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Summer Project Certificate

This is to certify that Mr. / Ms. _____________________________ Roll No. _________ a student of PGDM has worked on a summer project titled

____________________________________________ ___________________________________________________________ ___________ at ______________________ after Trimester-III in partial fulfillment of the requirement for the Post Graduate Diploma in Management programme. This is his/her original work to the best of my knowledge. Date:___________
Signature ________________ (_________________________) Name of Faculty



The purpose of this project report is not whose name appears but to acknowledge the value additions ant contributions. Success can never be achieved through individual effort but through guidance and teamwork. I would like to take this opportunity to thank my industry guide Mr. RACHIT SRIVASTAV, BRANCH MANAGER (DWARKA) and my faculty guide Prof R.J. MASILAMANI who helped me to complete this challenging task. I would like to extend my gratitude to Mrs. MANISHA VARMA, Personal Banker, HDFC bank (Dwarka) and MR. VIVEK PATHAK Personal Banker Authorizer, HDFC bank (Dwarka) who went out of their way to guide me throughout my project and gave varied insights. I am grateful to MR. SHUBHANKAR BOSE, BRANCH MANAGER (ANAND NIKETAN) for his constant interest, involvement and support. Besides, I thank all those invisible hands without whose contribution this project would not have been possible. I would like to thank all the concerned executives and staff members of HDFC bank and other bank staff members who acted as a constant support for me and also helped by providing valuable insights. I would like to express my gratitude towards my parents for their moral and financial support in completion of this project. Last but not least I would like to thank my colleagues and friends for their valuable support during my summer internship.

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The pace of development for the Indian banking industry has been tremendous over the past decade. As the world reels from the global financial meltdown, Indias banking sector has been one of the very few to actually maintain resilience while continuing to provide growth opportunities, a feat unlikely to be matched by developed markets around the world. Transition from class banking to mass banking and increased customer focus is drastically changing the landscape of Indian banking. Expansion of retail banking has a lot of potential as retail assets are just 22% of the total banking assets and the contribution of retail loans to GDP is a mere 6% in India compared to 15% in China. This report discusses the retail products available with HDFC bank and compares them with the products of competitor banks. This paper describes work undertaken to determine both retail customer and staff perceptions of those factors which determine service quality. The paper presents some conclusions of significance for retail banking in particular, and service providers in general. It provides a useful comparison of different banks with its key competitors i.e. ICICI bank, AXIS bank, KOTAK MAHINDRA bank and PUNJAB NATIONAL bank and presents the attributes of service marketing with the help of SERVQUAL model. It outlines the implementation of the SERVQUAL model in the banks subsequent quality improvement programme, as evidenced through the banks customer satisfaction endeavors and also what information I receive through customer interaction and by interaction in different banks. With time it has emerged consistently in the recent services marketing literature is the importance of frontline employees in service delivery. The internal marketing concept is based on the belief that a firms internal market/employees can be motivated to strive for customer-consciousness, market orientation and sales-mindedness through the application of accepted external marketing approaches and principles. This project considers that the objectives of the firm could be achieved by aligning them with the values to frontline employees as well as with the customers. The

information was gained after continuous interaction from the customers and the different banks and analyzing their culture. .


Introduction to banking Changing face of banking as a service industry

Banking in India has changed with time, it has seen a revolution and it has been growing. India has experienced tremendous reform in financial and banking sector. The jump of economy from the manufacturer industry, which used to be the most revenue generating industry, to the service industry has seen the makeover of the banking sector. The banking sector is one of the largest service providing sectors in India. These services are of utmost importance to the customers as it takes care of their financial needs, in fact even maintain them. Now this concept of banks as the service provider has underwent transformation as the concept of services is growing and has become more and more complex. In India the banking sector is segregated as public or private sector banks, cooperative banks and regional rural banks. Foreign banks have been given a different head followed by upcoming foreign banks in this section. Due to this the customers demand has seen a major rise. These changes has given rise to the need of the banking industry to analysis their competition and to have a defined marketing strategy , to become the leader in providing the bouquet of services at customers end as well as giving them the best financial advice. The Indian banking industry with time has achieved an astonishing and tremendous growth rate. When asked from bank executives or rather the expert in the field, the revenue from the banks has been growing and has recorded positive results for the year 2009-10. According to them the growth must have been around 1520% and is expected to grow more than 20% in the upcoming years.

Figure- Projected growth rate for banks

New approach
The development of technology has led to a more convenient retail banking system. ATM, Mobile banking, SMS banking and most popular these days net banking facilities are available to and being increasingly availed of by customers. With more persons open to the concept of easy banking, all the leading banks have started strategizing on the concept of convenient banking looking at the fast growing needs of the customers. Now the banks are striving to achieve this by having a cost effective approach, which means that to achieve maximum of profit but with minimum of cost. The banks now have such a close competitive angle in almost all of its products and services within the banking area that it has become difficult for the customers to distinguish between them. A progressively growing balance sheet, higher pace of credit expansion, expanding profitability and productivity akin to banks in developed markets, lower incidence of nonperforming assets and focus on financial inclusion have contributed to making Indian banking vibrant and strong. Indian banks have begun to revise their growth approach and re-evaluate the prospects on hand to keep the economy rolling. The way forward for the Indian banks is to innovate to take advantage of the new business opportunities and at the same time ensure continuous assessment of risks.

Global linkage
Our country with time has seen many collaborations in this sector with foreign banks taking large stakes in Indian banks. This has widened the horizons for banking services considerably and enabled operations on a much higher scale to meet the growing demands of customers. Some of the foreign banks operating successfully in India are ABN-AMRO, Citi Bank, Deutsche Bank, HSBC, Standard Chartered Bank and etc. The Indian banks have now become focused on being customer centric and the future challenge in front of them is to become a global brand example by providing an exhilarating experience to the customers in the service industry without compromising on the profit. For this the banks need to have a competition analysis of their competitive banks and by being able to develop unique marketing strategy for penetrating within the market.

HDFC BANK company overview

About HDFC
HDFC bank was among the few private banks to have started their operations in 1994 after the government of India allowed new private banks to emerge in Indian banking sector. Housing development and Finance Corporation of India has been credited with being one of the best financial bank in India with the track record of giving the best financial advice to its customers and offering the best products and services in banking area. Due to its impeccable service offered to the customer as per their demand and convenience, HDFC bank has become one of the leading banks in India offering customer service. In fact customers credit it for being one of the finest in customer service leading to easy and convenient banking. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC has positioned itself as being the bank that cares for the customers. HDFC Bank provides a variety of wholesale, retail, and depository financial services through more than 1,400 branches and some 3,000 ATMs throughout India. Established by the Housing Development Finance Corporation in 1994, the bank offers deposit accounts, loans, credit cards, insurance, investments, and related services. HDFC Bank targets individual customers in the middle and upper-class, as well as trusts, small businesses.

Company profile
HDFC bank is a leading private sector bank and financial services company in India. The bank aspires to be the preferred provider of financial services to upper- and middle-income individuals and leading corporations in India. The strategy of the bank over the years have been to provide a comprehensive range of financial products and services for the customers through multiple distribution channels, with high quality service and superior execution of the services offered. The bank principally deals into mainly three business activities which can be categorized as: retail banking, wholesale banking and treasury operations. The bank has achieved tremendous growth since it started its operations in January 1995. Over the last five years it has expanded operations from 231 branches and 732 ATMs in 122 cities to 1,412 branches and 2,890 ATMs in 527 cities in India as on December 31, 2008. Additionally the Bank

has a branch in Bahrain and representative offices in the U.A.E and Kenya. During the five years, banks customer base grew from 3.40 million customers to over 17 million customers. As with time the HDFC bank expanded its geographical reach and market penetration, with this the banks assets also increased, and it grew from Rs. 30,424 crore as of March 31, 2003 to Rs. 183,185 crore as of December 31, 2008. The net income also recorded an increase from Rs. 388 crore for the fiscal year 2003 to Rs. 1,590 crore for the fiscal year 2008 at a compounded annual growth rate of 32.60%. Notwithstanding the pace of growth, the bank has maintained a strong balance sheet and a low cost of funds. As of December 31, 2008 net non-performing assets constituted 0.6% of net advances. The average non-interest bearing current accounts and low-interest savings accounts represented 51.70% of total deposits for fiscal 2008. These low-cost deposits, which include the cash float associated with banks transactional services, led to an average cost of funds including equity for fiscal 2008 of 4.10%. HDFC bank is a part of the HDFC group of companies founded by our principal shareholder, Housing Development Finance Corporation Limited (HDFC Limited), which is a public limited company established under the laws of India. HDFC Limited and its subsidiaries owned 19.38% of banks outstanding equity shares as of February 06, 2009. The Bank has two subsidiaries: HDFC Securities Limited (HSL) and HDB Financial Services Limited (HDBFS). HSL is primarily in the business of providing brokerage services through the internet and other channels. HDBFS is a non-deposit taking non-bank finance company (NBFC), for the establishment of which the Bank received Reserve Bank of India (RBI) approval during the fiscal year 2008.

HDFC bank is a commercial bank of India, promoted by the housing development finance corporation, a premier housing finance company of India. The company headquarters are situated in Mumbai and has around all the branches in 528 cities which are all linked on an online realtime basis. HDFC bank is a type of public company and was founded by Mr. Deepak Parekh. The bank has approximately total assets of INR 1006.82 billion. For the fiscal year 2008-09, the bank has reported net profit of Rs.2, 244.9 crore, up 41% from the previous fiscal. Total annual earnings of the bank increased by 58% reaching at Rs.19, 622.8 crore in 2008-09.

The chairman of HDFC is Mr. Jagdish capoor and Mr. Aditya Puri serves as the company managing director. They have been responsible for making the company peoples company with their efforts. The company revenue in 2009 Rs. 197.5 billion and its profit has been Rs. 2.24 billion. The company now has total assets of Rs. 1.8 trillion and has 52,687 employees currently working with HDFC. The bank has about 570,000 shareholders. The shares are listed on the Stock Exchange, Mumbai and the National Stock Exchange. The bank's American Depository Shares are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB'.

Acquisitions and Mergers

In a milestone transaction in the Indian banking industry, Times Bank Limited (promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. 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. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a strong deposit base of around Rs. 1, 22,000 crore and net advances of around Rs. 89,000 crore. The balance sheet size of the combined entity is over Rs. 1, 63,000 crore. 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. The mergers can be termed as a quest for growth in the Indian banking environment.

Board committees
The Board has constituted committees of Directors to take informed decisions in the best interest of the Bank. These committees monitor the activities falling within their terms of reference. Various committees of the Board were reconstituted during the year due to induction of additional Director namely; Mr. Pandit Palande. The Board's Committees are as follows: The Board's Committees are as follows: Audit and Compliance Committee Compensation Committee

Investors' Grievance (SHARE) Committee Risk Monitoring Committee Credit Approval Committee The Premises Committee Nomination Committee Fraud Monitoring Committee

Compensation Committee
The Compensation Committee reviews the overall compensation structure and policies of the Bank with a view to attract, retain and motivate employees, consider grant of stock options to employees, reviewing compensation levels of the Bank's employees vis--vis other banks and industry in general. The Bank's compensation policy is to provide a fair and consistent basis for motivating and rewarding employees appropriately according to their job / role size, performance, contribution, skill and competence. The Committee met 3 (three) times during the year.

The Premises Committee

The Premises Committee approves purchases and leasing of premises for the use of Bank's branches, back offices, ATMs and residence of executives in accordance with the guidelines laid down by the Board. The Committee is chaired by Mrs. Renu Karnad. The Committee met 4 (four) times during the year.

Fraud Monitoring Committee

Pursuant to the directions of the Reserve Bank of India, the Bank has constituted a Fraud Monitoring Committee, exclusively dedicated to the monitoring and following up of cases of fraud amounting to Rs.1 crore and above. The objective of this Committee is the effective detection of frauds and immediate reporting thereof to regulatory and enforcement agencies and actions taken against the perpetrators of frauds.

Customer Service Committee

Committee monitors the quality of services rendered to the customers and also ensures implementation of directives received from RBI in this regard. The terms of reference of the Committee are to formulate comprehensive deposit policy incorporating the issues arising out of death of a depositor for operations of his account, the product approval process, and the annual survey of depositor satisfaction and the triennial audit of such services. The Committee met 4 (four) times during the year.

Corporate governance
HDFC Bank recognizes the importance of good corporate governance, which is generally accepted as a key factor in attaining fairness for all stakeholders and achieving organizational efficiency. This Corporate Governance Policy, therefore, is established to provide a direction and framework for managing and monitoring the bank in accordance with the principles of good corporate governance.

Code of corporate governance

The Bank believes in adopting and adhering to best recognized corporate governance practices and continuously benchmarking itself against each such practice. The Bank understands and respects its fiduciary role and responsibility to shareholders and strives hard to meet their expectations. The Bank believes that best board practices, transparent disclosures and shareholder empowerment are necessary for creating shareholder value. The Bank has infused the philosophy of corporate governance into all its activities. The philosophy on corporate governance is an important tool for shareholder protection and maximization of their long term values. The cardinal principles such as independence, accountability, responsibility, transparency, fair and timely disclosures, credibility etc. serve as the means for implementing the philosophy of corporate governance in letter and spirit.


The Banks staffing needs continued to increase during the year particularly in the retail banking businesses in line with the business growth. Total number of employees increased from 14878 as of March31, 2006 to 21477 as of March 31, 2007. The Bank continues to focus on training its employees on a continuing basis, both on the job and through training programs conducted by internal and external faculty. The Bank has consistently believed that broader employee ownership of its shares has a positive impact on its performance and employee motivation. The Banks employee stock option scheme so far covers around 9000 employees. HDFC Bank has demonstrated very consistent delivery of performance over the last so many years and has already notched up its place as the one of the largest private sector bank in the country and the growth momentum is expected to continue. The bank has stepped up to retail customer acquisition with deposit accounts increasing from 6.2 million to 8.7 million and total cards issued (debit and credit cards) increasing from 7 million to 9.2 million (approx). Not only the retail banking of HDFC is blooming day by day but its services offered in wholesale banking has also given tremendous growth to the bank. The online banking system i.e. net banking has been an eye attraction for the customers as it gives them fast and convenient banking. As already mentioned about its growing distribution network the bank is continually planning for expansion of the branches of the bank. Customers are efficiently serviced through telephone banking also. 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 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 the centers where the NSE/BSE has a strong and active member base. With the excellent distribution network HDFC aspires to have as strong position in the market and with the customers. HDFC bank has always aspired to become a world class bank and has been trying to adopt an efficient and effective approach to understand the ever changing customer demands and to offer them superior service. HDFC thus has been marketing itself with the tagline saying we understand your world.


Now if one observes the revenue earned by HDFC during last year than it can be said that revenue growth was driven principally by an increase in net income. The other income (non interest revenue) increased primarily due to fees and commissions, profit/ (loss) on revaluation / sale of investment and income from foreign exchange and derivates income. Operating (non-interest) expenses increased due to higher infrastructure and staffing expenses in relation to the expansion in the branch network, and growth in the retail loan and credit card businesses.

net revenuebreak downF Y09

treasury and other operating incom e 4% forex incom e 9%

fee incom e 18%

net incom e 69%

Figure- HDFC bank revenue breakdown

Awards and achievements

HDFC has earned several awards for its growth and progressive services offered to the customers. A few are listed below: Corporate best bank award Dun and Bradstreet American Express corporate best bank award 2007 Best Bank Award in the private sector category- outlook money and NDTV profit Best Retail Bank in India The Asian banker excellence in retail financial services awards. Euromoney Awards 2009 -'Best Bank in India'

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

Asia Money 2009 Awards - 'Best Domestic Bank in India' IBA Banking Technology Awards 2009-'Best IT Governance Award - Runner up' Global Finance Award -'Best Trade Finance Bank in India for 2009



The objective of this study is to study the products available with HDFC bank in the retail category and to understand and analyze the marketing. Another objective is to compare them with products provided by other banks in the retail category. The banks chosen for competitive analysis are ICICI bank AXIS bank KOTAK MAHINDRA bank PUNJAB NATIONAL bank The study also aims to understand how HDFC bank works in the service marketing by using the servqual model. The study will help to understand the following objectives: It will also help to understand and analyze the dimensions of the awareness and satisfaction level of customers with regard to the services provided by the selected branches of the major banking customers. The study will help to identify and differentiate the best banking sector among the above banks in terms of customer satisfaction, To ascertain the relevant dimensions of service quality in banks, and,

To offer suggestions, if needed, based on the analytical results of the current study.


Hence, the study seeks to develop a common understanding of service quality in the banking industry across different customer segments. The models of marketing like servqual model have been used to analyze services of HDFC and strategic marketing of HDFC bank. It helps HDFC bank to maintain a competitive edge. The data was collected through two sources which help me understand the working of HDFC bank and also make analysis for the project. The data was collected through following ways:Secondary sources- Secondary data provide a starting point for study and offer the valuable source of information. The secondary data was the most important source for my project because it helped in collecting desired information Primary sources- Primary data are data freshly gathered for a specific purpose. The various sources of primary data for my project are as follows. Banks. Customers of different banks People from industries



Products and services at a glance
HDFC Bank mainly provides three kinds of banking services:

Personal Banking NRI Banking Wholesale Banking

NRI banking 17%

wholesale banking 28%

personal banking 55%

Figure- product breakup according to the customer preferences If the customer needs to deal in foreign currency and keep tabs on exchange rates, transfer funds to India, make payments etc, HDFC Bank has a range of products and services that a customer can choose from to transact smoothly, efficiently and in a timely manner. HDFC Bank offers quick, economical and convenient options to remit and transfer funds to India.


With HDFC Banks payment services, one can bid goodbye to queues and paper work. HDFCs range of payment options make it easy to pay for a variety of utilities and services. Bank offers Private Banking services to high net worth individuals and institutions.

Corporate Banking reflects HDFC Banks strengths in providing corporate clients, a wide array of commercial, transactional and electronic banking products. HDFC Bank acts as an active medium between the government and the customers by means of various services. HDFC deals with basically three areas which can be segmented as: Wholesale banking services Retail banking services Treasury

It has entered the banking consortia of over 50 corporate for providing working capital finance, trade services, corporate finance and merchant banking. It is also providing sophisticated product structures in areas of foreign exchange and derivatives, money markets and debt trading and equity research.

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to small & mid-sized corporate and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers.

HDFC Bank has made significant inroads into the banking consortia of a number of leading Indian corporate including multinationals, companies from the domestic business houses and prime public sector companies. It is recognized as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock exchange members and banks.

Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The products are backed by 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. 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 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the merchant acquiring business with over 70,000 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.

Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. These services 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.


Savings account Current account Fixed deposits Loans Investments & Insurance Cards

- Regular Savings Account

Plus current account

Regular fixed deposit

Personal Loans

Mutual FundsInsurance

Silver Credit Card

- Savings Plus Account

Trade current account

5 year Tax savings fixed deposits

Two Wheeler Bonds Loans

Gold Credit Card

SavingsMax Account

Premium current account

Super saver facility

New Car Loan

Financial Planning

Woman's Gold Credit Card

- Senior Citizens Account

Regular current account

Sweep in facility

Used Car Loans

Equities & Derivatives

Platinum plus Credit Card

- No Frills Account

RFCdomestic account

Overdraft against Car

Mudra Gold Bar

Titanium Credit Card

- Institutional Savings

Flexi current

Express Loans

Value plus Credit Card



- Payroll Salary Account

Apex current account

Loan against Securities

Health plus Credit Card

- Classic Salary Account

Max current account

Loan against Property

HDFC Bank Idea Silver Card

- Regular Salary Account

Merchant advantage current account

Commercial Vehicle Finance

HDFC Bank Idea Gold Card

- Premium Salary Account

Merchant advantage plus current account

Construction Equipment Finance

Debit Cards

- Defense Salary Recurring Account deposits

Working Capital Finance

Easy ShopInternational Debit Card

- Kid's Advantage Account - Pension Saving Bank Account

Demat account

Easy Shop Gold Debit Card

Safe deposits lockers


- Easy ShopInternational Business Debit


- Family Savings Account

Easy Shop Womans Advantage Debit Card

- Kisan No Frills Savings Account - Kisan Club Savings Account

Prepaid Cards

Forex plus card

Kisan card


Corporate banking Small and medium Financial institution trusts

FOREX Services

NRI Services

enterprises Funded Services Funded Services

and bank Clearing SubMembership RTGS sub membership Fund Transfer ATM Tie-ups Corporate Salary a/c Tax Collection Trade Finance Accounts & Deposits Rupee Saving a/c Rupee Current a/c Rupee Fixed Deposits Foreign Currency Deposits Accounts for Returning Indians

Non Funded Services

Non- funded services

Mutual funds

Travelers Cheques

Accounts & Deposits Remittances

Value added services

Specialized services

Stock brokers

Foreign Currency Cash

Other services like -Private Banking -Portfolio Investment Scheme -home Loans -Loans Against Securities -Loans Against Deposits -Gold Credit Card -Payment Services Access To Bank -NetSafe -BillPay -InstaPay -DirectPay


-Visa Money -Online Donation -Net Banking -One View -InstaAlert -ATM Phone Banking -Email Statements -Branch Network

Internet banking

Internet banking

Foreign Currency Drafts

Foreign Currency Cheque Deposits

Foreign Currency Remittances ForexPlus Card



Operational strategy
HDFC bank has been a consistent player in the banking industry and has always been trying to produce the well balanced and right mix of products and services for both of its customers in retail base and corporate base. 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. The Bank's business is supported by scalable and robust systems which ensure that the clients always get the finest services bank offer. 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. In the era of globalization each and every sector faced the stiff competition from their rivals. And world also converted into the flat from the globe. Private sector banks today used the latest technology for the different transaction of day to day banking life. As we know that Information Technology plays the vital role in the each and every industries and gives the optimum return from the limited resources. Banks are service industries and today IT gives the innovative Technology application to Banking industries. HDFC bank is the leader in the industries and today IT and HDFC bank together combined they reached the sky. New technology changed the mind of the customers and changed the queue concept from the history banking transaction. Today there are different channels which are available for the banking transactions.

There are drastically changes seen in the use of Internet banking, in a year 2001 (2%) and in the year 2008 (25%). This type of technology gives the freedom to retail customers. New and improved technology results in the advantageous functioning of the bank smoothly and efficiently. HDFC BANK is the very consistent player in the new private sector banks. New private sector banks to withstand the competition from public sector banks came up with innovative products and superior service. Customer segments (retail & wholesale) account for 84% of Net revenue


2009) .Higher retail revenues partly offset by higher operating and credit costs. HDFC has tried to equally well position itself to grow both segments.

Competitive Strengths
The bank attributes its growth and continuing success to the following competitive strengths: a) HDFC bank is a leader among Indian banks in the use of technology Since the banks inception, it has made substantial investments in technology platform and systems. Bank has built multiple distribution channels, including an electronically linked branch network, automated telephone banking, Internet banking and banking by mobile phone, to offer customers convenient access to our products. Technology platform has driven the development of innovative products and reduced operating costs. b) HDFC bank delivers high quality service with superior execution Bank tries to deliver efficient service with rapid response time. Banks focus on personalized service tries to draws customers to the products and increases existing customer loyalty. c) HDFC offer a wide range of products Whether in retail or wholesale banking, the bank tries to be a one-stop shop for the Customers banking needs. The wide range of products creates multiple cross-selling opportunities for bank and improves customer retention rates.

d) HDFC claims to have an experienced management team According to HDFC, many of the members of senior management team who have been with the bank; since inception seem to have substantial experience in multinational banking.

Business strategy
HDFC BANK 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 & compliance. The objective is to build sound customer

franchises across distinct businesses so as to be a preferred provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, consistent with the Bank's risk appetite. Bank is committed to do this while ensuring the highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance. Continue to develop new product and technology is the main business strategy of the bank. Maintain good relation with the customers is the main and prime objective of the bank. HDFC BANK business strategy emphasizes the following: Increase market share in Indias expanding banking following a disciplined growth high quality customer service. Leverage our technology platform and open scalable systems to deliver more products to more customers and to control operating costs. Maintain current high standards for asset quality through disciplined credit risk management. Develop innovative products and services that attract the targeted customers and address inefficiencies in the Indian financial sector. Continue to develop products and services that reduce banks cost of funds. Focus on high earnings growth with low volatility and financial services industry by strategy focusing on quality and not on quantity and delivering

STRENGTH Support of various promoters High level of services Knowledge of Indian market Right strategy for the right products.

Superior customer service vs. competitors Great Brand Image Products have required accreditations. High degree of customer satisfaction. Good place to work Lower response time with efficient and effective service. Dedicated workforce aiming at making a long-term career in the field.

. WEAKNESSES Some gaps in range for certain sectors. Problems of sales staff. Processes and systems, etc. Not been fully able to position it correctly

Opportunities Profit margins will be good. Could extend to overseas broadly. New specialist applications. Could seek better customer deals Fast-track career development opportunities on an industry-wide basis.

An applied research centre to create opportunities for developing techniques to provide value-added services. Growing Indian banking sector People are becoming more service oriented global market opportunity

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

Marketing strategies
Distribution Choice of channels for services Modern technology Maintaing public relationship

Internet services Advertising Strong marketing position Personal banking for the customers Focus on Relationship banking Bank tries to establish a customer relationship management in almost every branch. Customer centric technologies

Marketing campaigns launched by HDFC bank

HDFC Bank has launched neighborhood marketing initiatives in tier-two cities and towns to create awareness about its various products and services. These initiatives are especially targeted at those consumers who are not aware about the bank's various value-added services such as direct banking facilities. These campaigns demonstrated the advantages of net banking and mobile banking, as these concepts are relatively new to people living in smaller towns and cities. The bank has also launched another initiative called Business Ki Baten, which is targeted at areas where the bulk of the population comprises small businessmen. The bank would get experts to talk on a number of issues such as value-add tax and sales tax. According to an article in Hindu business line dated November 4, 2008, these campaigns provide bank with information about customer preferences that can be used for mass media communication, making it more effective. HDFC can measure the result of a campaign through the sales that they generate and the customers that are added. There is a clear return on investment, which from a functional point of view gives the team a stronger voice. HDFC has also been able to reduce ad spends by about 10-15 per cent and has also reduced the cost of acquisition. HDFC wants to create an environment that is required to support customer intelligence that leads to database marketing. HDFC bank has invested in many cross- selling activities. HDFC strategy has been not only the acquisition of new customers but at creating product awareness, enhancing usage and also

providing value-added services to customers to reward them for their faith and loyalty. HDFC also sends personalized mailers about their various products to the data base which they acquire. HDFC tries to sell itself as one- stop financial super market.

Customers and Marketing- how is it done for retail products of the bank
The target market for retail services comprises upper- and middle-income persons and high net worth customers. HDFC also target small businesses, trusts and non-profit corporations. The marketing of products is done through branches, telemarketing and a dedicated sales staff for niche market segments. HDFC also use third-party agents and direct sales associates to market certain products and to identify prospective new customers. Additionally, bank obtains new customers through joint marketing efforts with our wholesale banking department, such as our Corporate Salary Account package. The marketing of auto loan and two-wheeler loan products are done through joint efforts with relevant manufacturers and distributors. There are programs that target other particular segments of the retail market. For example, the private and preferred banking programs provide customized financial planning to high net worth individuals in order to preserve and enhance their wealth. Private banking customers receive a personal investment advisor who serves as their single-point HDFC Bank contact, and who compiles personalized portfolio tracking products, including mutual fund and equity tracking statements. HDFC bank private banking program also offers equity investment advisory products. While not as service-intensive as the private banking program, preferred banking offers similar services to a slightly broader target segment. Top revenue-generating customers of the preferred banking program are channeled into banks private banking program.


Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages,

personal loans, debit cards, credit cards, and so forth. This is very different from wholesale banking.


India is poised to become the world's fourth largest economy in the span of two decades. Economic prosperity is providing many in this populous nation with real purchasing power; it simply is an opportunity that cannot be overlooked by global banks. During the last decade, India has emerged as one of the biggest and fastest growing economies in the world. The strengthening economy in India has been fueled by the convergence of several key influences: liberalization policies of the government, growth of key economic sectors, development of an English-speaking, well-educated work force and the emergence of a middle class population.

The financial sector reforms undertaken by the Government since the year 1991 have accelerated the process of disintermediation which has encouraged blue chip corporate to access cheaper funds to meet their working capital requirements directly from investors in India. The deregulation of markets and interest rates has lead to cut throat competition among Banks for corporate loans and offer other valued services at comparatively cheaper rates to big and high value corporate. In the process, most of the banks have experienced substantial reduction in interest spreads and drain on their profitability. The risks involved in corporate loans are very high as corporate have to keep all their eggs in one basket. The risks involved in retail Banking advances are comparatively less and well diversified as loan amounts are relatively small ranging from Rs. 5000 to Rs. 100 lack and repayable normally in short period of like salaries. Whereas corporate loans give average return of just 0.5 to 1.5 percent only, the retail advances offer attractive interest spread of 3to 4 percent, because retail borrowers are less

3-5 years except housing loans (where

repayment period is long up to 15 years in some cases) and from fixed source of income

interest rate sensitive than the Corporate. Another reason for large interest spreads on retail advances is that the retail customers are too fragmented to bargain effectively. While corporate loans are subject to ups and downs in trade frequently, retail loans are comparatively independent of recession and continue to deliver even during the sluggish phase of economy.

Retail Banking gives a lot of stability and public image to banks as compared to corporate banking. The greater amount of consumerism in the country with upswing in income levels of burgeoning middle class, which has propensity to consume to raise their standard of living, is enlarging the retail markets. Given the easy liquidity scenario in the country the growth rate in this sector is likely to go up manifold in the years come.

Retail Banking clients are generally loyal and tend not to change from one Bank to another very often. Large numbers of Retail clients facilitate marketing, mass selling and ability to categorize/select clients using scoring system and data mining. Banks can cut costs and achieve economies of scale and improve their bottom-line by robust growth in retail business volume.

Through product innovations and competitive pricing strategies Banks can foster business relationship with customers to retain the existing clients and attract new ones. Innovative products like asset securitization can open new vistas in sustaining optimal capital adequacy and asset liability management for banks. Retail Banking offers opportunities to banks to cross sell other retail products like credit card, insurance, mutual fund products and demat facilities etc. to depositors and investors.


HDFC bank principal banking activities consist of retail banking, wholesale banking and treasury operations. The retail banking operations of the HDFC bank have been discussed below.

Retail Banking: Overview

HDFC bank considers itself a one-stop shop for the financial needs of upper- and middle-income individuals. It provide a comprehensive range of financial products including deposit products, loans, credit cards, debit cards, third-party mutual funds and insurance products, investment advice, bill payment services and other services. It offers high quality service and greater convenience by leveraging our technology platforms and multiple distribution channels. HDFC bank goal is to provide banking and financial services to our retail customers on an anytime, anywhere, anyhow basis. HDFC bank market services aggressively through its branches and direct sales associates, as well as through the banks relationships with automobile dealers and corporate clients. What the bank does is to establish a relationship with a retail customer and then expand it by offering more products and expanding their distribution channels so as to make it easier for the customer to do business with bank. Bank believes in this strategy, so that it can lead to general growth of the Indian economy and the Indian upper and middle classes, can afford banks significant opportunities for growth. HDFC s plan is to continue to expand their branch and ATM network as well as their other distribution channels, subject to receiving regulatory approvals.

Retail Loans and Other Asset Products

HDFC Bank offers a wide range of retail loans, including loans for the purchase of automobiles, personal loans, retail business banking loans, loans for the purchase of commercial vehicles and construction equipment finance, two-wheeler loans, credit cards and loans against securities. The retail loans were 59.6% of banks gross loans as of December 31, 2008. Apart from the branches of the bank, HDFC use their ATM screens and the Internet to promote its loan products and they also employ additional sales methods depending on the type of products. HDFC bank themselves performs credit analyses of the borrowers and the value of the collateral. The bank also buys mortgage and other assetbacked securities and invests in retail loan portfolios through assignments. In addition to taking collateral in many cases, HDFC bank obtains post-dated checks covering all payments at the time a retail loan is made. It is a criminal offense in India to issue a bad check. Though through my observation in bank I have seen that bank also sometimes

obtain irrevocable instructions to debit the customers account directly for the making of payments. EMI calculator- The bank offers proper details on how it is done in fact the bank makes sure that the customers are aware about its use and how is it relevant. It makes use of amortization table for its calculation. The term and EMI has been explained below. Equated Monthly Installment (EMI) An equated monthly installment (EMI) is the fixed monthly payment made by a borrower to the lender each calendar month. The amount of the EMI depends upon the loan amount, interest rate charged for the loan and the duration in which the loan is to be repaid. The EMI is made up of two parts, the principal amount and the interest on the principal amount divided across each month in the loan tenure. The EMI is always paid up to the lender on a fixed date each month until the loan is paid off in full at the end of the tenure. The benefit of an EMI for borrowers is that they know precisely how much money they will need to pay toward their loan each month, making the personal budgeting process easier. Amortization Tables and Why They Are Useful Now, one might assume that the EMI is applied in equal parts towards the principal and the interest every month, however this not the case. During the initial years the interest component repaid is higher and during the latter years of repayment the principal component is higher. While a portion of every payment is applied towards both the interest and the principal balance of the loan, the exact amount applied to principal each time varies (with the remainder going to interest). An amortization schedule reveals the amount applied towards interest, as well as the amount paid towards the principal balance, with each payment. Initially, a large portion of each payment is devoted to interest. As the loan matures, larger portions go towards paying down the principal. In addition to breaking down each payment into interest and principal portions, an amortization schedule also reveals









Loan repayment calculator The following table shows the value and share of our retail loan products (net of loans securitized out):

(Rs. crore) Particulars As at December 31, 2008 % of total value Auto Loans Commercial Vehicle and Construction Equipment Personal Loans Loans Against Securities Two Wheeler Loans Credit Cards Other Retail Loans Total Retail Loans 15,124 25.4% 8,321 13.9% 8,917 14.9% 699 1.2% 2,092 3.5% 4,053 6.8% 6,881 11.5% 59,647 100.00%

HDFC bank offer secured loans at fixed interest rates for financing new and used automobile purchases. In addition to their general marketing efforts for retail loans, HDFC market this product through building their relationships with car dealers, corporate packages and joint promotion programs with automobile manufacturers.

Commercial Vehicles and Construction Equipment Finance

HDFC bank provides secured financing for commercial vehicles and provides working capital, bank guarantees and trade advances to customers who are transportation operators. In addition to funding domestic assets, bank also finance imported assets for which they open foreign letters of credit and offer treasury services such as forward exchange cover. To do this smoothly bank coordinates with manufacturers to jointly promote their financing options to their clients.

Personal Loans

The bank offer unsecured personal loans at fixed rates to specific customer segments, including salaried individuals and self-employed professionals. In addition, they offer unsecured personal loans to small businesses and individuals.

Loans against Securities

It also offers loans against equity shares, mutual fund units, bonds issued by the RBI and other securities that are on our approved list. HDFC bank limits their loans against equity shares to Rs. 20 lacks per retail customer in line with regulatory guidelines and limits the amount of their total exposure secured by particular securities. Bank lend only against shares in book-entry (dematerialized) form, which ensures that they obtain perfected and first-priority security interests. The minimum margin for lending against shares is prescribed by the RBI.

Two Wheeler Loans

HDFC offer loans for financing the purchase of scooters or motorcycles. The bank markets this product in ways similar to their marketing of auto loans.

Retail Business Banking

HDFC bank address the borrowing needs of the community of small businessmen near the bank branches by offering facilities such as credit lines, term loans for expansion or addition of facilities and discounting of credit card receivables. The bank classifies these business banking loans as a retail product. Such lending is typically secured with current assets as well as immovable property and fixed assets in some cases. The bank also offer letters of credit, guarantees and other basic trade finance products and cash management services to such businesses.

Credit Cards
HDFC bank offer credit cards from the VISA and MasterCard stable including gold, silver, corporate, platinum and titanium credit cards. As per the information gained from bank, the bank


had approximately 45 lacks cards outstanding as of December 31, 2008 as against 38 lacks as of March 31, 2008.

Other Retail Loans

Such loans primarily include overdrafts against time deposits, health care equipment financing loans, tractor loans, loans against gold and ornaments and small loans to farmers. Currently other loans also include home loans disbursed by the erstwhile Centurion Bank of Punjab Ltd.

Retail Deposit Products

Retail deposits provide the bank with a low cost, stable funding base and have been a key focus area for HDFC since commencing operations. Retail deposits represented 67% of banks total deposits as of December 31, 2009. The following chart shows the value of our retail deposits by our various deposit products as of the same date:

Type of Deposit Value (Rs. crore) % of Total

Savings Current Fixed deposits Total 30,761 31.67% 14,001 14.41% 52,372 53.92 97,135 100.00%

HDFC banks individual retail account holders have access to the benefits of a wide range of direct banking services, including debit and ATM cards, access to the growing branch and ATM


network, access to other distribution channels and eligibility for utility bill payments and other services. The retail deposit products include the following: a) Savings accounts, which are demand deposits in checking accounts designed primarily for individuals and trusts. These accrue interest at a fixed rate set by the RBI (currently 3.50% per annum). b) Current accounts, which are non-interest bearing checking accounts designed primarily for small businesses. Customers have a choice of regular and premium product offerings with different minimum average quarterly account balance requirements. c) Time deposits, which pay a fixed return over a predetermined time period. Bank also offers special value-added accounts, which offer the customers added value and convenience. These include a time deposit account that allows for automatic transfers from a time deposit account to a savings account, as well as a time deposit account with an automatic overdraft facility. E-Broking accounts are offered as current accounts to customers of stock brokers where all transactions are routed electronically between the broker and beneficiaries.

Other Retail Services and Products Debit Cards

The debit cards may be used with more than 400,000 merchant point-of-sale machines and over 30,000 ATMs in India and more than 2.90 crore merchant outlets and 10 lacs ATMs worldwide. HDFC was the first in India to issue international Visa Electron debit cards on a nationwide basis and currently issue both Visa and MasterCard debit cards.

Individual Depositary Accounts

Bank provides depositary accounts to individual retail customers for holding debt and equity instruments. Securities traded on the Indian exchanges are generally not held through a brokers account or in street name. Instead, an individual will have his own account with a depositary

participant for the particular exchange. Depositary participants, including us, provide services through the major depositaries established by the two major stock exchanges. Depositary participants record ownership details and effectuate transfers in book-entry form on behalf of the buyers and sellers of securities. We provide a complete package of services, including account opening, registration of transfers and other transactions and information reporting.

Mutual Fund Sales

HDFC offer retail customers units in most of the large and reputable mutual funds in India. For this bank earns front-end commissions for new sales and in some cases additional fees in subsequent years. Bank distributes mutual fund products primarily through branches and private banking advisors.

HDFC has arrangements with HDFC Standard Life Insurance Company and Bajaj Allianz General Insurance Company to distribute their life insurance products and general insurance products to the customers. For this also bank earns upfront commissions on new premiums collected as well as some trailing income in subsequent years while the policy is still in force.

Precious Metals
HDFC bank also import gold bars for sale to retail customers through branch network.

Investment Advice
Bank offer customers a broad range of investment advice including advice regarding the purchase of Indian debt, equity shares, and mutual funds. Bank provides private banking customers with a personal investment advisor who can consult with them on their individual investment needs.

Bill Payment Services

Besides bank also offer customers utility bill payment services for leading utility companies including electricity, telephone, mobile telephone and Internet service providers. Customers can also review and access their bill details through direct banking channels. This service is valuable to customers because utility bills must otherwise be paid in person in India. These services ARE offered to customers through multiple distribution channelsATMs, telephone banking, Internet banking and mobile telephone banking.

Corporate Salary Accounts

HDFC offer Corporate Salary Accounts, which allow employers to make salary payments to a group of employees with a single transfer. Bank then transfer the funds into the employees individual accounts, and offer them preferred services, such as preferential loan rates, and in some cases lower minimum balance requirements.

Non-Resident Indian Services

Non-resident Indians are an important target market segment for Indian banking industry given their relative affluence and strong ties with family members in India.

Retail Foreign Exchange

HDFC bank purchase foreign currency from and sell foreign currency to retail customers in the form of cash, travelers checks, demand drafts and other remittances. Banks also provide out foreign currency check collections. HDFC Bank has been one of the pioneers in extending internet banking services to cater to anytime, anywhere banking needs of its customers by leveraging on to its state-of-the-art technology platforms. Internet Banking has also been exploited by hackers and fraudsters to deceive the bank's customer and commit frauds. While the bank has best-of-the-breed solutions, processes and people deployed to extend secure banking to its customers, it is important for our customers to know that "SecUrity is incomplete without U".

Citizens charter
HDFC banks Citizen's Charter offers relevant information about the products, facilities and services we provide. Customers can also find out about the time norms for various banking transactions, our policy on customer information, and the process followed for redressal of grievances.

Types of Deposit Accounts

While various deposit products offered by the bank are assigned different names, the deposit products can be categorized broadly into the following types. Definition of major deposit schemes are as under : 45

"Demand Deposits " means a deposit received by the bank which is withdraw able on demand; "Savings Deposits" means a form of Demand Deposit which is subject to restrictions as to the number of withdrawals as also the amounts of withdrawals permitted by the bank during any specified period;

"Term Deposit" means a deposit received by the bank for a fixed period withdraw able only after the expiry of the fixed period and includes deposits such as Recurring / Double Benefit Deposits / Short Deposits / Fixed Deposits / Monthly Income Certificate / Quarterly Income Certificate etc.

''Notice Deposit'' means Term Deposit for a specific period but withdraw able on giving at least one complete banking day's notice; "Current Account" means a form of Demand Deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and will also include other deposit accounts which are neither Savings Deposit nor Term Deposit;

Account Opening & Operation of Deposit Account

Before opening any Deposit Account, the bank will carry out due diligence as required under "Know Your Customer" (KYC) guidelines issued by RBI and or such other norms or procedures adopted by the bank. If the decision to open an account of a prospective depositor requires clearance at a higher level, reasons for any delay in opening of the account will be informed to him and the final decision of the bank will be conveyed at the earliest to him. The account opening forms and other material would be provided to the prospective depositor by the bank. The same will contain details of information to be furnished and documents to be submitted for verification and / or for record. It is expected of the bank official to explain the procedural formalities and provide necessary clarifications sought by the prospective depositor when he approaches the bank for opening a Deposit Account.


For deposit products like Savings Bank Account and Current Deposit Account, the bank will normally stipulate certain minimum/average balances to be maintained as a part of the terms and conditions governing operation of such accounts. Failure to maintain stipulated minimum/ average balance in the account will attract levy of charges as specified by the bank. For Savings Bank Account, the bank may also restrict the number of transactions, cash withdrawals, etc., for a given period. Similarly, the bank may specify charges for issue of cheque books, additional statement of accounts, duplicate pass book, folio charges, etc. All such details, regarding terms and conditions for operation of the accounts and schedule of charges for various services provided will be communicated to the prospective depositor while opening the account. Savings Bank Accounts can be opened for eligible person / persons and certain organizations / agencies (as advised by Reserve Bank of India (RBI) from time to time).These accounts are designed to help the individual (personal customers) to inculcate the habit of saving money and to meet their future requirement of money. The amounts can be deposited/withdrawn from these accounts by use of cheques/ATM. It helps customers to keep minimum cash at home besides earning interest. Current Accounts can be opened by Individuals / Partnership firms / Private and Public Limited Companies / HUFs / Specified Associates / Societies / Trusts, etc. Term Deposit Accounts can be opened by Individuals / Partnership firms / Private and Public Limited Companies / HUFs/ Specified Associates / Societies / Trusts, etc. Bank has tailored various deposit schemes to suit the needs and expectations of investing people in every walk of life. The due diligence process, while opening a Deposit Account will involve satisfying about the identity of the person, verification of address, satisfying about his occupation and source of income. Obtaining introduction of the prospective depositor from a person acceptable to the bank and obtaining recent photographs of the person/s opening / operating the account are part of the due diligence process.


In addition to the due diligence requirements, under KYC norms(i.e. know your customers) the bank is required by law to obtain Permanent Account Number (PAN) or General Index Register (GIR) Number or alternatively declaration in Form No. 60 or 61 as specified under the Income Tax Act / Rules. Deposit Accounts can be opened by an individual in his own name (status: known as account in single name) or by more than one individual in their own names (status: known as Joint Account). Savings Bank Account can also be opened by a minor jointly with natural guardian or with mother as the guardian (Status: known as Minor's Account). Minors above the age of 12 will also be allowed to open and operate Saving Bank Account independently. Operation of Joint Account: The Joint Account opened by more than one individual can be operated by single individual or by more than one individual jointly. The mandate for operating the account can be modified with the consent of all account holders. The Savings Bank Account opened by minor jointly with natural guardian / guardian can be operated by natural guardian only. The joint account holders choose any of the following options for the disposal of balance in the above accounts:

Either or Survivor : If the account is held by two individuals say, A & B, the final balance along with interest, if applicable, will be paid to survivor on death of any one of the account holders.

Anyone or Survivor/s : If the account is held by more than two individuals say, A, B and C, the final balance along with interest, if applicable, will be paid to the survivor on death of any two account holders.

The above mandates will be applicable to or become operational only on or after the date of maturity of term deposits. This mandate can be modified by the consent of all the account holders. At the request of the depositor, the bank will register the mandate / power of attorney given by him authorizing another person to operate the account on his behalf.


The term deposit account holders at the time of placing their deposits can give instructions with regard to closure of deposit account or renewal of deposit for further period on the date of maturity A statement of account will be provided by the bank to Savings Bank as well as Current Deposit Account Holders periodically as per terms and conditions of opening of the account. Passbook facility is available to all savings account holders free of cost.

Nomination Facility
Nomination Facility: Bank offers nomination facility in deposit accounts, safe deposit lockers, articles in safe custody etc. Nomination facility is available on all deposit accounts opened by the individuals. Nomination is also available to a sole proprietary concern account. Nomination can be made in favor of one individual only. Nomination so made can be cancelled or changed by the account holder/s any time. While making nomination, cancellation or change thereof, it is required to be witnessed by a third party. Nomination can be modified by the consent of account holder/s. Nomination can be made in favor of a minor also subject to other major individual being named appointee(s) during the minority period. The bank recommends that all depositors avail nomination facility. The nominee, in the event of death of the depositor/s, would receive the balance outstanding in the account as a trustee of legal heirs.

Interest Payments Minor's Accounts

The minor can open a savings bank account and the same can be operated by the natural guardian or by the minor himself / herself, if he/she is above the age of 12 years. The account can also be opened jointly. On attaining majority, the erstwhile minor should confirm the balance in his/her account and if the account is operated by the natural guardian / guardian, fresh specimen signature of erstwhile minor duly verified by the natural guardian would be obtained and kept on record for all operational purposes.


ICICI bank
ICICI Bank is India's second-largest bank with total assets of Rs. 3,634.00 billion (US$ 81 billion) at March 31, 2010 and profit after tax Rs. 40.25 billion (US$ 896 million) for the year ended March 31, 2010. The Bank has a network of 2,009 branches and about 5,219 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. The bank has a presence in around 18 countries across the globe. They offer a wide gamut of retail products to its retail customers and as well as other

banking products related to the corporate segment. These include ICICI personal loan, ICICI home loan, ICICI car loan, ICICI credit cards, ICICI LAP etc. They also offer financial services that span asset management, venture capital, investment banking, life and non-life insurance. ICICI equity shares find a place in the Bombay Stock Exchange and National Stock Exchange in India with its American depositary receipts listed in the New York Stock Exchange. ICICI Bank is one of the most popular banks in recent times with its presence felt through a huge network of 1,495 branches and 4,816 ATMs across the country, with profits running into 8.8 billion in the quarter ended June 2009. The bank also has a presence in around 18 countries across the globe. They offer a wide gamut of retail products to its retail customers and as well as other banking products related to the corporate segment.

In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. Merger of ICICI Bank with Bank of Madura Limited in fiscal 2001 and 2002. In October 2001, ICICI Personal Financial Services and ICICI Capital Services wholly owned by ICICI Limited were allowed to be merged with ICICI Bank, which was formally approved by the RBI in April 2002. K.V. Kamath is the Chairman of the ICICI group. Chanda D. Kochhar, the Managing Director & CEO of ICICI Bank was recently named in Forbes list of the Worlds 100 Most Powerful Women and ranked in the top 20 of the list compiled by Forbes, sharing the honor with Sonia Gandhi, Congress President who ranked 13th.

ICICI bank retail products Accounts and deposits


Savings account
ICICI bank savings account offers the customers following features: Debit-cum-ATM Card Money Multiplier Facility Internet Banking Customer Care Mobile Banking Standing Instructions Nomination facility DD Call and Collect

Debit-cum-ATM Card - With ICICI Bank Savings Account the customers will get a debit card that one can use to withdraw cash from any ATM. Customers may also use their debit card to directly make purchases through a Visa/MasterCard POS (Point of Sale) machine available at most stores, according to the bank this will help customers access their money from anywhere. The ICICI Bank International debit card is a debit-cum-ATM card providing customers with the convenience of acceptance at merchant establishments and cash withdrawals at ATMs. If the customers want to withdraw cash from their ICICI Bank Savings account, they can walk into any bank's ATM and use their ICICI Bank ATM-cum-Debit card for free. The above benefit is available free of cost for the first 5 transaction per month upto Rs 10,000 per transaction. Money Multiplier Facility-The Money Multiplier feature gives customer the liquidity of a Savings Account coupled with high earnings of a Fixed Deposit. This is achieved by creating a Fixed Deposit linked to customers Savings Account providing them the following facilities.

Maximum returns According to the bank the customers money is never idle. Creation of a linked FD ensures higher rate of interest on their Savings Bank Deposits. One can issue instructions through any channel such as the ICICI Bank Branch, ICICI Bank Phone

Banking and ICICI Bank's Internet Banking for creation of Fixed Deposit(s) from the surplus funds in your Savings Bank Account (subject to a minimum of Rs. 10,000). The Fixed Deposits will be created in multiples of Rs. 5,000 for tenure of one year or more as instructed by the customer.

Maximum Liquidity The customers can withdraw the funds from their savings account through any channel such as the ICICI Bank ATM, ICICI Bank Internet Banking or by issuing a cheque etc. All linked Fixed Deposits will be enabled for automatic Reverse Sweep in multiples of Rs. 5000 on a Last-In-First-Out (LIFO) basis when the balance in the Savings Account falls below Rs.10, 000. The amount reverse swept will earn interest rates at the applicable rate for the period that the deposit was held with the Bank. The remaining amount will continue to earn higher interest at the original rate applicable to the fixed deposit.

Auto Renewal - Under this facility, when their deposits fall due, the bank will automatically renew the principal and accrued interest for the same tenure as the original deposit.

Internet Banking-For internet banking the customers need to log in with their user ID and password and make banking a hassle-free routine. It is offered free of cost. Customer Care The bank has 24-hour Customer Care service always available to answer any query or take their instructions. Mobile Banking The customers have an option of mobile banking through which they can do Transferring of funds or getting to know their balance. Standing Instructions - ICICI Bank accepts and supports Standing Instructions. According to them the customers don't have to worry about the chore of carrying out a routine transaction. They can just set up a Standing Instruction and then the bank will manage. Nomination Facility The customers may nominate a person as beneficiary to their account proceeds. Nomination facility available for bank deposits.

There can be only one Nominee for a deposit account whether held singly or jointly. A person legally empowered to operate a minor's account can file a nomination on behalf of the minor. Applicants can make nomination by filling up the Form prescribed under the Banking Companies (Nomination) Rules 1985 The nomination details can be changed during the subsistence of the account relationship by filling up the Form prescribed under the Banking Companies (Nomination) Rules 1985.

DD Call and Collect according to the bank the customers need to wait in bank to collect DD they can do so on the way to the branch, by just calling Customer Care and providing them details of the DD to be prepared and collect it ready and signed at the branch.

Salary accounts
ICICI Bank Salary Account is a benefit-rich payroll account for Employers and Employees. As an organization, one can opt for Salary Accounts to enable easy disbursements of salaries and to have access to other benefits too. According to the bank with ICICI Bank Salary Accounts employees will enjoy the convenience of having the largest network of ATMs, free 24 hour phone banking and free internet banking. What the customers would require to do is to send ICICI Bank an advice (in form of a cheque/debit instruction, ecs, etc) for the total salary amount along with the salary details of the designated employees in a soft and hard copy format and bank will credit the respective employees' accounts as per the companys statement of advice. ICICI Bank Salary Accounts has the benefits of reduce paper work and saves remittance costs and also the employees receive instant credit of salaries. Besides all of the above, employees will automatically become ICICI Bank account holders with special benefits and privileges of 8-8 banking, Investment advisory and much more. ICICI Bank also has a special offering: Defense Banking Services designed exclusively for the armed forces.

Fixed deposits
The ICICI bank fixed deposits offer following advantages:

Wide range of tenures. Choice of investment plans. Partial withdrawal permitted. Safe custody of fixed deposit receipts. Auto renewal possible. Loan facility available.

The customers can deposit any amount of money in Fixed Deposit for as long as they wish between 15 days to 10 years. All fixed deposits come with a set choice of investment plans. Fixed Rate Deposit accounts also provide Fixed Loans. Re-investment Fixed Deposit rates do not change but works like a Recurring Debit Account transaction. In other words, Reinvestment Plans are compounded over traditional deposits and hence are more lucrative over different time periods. Other features include:

Minimum Balance
Customers can avail of ICICI Bank Fixed Deposits for a minimum deposit of Rs 10,000.

Nomination facility available for bank deposits. There can be only one Nominee for a deposit account whether held singly or jointly. A person legally empowered to operate a minor's account can file a nomination on behalf of the minor. Applicants can make nomination by filling up the Form prescribed under the Banking Companies (Nomination) Rules 1985.


The nomination details can be changed during the subsistence of the account relationship by filling up the Form prescribed under the Banking Companies (Nomination) Rules 1985. Choice of two investment plans:

Interest payable monthly or quarterly as per your convenience Maturity period ranges from 15 days to 10 years

Interest is compounded quarterly and reinvested with principal amount Maturity period ranges from 6 months to 10 years

Fixed Deposits at ICICI Bank comes with nomination facility. The bank also offers online access to Fixed Deposits through their Internet Banking channel. Internet Banking at ICICI Bank allows customers to connect to their Credit Card, Loan and their Fixed Deposit with their savings account. In re-investment deposits, the interest is compounded quarterly and reinvested with the principal. Traditional term deposits provide tax shelter and shield you from factors affecting fixed deposits in India over longer periods of fixed time. All the facilities available with ICICI bank can be listed as follows.

ICICI Bank has the following channels through which it offers its products and services to its customers. Branches

ATMs Internet Banking Mobile Banking Phone Banking

Products and services ICICI Bank offers a host of products and services to its clients, which include Deposits, Loans, Cards, Investments, Insurance, Demat, NRI Services and Online Services etc.

Following deposits are offered:

Savings Account Advantage Deposit Special Savings Account Life Plus Senior Citizens Savings Account Fixed Deposits Security Deposits Recurring Deposits Tax-Saver Fixed Deposit Young Stars Savings Account Child Education Plan Bank@Campus Salary Account Advantage Woman Savings Account EEFC Account Resident Foreign Currency (Domestic) Account Privilege Banking

No Frills Account Rural Savings Account People's Savings Account Self Help Group Accounts Outward Remittance Freedom Savings Account Family Banking

ICICI Bank offers following loan facilities:

Home Loans Loan Against Property Personal Loans Car Loans Two Wheeler Loans Commercial Vehicle Loans Loans Against Securities Loan Against Gold Ornaments Pre-approved Loans

ICICI Bank is India's largest issuer of credit cards. It also offers other types of cards. The various cards offered by ICICI bank are as below: Consumer Cards


Credit Cards Travel Cards Debit Cards

Commercial Cards

Corporate Cards Prepaid Cards Purchase Cards Distribution Cards Business Cards

Axis bank
Axis Bank, previously known as UTI Bank, is one of the leading Banks of India along with HDFC Bank and ICICI Bank. Established in 1994, it's the first of the new private sector banks in India to start its operations, when Government of India opened the gate for the private banks to flock into the Indian financial market. Though the bank started its operation with the name UTI Bank, but later, in order to avoid ambiguities and confusion with other discrete entities carrying the same name, it changed its name to its current form (Axis Bank) in April 2007. Axis Bank Limited recorded a total income of Rs. 13,745.04 crore as on the year ended March 31, 2009. It also made a net profit of Rs. 1,812.93 crore in the same financial year. Axis Bank offers a range of financial products and services to its clients throughout the country. It also has special strength in retail and corporate banking. Axis Bank offers following services:

Personal Banking Corporate Banking NRI Priority Banking

Personal banking

The Personal Banking of Axis Bank includes following services:


Zero Balance Savings Account Krishi Savings Account Easy Access Savings Account Prime Savings Account Corporate Salary Account Women's Savings Account Demat Account Senior Citizen's Account Defence salary Account Trust/NGO Savings Account RFC(D) Account Azzadi - No Frills Pension Savings Account


Fixed Deposits Recurring Deposits Encash 24 Tax Saver Fixed Deposit


Home Loan Car Loan Personal Loan Loan Against Shares Loan Against Property

Loan Against Security Study Loan Consumer Loan


Credit Cards Debit Cards Prepaid Cards


Bill Pay Electronic Clearing Service Tax Payments Tax e-Payments Direct Tax Payments Pension Disbursement

Other Services

Mobile Refill Locker Online Shopping IPOS mart E-Statement


Large Corporate Working Capital Finance Term Loans Trade Services Structured Finance Supply Chain Management Overseas Transactions Agri Business Kisan Power Powertrac Commodity Power Contract Farming Arthia Power

SME Standard SME Fast Track Microfinance

Priority banking
Following services are offered under this category:


Resident NRI


Fixed Deposits Recurring Deposits Encash 24


Home Loan Personal Loan Loan Against Property Loan Against Security Car loans Consumer Power Study Power


Priority Debit Card Credit Cards Platinum Credit Card Gold Plus Credit Card Gold Credit Card Silver Credit Card Secured Credit Card eShop Card Travel Currency Card Remittance Card Gift Card

Other Services

Mobile Refill

o o

Locker Online Shopping

24 hour banking services

Following services are offered under 24 x 7 Banking:

Internet Banking Mobile Banking Savings Account NRI Account Current Account Phone Banking Visa Money Transfer Power Transfer ATM


Kotak Mahindra is among the leading financial organization of India, with a range of financial services that caters to all customers' day to day requirements. Their products spans from commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking diverse needs of individuals and corporate are catered to. The Kotak group has a net worth of more than Rs. 6,799 crore with the branches, franchisees, representative offices and satellite offices spread across cities and towns in India. They also have global offices in New York, London, San Francisco, Dubai, Mauritius and Singapore. The Kotak Group offers their services to approximately 6.4 million customers. The Kotak Mahindra Group got incepted in 1985 in the form of Kotak Capital Management

Finance Limited, being promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. A stake in the group was taken in by industrialists Harish Mahindra and Anand Mahindra and this is the time when the company changed its name to Kotak Mahindra Finance Limited.

Kotak Group Products & Services

1. Bank 2. Credit Cards 3. Life Insurance 4. Mutual Funds 5. Car Finance 6. Securities 7. Institutional Equities 8. Investment Banking 9. International Business 10. Kotak Private Equity 11. Kotak Realty Fund 12. Wealth Management

About Kotak Mahindra Bank

The flagship company of Kotak Mahindra Group, Kotak Mahindra Finance Ltd was established in 1985. The same got converted into a bank - Kotak Mahindra Bank Ltd in March 2003. Kotak Mahindra bank has presence in commercial vehicles, retail finance, corporate banking, treasury and housing finance.

Services of Kotak Mahindra Bank Deposit Accounts


Savings account Current Account Term Deposits


Personal Loans Home Loans Loan Against Property

Investment Services

Demat Mutual Fund Insurance Gold

Convenience Banking

Net Banking Mobile Banking Phone Banking ATM Network


The Punjab National Bank or PNB is one of the well known commercial and banking institutions in India. It is the second largest government owned and regulated commercial bank

in the country and offers specialized solutions and financial services in a number of sectors. Around 37 million customers are served by the bank on an average basis. The customized facilities and services make it a trusted name in the domain of banking.

Growth of Punjab National Bank

Punjab National Bank was registered under the Indian Companies Act on 19 May in the year 1894 and its first office was set up at Anarkali Bazaar in Lahore. Since then, the bank has become a great name in the field of banking and is very much preferred by the customers for the wide range of its services. Today, the bank has around 4,904 branches in around 764 cities. Due to its facilities and services of high standards, Punjab National Bank has also been the recipient of a number of prestigious awards. It has been adjusted as the 248th biggest bank across the globe according to a recent survey made by Bankers Almanac in London. The Economic Times has also listed the bank as 38th among the premier 500 companies and the 9th among the most trusted brands in India. The total asset value of the bank amounts to around US$60 billion. There is also a subsidiary of the PNB in the United Kingdom. In addition the bank also has branches in some other cities like:

Kabul Honk Kong Oslo Shanghai Dubai

Services of Punjab National Bank

Punjab National Bank offers financial solutions and services in an array of sectors. All these services that are offered keep pace with the changing market trends in order to fulfill the needs and preferences of the customers. Some of the well known sectors on which the main functions of the bank are based are:

Personal Banking

Corporate Banking Agriculture finance services Industrial finance services Trade financial services International banking services

PNB also has commercial relationship with more than 200 prestigious international banks across the globe. It has the provisions of Rupee Drawing Arrangements with around 15 exchange companies in the UAE and 1 in Singapore. In case of the personal banking segment, the bank offers customized solutions to take care of almost all financial needs of the customers. Some of the well known services that are offered in the bank are:

Savings Fund Account Fixed Deposit scheme Current account Loan services

Punjab National Bank is also a well known name in housing loan benefits. The bank offers both short term and long term loans. The rates are also affordable and can be paid within a particular time. The housing loans are given for a number of purposes such as:

Construction of a building Purchase of a new house or a flat Purchase of flat or house on a First Power of Attorney basis For the purpose of repair or renovation of a house or a building

The PNB Housing Finance sanctions around 80% of the cost of the project. However, the maximum amount is around Rs 50 lakh. The maximum loan amount for the purpose of renovation and repair is Rs 5 lakh. In most cases, the loan is available for a period between 5 and 20 years before one becomes 65 years of age. The interest of the loan is based on the reducing balance and the principal amount of the loan is also based on the repaying capability of the borrower.

Mutual funds of Punjab National Bank

The mutual funds of Punjab National Bank are covered under the Principal PNB Asset Management Company. Some of the well known schemes of mutual funds are:

Principal Growth Scheme Principal balanced Fund Principal Income Fund Principal government Securities Fund Principal Income Fund Short Term Debt Principal Cash management Fund Principal Index Fund

Table showing analysis on different parameters:-










1412 (INDIA)

2009 (INDIA) ( Delhi) 5219 (INDIA)

1700+ (INDIA) 78(DELHI) 4055 (INDIA) YES

245 (INDIA) 66(DELHI) 117approx. (INDIA) YES

141(DELHI) 109 2. ATMs














Rs. 10,000 (URBAN /METRO) Rs. 5000 (SEMI URBAN)

ZERO BALANCERs.5,500 EASY ACCESSRs. 5,000 in metro or urban centers, Rs. 2,500 in semi urban centers and Rs. 1,000 in rural centers. PRIME SAVINGS ACCOUNTRs 5,000 (urban & metropolitan branches) or Rs 2,500 (rural & semi-urban branches)

ACE: Rs.50,000 PRO: Rs.20,000 EDGE: RS.10,000


ACCOUNT 6. RATE APPLICABLE ON SAVINGS ACCOUNT 7. 8. Gold debit card Statement charges 9. 24 hour phone banking Rs. 25000 Saving A/c 3.50% on regular savings account Yes Free Quarter Yes Saving A/c 3.50% and interest paid Half Yearly yes Free Quarter yes 3.50% and interest paid Quarterly on easy access account yes Free Quarter yes 3.50% 3.5% pa

Yes Free Quarter Yes

Yes Free monthly Yes

The following list of the fixed deposits that was created by interacting with the customers as what they prefer most of the listed banks. The customers said that they are not aware about the FDs of Kotak Mahindra bank and dont mind Punjab national bank as they trust the bank with all of its products. The comparison is made on the basis of what customers think was beneficial.

FIXED DEPOSITS Account name Fixed Deposit Regular Fixed Deposit Fixed Deposit Bank Name ICICI BANK Type of account FIXED DEPOSITS HDFC BANK AXIS BANK FIXED DEPOSITS FIXED DEPOSITS

Rate 9.5%

Minimum balance/deposits Rs.10,000

Interest paid QUARTERLY


RS. 10,000



RS. 10,000


When discussed with customers regarding their preference for the various Private Banks the analysis from that was that ICICI Bank and HDFC are the two leading private banks of the city. This is mainly because. These two banks are the first private banks which has opened their branches in the city. ICICI and HDFC brands name, play an important part in their success in the city because people usually go through the name the company. The difference lies within the few parameters that seem to differ with in the banking structure of different banks especially public sector bank i.e. Punjab national bank and private sector banks i.e. HDFC, ICICI, AXIS and KOTAK MAHINRDA bank. If one closely observes there is not major difference between the services offered in these banks what differs is their banking culture and how they offer their services. The factors which distinguish are

Business process re-engineering Proper and timely management of changes Large number of transactions and changes Internal commitment Availability of adequate finance Strategic Human Resources changes PSU banks which are a dominating force in the Indian banking system have lacked a proactive HR environment. However, much has changed with the opening of other sectors

and increased competition from newer banks in the system. So Punjab national bank has undergone a drastic change with in time and has been giving a serious competition to HDFC bank. There is a realization that skill development is extremely important for staff retention as well as the quality of manpower, and all banks whether HDFC or any other bank had in place a system of continuous professional learning. A few banks like Kotak Mahindra are time and again in the process of revamping their training processes and their emphasis is being laid on hard as well as soft skills. Banks are keen to tie up with external training agencies for in-house training. Now if one look at the retail products offered at different banks then the savings account facility offered at Punjab national bank finds more takers in the middle level earning group of people like for example the total freedom savings account of PNB where there is no need to maintain an average quarterly balance and even the fees that is deducted for other accounts where the customers are not able to maintain average balance is much less than HDFC, ICICI, AXIS and KOTAK MAHINDRA bank. Kotak Mahindra bank seems to target customers of higher league as they dont have many branches in Delhi as compared to HDFC, ICICI, and AXIS bank. They have their own exclusive class of customers and they market their products like that only. The current and savings account of Kotak Mahindra bank is marketed with terms like the power to have an exclusive banking service. Now HDFC bank has a very special way of treating its customers by giving them the convenience of imperia customer programme, classic customer programme and preferred customer programme. This helps the banks in attracting more and more customers for the retail products. This is referred as priority banking. The plus current account of HDFC bank is preferred more by the customers the minimum balance required to be paid is RS. 1, 00,000 and the interest paid are nil. Punjab national bank actually has been able to develop a more trustworthy relation with the customers since its a public bank and does not charge much for not maintaining AQB. HDFC bank has been a leader clearly among the private banks and has its own strong and loyal customer base ICICI bank has been giving a close competition to HDFC bank as told by the customers. After the customers were contacted Bank FD emerges out to be the most preferred option for the clients to invest in the market after real estate. This is also dependant on various reasons which are given as under:

o Easy loans available against the Bank Fixed Deposits. o Clients can withdraw their money at almost any time giving them the option of maintaining Liquidity. o With all this Bank FD also provides a decent return concerned the minimum of the risk in any of the available investment instruments. o We have seen above in the analysis of nationalized vs. private banks that nationalized banks are the more preferred ones, this also adds weight to clients preferring Bank FDs due to trust build during all these years. Then, next preferred option for the clients is Unit link plan/Insurance. Another thing that was noted were that majority of clients preferred the short term fixed deposits as their favorite option. Most of the clients use the ideal money which they have to meet the uncertainty or short term requirement. Now if we talk about insurances the preference of the people who had invested in the insurance sector, it is very clear that LIC is the leading company in this field, because of many factors such as:-. LIC is leading in this field mainly, because it is the first mover in the insurance sector and thereby had captured most of the market. LIC had a very good network of agents, who can be seen as the back bone of the company. LIC had provided better service in the past which had made trust in the mind of the people and for that reason they feel more comfortable. HDFC and ICICI are the second in this field mainly because they had opened their branches recently but have made progress in capturing a significant share of the market and in the future the ratio is decrease, because there are many opportunity to cash in by both the company .

The features that distinguish HDFC bank from other banks, according to the customers are:1. The customers feel that services across different branches of the HDFC bank differs since they have different branches for various departments for example Dwarka sector 22 which deals with visa services because of this the customer have an advantage of convenience banking 2. Customers having long relationship with bank rely a lot on the investment services and advices offered by the bank since bank through one or the other way try to give some benefits to such customers, the bank named them as classic customers. 3. Customers call HDFC bank as friendly and reliable bank because of its CRM services 4. HDFC bank is also regarded as a leader in deploying technology in its services which makes it different from other banks. 5. HDFC bank has become relatively large especially by the virtue of introducing various schemes for the benefits of the customer. 6. HDFC bank has created a brand equity that reflects trust and integrity. 7. HDFC bank has also targeted kids by opening accounts for them and by introducing kids advantage plan under mutual funds. Due to these efforts of HDFC bank lots of kids have become loyal customers of HDFC already. 8. HDFC bank has positioned itself more than just bank. It is already perceived as comprehensive financial supermarket. According to the customers they have created a virtual market place on the net. 9. HDFC bank ATM services have been considered remarkable by the customers. The bank tries to handles the complaints it receives regarding ATMs and DEBIT card as efficiently and effectively as possible. This is because one will find maximum takers of HDFC banks ATM cards.


10. In a nutshell what differentiates HDFC bank is the ability to add- value, the global image and the personality of the bank i.e. being dynamic, innovative and vibrant .

FINDINGS Sales Staff differ in their information and Telephone Calling by the HDFC bank, ICICI bank and ICICI prudential and HDFC standard life Advisors are disturbing the clientsThere is excess calling by the employee of the HDFC and ICICI banks and by the Advisors of insurance, and this is one of the reasons why they are not interested in the bank sometimes, and the other reason is that most of the time the sales staff does not give what they promise, their information generally differs from the bankers in the bank this create a bad impression about the company. In the banking sector Punjab national bank is the bank many customers prefer PNB is the most preferred bank because of its brand equity and also because it has an old and loyal customer which has proved to be a great advantage.. There are several things which favor them including: The companys image in the mind of the people The companys successful track record in providing life long services to its customers A very good agent base Excellent relationship with clients


A large Part of the Market yet to be covered by Mutual Funds-

Large parts of the people do not know about the mutual funds investment and insurance and other retail products schemes but they have the power of Money. These clients should be cash in by the HDFC bank.


ServQual model of marketing
The Service Quality Model or ServQual model is used to measure the differences between consumers perception and expectation of service quality. According to the servqual model there are five gaps: I Gap - refers to the difference between customers expected service and managements perceptions of customers expectations. This gap means that management may not correctly perceive customer expectations. II Gap - refers to the difference between management perceptions of customers expectations and service quality specifications. This gap means that although the people in management level may perceive the correct expectations of the customers, they may not have suitable and sufficient service quality specifications. III Gap - refers to the difference between service quality specifications and the real service delivery. This gap means that although the service providers may have suitable and sufficient service quality specifications, they may not have the satisfactory service delivery in the real situation. That may be because service providers lack well-trained employees to deliver satisfactory service.


IV Gap - refers to the difference between the service delivered and external communication about the service with customers. That is, the service providers may not have suitable and sufficient communication with the customers or the service providers may have commitments that exceed what they can do or they may not sufficiently inform the customers of what they have done. V Gap - is the difference between consumer expectation and their perception of service quality measured by the difference between what customers expect and what customers perceive about the service. In addition, gap 5 is a function of gap 1, gap 2, gap 3, and gap 4; that is, Gap 5= f (gap1, gap2, gap3, gap4). This means that the service quality is closely related to management perception, marketing, personnel management, communications with customers, service specifications and delivery.


Figure - ServQual model


GAP I- As explained before, this gap means that the management is not able to correctly meet the customers expectations. HDFC bank main service focus is delivering excellent service for the customers. Infact when inquired from the customers of the branch most of them claim that HDFC bank service is at par than other banks. Many of the bank customers have been with the bank since a long time. The customers have their loyalty towards the bank and even have trust with the bankers in the bank. Another good point about the service is that management is always there for customers service in most of the branches of the bank one would easily find the branch managers available. In my view the management is able to correctly perceive customers expectations. The customers of the HDFC bank have been able to develop their expectation from the bank on the basis of mostly word of mouth communication from their relationship managers in HDFC bank or through their own relatives like for example many of the customers of the branch came to invest in the endowment plan, one of the insurance scheme offered by HDFC bank, because they were given references by their senior citizens in the family. Though if one observes Punjab National bank then their customers develops their expectations more on the basis of their needs and past experience. HDFC bank is able to have more or less a clearer perception of customer expectations. GAP II- Customer value is perceived as one of the principal drivers of customers satisfaction which in turn act as a key determinant of repurchase and ultimately of customer retention and loyalty. Though HDFC bank has clear perceptions about what customers expect from them what this gap discusses is that whether HDFC bank has suitable specifications in the service basically it talks about the service design. Now in order to deliver customer satisfaction HDFC bank has personal banking provisions for the customers, there is a relationship manager assigned to the customers who look into the customers banking needs also almost every branch of HDFC bank has a teller who guides the customers. However, it cannot be denied that there is no scope for improvements. When contacted the customers they seems to be satisfied with the customer service they experience in the bank.

GAP III- Most of the complaints that banking industry receives is in reference with this gap. There seems to be a discrepancy within the sales staff. The sales staff of the bank seems to make

promises which they fail to deliver later. So what is required is to be able to have a more trained sales staff which has a more clear understanding about each and every product area in which he/she deals so that they can deliver a more satisfactory service to the customers. HDFC bank seems to suffer from this gap at certain level. GAP IV- HDFC standard life has a very strong external communication but most of the retail products of the bank lacks in this. Though HDFC banks fixed deposits seems to be a pull product rest most of the products are push products. HDFC bank with time has made considerable efforts to market its products to the customers with advertising like big vans having LCD screens displaying the products of the bank. Recently HDFC bank has been trying to get more and more customers for its loan products. It is looking for a customer base in retail as well as in corporate. HDFC bank has involved itself into this type of marketing but there are not much advertisements one find about HDFC bank retail products on television as compared to ICICI bank which carefully markets it savings account as well as the personal banking experience for the customers. With customer and the bank people interaction I was able to identify certain key words which the customers look for while fulfilling their banking needs and what most of the banks promises about. These are basically the parameters by which the customers as well as the bank management measures service. These are as follows: Reliable (consistently do what bank say) Responsive (cheerfully do what bank say) Competent (bank management has knowledge and expertise) Accessible (bank management is available to talk to) Courteous (treat with respect) Communication (listens carefully and explains carefully) Credible (honest and trustworthy) Security (information of customers kept private and confidential) Empathy (understands customers views and show genuine interest) Tangible (maintains good bank environment and good staff) Survey needs (asks and understands needs and expectations)

Need fulfillment (needs and expectations are identified and met) Mistakes (mistakes are properly corrected) Treatment (treat the customers the way they should be)

FOUR Quadrant Diagram


The diagram is used to explain the relation of the various employees with the bank. It helps to understand that who proves to be star for the bank and who proves to be a dud.

Stars Personal bankers Relationship managers Sales staff


Staff outside bank looking for current account and savings account customers

Teller ATM and Debit card service employees

not applicable

Good people

negative employees

The diagram puts personal bankers and relationship managers as stars for the company because they have been providing HDFC bank with revenue. By maintaing a healthy relation with the customers they attract the customers for new investments and new schemes infact in some cases it was observed that the customers enter into investment deal because of their relationship manager or personal banker. Good people83

Now the teller and the bankers which help customers in ATM and Debit card services have been regarded as good people because they are willing to help the customers in any way possible. Some of the branches of HDFC bank like the one in Connaught place have a larger customer base for the ATM and Debit card services. The stars and good people are important for HDFC bank because they are the one bringing customers, basically their main function is acquisition of new customers and retaining them. Duds Duds are basically referred to those employees who are not working properly or are not successful. The sales staff and the staff exclusively working for current and savings account does not have correct knowledge of information required for opening the accounts in the bank and it results in dissatisfaction of customers. This happens because of the difference of opinion between those in the bank and those outside the bank. There have been lots of complaints regarding that sales staff promised something and it did not happened. Negative employeesNegative employees are basically those who work against the nature of banking or who are not interested in attracting customers. Duds are different from them because though they do not work properly but they have all intentions to attract new customers and give revenue to bank but they lack in the way they work and their knowledge about their work. But negative employees on the other hand are not interested in giving any business to the bank. I personally did not find any employee with those intentions in the bank.


This diagram was constructed in order to make an observation about who are the employees that are most important for the bank. Since bank is one of the important examples of service industry, and these employees becomes the first encounter with the customers, representing bank. This encounter helps customer in deciding whether he/she wants to a investment relation with the bank or not.



The service sector has assumed greater economic importance over the past decade. India is fifteenth in services output. Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The elimination of this waste and meeting customer expectations are the major challenges facing managers these days in the service sector. This is why quality improvement is a vital concern for many service organizations. The servqual model represents a different approach to quality improvement. Quality is increasingly being seen as a key strategic differentiator within the financial services sector, with most major players undertaking some form of quality initiative. From the customers perspective, service quality significantly influences customer satisfaction and customer satisfaction has direct influences on purchase intentions. Research findings indicate that service quality influences purchase intentions more than does customer satisfaction. It is therefore imperative on the part of bankers to stress upon both service quality and customer satisfaction, in order to raise the purchase intentions of customers.

Service Quality and Customer Satisfaction:

The customer satisfaction paradigm posits that confirmed standards lead to moderate satisfaction; positively disconfirmed (exceeded) standards lead to high satisfaction, and negatively disconfirmed (underachieved) standards lead to dissatisfaction. The subject of continued (and considerable) debate in the marketing literature, the distinction and association between service quality and customer satisfaction remains at the forefront of many academic- and practitioneroriented research endeavors. Service quality and customer satisfaction do exhibit independence and are indeed different constructs from the customers point of view. A small step in unearthing and understanding the constructs of service quality and customer satisfaction and their implications on competitive fruition has been put forward in a study on banking services. The comparative analysis on the services among the major banking segments revealed that the HDFC and ICICI banks have topped the list in terms of delivering qualitative customer service. It has also been observed that the

private sector banks compete successfully with foreign banks and make efforts to provide better banking services in tune with the changing global competitive scenario. However Punjab national bank has been credit by the customers as being the most trustworthy banks as it provides various features for the larger segment of customers. Through continuous interaction with the customers and the bank people it has been observed that customers of banks such as ICICI, AXIS, HDFC, PNB and KOTAK MAHINDRA were either in service or self employed. Many customers of PNB were found to be retired from their respective profession. Thus they recommended that banks should envisage a strategy to serve customers with different occupations & educational backgrounds. Banks must also advance their customer-centric strategies by providing satisfaction through services leading to better relationship building and earning profits for the banks. However it also depends on the location of the branch like for example a branch situated in the residential area will have more customers for pensions like in Dwarka they were more customers for pensions and other senior citizens services while in branches like Connaught place or K.G. Marg one will find customers for other needs as well. It has been observed that poor service quality in public sector banks is mainly because of deficiency in tangibility, lack of responsiveness and empathy. Private sector banks, on the other hand, were found to be more reformed in this regards. Above all, the HDFC bank is relatively close to the expectations of their customers with regard to various dimensions of service quality. Further, the study revealed that there existed service quality variation across demographic variables, and suggested that management of banks should pay attention to potential failure points and should be responsive to customer problems. Now in order to deliver excellent service the necessity of employee contacts and evaluation of service experiences has been very effective. The problem of reliability in various measures of service quality, and the perception responses has high reliability as compared to expectation responses. Service quality in banking implies consistently anticipating and satisfying the needs and expectations of customers. However, evaluating service quality sometimes is not an easy task due to the intangible nature of services.

Measurement of Expectation and Perception of Service Quality:


There are many reasons for poor service quality across industries. One reason may be an inability to collect or use collected data. For example, in direct opposition to consumer opinion, bank executives perceive themselves and their companies to be doing an excellent job. This apparent discrepancy of opinion creates questions about banking service information-gathering effectiveness. Because perceived quality is conceptualized as the customer's overall attitude towards the excellence of service, many researchers have relied on a single overall quality question, measured on a scale ranging from poor to excellent .More generally, however, service quality perception is thought to be based on several quality attributes . These are: reliability - reflecting the technical quality of the outcome of the service encounter, i.e. what is received by the customer; and tangibles, responsiveness, assurance and empathy - reflecting the functional quality of the process itself, i.e. how the service is provided. SERVQUAL was deemed "to be applicable to retail and business services and relevant for banking services".

The bank needs to work in a way that it can communicate the features of its products to the customers in the most profitable way which would be cost effective for the bank.

Housewives as the target customersThe housewives can be targeted by the sales staff by explaining them to earn money from their monthly day to day expenses money by opening saving account in HDFC bank. This is possible as with effect from 1st April 2010 that the bank interest rate is earned on daily balance. Earlier it uses to be half early on the lowest balance maintained during the period. Under this scheme a housewife\customer will open a bank account with initial deposit of Rs. 10000 along with an amount equal to total expected expenses to be incurred by him\her during the month. As a sample model the target customers\families of Dwarka residents have been taken into account on an average the expenses incurred by a family in Dwarka having own house or rented have been worked out separately as under:-

88 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Details of Expenses (expected) Rent Electricity, water& maintenance charges Sweeper charges Maid charges Car wash Groceries and toiletries School fees of two kids to be paid quarterly (10000*3) Vegetables and fruits Milk (@Rs.30*2) Petrol\transport Miscellaneous expenses TOTAL

Family on rent 16,000 3000 150 700 150 3000 30000 3000 1800 3000 4500 65300

Family having own house 3000 150 700 150 3000 30000 3000 1800 3000 4500 49300

The above table clearly reveals that expenses mentioned at serial no. 1 to 6 are too incurred once in a month and expense at serial no. 7 will be incurred quarterly where as remaining expenses are to be incurred on day to day basis. Accordingly a family on an average will initially deposit in its saving account Rs. 70000 which will include minimum balance of 10000 i.e. AQB for HDFC bank. The interest earned on above deposits after taking into account the expenses incurred by the family once in a month, quarterly and on day to day basis are projected as under: a) Interest on minimum balance of Rs 10,000: Rs 28.77 b) Interest on item at serial number 7: Rs 86.30 c) Interest on expenses incurred once in a month: Rs 66.16 d) The other expenses which are to be incurred on day to day basis, it would be advised to concerned family/customer to withdraw money on weekly basis so that interest can be earned as under: (1) First week (Rs 9430 after withdrawing Rs 2870 for weekly expenses): Rs 5.42 (2) Second week (Rs 6560 Balance): Rs 3.77 (3) Third week (Rs 3690 Balance): Rs 2.12 (4) Fourth week (Rs 820 Balance): Rs 0.47

* Interest has been calculated by using daily balance multiplied by no. of days multiplied by interest rate of saving account i.e. 3.5/36500 This way a family will earn Rs 193.01 per month i.e. 193.01 * 12 = 2316.12 per year out off the expenses incurred by family. This scheme can be named as EARNED WHILE SPENDING. The concept is required to be advertised properly among the dwarka families for which sales personnel can specially be deputed to visit personally to the families and motivate them for opening accounts and explaining them the benefits. The dwarka sub city provides for housing for about 5 lakh families. Many of these families have not yet been able to move into their flats because of one or the other reason, however with the inception of metro rail system, thousands of families have been residing in the sub city. This clearly suggests there is huge scope for targeted customers. To be on safer side it is presumed that at least 1% of the clientage could be convinced for opening the account under above scheme which would amount to 5000 customers/saving accounts.

Viability for HDFC Bank for this:

1) Initial deposit per customer: Rs 70,000 and expected number of customers i. e. is 5000, bank will get deposit of Rs 350000000. 2) Bank will give interest to customers @ 3.5%:12250000 3) Salary of sales person\ administrative expenses: 15000(approx.) 4) Total expenses of bank (2+3):12265000 5) The bank can generate revenue by investing the initial deposit amount of Rs. 350000000 by choosing the best revenue generating scheme. As a role model it is presumed that this amount will be invested in loan scheme @ 8.25%, thus would generate Rs. 10106250000000000. 6) Bank will earn (5-4): Rs 10106249987735000. NOTE: - the figures taken for this mathematical calculation are all approximation value and are expected but it clearly reveals that it is a beneficial scheme for the HDFC bank.

Looking for the other potential customers


The owners of kirana stores or groceries stores have lot of money but have little knowledge of as to how to invest them productively for this the sales staff should go to them instead of waiting for them to come to the bank. The sales staffs that generally wait for the customers can actually prepare a database of the customers and try to explain them the products that best suit their needs rather randomly calling people. Thus they can be the other target customer and can be worked upon the above mentioned way.

Giving incentives for all retail products to employees

The employees should be given incentives for every customer conversion in retail products depending upon how much have invested by the customer. This will motivate the employees to attract customers not only for insurance but other products also.

ATMs / exclusive small branches

HDFC bank can place its ATM machines or open small branches exclusively in the corporate organizations this will increase their market penetration in the wholesale customers as well. This actually will help the bank spread a word about its retail products to the customers by placing small brochures of retail products for the target customers. By opening small branch exclusive for the organizations might results in spreading the features of the insurances or other accounts of HDFC bank.

CRMnext Profiles
The CRMnext Profiles can be used in a way to encourage more and more customers. The database can be properly created by carefully making note and observations from the profiles of the customers.

More investment in Plastic money customers base

The idea behind this is that the bank gives credit card swipe machines to the wholesalers and retailers so that they use the credit card of the bank. As a result bank gets the wide list of customers of wholesalers and retailers. This will surely result in bulk sales for the bank. Through this bank

can create group transactions by selling products to wholesalers and retailers both. This will encourage retail products of the banks i.e. credit cards and debit cards and bank will get new customers. This will work by meeting the wholesalers first and getting details about their retailers and then explaining the benefits of using this transaction. This is actually indirect marketing. It means communicating benefits of your products to its customers.

Start Making Link with the Nationalized Banks to get more Business
When we look at the Small city, most of the customers prefer and have their account in nationalized banks, because this banks are giving good service for many years and If HDFC can make tie-up with the employees of this banks then they can be able to get more business from this contact.

Rural banking
Rural markets are seen as the new profitable investment for banks in India with banks like ICICI bank have been able to popularized micro financing in which they did a tie up with the SHG but what needs to look into is that how successful the banks have been in doing so. This type of banking is increasingly being popularized as social marketing. Infact even HDFC bank started with BUSINESS CORRESPONDENT MODEL to make the viability of banks branches in the unbanked areas of India and did a tie up with NGOS and post offices. But the success of these models is still questioned. What HDFC needs to do is o try to penetrate more into rural banking so that it will be able to acquire a larger customer base.

Opportunities and Challenges for Players

The bar for what it means to be a successful player in the sector has been raised. Four challenges must be addressed before success can be achieved. First, the market is seeing discontinuous growth driven by new products and services that include opportunities in credit

cards, consumer finance and wealth management on the retail side, and in fee-based income and investment banking on the wholesale banking side. These require new skills in sales & marketing, credit and operations. Second, banks will no longer enjoy windfall treasury gains that the decadelong secular decline in interest rates provided. This will expose the weaker banks. Third, with increased interest in India, competition from foreign banks will only intensify. Fourth, given the demographic shifts resulting from changes in age profile and household income, consumers will increasingly demand enhanced institutional capabilities and service levels from banks.

Need to Create a Market-Driven Banking Sector with Adequate Focus on Social Development
The term policy makers used in this thesis, refers to the Ministry of Finance and the RBI and includes the other relevant government and regulatory entities for the banking sector. I believe a co-ordinate effort between the various entities is required to enable positive action. This will spur on the performance of the sector as a whole. Other suggestions could be: Every bank should take precautions to keep customers experience safe. It should take continued efforts to safeguard online banking transactions. The bank should provide more customer awareness and need of transparency in their dealings. The banks should come up with innovative ways of service at their door steps this may be a costly affair but will surely give positive results in the long run. The banks should take the initiative of training the advisors about the new schemes from time to time which also makes the advisors connected to the bank. The banks should also emphasis on the monitoring of EMI which directly relates to the returns of a loan amount. The company should come up with proper fixed deposit plans at this point of time where the market is highly volatile and the investors become very cautious at this level.

The banks should use brand ambassadors for example the CEOs of major companies where the company allocate the funds. This will probably ensure proper results. The banks should focus on the advertising strategy and also the marketing of the bank product.

HDFC bank has been the strong arm of HDFC and with continual focus on the customer service has taken the bank to new heights in the banking industry. It is on the brim of increasing its

customers through attractive schemes and offers. The project highlighted the strategies adopted by the bank and how it targets customers for retail products. It also explains the products HDFC offers with its comparison to the close competitors and their retail products. Since banking industry now days focuses on service marketing so the project was able to identify the gaps with the HDFC bank. However it cannot be denied that HDFC bank has been a pioneer in delivering excellent service to its customers which leads to customer satisfaction ration higher and higher day by day.


Books Arturo Molina, David Martin- Consuegra, Agueda Esteban, Relational Benefits and Customer Satisfaction in Retail banking, International journal of Bank Marketing, Vol.25, No.4, 2007, 253-271. G.S. Suresh Chander, Chandrasekharan Rajendran, R.N. Anantharaman, Customer Perceptions of Service quality in the Banking Sector of a Developing Economy: A Critical Analysis, International Journal of Bank Marketing, Vol 21, No5, 2003, pp.233-242. Allred, A. and H.L. Addams, 2001. Service quality at banks and credit unions: what do their customers say? Managing service quality, 10:52-60