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RELIANCE JIO VS HDFC
BANK
Group-16
1.Nikhil Kalia – FT242080
2.Radhika Chinchghare –
FT242082
3.Saurav Kumar – FT242085
4.Rushikesh Sindekar – FT242083
5. Akash Vatsyayan – FT242072
LET’S UNDERSTAND THE MARKET!
WHERE JIO FINANCIAL SERVICES
FIT!
KEY PLAYERS IN MARKET
MARKET STRUCTURE: OLIGOPOLY
• The type of market structure for
NBFCs (Non-Banking Financial
Companies) is oligopoly. This
means that there are a few large
NBFCs that dominate the
market, and they have a
significant amount of market
power. The other NBFCs in the
market are much smaller, and
they have very little influence on
prices or competition.
Reasons:
1. First, it is a very capital-intensive industry, which
makes it difficult for new entrants to come in and
compete with the established players
2. Second, the NBFC market is regulated by the
Reserve Bank of India (RBI), which makes it difficult
for new entrants to get the necessary licenses and
approvals
3. Third, the NBFC market is characterized by high
switching costs, which makes it difficult for
customers to switch from one NBFC to another.
NBFC:COLLUSIVE OLIGOPOLY
MARKET
• The NBFC market in India is a collusive oligopoly market.
This means that the NBFCs in the market cooperate with
each other to set prices and restrict competition.
• The RBI's regulations are designed to make it more difficult
for NBFCs to collude and to protect consumers from the
negative consequences of collusion.
• Example: The Prohibition of Fraudulent and Unfair Trade
Practices Regulation, 2020: This regulation prohibits NBFCs
from engaging in fraudulent and unfair trade practices, such
as price collusion, bid rigging, and market allocation.
• The RBI is also monitoring the NBFC market closely and
taking enforcement action against NBFCs that are found to be
colluding. In 2021, the RBI imposed a fine of INR 200 million
on two NBFCs for engaging in price collusion.
OLIGOPOLY: DEMAND AND SUPPLY
DYANMICS
• In an oligopoly, there are a few large firms that
dominate the market. These firms have a
significant amount of market power, and they
can influence prices and competition. As a
result, the demand curve for an oligopoly firm
is not a straight line, but rather a kinked
demand curve.
• The kink in the demand curve occurs because
of the reaction of other firms in the industry to a
price change by one firm. If one firm lowers its
price, the other firms are likely to follow suit in
order to avoid losing customers. This means
that the demand curve for the first firm
becomes more elastic, or responsive to price
changes, at the lower prices.
OLIGOPOLY: DEMAND AND SUPPLY
DYANMICS
• On the other hand, if one
firm raises its price, the
other firms are not likely to
follow suit. This is because
they don't want to lose
customers to the firm that
has lowered its price. This
means that the demand
curve for the first firm
becomes more inelastic, or
less responsive to price
changes, at the higher
prices
• The supply curve for an
oligopoly is more inelastic
than the supply curve for a
perfectly competitive
Implication of Kinked Demand Curve on
firm:
• First, it means that they are less likely to
change prices, because they know that other
firms will follow suit. This can lead to price
rigidity in the market.
• Second, it means that oligopoly firms are
more likely to engage in non-price
competition, such as advertising or product
differentiation. This is because they can't
compete on price, so they have to compete
on other factors.
NBFC:MARKET POTENTIAL!
NBFC:MARKET POTENTIAL!
JIO FINANCIAL SERVICES VS HDFC
BANK
HDFC Bank and Jio Financial Services offer a
variety of financial services, but some of the
most common ones they have in common
include:
•Personal loans: Both banks offer personal loans
to individuals for a variety of purposes, such as
consolidating debt, financing a major purchase,
or paying for home improvements.
•Credit cards: HDFC Bank and Jio Financial
Services both offer a variety of credit cards with
different features and benefits, such as rewards
programs, cashback offers, and travel insurance.
•Debit cards: Both banks also offer debit cards
that can be used to make purchases and
withdraw cash from ATMs.
JIO FINANCIAL SERVICES VS HDFC
BANK
•Mortgages: HDFC Bank is one of the largest
mortgage lenders in India, and Jio Financial
Services also offers mortgages to individuals and
businesses.
•Investment products: Both banks offer a variety
of investment products, such as mutual funds,
stocks, and bonds.
•Insurance products: HDFC Bank and Jio
Financial Services both offer a variety of
insurance products, such as life insurance,
health insurance, and car insurance.
SPREADING THE FINANCE - CAN
JIO FINANCIAL SERVICES
CHALLENGE HDFC BANK?
"Since the parent company RIL is rated AAA, there are
expectations that JFSL will also receive a good rating
which will eliminate concerns about the cost of funding.
This paves the way for addressing the demand and
supply concerns significantly and enabling them to
disrupt the market with even lower lending fees due
to their substantial volumes," said Jain.
• KV KAMATH AND TEAM (IN SHORT ALL LEADERSHIP)
• JFS association with largest and most diversified business reliance group will be powered by the
groups wide presence in 15000 retail store. Customer base of over 400 million in telecom and 200 million
retails. Jio seeks to hurt competitors by easily achieving economy of scale and hence operating at
low cost
DEMERGER!
• On July 20, 2023, Reliance Industries demerged its
financial services business, Reliance Strategic
Investments Limited (RSIL), into a new entity called
Jio Financial Services
• The demerger was a key development for Jio
Financial Services, as it gave the company a
separate stock market identity and allowed it to raise
capital independently
• The demerger also had a significant impact on HDFC
Bank. HDFC Bank is a major shareholder in RSIL,
and it held a 20% stake in the company before the
demerger. As a result of the demerger, HDFC Bank's
stake in JFSL was diluted to 10%.
• HDFC Bank responded to the demerger by stating
that it remains committed to Jio Financial Services.
The bank said that it is confident in the company's
FEW LATEST NEWS!
The demerger of Jio Financial Services
(JFSL) from diversified conglomerate
Reliance Industries (RIL) will create a
non-banking financial behemoth with a
size of approximately ₹1.5 lakh crore
which could pose a tough challenge to
existing non-banking financial companies
(NBFCs), according to experts.
The financial arm of Reliance Industries
was demerged from its parent company
Reliance Industries today. The demerged
entity RSIL (Reliance Strategic
Investments Limited), would be renamed
JFSL (Jio Financial Services Limited)
and it will be listed separately on NSE
and BSE in the next few months.
FEW LATEST NEWS!
Sashi Jagdishan, CEO & MD,
HDFC Bank said, “This is a
defining event in our journey
and I am confident that our
combined strength will enable
us to create a holistic
ecosystem of financial
services.”
“We are truly happy to
welcome the talented team of
HDFC Ltd. into the HDFC Bank
family. I believe our journey will
be defined by agility,
adaptability, and a relentless
pursuit of excellence,” he said.
HDFC DEFENCE!
• Strong financials: HDBFS is a well-capitalized NBFC with a strong track record of profitability. In FY22,
HDBFS reported a net profit of INR 3,111 crore, an increase of 16% from the previous year. The company's
capital adequacy ratio (CAR) was 23.5%, well above the regulatory requirement of 15%. [Source: HDBFS
Annual Report 2022]
• Wide range of products and services: HDBFS offers a wide range of financial products and services to
meet the needs of a variety of customers. In FY22, the company disbursed loans worth INR 1.4 trillion, an
increase of 22% from the previous year. The top 3 products by loan amount were:
Personal loans: INR 48,000 crore
Home loans: INR 34,000 crore
Commercial loans: INR 29,000 crore [Source: HDBFS Annual Report 2022]
• Brand reputation: HDBFS is a well-known and respected brand in India. The company has been ranked
as the 3rd most trusted brand in India by the Trust Research Advisory in 2022. [Source: Trust Research
Advisory]
• Strong distribution network: HDBFS has a strong distribution network that reaches a large number of
CONSUMER RESEARCH: SURVEY
CONSUMER RESEARCH: VOICE OF
CUSTOMER
CONCLUSION:
The survey results show that HDFC Bank is the preferred customer choice
among Indians for financial services. HDFC Bank was ranked the most trusted
brand in India by the Trust Research Advisory in 2022. The company has a
strong reputation for offering quality products and services, and it has a wide
network of branches and ATMs across India.
Jio Finance Service is a new entrant in the financial services market, and it is
still gaining traction. The company has a strong backing from Reliance
Industries, but it lacks the experience and reputation of HDFC Bank. Jio
Finance Service will need to invest in building its brand and customer base in
order to compete with HDFC Bank.

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RELIANCE JIO Vs HDFC BanK-1.pptx

  • 1. RELIANCE JIO VS HDFC BANK Group-16 1.Nikhil Kalia – FT242080 2.Radhika Chinchghare – FT242082 3.Saurav Kumar – FT242085 4.Rushikesh Sindekar – FT242083 5. Akash Vatsyayan – FT242072
  • 2.
  • 4. WHERE JIO FINANCIAL SERVICES FIT!
  • 5. KEY PLAYERS IN MARKET
  • 6. MARKET STRUCTURE: OLIGOPOLY • The type of market structure for NBFCs (Non-Banking Financial Companies) is oligopoly. This means that there are a few large NBFCs that dominate the market, and they have a significant amount of market power. The other NBFCs in the market are much smaller, and they have very little influence on prices or competition. Reasons: 1. First, it is a very capital-intensive industry, which makes it difficult for new entrants to come in and compete with the established players 2. Second, the NBFC market is regulated by the Reserve Bank of India (RBI), which makes it difficult for new entrants to get the necessary licenses and approvals 3. Third, the NBFC market is characterized by high switching costs, which makes it difficult for customers to switch from one NBFC to another.
  • 7. NBFC:COLLUSIVE OLIGOPOLY MARKET • The NBFC market in India is a collusive oligopoly market. This means that the NBFCs in the market cooperate with each other to set prices and restrict competition. • The RBI's regulations are designed to make it more difficult for NBFCs to collude and to protect consumers from the negative consequences of collusion. • Example: The Prohibition of Fraudulent and Unfair Trade Practices Regulation, 2020: This regulation prohibits NBFCs from engaging in fraudulent and unfair trade practices, such as price collusion, bid rigging, and market allocation. • The RBI is also monitoring the NBFC market closely and taking enforcement action against NBFCs that are found to be colluding. In 2021, the RBI imposed a fine of INR 200 million on two NBFCs for engaging in price collusion.
  • 8. OLIGOPOLY: DEMAND AND SUPPLY DYANMICS • In an oligopoly, there are a few large firms that dominate the market. These firms have a significant amount of market power, and they can influence prices and competition. As a result, the demand curve for an oligopoly firm is not a straight line, but rather a kinked demand curve. • The kink in the demand curve occurs because of the reaction of other firms in the industry to a price change by one firm. If one firm lowers its price, the other firms are likely to follow suit in order to avoid losing customers. This means that the demand curve for the first firm becomes more elastic, or responsive to price changes, at the lower prices.
  • 9. OLIGOPOLY: DEMAND AND SUPPLY DYANMICS • On the other hand, if one firm raises its price, the other firms are not likely to follow suit. This is because they don't want to lose customers to the firm that has lowered its price. This means that the demand curve for the first firm becomes more inelastic, or less responsive to price changes, at the higher prices • The supply curve for an oligopoly is more inelastic than the supply curve for a perfectly competitive Implication of Kinked Demand Curve on firm: • First, it means that they are less likely to change prices, because they know that other firms will follow suit. This can lead to price rigidity in the market. • Second, it means that oligopoly firms are more likely to engage in non-price competition, such as advertising or product differentiation. This is because they can't compete on price, so they have to compete on other factors.
  • 12. JIO FINANCIAL SERVICES VS HDFC BANK HDFC Bank and Jio Financial Services offer a variety of financial services, but some of the most common ones they have in common include: •Personal loans: Both banks offer personal loans to individuals for a variety of purposes, such as consolidating debt, financing a major purchase, or paying for home improvements. •Credit cards: HDFC Bank and Jio Financial Services both offer a variety of credit cards with different features and benefits, such as rewards programs, cashback offers, and travel insurance. •Debit cards: Both banks also offer debit cards that can be used to make purchases and withdraw cash from ATMs.
  • 13. JIO FINANCIAL SERVICES VS HDFC BANK •Mortgages: HDFC Bank is one of the largest mortgage lenders in India, and Jio Financial Services also offers mortgages to individuals and businesses. •Investment products: Both banks offer a variety of investment products, such as mutual funds, stocks, and bonds. •Insurance products: HDFC Bank and Jio Financial Services both offer a variety of insurance products, such as life insurance, health insurance, and car insurance.
  • 14. SPREADING THE FINANCE - CAN JIO FINANCIAL SERVICES CHALLENGE HDFC BANK? "Since the parent company RIL is rated AAA, there are expectations that JFSL will also receive a good rating which will eliminate concerns about the cost of funding. This paves the way for addressing the demand and supply concerns significantly and enabling them to disrupt the market with even lower lending fees due to their substantial volumes," said Jain. • KV KAMATH AND TEAM (IN SHORT ALL LEADERSHIP) • JFS association with largest and most diversified business reliance group will be powered by the groups wide presence in 15000 retail store. Customer base of over 400 million in telecom and 200 million retails. Jio seeks to hurt competitors by easily achieving economy of scale and hence operating at low cost
  • 15. DEMERGER! • On July 20, 2023, Reliance Industries demerged its financial services business, Reliance Strategic Investments Limited (RSIL), into a new entity called Jio Financial Services • The demerger was a key development for Jio Financial Services, as it gave the company a separate stock market identity and allowed it to raise capital independently • The demerger also had a significant impact on HDFC Bank. HDFC Bank is a major shareholder in RSIL, and it held a 20% stake in the company before the demerger. As a result of the demerger, HDFC Bank's stake in JFSL was diluted to 10%. • HDFC Bank responded to the demerger by stating that it remains committed to Jio Financial Services. The bank said that it is confident in the company's
  • 16. FEW LATEST NEWS! The demerger of Jio Financial Services (JFSL) from diversified conglomerate Reliance Industries (RIL) will create a non-banking financial behemoth with a size of approximately ₹1.5 lakh crore which could pose a tough challenge to existing non-banking financial companies (NBFCs), according to experts. The financial arm of Reliance Industries was demerged from its parent company Reliance Industries today. The demerged entity RSIL (Reliance Strategic Investments Limited), would be renamed JFSL (Jio Financial Services Limited) and it will be listed separately on NSE and BSE in the next few months.
  • 17. FEW LATEST NEWS! Sashi Jagdishan, CEO & MD, HDFC Bank said, “This is a defining event in our journey and I am confident that our combined strength will enable us to create a holistic ecosystem of financial services.” “We are truly happy to welcome the talented team of HDFC Ltd. into the HDFC Bank family. I believe our journey will be defined by agility, adaptability, and a relentless pursuit of excellence,” he said.
  • 18. HDFC DEFENCE! • Strong financials: HDBFS is a well-capitalized NBFC with a strong track record of profitability. In FY22, HDBFS reported a net profit of INR 3,111 crore, an increase of 16% from the previous year. The company's capital adequacy ratio (CAR) was 23.5%, well above the regulatory requirement of 15%. [Source: HDBFS Annual Report 2022] • Wide range of products and services: HDBFS offers a wide range of financial products and services to meet the needs of a variety of customers. In FY22, the company disbursed loans worth INR 1.4 trillion, an increase of 22% from the previous year. The top 3 products by loan amount were: Personal loans: INR 48,000 crore Home loans: INR 34,000 crore Commercial loans: INR 29,000 crore [Source: HDBFS Annual Report 2022] • Brand reputation: HDBFS is a well-known and respected brand in India. The company has been ranked as the 3rd most trusted brand in India by the Trust Research Advisory in 2022. [Source: Trust Research Advisory] • Strong distribution network: HDBFS has a strong distribution network that reaches a large number of
  • 20.
  • 21.
  • 22.
  • 23.
  • 25. CONCLUSION: The survey results show that HDFC Bank is the preferred customer choice among Indians for financial services. HDFC Bank was ranked the most trusted brand in India by the Trust Research Advisory in 2022. The company has a strong reputation for offering quality products and services, and it has a wide network of branches and ATMs across India. Jio Finance Service is a new entrant in the financial services market, and it is still gaining traction. The company has a strong backing from Reliance Industries, but it lacks the experience and reputation of HDFC Bank. Jio Finance Service will need to invest in building its brand and customer base in order to compete with HDFC Bank.