state store cash associated organization, Banco di San Giorgio (Bank of St.

George), wind up it appears that evidently located in 1414 at Genoa, Italy.

The expression bank become acquired in Middle English from Middle French banque, from

Old Italian banca, from Old High German bank "seat, counter". Seats have been utilized as

paintings regions or alternate counters at a few phases inside the Renaissance via Florentine

investors, who used to make their exchanges on work areas blanketed through inexperienced

tablecloths. One of the most established matters observed displaying money changing over

enjoyment pastime is a silver Greek drachm coin from recorded Hellenic province Trapezius

on the Black Sea, bleeding part Trabzon, c. 350– 325 BC, furnished in the British Museum in

London. The coin demonstrates an investor's table (trapeze) hampered with cash, a play on

words on the call of the metropolis. In fact, even these days in Modern Greek the expression

Trapeze (Τράπεζα) implies both a desk and a cash associated basis.

[23]
Another reasonable starting spot of the expression is from the Sanskrit phrases 'byaya' (rate)

and 'okay' (figuring) = byaya-extraordinarily well. This expression through the by using gets

through in Bangla, that's one in the whole lot about teenager dialects. Such fee computations

have been the most essential a piece of scientific treatises composed with the guide of Indian

mathematicians as proper on time as 500 B.C.

Definition

The meaning of a cash related organization fluctuates from U. S. A. To U. S. See the crucial

U. S. A. Page (below) for more information.

Under English normal control, a financier is portrayed as any individual who consists of at

the enterprise challenge of saving money, this is unmistakable as:

o undertaking contemporary bills for his customers,

o paying tests drawn on him/her, and

o amassing assessments for his/her clients.

[24]
In greatest no longer atypical manipulate purviews there is a Bills of Exchange Act that

classifies the course as some distance as arguable units, collectively with checks, and this Act

contains of a statutory meaning of the time period financier: investor comprises of an edge of

people, no matter whether consolidated or now not, who bear on the enterprise mission of

saving money' (Section 2, Interpretation). In spite of the truth that this definition appears

round, it's miles maximum in all likelihood all the way down to earth, as it ensures that the

lawful purpose for bank exchanges including assessments does not depend on how the

financial institution consists or managed.

The mission of handling an account is in numerous Englishes now not ordinary course global

regions by no means again characterized with the aid of statute but thru traditional manage,

the definition above. In other English not unexpected manipulate wards there are statutory

meanings of the matter of coping with an account or preserving money commercial

enterprise. While searching at the ones definitions it's far crucial to bear in mind the way that

they may characterize the problem of maintaining cash for the elements of the law, and no

longer normally in preferred. In particular, maximum severe of the definitions are from path

that has the motivations in the back of access coping with and overseeing banks rather than

controlling the real commercial enterprise of keeping money. In any case, in most cases the

statutory definition eagerly reflects the ordinary regulation one. Cases of statutory definitions:

 "Banking enterprise" manner the problem of accepting cash on modern or keep account,

paying and amassing checks drawn with the aid of or paid in through techniques for clients,

the making of advances to clients, and carries such amazing business task in mild of the

reality that the Authority may additionally moreover propose for the factors of this Act;

(Banking Act (Singapore), Section 2, Interpretation).

[25]
  "Banking enterprise venture" technique the commercial enterprise assignment of either or

each of the accompanying:

 Receiving from a massive portion of the overall populace coins on modern-day, store, cash

related reserve budget or various comparative file repayable available to come back returned

to work for or inner underneath [3 months] ... Or, on the other hand with a duration of name

or see of now not as lots as that time period;

 Paying or accumulating tests drawn by using or paid in through clients.

Since the technique of EFTPOS (Electronic Funds Transfer at Point of Sale), coordinate

credit score, coordinate price and internet retaining money, the test has lost its strength in

maximum managing an account structures as a fee machine. This has pushed jail students to

demonstrate that the take a look at based totally definition have to be widened to incorporate

monetary foundations that lead cutting edge coins owed for clients and allow customers to

pay and be paid by means of third events, no matter whether they do never again pay and

obtain checks.

Banks move approximately as fee advertisers by way of taking component in checking or

front line represents customers, paying appraisals drawn via customers at the bank, and

assembling reviews saved to clients' present data. Banks moreover empower consumer

charges thru other price strategies which includes Automated Clearing House (ACH), Wire

exchanges or transmitted transfer, EFTPOS, and programmed teller framework (ATM).

Banks acquire cash through tolerating spending plan saved on current cash owed, by using

tolerating term stores, and through techniques for issuing obligation securities which includes

banknotes and securities. Banks mortgage money via making advances to clients on introduce

day bills, with the aid of approach of creating element credits, and by means of making an

interest in attractive obligation securities and different forms of cash loaning.

[26]
Banks supply particular expense administrations, and a financial stability is mulled over basic

thru greatest businesses and those. Non-banks that give fee offerings comprising of

agreement agencies are typically in no way again pondered as a very well alternative for a

budgetary established order account.

Channels

Banks provide numerous superb channels to get passage to their managing an account and

exceptional administrations:

• Automated Teller Machines

• A division is a retail area

• Call middle

• Mail: most banks accept take a look at stores via mail and make use of mail to speak

with their clients, e.g.by approach of conveying proclamations

• Mobile handling an account is a technique of making use of one's cell smartphone to

behavior saving money exchanges

• Online managing an account is a term applied for gambling out numerous exchanges,

installments et cetera. Over the Internet

[27]
• Relationship Managers, as regularly as viable for personal saving cash or assignment

maintaining cash, routinely voyaging customers at their houses or institutions

• Telephone managing an account is an administration which lets in its clients to

perform exchanges thru telephone with mechanized orderly or at the same time as requested

for with cellphone administrator

• Video preserving cash is a time period utilized for appearing saving money exchanges

or master managing an account conferences via a much away video and sound affiliation.

Video saving money might be completed through cause-built saving cash trade machines

(similar to an Automated teller gadget), or thru a video collecting empowered monetary basis

office illumination

Plan of action

A budgetary basis can create profits in an expansion of numerous techniques along diversion,

trade costs and monetary recommend. The primary technique is thru charging enthusiasm on

the capital it loans out to clients. The financial institution pays from the distinction among the

degree of diversion it pays for stores and one-of-a-kind assets of value increase, and the level

of top rate it charges in its loaning physical games.

This difference is known as the unfurl among the cost of cost go and the advance amusement

hobby rate. Truly, benefit from loaning sports activities has been repeating and challenge to

the wishes and characteristics of enhance customers and the extent of the cash related cycle.

Charges and economic recommend communicate to a greater sturdy offer circulate and banks

[28]
have on this manner positioned greater outstanding accentuation on these profits’ traces to

simple their financial execution.

In the past 20 years American banks have taken many measures to assure that they remain

gainful even as reacting to gradually converting industrial middle circumstances. To start

with, this carries the Gramm-Leach-Bliley Act, which licenses banks again to converge with

speculation and protection homes. Combining saving cash, financing, and protection abilities

presents commonplace banks to react to expanding patron necessities for "one-save you

buying" with the aid of method for allowing move-supplying of stock (which, the banks agree

with, may even blast gainfulness).

They have looked to extend the techniques for installment getting readily available to the

greater element and business enterprise customers. These stocks contain of check cards, pay

as you move gambling cards, smart playing cards, and financial evaluation cards. They make

it less complicated for clients to effortlessly make exchanges and simple their utilization

throughout the years (in a few countries with immature economic frameworks, it's far

regardless now not strange to bargain absolutely in actual money, together with sporting

baggage loaded with money to buy a home).

Be that as it is able to, with solace of simple credit, there might be additionally duplicated

danger that consumers will fumble their economic assets and acquire radical obligation.

Banks make money from card gadgets through top rate payments and prices charged to

consumers and alternate prices to groups that get the FICO score charge - cards. This aides in

making gain and encourages financial alternate all in all.

Products

Retail banking

• Checking account

[29]
• Savings account

• Money market account

• Certificate of deposit (CD)

• Individual retirement account (IRA)

• Credit card

• Debit card

• Mortgage

• Home fairness mortgage

• Mutual fund

• Personal mortgage

• Time deposits

• ATM card

• Current Accounts

Business (or commercial/investment) banking

• Business mortgage

• Capital raising (Equity / Debt / Hybrids)

• Mezzanine finance

• Project finance

• Revolving credit score rating

• Risk control (FX, hobby rates, commodities, derivatives)

• Term mortgage

• Cash Management Services (Lock discipline, Remote Deposit Capture, Merchant

Processing)

[30]
Hazard and capital

Banks confront various perils keeping in thoughts the end intention to behavior their

assignment, and the way well those dangers are overseen and comprehended is a key idea

system constrain inside the back of advantage, and what kind of capital a cash related basis is

predicted to hold. A part of the rule of thumb dangers seemed by way of making use of banks

comprise of:

• Credit risk: chance of misfortune emerging from a borrower who does now not make

charges as assured.

• Liquidity danger: danger that a given guarantee or useful resource cannot be

exchanged unexpectedly sufficient inside the market to preserve a misfortune (or make the

predefined earnings).

[31]
• Market danger: peril that the cost of a portfolio, either a speculation portfolio or a

purchasing and offering portfolio, will convey down because of the adjustment in price of the

market threat components.

• Operational risk: danger leaping up from execution of an undertaking's commercial

enterprise project capacities.

• Reputational threat: a type of danger identified with the reliability of big business.

• Macroeconomic threat: perils related with the combination monetary framework the

bank is working in.

The capital necessity is a bank regulation, which sets a shape on how banks and vault

foundations need to address their capital. The category of property and capital is staggeringly

institutionalized all together that it is probably chance weighted.

Banks inside the money related framework

Financial capacities

The money related highlights of banks envelop:

1.Issue of coins, inside the form of banknotes and present-day records hassle to check or

price at the purchaser's request. These cases on banks can move about as cash considering

they are debatable or repayable to be had to come back lower back to paintings for, and on

this way really worth well-known. They are successfully transferable by means of

[32]
insignificant conveyance, because of banknotes, or with the aid of strategies for drawing an

look into that the payee may additionally likewise financial institution or cash.

2.Netting and settlement of installments – banks move about as every association and paying

experts for clients, taking an hobby in interbank clearing and assent ion frameworks to build

up, introduce, be furnished with, and pay installment devices. This empowers banks to spare

cash on saves held for settlement of installments, on the grounds that inner and outward

installments stability each different. It additionally empowers the balancing of price streams

among geological zones, diminishing the value of agreement amongst them.

3.Credit intermediation – banks reap and loan deliver down lower back-to-back on their

personal report as center guys.

4.Credit respectable development – banks mortgage coins to normal enterprise and character

account holders (well-known FICO rating first rate), however are intemperate incredible

debtors. The development originates from expansion of the financial institution's assets and

capital which gives a cushion to assimilate misfortunes without defaulting on its

commitments.

5.Be that as it is able to, banknotes and shops are normally unsecured; if the cash related

established order receives into difficulty and vows property as security, to raise the financing

it needs to preserve to play out, this puts the recognize holders and buyers in a financially

subordinated work.

6.Asset lawful responsibility crisscross/Maturity trade – banks attain additional on request

duty and quick day and age obligation, but offer all of the greater long-haul advances. In

[33]
extraordinary expressions, they acquire short and mortgage vast. With a more excessive

credit score high-quality than best specific borrowers, banks can do that by way of using

amassing inconveniences (e.g. Tolerating shops and issuing banknotes) and recoveries (e.g.

Withdrawals and reclamation of banknotes), preserving shops of money, putting assets into

attractive securities that may be easily changed to money if needed, and elevating substitution

subsidizing as wished from diverse assets (e.g. Discount money markets and securities

markets).

7.Money creation – on each event a financial institution offers out a home loan in a

fragmentary save dealing with an account device, a shiny new general of digital coins is

made.

Sorts of retail banks

• Commercial cash related established order: the time period applied for a normal budgetary

basis to understand it from a challenge economic agency. After the Great Depression, the

U.S. Congress required that banks least complex have collaboration in dealing with an

account exercises, even as subsidizing banks have been obliged to capital business middle

games. Since the two by no means again need to be underneath isolated possession, a few

utilizations the day and age "business money associated basis" to allude to a monetary

established order or a bureau of a financial institution that by and big manages stores and

advances from agencies or sizeable agencies.

[34]
• Community banks: privately labored economic foundations that allow group of workers to

choose neighborhood choices to serve their clients and the accomplices.

• Community exchange banks: controlled banks that provide money associated services and

FICO rating to underserved markets or populaces.

• Credit unions: no extra prolonged for-income cooperatives claimed through the traders and

frequently providing cites extra noteworthy high quality than revenue pushed banks.

Commonly, membership is obliged to people of a selected company, nationals characterized

group, supporters of a effective efforts union or otherworldly companies, and their set off

households.

• Postal economic budget banks: money related funding price range banks associated with

country extensive postal frameworks.

• Private Banks: banks that manage the belongings of over the top internet actually well

worth humans. Verifiably in any occasion USD 1 million converted into required to open a

file, be that as it can, over the previous year’s several non-public banks have faded their

entrance limitations to USD 250,000 for person dealers.

• Offshore banks: banks located in wards with low tax series and control. Numerous seaward

banks are essentially character banks.

• Savings financial employer: in Europe, budgetary funding finances banks took their

foundations inside the nineteenth or on occasion even within the eighteenth century

• Building social orders and Landbanks: foundations that lead retail managing an account.

• Ethical banks: banks that arrange the straightforwardness of all operations and affect

simplest what they to preserve up below at the pinnacle of the concern listing to be socially-

successful speculations.

• A Direct or Internet-Only financial institution is a preserving money operation without a

bodily bank places of work, imagined and connected absolutely with prepared PCs.

[35]
Different sorts of banks

• Central banks are often government-possessed and accused of semi administrative

obligations, alongside administering mechanical banks, or controlling the cash side interest

rate. They frequently offer liquidity to the saving money gadget and act considering the

moneylender of shutting inn in occasion of an emergency.

• Islamic banks stick with the mind of Islamic law. This nation of coping with an account

rotates spherical various pleasantly mounted gauges basically in view of Islamic

requirements.

HDFC BANK

WE UNDERSTAND YOUR WORLD

HDFC (Housing Development Financial Corporation) Bank Limited is an Indian banking

and financial services company headquartered in Mumbai, Maharashtra. It has 84,325

employees and has a presence in Bahrain, Hong Kong and Dubai. HDFC Bank is India’s

largest private sector lender by assets. It is the largest bank in India by market capitalization

as of February 2019. It was ranked 69th in 2019 Brand Top 100 Most Valuable Global

Brands.

[36]
In 1994 HDFC Bank was incorporated, with its registered office in Mumbai, India. Its first

corporate office and a full service branch at Sandoz House, Worli were inaugurated by the

Union Finance Minister, Man Mohan Singh.

As of June 30, 2019, the bank's distribution network was at 4,717 branches and 14,260 ATMs

across 2,657 cities and towns. The bank also installed 4.30 Lacks POS terminals and issued

235.7 Lacks debit cards and 85.4 Lacks credit card in FY 2019.

Products and services

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

and credit cards.

The latest entry in the league is 'Project AI', under which HDFC Bank, over the next few

weeks, would deploy robots at select bank branches. These robots will offer options such as

cash withdrawal or deposit, forex, fixed deposits and demat services displaying on a screen to

customers.

Acquisitions

HDFC Bank merged with Times Bank in February 2000. This was the first merger of two

private banks in the New Generation private sector banks category. In 2008, Centurion Bank

was acquired by HDFC Bank. HDFC Bank Board approved the acquisition of CBoP for 95.1

billion INR in one of the largest mergers in the financial sector in India.

Listings and shareholding

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and the National

Stock Exchange of India. Its American Depository Shares are listed on NYSE and the global

[37]
depository receipt are listed on the Luxembourg Stock Exchange where two GDRs represent

one equity share of HDFC Bank.

Table: 1

Shareholders (as of 31 December 2017) Shareholding

Promoter group (HDFC) 21.57%

Foreign institutional investors (FII) 32.4%

Individual shareholders 8.5%

[38]
 Bodies corporate 7.5%

Insurance companies 5.38%

Mutual funds/UTI 8.65%

NRI/OCB/others 0.29%

Financial institutions/banks 2.75%

ADS/GDRs 18.78%

Awards and recognition

 Best Banking Performer, India in 2019 by Global Brands Magazine Award.

Table 2:

Best Performing Branch in Microfinance among Award for Best Performance in

private sector banks by NABARD, 2019 Microfinance

Bank of the year & best digital

KPMG study of India's Best Banks
banking initiative award 2019

[39]
 Business leader of the year- Aditya
AIMA Managing India Awards 2017
Puri

Most Valued brand in India for third

Brands’ Rankings
successive year

Best managed public company –

Finance Asia poll on Asia's Best Companies 2017
India

Barron's World's 30 Best CEOs - Aditya Puri

Best in class straight through

J. P. Morgan Quality Recognition Award
processing rates

BACKGROUND

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank

in the private sector, as part of RBI’s liberalization of the Indian Banking Industry in

1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited',

with its registered office in Mumbai, India. HDFC Bank commenced operations as a

Scheduled Commercial Bank in January 1995.

[40]
 PROMOTER

HDFC is India’s premier housing finance company and enjoys an impeccable track record

in India as well as in international markets. Since its inception in 1977, the Corporation

has maintained a consistent and healthy growth in its operations to remain the market

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

units. HDFC has developed significant expertise in retail mortgage loans to different

market segments and also has a large corporate client base for its housing related credit

facilities. With its experience in the financial markets, strong market reputation, large

shareholder base and unique consumer franchise, HDFC was ideally positioned to

promote a bank in the Indian environment.

BUSINESS FOCUS

HDFC Bank’s mission is to be a World Class Indian Bank. The objective is to build sound

customer franchises across distinct businesses so as to be the preferred provider of

banking services for target retail and wholesale customer segments, and to achieve

healthy growth in profitability, consistent with the bank’s risk appetite. The bank is

committed to maintain the highest level of ethical standards, professional integrity,

corporate governance and regulatory compliance. HDFC Bank’s business philosophy is

based on five core values: Operational Excellence, Customer Focus, Product Leadership,

[41]
People and Sustainability.

CAPITAL STRUCTURE

As on 31st March, 2017 the authorized share capital of the Bank is Rs. 550 crores. The

paid-up share capital of the Bank as on the said date is Rs. 501,29,90,634/- (2506495319)

equity shares of Rs. 2/- each). The HDFC Group holds 21.67 % of the Bank's equity and

about 18.87 % of the equity is held by the ADS / GDR Depositories (in respect of the

bank's American Depository Shares (ADS) and Global Depository Receipts (GDR)

Issues). 32.57 % of the equity is held by Foreign Institutional Investors (FIIs) and the

Bank has 4, 41,457 shareholders.

The shares are listed on the Bombay Stock Exchange Limited and The National Stock

Exchange of India Limited. The Bank's American Depository Shares (ADS) are listed on

the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global

Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No

US40417F2002.

AMALGAMATION OF TIMES BANK & CENTURION BANK OF PUNJAB

WITH HDFC BANK

On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was

formally approved by Reserve Bank of India to complete the statutory and regulatory
[42]
approval process. As per the scheme of amalgamation, shareholders of CBoP received 1

share of HDFC Bank for every 29 shares of CBoP.

The amalgamation added significant value to HDFC Bank in terms of increased branch

network, geographic reach, and customer base, and a bigger pool of skilled manpower.

In a milestone transaction in the Indian banking industry, Times Bank Limited (another

new private sector bank promoted by Bennett, Coleman & Co. / Times Group) was

merged with HDFC Bank Ltd., effective February 26, 2000. This was the first merger of

two private banks in the New Generation Private Sector Banks. As per the scheme of

amalgamation approved by the shareholders of both banks and the Reserve Bank of India,

shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of

Times Bank.

DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. As of March 31, 2017, the Bank’s distribution

network was at 4,014 branches in 2,464 cities. All branches are linked on an online real-

time basis. Customers across India are also serviced through multiple delivery channels

such as Phone Banking, Net Banking, Mobile Banking and SMS based banking. The

Bank’s expansion plans take into account the need to have a presence in all major

industrial and commercial centers, where its corporate customers are located, as well as

[43]
the need to build a strong retail customer base for both deposits and loan products. Being

a clearing / settlement bank to various leading stock exchanges, the Bank has branches in

centers where the NSE / BSE have a strong and active member base.

The Bank also has a network of 11,766 ATMs across India. HDFC Bank’s ATM network

can be accessed by all domestic and international Visa / MasterCard, Visa Electron /

Maestro, Plus / Cirrus and American Express Credit / Charge cardholders.

MANAGEMENT

Mrs. Shyamal Gopinath holds a Master’s Degree in Commerce and is a CAIIB. Mrs.

Gopinath has 39 years of experience in financial sector policy formulation in different

capacities at RBI. As Deputy Governor of RBI for seven years and member of the Board.

Mrs. Gopinath had been guiding and influencing the national policies in the diverse areas

of financial sector regulation and supervision, development and regulation of financial

markets, capital account management, management of government borrowings, forex

reserves management and payment and settlement systems.

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years

and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of

experience in public policy, administration, industry and commercial banking. Senior

executives representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad head various

businesses and functions and report to the Managing Director. Given the professional

expertise of the management team and the overall focus on recruiting and retaining the

best talent in the industry, the bank believes that its people are a significant competitive

[44]
strength.

TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms of information

technology and communication systems. All the bank’s branches have online

connectivity, which enables the bank to offer speedy funds transfer facilities to its

customers. Multi-branch access is also provided to retail customers through the branch

network and Automated Teller Machines (ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology

available internationally, to build the infrastructure for a world class bank. In terms of

core banking software, the Corporate Banking business is supported by Flex cube, while

the Retail Banking business by Fin ware, both from I-flex Solutions Ltd. The systems are

open, scalable and web-enabled.

The Bank has prioritized its engagement in technology and the internet as one of its key

goals and has already made significant progress in web-enabling its core businesses. In

each of its businesses, the Bank has succeeded in leveraging its market position, expertise

and technology to create a competitive advantage and build market share.

BUSINESS PROFILE

HDFC Bank caters to a wide range of banking services covering commercial and

investment banking on the wholesale side and transactional / branch banking on the retail

side. The bank has three key business segments:

[45]
Wholesale Banking

The Bank’s target market is primarily large, blue-chip manufacturing companies in the

Indian corporate sector and to a lesser extent, small & mid-sized corporates and Agri-

based businesses. For these customers, the Bank provides a wide range of commercial and

transactional banking services, including working capital finance, trade services,

transactional services, cash management, etc. The bank is also a leading provider of

structured solutions, which combine cash management services with vendor and

distributor finance for facilitating superior supply chain management for its corporate

customers. Based on its superior product delivery / service levels and strong customer

orientation, the Bank has made significant inroads into the banking consortia of a number

of leading Indian corporates including multinationals, companies from the domestic

business houses and prime public sector companies. It is recognized as a leading provider

of cash management and transactional banking solutions to corporate customers, mutual

funds, stock exchange members and banks.

Treasury

Within this business, the bank has three main product areas - Foreign Exchange and

Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the

liberalization of the financial markets in India, corporates need more sophisticated risk

management information, advice and product structures. These and fine pricing on

various treasury products are provided through the bank’s Treasury team. To comply with

statutory reserve requirements, the bank is required to hold 25% of its deposits in

government securities. The Treasury business is responsible for managing the returns and

market risk on this investment portfolio.

[46]
Retail Banking

The objective of the Retail Bank is to provide its target market customers a full range of

financial products and banking services, giving the customer a one-stop window for all

his/her banking requirements. The products are backed by world-class service and

delivered to customers through the growing branch network, as well as through alternative

delivery channels like ATMs, Phone Banking, Net Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus

and the Investment Advisory Services programs have been designed keeping in mind

needs of customers who seek distinct financial solutions, information and advice on

various investment avenues. The Bank also has a wide array of retail loan products

including Auto Loans, Loans against marketable securities, Personal Loans and Loans for

Two-wheelers. It is also a leading provider of Depository Participant (DP) services for

retail customers, providing customers the facility to hold their investments in electronic

form.

HDFC Bank was the first bank in India to launch an International Debit Card in

association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as

well. The Bank launched its credit card business in late 2001. By March 2017, the bank

had a total card base (debit and credit cards) of over 25 million. The Bank is also one of

the leading players in the “merchant acquiring” business with over 235,000 Point-of-sale

(POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank

is well positioned as a leader in various net based B2C opportunities including a wide

range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.

[47]
Rewards and Recognitions:

2019

Table: 3

AIMA Managing India Awards 2017 - Business Leader of the Year - Aditya

Puri

Barron's - World's 30 Best CEOs - Mr. Aditya

Puri

Finance Asia poll on Asia's Best - Best Managed Public Company -

[48]
Companies 2019 India'

Best CEO- Aditya Puri

Best Corporate Governance- Rank 3

Best Investor Relations- Rank 3

J. P Morgan Quality Recognition - Best in class straight Through

Award Processing Rates

2018

Euro money - HDFC Bank wins Best Private Banking Services for

Super affluent clients for 5 years in a row at Euro money

Awards

Euro money Private - Best Private Banking Services award for Net-worth-

Banking and Wealth specific services category for Super affluent clients (US$

Management 1 million to US$ 5 million).

Survey 2017 - Best Private Banking Services award Asset

Management

FE Best Bank - Best Bank in the New Private sector

Awards - Winner - Profitability

- Winner - Efficiency

Business Today - - Best Large Bank - Overall

[49]
KPMG Study 2014 - Best Large Bank - Growth

Business world- - Best Large Bank 

PwC India Best - Fastest Growing Large Bank

Banks Survey 2014

Asia money FX Poll - Best Domestic Provider of FX options 

2014 - Best Domestic Provider of FX products & Services 

- Best Domestic Provider of FX research & market

coverage 

- Best Domestic provider for FX Services

The Asian Banker Strongest Bank in India in the Asian Banker 500 (AB

500) Strongest Bank by Balance Sheet Ranking 2014

Dun & Bradstreet - - Best Bank - Managing IT Risk (Large Banks)

Polaris Financial - Best Bank - Mobile Banking (Large Banks)

Technology - Best Bank - Best IT Team (Private Sector Banks)

Banking Awards

2014

Forbes Asia Fab 50 Companies List for the 8th year

BrandZ TM Top 50 India's Most Valuable Brand

Most Valuable

Indian Brands study

by Millward Brown

Finance Asia - Best Bank - India

[50]
Country Awards - Best CEO- Rank 1

2014 and poll on - Best CSR - Rank 1

India's Top - Best CFO - Rank 2

Companies

Asia money Best of Best Domestic Banks - India

Dun & Bradstreet - Best Corporate in Banking Sector

Manipuri Finance

Limited Corporate

Award 2014

CHAPTER – 4

[51]
 DATA ANALYSIS

AND

INTERPRETATION

The main function of HDFC BANK LTD is to accept the deposits from the public for the

purpose of lending. The bank has to manage the loans disbursements in a better way to earn

income so that they can repay to the depositors. Therefore, the bank has to take the necessary

steps to increase the loan disbursement and manage them effectively. In this context analysis

is done regarding the bank’s loan disbursement in order to know whether the bank is

performing well or not.

In this study the data analysis is done for ten types of home loans offered by HDFC

BANKLTD for a period of five years 2008-2009,2011-14, 2014-17, 2017-18, 2018-19.

For the better understanding of the data graphical representation has been used. For this

purpose, different charts are used.

[52]
THE LOANS ANALYSED ARE:

 Housing loan (residents)

 Home Loan

 NRI housing loan

 Education loan

 Two-wheeler loan

 Car loan

 Mortgage loan

 Fast credit loan

 Loans against gold ornaments/ Agriculture Loan

 Business Loan

[53]
Balance Sheet of HDFC Bank

Mar '19 Mar '18 Mar '17 Mar 16 Mar '15

14 MThs 14 MThs 14 MThs 14 MThs 14 MThs

Capital and Liabilities:

Total Share Capital 514.51 505.64 501.30 479.81 475.88

Equity Share Capital 514.51 505.64 501.30 479.81 475.88

Reserves 88,949.84 72,192.15 61,508.14 42,998.82 35,738.26

Net Worth 89,462.35 72,677.77 62,009.42 43,478.63 36,214.14

Deposits 643,639.66 546,424.19 450,795.64 367,337.48 296,246.98

Borrowings 74,028.87 53,018.47 45,215.56 39,438.99 33,006.60

Total Debt 719,668.53 599,442.66 496,009.20 406,776.47 329,253.58

Other Liabilities & Provisions 56,709.32 36,725.15 32,484.46 41,344.40 34,864.19

Total Liabilities 863,840.20 708,845.56 590,503.08 491,599.50 400,331.89

Mar '19 Mar '18 Mar '17 Mar 16 Mar '15

[54]
 14 MThs 14 MThs 14 MThs 14 MThs 14 MThs

Assets

Cash & Balances with RBI 37,896.88 30,058.31 27,510.45 25,345.63 14,627.40

Balance with Banks, Money at

11,055.22 8,860.53 8,821.00 14,238.01 14,652.77
Call

Advances 554,568.20 464,593.96 365,495.03 303,000.27 239,720.64

Investments 214,463.34 183,885.77 186,459.95 140,951.07 111,615.60

Gross Block 3,626.74 3,343.18 3,141.73 2,939.92 2,703.08

Net Block 3,626.74 3,343.18 3,141.73 2,939.92 2,703.08

Other Assets 42,229.82 38,103.84 19,094.91 25,144.60 19,014.41

Total Assets 863,840.20 708,845.57 590,503.07 491,599.50 400,331.90

Contingent Liabilities 848,719.62 876,808.11 997,538.88 744,097.98 746,226.39

Book Value (Rs) 349.14 287.47 247.39 181.23 172.20

[55]
 FINANCIAL ANALYSIS

HDFC Bank

Consolidated Balance Sheet ------------------- in Rs. Cr.-------------------

Mar '19 Mar '18 Mar '17 Mar 16 Mar '15

14 MThs 14 MThs 14 MThs 14 MThs 14 MThs

Capital and Liabilities:

Total Share Capital 469.34 465.23 457.74 425.38 354.43

Equity Share Capital 469.34 465.23 457.74 425.38 354.43

Share Application Money 0.00 0.00 0.00 400.92 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Initial Contribution Settler 0.00 0.00 0.00 0.00 0.00

Preference Share Application

0.00 0.00 0.00 0.00 0.00

Money

Employee Stock Option 0.30 0.00 2.91 5.49 0.00

Reserves 29,741.11 25,140.83 21,178.17 14,262.74 11,180.72

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Net Worth 30,210.45 25,586.06 21,617.89 17,089.04 11,535.17

Deposits 246,539.58 208,287.21 187,297.78 142,644.80 100,631.38

Borrowings 26,334.17 14,650.44 15,191.80 2,775.84 4,478.86

Total Debt 272,873.73 222,937.65 180,469.58 145,420.64 105,110.24

Minority Interest 183.66 141.66 75.89 43.35 36.92

Policy Holders Funds 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00

Other Liabilities & Provisions 37,786.88 29,319.57 20,783.21 22,844.24 18,510.76

Total Liabilities 340,871.06 277,841.28 222,868.68 183,353.92 153,176.17

Mar '19 Mar '18 Mar '17 Mar 16 Mar '15

[56]
 14 MThs 14 MThs 14 MThs 14 MThs 14 MThs

Assets

Cash & Balances with RBI 14,991.63 25,100.89 17,483.31 15,527.22 14,553.18

Balance with Banks, Money at

6,183.53 4,737.39 14,594.88 4,009.94 2,274.80

Call

Advances 198,837.53 180,831.42 146,182.73 99,027.37 63,426.90

Investments 96,795.11 70,276.67 58,508.28 58,717.17 49,288.01

Gross Block 6,024.90 5,328.86 4,777.65 4,019.68 2,437.58

Accumulated Depreciation 3,646.99 3,147.91 2,628.59 2,287.40 1,241.29

Net Block 2,377.91 2,200.95 2,149.06 1,732.28 1,196.29

Capital Work in Progress 0.00 0.00 0.00 0.00 0.00

Other Assets 21,869.30 15,626.33 5,205.07 5,528.89 4,453.89

Minority Interest 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 0.00 0.00 0.00 0.00

Total Assets 341,055.01 276,773.65 222,103.33 182,540.85 153,193.07

Contingent Liabilities 844,393.94 559,718.86 466,309.73 396,639.98 208,498.36

Bills for collection 39,610.71 28,869.10 20,940.15 19,939.62 19,092.85

Book Value (Rs) 148.74 549.97 472.23 345.29 325.45

[57]
P/L account

HDFC Bank Previous Years»

Profit & Loss account ------------------- in Rs. Cr. -------------------

Mar '19 Mar '18 Mar '17 Mar 16 Mar '15

14 mths 14 mths 14 mths 14 mths 14 mths

Income

Interest Earned Other

Income
27,286.35 19,928.21 18,192.90 18,332.26 10,117.00

5,333.41 4,433.51 3,810.62 3,470.63 2,205.38

Total Income 32,619.76 24,361.72 19,983.52 19,802.89 14,320.38

Expenditure

Interest expended 14,989.58 9,385.08 7,786.30 8,911.10 4,887.14

Employee Cost 3,399.91 2,836.04 2,289.18 2,238.20 1,301.35

Selling and Admin Expenses 2,647.25 2,510.82 3,395.83 2,851.26 974.79

Depreciation 542.52 497.41 394.39 359.91 271.72

Miscellaneous Expenses 5,873.42 5,205.97 3,189.14 3,197.49 3,295.22

Preoperative Exp Capitalized 0.00 0.00 0.00 0.00 0.00

Operating Expenses 9,241.64 8,045.36 7,703.41 7,290.66 3,935.28

Provisions & Contingencies 3,221.46 3,004.88 1,545.11 1,356.20 1,907.80

Total Expenses 27,452.68 20,435.32 19,034.82 19,557.96 10,730.20

Mar '19 Mar '18 Mar '17 Mar 16 Mar '15

[58]
 14 mths 14 mths 14 mths 14 mths 14 mths

Net Profit for the Year 5,187.09 3,926.40 2,948.70 2,244.94 1,590.18

Extraordinary Items -2.14 -2.65 -0.93 -0.59 -0.06

Profit brought forward 6,194.24 4,532.79 3,455.57 2,574.63 1,932.03

Total 11,339.21 8,456.54 6,403.34 4,818.98 3,522.17

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 1,009.08 767.62 549.29 425.38 301.27

Corporate Dividend Tax 183.70 144.53 91.23 72.29 51.20

Per share data (annualized)

Earnings Per Share (Rs) 22.02 84.40 64.42 52.77 44.87

Equity Dividend (%) 217.00 185.00 140.00 100.00 85.00

Book Value (Rs) 147.52 545.53 470.19 344.44 324.38

Appropriations

Transfer to Statutory Reserves 1,250.08 997.52 935.17 641.25 436.05

Transfer to Other Reserves 518.70 392.64 294.87 224.50 179.02

Proposed Dividend/Transfer to Govt

1,192.78 892.17 640.52 497.67 352.47

Balance c/f to Balance Sheet 8,399.65 6,194.24 4,532.79 3,455.57 2,574.61

Total 11,339.21 8,456.55 6,403.33 4,818.99 3,522.17

[59]
HDFC Bank Previous Years»

Cash Flow ------------------- in Rs. Cr.-------------------

Mar '19 Mar '18 Mar '17 Mar 16 Mar '15

14 mths 14 mths 14 mths 14 mths 14 mths

Net Profit Before Tax 7515.19 5818.66 4289.14 3299.25 2280.63

Net Cash from Operating Activities Net

Cash (used in)/from

-11555.61 -375.83 9389.89 -1936.14 3583.43
Investing Activities

-686.85 -1142.74 -551.51 -663.78 -619.82

Net Cash (used in)/from

3286.19 1427.99 3598.91 2964.66 3628.34
Financing Activities

Net (decrease)/increase In Cash

and Cash Equivalents
-8731.11 -273.56 14435.78 564.74 6591.95

Opening Cash & Cash Equivalents

29668.83 29942.40 19506.62 14778.34 8074.54
Closing Cash & Cash Equivalents
20937.73 29668.83 29942.40 17343.08 14666.49

ANALYSIS IS DONE ON THE FOLLOWING CRITERIA:

1.Table showing outstanding Housing Loan for the years 2015-2019

Table: 4
YEARS AMOUNT (in
crores)
2014-15 4638.3
2015-16 9992
2016-17 14648.8
2017-18 18675.5

[60]
 2018-19 19964.8

Interpretation:
The reason for increase in loan is due to public demand, decrease in land value, inflation,
increase in competitive life among people, increase in salary due to that public are willing to
have a better standard of life.

AMOUNT(in crores)
25000

20000

15000 AMOUNT(in crores)

10000

5000

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 1
Analysis:
The maximum amount was sanctioned in the year 2018-19, there is a gradual increase in the
sanctioning from 2015-16 to 2018-19

Table showing outstanding amount of NRI HOUSING LOAN for the years 2015-2019
Table: 5
YEARS AMOUNT (in
crores)
2014-15 143.5
2015-16 259.6
2016-17 208.5
2017-18 206.5
2018-19 202.5
Interpretation:

[61]
The reason for decrease in NRI housing loan is that off recently the NRI’s are showing less
interest in buying houses as their parents are residing here and they have existing property and
most of the NRI’s would like to settle abroad.

AMOUNT (in crores)

300

250

200
AMOUNT (in crores)
150

100

50

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 2
Analysis:
The maximum amount was sanctioned in the year 2011-14 and the minimum amount was
sanctioned in the year 2010-11. There is a gradual decrease in sanctioning from 2015-16 to
2018-19.

2.Table showing outstanding Educational Loan for the years 2015-2019.

Table: 6
YEARS AMOUNT
2014-15 1853.7
2015-16 2704.4
2016-17 5234
2017-18 14449.5
2018-19 18625.3

Interpretation:

[62]
The reason for gradual increase in sanctions is that many of the students are opting for
studying abroad, to acquire better job and earnings, they would like to lead a better life.

AMOUNT
20000
18000
16000
14000
12000 AMOUNT
10000
8000
6000
4000
2000
0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 3
Analysis:
The maximum amount was sanctioned in 2018-19 and the minimum amount was sanctioned
in 2015-19. There is a gradual increase in the loans sanctioned from 2015-16 to 2018-19.

3.Table showing outstanding vehicle loans for the years 2015-2019

Table: 7
YEARS AMOUNT
2014-15 543
2015-16 972.3
2016-17 1827
2017-18 2635.2
2018-19 3504.7

Interpretation:

[63]
The reason for gradual increase in sanctions is due to launching of different new models in the
market, people are getting attracted to them, and the loans are easily available at affordable
rates. Vehicles are becoming a necessity in today’s life.

AMOUNT
4000
3500
3000
2500
AMOUNT
2000
1500
1000
500
0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 4
Analysis:
The maximum amount was sanctioned in 2018-19 and the minimum amount was sanctioned
in 2010-11. There is a gradual increase in the sanctioning of loans from 2015-16 to 2018-19.

4.Table showing outstanding Mortgage Loan for the years 2015-2019

Table: 8
YEARS AMOUNT
2014-15 190.2
2015-16 857
2016-17 2194.2
2017-18 1405
2018-19 525.4

Interpretation:

[64]
The reason for gradual increase in sanctions is due to need of finances for business purpose,
for buying consumer durables, marriage and better livelihood.

AMOUNT
2500

2000

1500 AMOUNT

1000

500

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 5

Analysis:
The maximum amount was sanctioned in 2014-17 and the minimum amount was sanctioned
in 2010-11. There is an increasing trend from 2015-16 to 2018-19 and from 2018-19 loan
sanctioned was decreasing gradually.

5.Table showing total advances from the year 2015-2019

Table: 9
Year Amount (in Crores)
2014-15 1962
2015-16 2030
2016 -17 2219
2017-18 2786
2018-19 3539

Interpretation:

[65]
The amount is increasing as there is a great demand for this category of loan as this is the loan
amount on the fixed deposit and the repayment of the amount depends on the maturity period.
The C.C.O.D can be also renewed therefore this is an extra benefit to the customer as the
customer can withdraw amount according to their requirements whenever they need.

Graph representing Cash Credit Overdraft (C.C.O.D) for the years 2015-2019

Amount( in Crores)
4000
3500
3000
2500
Amount( in Crores)
2000
1500
1000
500
0
2014-15 2015-16 2016 -17 2017-18 2018-19

Fig. 6

Analysis:
The maximum amount was sanctioned in 2018-19 and the minimum amount sanctioned was
in 2010-11. There is a gradual increase every year from 2010-11 to 2018-19.
6.Table showing term loans for the years 2015- 2019
Table: 10
Year Amount (in Crores)
2014-2015 365

2015-2016 1170

2016 – 2017 980

2017 – 2018 1460

2018 – 2019 1900

Interpretation:
[66]
There is a fluctuation in amount as the priority of the business changes according to the
economy of the market. This term is usually for above 50 lakhs i.e., for the business concerns
who are already existing in the market and are developed.

Graph showing term loans for the years 2015 – 2019

Amount( in Crores)
2000
1800
1600
1400
1200
1000 Amount( in Crores)
800
600
400
200
0
2014- 2015- 2016 - 2017 - 2018 -
2015 2016 2017 2018 2019

Fig. 7
Analysis:
The maximum amount was sanctioned in 2018-19 and the minimum amount sanctioned was
in 2010-11. There was gradual increase from 2014-17 to 2018-19.

7.AMOUNT SANCTIONED FOR FAST CREDIT LOANS

Table: 11
YEARS AMOUNT
2014-15 1923.4
2015-16 1802.1
2016-17 3893.7
2017-18 4256.8
2018-19 4995.3

Interpretation:

[67]
The reason for gradual increase in sanctions is due to easy transactions, increase in business
and the people can purchase their willing commodity easily through credit facilities given by
the bank.

AMOUNT
6000

5000

4000
AMOUNT
3000

2000

1000

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 8
Analysis:
The maximum amount was sanctioned in 2018-19 and the minimum amount sanctioned was
in 2010-11. There is a gradual increase in sanctions from 2010-11 to 2018-19.

8.Table showing outstanding amount sanctioned for loans against gold ornaments for the
years 2015-2019
Table: 12
YEARS AMOUNT
2014-15 226.8
2015-16 200
2016-17 493.2
2017-18 514.7
2018-19 656.3

Interpretation:

[68]
The reason for gradual increase in sanctions is due to marriage purpose, increase of gold value
for investments. Business, highly liquid asset and security and status purpose.

AMOUNT
700

600

500

400 AMOUNT

300

200

100

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 9

Analysis:
The maximum amount was sanctioned in 2018-19 and the minimum amount was sanctioned
in 2011-14. There is a gradual increasing trend from 2014-17 to 2018-19.

9.Table showing outstanding amount sanctioned for loan to pensioners for the years
2015-2019

Table: 13
YEARS AMOUNT
2014-15 145.7
2015-16 177.5
2016-17 219.1
2017-18 154.3
2018-19 91.8

Interpretation:

[69]
The reason for gradual increase in sanctions is due to livelihood, marriage and retired citizens
depend only on their pension. The decrease in sanctions lately has been due to investment in
other sources.

AMOUNT
250

200

150 AMOUNT

100

50

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig. 10
Analysis:
The maximum amount sanctioned was in the year 2014-17 and the minimum amount was in
2009-17. There is a gradual increase from 2010-11 to 2014-17. There is a decreasing trend
from 2017-18 to 2018-19.

CHAPTER – 5

[70]
 SUGGESTIONS

FINDINGS

&

CONCLUSIONS

SUGGESTIONS

 Enough awareness should be created among the customers about the advantages of all

loans in general and new schemes in particular by the bank.

 The bank has to take good care to maintain the current position for the schemes like

Housing loans and Educational loans.

 From the analysis it is absorbed that most of the customers preferring these loans are

from HDFC BANK.

 The bank is disbursing major percentage of their funds under such loans.

 The bank has to take some steps to increase the number of personal loans because they

are major source of regular interest for longer period to the bank.

[71]
 FINDINGS

 The Rs. 12,500 crore housing finance industry in the country is finally in an enviable

position, where the demand for housing finance has outstripped the supply.

 The foreclosure norms for housing finance institutions that will allow them to

repossess the financed properties in defaulted loans without having to seek recourse

from the courts are shortly expected to come into effect.

 They are all in the race to grab a share in the magic figure of Rs. 151,000 crore which

the National Building Association has projected as the amount required for providing

housing for all by the end of this decade.

 The prospect for the housing finance industry in the country of one million populations

continues to be encouraging.

 The biggest players today would include HDFC, ICICI Bank, SBI and LIC Housing

Finance.

CONCLUSION

 The home loan segment can be extended to the lucrative NRI segment; this would

provide the bank a cutting edge and larger share of the home loan market.

 The bank can provide the benefits like SMS alert and other features so as to make the

home loans more attractive.

 The bank can contemplate on decentralizing the operations however taking into

consideration the experience and expertise of the members at Loan Department enters.

[72]
 BIBLIOGRAPHY

BOOKS:

 FINANCIAL ACCOUNTING AND CMA: S. P. JAIN

 COST ACCOUNTING: SIMMI AGARWAL

 ANNUAL REPORTS OF HDFC BANK

NEWSPAPERS:

 FINANCIAL EXPRESS

 THE HINDU

 BUSINESS STANDARD

[73]
WEBSITES:

 www.hdfcbank.com

 http://ww12.shodhganga.com/

 https://financialaccounting.com/

[74]