An Organizational study At HDFC Bank


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An Organizational study At HDFC Bank

  1. 1. HDFC Bank Ltd INTRODUCTION TO STUDY Organizational Studies is designed to provide a broad understanding of the political, social,and economic organizations that make up modern society. Organizational Studies emphasizesa sociological perspective, but incorporates a multi-disciplinary field of study. The majorintroduces students to a range of theories and methods that social scientists use in the analysisof organizations. Courses are chosen to strengthen an emphasis in administration andmanagement, and from the disciplines of Economics, Political Science, Communication,Community & Regional Development, Agricultural & Resource Economics, History, and ofcourse, Sociology. Majors in Organizational Studies will be prepared for a variety of careeroptions. The area of study lends itself to a career in management, or to further professionaltraining for a Master‘s degree in public or private management. The program offers anopportunity to develop a multidisciplinary approach to the understanding of modern society. Organisation is the process of identifying and grouping the work to be performed,defining, and deliberating responsibilities and the authority and establishes relationship for thepurpose of enabling people to work most effectively together in accomplishing the objectives. Need for the StudyOrganization Studies provides you with a critical understanding of organizational behavior andits theoretical foundations, with a specific focus on organizational complexity and dynamics. Itis designed for those seeking a sound theoretical basis in organization studies, a deeper levelof understanding about how organizations deal with complexity and dynamics and an advancedlevel study that will generate transferable skills and facilitate employment in a great variety oforganizations. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page1
  2. 2. HDFC Bank LtdOB JE CT I V E S OF STUDYING THE ORGANIZATIONThe primary purpose of this study is to fulfillment of the requirements for the degree of MBA(Finance).For this connection each student of this particular course is required to undertaketraining in a relevant organization selected by them, for a period of 4-6 weeks. The secondarypurpose of this internship is to understand how the theoretical knowledge can be applied to thepractical situations and examine an organization‘s financial issues and identifyitsopportunities/ problems and also suggest corrective measures. This internship is also verynecessary to gain confidence and become aware of the mechanism of an organization. As aninternee I want to achieve following objectives during my internship and organization study: 1. To familiarize with a business organization. 2. To familiarize with the different departments in the organization and their functioning. 3. To enable myself to understand how the key business process are carried out in organization. 4. To understand how information is used in an organization for decision making at various levels. 5. To relate theory with practice. 6. To gain professional experience in an actual testing environment.. 7. To develop my attitude conducive to effective interpersonal relationships. 8. To acquire good work habits and sense of responsibility. 9. To enhance my learning experience by application of fundamental concepts previously learned. 10. To observe, analyze and interpret the relevant data competently and in a useful manner. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page2
  3. 3. HDFC Bank LtdMETHODOLOGY OF ORGANISATIONAL STUDYPrimary dataPrimary data were collected from discussions with the Managerial Head of the variousdepartments.Secondary data Secondary data were obtained from the annual report, from the website and other concernedbooks..SCOPE AND SIGNIFICANCE OF ORGANISATIONAL STUDY ON HDFC BANKIn this study, the researcher analyzed the overall functioning of the firm and also the financialperformance of the enterprise. The researcher made a moderate attempt to have the SWOTanalysis of the organization study on HDFC bank. It aim at understand the companyestablishment organisation structure department, techniques, marketing strategies and theadvantage it is having over the competitions The study gave more emphasis on the process that takes place in variousdepartments in HDFC Bank. Organisational structure and management of various departmentsof HDFC Bank are taken for the purpose of study. In a broad sense the scope of this project work is an attempt to knowabout the organisation as a whole and also about the functions and practices of theorganisation and duties and responsibilities of different staffs. The study helps to understandthe improvements, the working conditions, work environment of the organisation. Sufficient GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page3
  4. 4. HDFC Bank Ltdattempt has been to cover almost all facets of this organisation and to understand the complexfactors that are functioning within the organisationLIMITATIONS OF ORGANISATIONAL STUDY  Time limit, a major constraint.  As per the company rules many information was not disclosed.  As the managers are busy in their daily schedules it is not possible to us to spend more time in the interaction and discussion with them.  The inherent limitation of secondary data is unavoidable. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page4
  5. 5. HDFC Bank Ltd INDUSTRY PROFILE A bank is a financial institution that provides banking and other financialservices to their customers. A bank is generally understood as an institution which providesfundamental banking services such as accepting deposits and providing loans. There are alsononbanking institutions that provide certain banking services without meeting the legaldefinition of a bank. Banks are a subset of the financial services industry. A banking system also referred as a system provided by the bank whichoffers cash management services for customers, reporting the transactions of their accountsand portfolios, throughout the day. The banking system in India should not only be hassle freebut it should be able to meet the new challenges posed by the technology and any otherexternal and internal factors. For the past three decades, India‘s banking system has severaloutstanding achievements to its credit. The Banks are the main participants of the financialsystem in India. The Banking sector offers several facilities and opportunities to theircustomers. All the banks safeguard the money and valuables and provide loans, credit, andpayment services, such as checking accounts, money orders, and cashier‘s Cheque the banksalso offer investment and insurance products. As a variety of models for cooperation andintegration among finance industries have emerged, some of the traditional distinctionsbetween banks, insurance companies, and securities firms have diminished. In spite of thesechanges, banks continue to maintain and perform their primary role—accepting deposits andlending funds from these deposits. The soundness of any economy depends on the soundness of the banking system prevailing there. In India we have a very good banking system well regulated and directed by the Reserve Bank of India (RBI). It comprises of RBI – the central bank, GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page5
  6. 6. HDFC Bank Ltd public sector banks, private banks, foreign banks and co-operative banks. In India there are more than 450 million bank accounts, but it is just 45 percent of the total population. Majority of the population are still away from the reach of the banking services and many who have an account just holds a ‗no-frills account‘. There is a long way for Indian banks to go. They have to extent their service to more people as well as improve the quality of the service they provide. Indian banks while targeting earnings should also consider other objectives like inclusive growth and solvency. Excessive stress on improving profits should not tempt the banks to go for high risky ventures. In order to maintain the credibility of the Indian banking system, RBI has come out with various regulatory measures. Such measures including the application of Basel norms have proved to be highly effective during the time of global financial crisis. While many big banking giants of US and Europe crumbled, Indian banks stood without much damage. The credit goes to the prudent measures taken by the Reserve Bank of India and the policies of the Ministry of Finance. The era since independence has seen many positive developments in the Indian banking sector. The policy makers, which comprise the RBI, Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve regulation in the sector. The sector now compares favorably with banking sectors in the region on metrics like growth, profitability and non-performing assets (NPAs).Currently, there are 88 scheduled commercial banks (SCBs) - 27 public sector banks(that is with the Government of India holding a stake), 31 private banks (these do not GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page6
  7. 7. HDFC Bank Ltdhave government stake; they may be publicly listed and traded on stock exchanges)and 38 foreign banks operating in India. They have a combined network of over 55,000branches and 44,000 ATMs. According to a report by ICRA Limited, a rating agency,the public sector banks hold over 70 percent of total assets of the banking industry, withthe private and foreign Banks holding 20.2% and 9.8 % respectively. Indian banking has undergone a total transformation over the last decade. Moving seamlessly from a manual, scale- constrained environment to a technologically-leading position, it has been a miracle. Nowhere in the world has such a transformation taken place in such a short span of time with such a low cost. Financial sector reforms since 1991 has brought in drastic changes in the banking industry. Banks have become more service oriented, customer-focused and technologically advanced in the last decade. The entry of private banks and foreign banks has increased the competition in the sector. Today in addition to the traditional banking services, banks cater a variety of financial products and services to its customers such as insurance products, mutual funds, credit cards, etc. In addition, the areas in which banks make their investment has also became wider. Today banks are dealing with a lot of derivatives products, futures and options etc. They also face the exchange rate risk. Since banks indulge themselves in granting big loans to corporate houses engaged in international business, any fluctuations in the world economy will affect their pay back. The stiff competition and social obligations has forced the banks to grant credit to persons and entities with low credit worthiness. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page7
  8. 8. HDFC Bank Ltd Banking sector reforms since 1991 brought significant progress on regulatory side. Banking is undoubtedly one of the most regulated industries globally and the rules governing bank capital are one of the most prominent aspects of such regulation.Need of the Banks Before the establishment of banks, the financial activities were handled bymoney lenders and individuals. At that time the interest rates were very high. Again there wereno security of public savings and no uniformity regarding loans. So as to overcome suchproblems the organized banking sector was established, which was fully regulated by thegovernment. The organized banking sector works within the financial system to provide loans,accept deposits and provide other services to their customers. The following functions of thebank explain the need of the bank and its importance: To provide the security to the savings of customers. To control the supply of money and credit To encourage public confidence in the working of the financial system, increase savings speedily and efficiently. To avoid focus of financial powers in the hands of a few individuals and institutions. To set equal norms and conditions (i.e. rate of interest, period of lending etc) to all types of customersHistory of Indian Banking System GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page8
  9. 9. HDFC Bank Ltd The first bank in India, called The General Bank of India was established inthe year 1786. The East India Company established The Bank of Bengal/Calcutta (1809), Bankof Bombay (1840) and Bank of Madras (1843). The next bank was Bank of Hindustan whichwas established in 1870. These three individual units (Bank of Calcutta, Bank of Bombay, andBank of Madras) were called as Presidency Banks. Allahabad Bank which was established in1865 was for the first time completely run by Indians. Punjab National Bank Ltd. was set up in1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank ofIndia, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. In 1921, allpresidency banks were amalgamated to form the Imperial Bank of India which was run byEuropean Shareholders. After that the Reserve Bank of India was established in April 1935. At the time of first phase the growth of banking sector was very slow.Between 1913 and 1948 there were approximately 1100 small banks in India. To streamline thefunctioning and activities of commercial banks, the Government of India came up with theBanking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as peramending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was vested with extensivepowers for the supervision of banking in India as a Central Banking Authority. Afterindependence, Government has taken most important steps in regard of Indian Banking Sectorreforms. In 1955, the Imperial Bank of India was nationalized and was given the name "StateBank of India", to act as the principal agent of RBI and to handle banking transactions all overthe country. It was established under State Bank of India Act, 1955. Seven banks formingsubsidiary of State Bank of India was nationalized in 1960. On 19th July, 1969, major processof nationalization was carried out. At the same time 14 major Indian commercial banks of thecountry were nationalized. In 1980, another six banks were nationalized, and thus raising thenumber of nationalized banks to 20. Seven more banks were nationalized with deposits over GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page9
  10. 10. HDFC Bank Ltd200 Crores. Till the year 1980 approximately 80% of the banking segment in India was undergovernment‘s ownership. On the suggestions of Narsimhan Committee, the BankingRegulation Act was amended in 1993 and thus the gates for the new private sector banks wereopened. The following are the major steps taken by the Government of India to RegulateBanking institutions in the country:-1949: Enactment of Banking Regulation Act.1955: Nationalization of State Bank of India.1959: Nationalization of SBI subsidiaries.1961: Insurance cover extended to deposits.1969: Nationalization of 14 major Banks.1971: Creation of credit guarantee corporation.1975: Creation of regional rural banks.1980: Nationalization of seven banks with deposits over 200 Crores.Post-Independence The partition of India in 1947 had adversely impacted the economies of Punjaband West Bengal, and banking activities had remained paralyzed for months. Indiasindependence marked the end of a regime of the Laissez-faire for the Indian banking. TheGovernment of India initiated measures to play an active role in the economic life of the nation,and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixedeconomy. This resulted into greater involvement of the state in different segments of theeconomy including banking and finance.The major steps to regulate banking included: GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page10
  11. 11. HDFC Bank Ltd In 1948, the Reserve Bank of India, Indias central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors.NationalizationBy the 1960s, the Indian banking industry has become an important tool to facilitate thedevelopment of the Indian economy. At the same time, it has emerged as a large employer,and a debate has ensured about the possibility to nationalize the banking industry. IndiraGandhi, the-then Prime Minister of India expressed the intention of the Government of India(GOI) in the annual conference of the All India Congress Meeting in a paper entitled "Straythoughts on Bank Nationalization". The paper was received with positive enthusiasm.Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalizedthe 14 largest commercial banks with effect from the midnight of July 19, 1969. JayaprakashNarayan, a national leader of India, described the step as a "Masterstroke of politicalsagacity" Within two weeks of the issue of the ordinance, the Parliament passed the BankingCompanies (Acquisition and Transfer of Undertaking) Bill and it received the presidentialapproval on 9 August, 1969. A second step of nationalization of 6 more commercial banksfollowed in 1980. The stated reason for the nationalization was to give the government morecontrol of credit delivery. With the second step of nationalization, the GOI controlled around91% of the banking business in India. Later on, in the year 1993, the government merged New GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page11
  12. 12. HDFC Bank LtdBank of India with Punjab National Bank. It was the only merger between nationalized banksand resulted in the reduction of the number of nationalized banks from 20 to 19. After this, untilthe 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growthrate of the Indian economy. The nationalized banks were credited by some; including Homeminister P. Chidambaram, to have helped the Indian economy withstand the global financialcrisis of 2007-2009.Liberalization In the early 1990s, the then Narsimha Rao government embarked on a policy ofliberalization, licensing a small number of private banks. These came to be known as NewGeneration tech-savvy banks, and included Global Trust Bank (the first of such newgeneration banks to be set up), which later amalgamated with Oriental Bank of 24 Commerce,Axis Bank (earlier as UTI Bank), ICICI Bank and HDFC Bank. This move along with the rapidgrowth in the economy of India revolutionized the banking sector in India which has seen rapidgrowth with strong contribution from all the three sectors of banks, namely, government banks,private banks and foreign banks. The next stage for the Indian banking has been setup with theproposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors inbanks may be given voting rights which could exceed the present cap of 10%, at present it hasgone up to 49% with some restrictions. The new policy shook the banking sector in Indiacompletely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvymethods of working for the traditional banks. All this led to the retail boom in India. People notjust demanded more from their banks but also received more. Currently (2007), banking in GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page12
  13. 13. HDFC Bank LtdIndia is generally fairly mature in terms of supply, product range and reach-even though reachin rural India still remains a challenge for the private sector and foreign banks. In terms ofquality of assets and capital adequacy, Indian banks are considered to have clean, strong andtransparent balance sheets as compared to other banks in comparable economies in its region.The Reserve Bank of India is an autonomous body, with minimal pressure from thegovernment. The stated policy of the Bank on the Indian Rupee is to manage volatility butwithout any fixed exchange rate-and this has mostly been true. With the growth in the Indianeconomy expected to be strong for quite some time-especially in its services sector-thedemand for banking services, especially retail banking, mortgages and investment services areexpected to be strong.1949: Enactment of Banking Regulation Act.1955: Nationalization of State Bank of India.1959: Nationalization of SBI subsidiaries.1961: Insurance cover extended to deposits.1969: Nationalization of 14 major Banks.1971: Creation of credit guarantee corporation.1975: Creation of regional rural banks.1980: Nationalization of seven banks with deposits over 200 Crores.Recent Trends 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 GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page13
  14. 14. HDFC Bank Ltd other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect mergers and acquisitions (M&As), takeovers, and asset sales.An outline of the Indian Banking structure may be presented as follows:-1. Reserve banks of India.2. Indian Scheduled Commercial Banks. a) State Bank of India and its associate banks. b) Twenty nationalized banks. c) Regional rural banks. d) Other scheduled commercial banks.3. Foreign Banks4. Non-scheduled banks.5. Co-operative banks. 1 .Reserve bank of IndiaThe reserve bank of India is a central bank and was established in April 1, 1935 in accordancewith the provisions of reserve bank of India act 1934. The central office of RBI is located atMumbai since inception. Though originally the reserve bank of India was privately owned, sincenationalization in 1949, RBI is fully owned by the Government of India. It was inaugurated withshare capital of Rs. 5 Crores divided into shares of Rs. 100 each fully paid up. RBI is governed GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page14
  15. 15. HDFC Bank Ltdby a central board (headed by a governor) appointed by the central government of India. RBIhas 22 regional offices across India. The reserve bank of India was nationalized in the year1949. The general superintendence and direction of the bank is entrusted to central board ofdirectors of 20 members, the Governor and four deputy Governors, one Governmental officialfrom the ministry of Finance, ten nominated directors by the government to give representationto important elements in the economic life of the country, and the four nominated director bythe Central Government to represent the four local boards with the headquarters at Mumbai,Kolkata, Chennai and New Delhi. Local Board consists of five members each centralgovernment appointed for a term of four years to represent territorial and economic interestsand the interests of cooperative and indigenous banks. The RBI Act 1934 was commenced onApril 1, 1935. The Act, 1934 provides the statutory basis of the functioning of the bank. Thebank was constituted for the need of following:- To regulate the issues of banknotes.- To maintain reserves with a view to securing monetary stability- To operate the credit and currency system of the country to its advantage.Functions of RBI as a central bank of India are explained briefly as follows:Bank of Issue: The RBI formulates, implements, and monitors the monitory policy. Its mainobjective is maintaining price stability and ensuring adequate flow of credit to productive sector.Regulator-Supervisor of the financial system: RBI prescribes broad parameters of bankingoperations within which the country‘s banking and financial system functions. Their mainobjective is to maintain public confidence in the system, protect depositor‘s interest and providecost effective banking services to the public.Manager of exchange control: The manager of exchange control department manages theforeign exchange, according to the foreign exchange management act, 1999. The manager‘s GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page15
  16. 16. HDFC Bank Ltdmain objective is to facilitate external trade and payment and promote orderly development andmaintenance of foreign exchange market in India.Issuer of currency: A person who works as an issuer, issues and exchanges or destroys thecurrency and coins that are not fit for circulation. His main objective is to give the publicadequate quantity of supplies of currency notes and coins and in good quality.Developmental role: The RBI performs the wide range of promotional functions to supportnational objectives such as contests, coupons maintaining good public relations and manymore.Related functions: There are also some of the related functions to the above mentioned mainfunctions. They are such as, banker to the government, banker to banks etc….• Banker to government performs merchant banking function for the central and the stategovernments; also acts as their banker.• Banker to banks maintains banking accounts to all scheduled banks.Controller of Credit: RBI performs the following tasks:• It holds the cash reserves of all the scheduled banks.• It controls the credit operations of banks through quantitative and qualitative controls.• It controls the banking system through the system of licensing, inspection and calling forinformation.• It acts as the lender of the last resort by providing rediscount facilities to scheduled banks.Supervisory Functions: In addition to its traditional central banking functions, the ReserveBank performs certain non-monetary functions of the nature of supervision of banks andpromotion of sound banking in India. The Reserve Bank Act 1934 and the banking regulationact 1949 have given the RBI wide powers of supervision and control over commercial and co-operative banks, relating to licensing and establishments, branch expansion, liquidity of their GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page16
  17. 17. HDFC Bank Ltdassets, management and methods of working, amalgamation, reconstruction and liquidation.Promotional Functions: With economic growth assuming a new urgency since independence,the range of the Reserve Bank‘s functions has steadily widened. The bank now performs avariety of developmental and promotional functions, which, at one time, were regarded asoutside the normal scope of central banking. The Reserve bank was asked to promote bankinghabit, extend banking facilities to rural and semi-urban areas, and establish and promote newspecialized financing agencies. Bank Rate 9.00% (w.e.f. close Decreased from 9.50% to ofbusiness of 9.00% which was continuing 17/04/2012) since 13/02/2012 4.75% (wef 10/03/2012) - Decreased from 5.50%which was Cash Reserve Ratio announced on continuing since 24/01/2012 (CRR) 24/01/2012 Decreased from 23%(w.e.f. 11/08/2012) 24% which was Statutory Liquidity Ratio (SLR) (announced on continuing since 31/07/2012) 18/12/2010 Decreased from 8.50% which 8.00% (w.e.f. Repo Rate under LAF was continuing since 17/04/2012) 25/10/2011 Reverse Repo Rat 7.00% (w.e.f. Decreased from 7.50% which was e under LAF 17/04/2012) continuing since 25/10/2011 GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page17
  18. 18. HDFC Bank Ltd2. Indian Scheduled Commercial Banks.Commercial banks form a significant part of the country‘s Financial Institution System.Commercial Banks are those profit seeking institutions which accept deposits from generalpublic and advance money to individuals like household, entrepreneurs, businessmen etc. withthe prime objective of earning profit in the form of interest, commission etc. The operations ofall these banks are regulated by the Reserve Bank of India, which is the central bank andsupreme financial authority in India. The main source of income of a commercial bank is thedifference between these two rates which they charge to borrowers and pay to depositors.Examples of commercial banks are ICICI Bank, State Bank of India, Axis Bank, and HDFCBank.4. Foreign banksThe foreign banks in India are slowly but steadily creating a niche for themselves. With theglobalization hitting the world, the concept of banking has changed substantially over the lastcouple of years. Some of the foreign banks have successfully introduced latest technologies inthe banking practices in India. This has made the banking business in the country more smoothand interesting for the customers. The concept of foreign banks in India has changed theprevailing banking scenario in the country. The banking industry is now more competitive andcustomer-friendly than before. The foreign banks have brought forth some innovations andchanges in the banking industry of the country. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page18
  19. 19. HDFC Bank Ltd4. Non-scheduled banksThe banks which are not registered in the list of central bank under its charter are known asnon-scheduled banks. They are not bound to perform banking services according to thepolicies and instructions of central bank e.g. Bank of Punjab was a non-scheduled bank.These banks do not fulfill the required qualifications of a scheduled bank as prescribed by thecentral bank. They also do not enjoy the public confidence. In many countries, many non-scheduled banks are also working."Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".5. Co-operative banksAccording to the International Co-operative Alliance Statement of co-operative identity, a co-operative is an autonomous association of persons united voluntarily to meet their commoneconomic, social, and cultural needs and aspirations through a jointly-owned anddemocratically-controlled enterprise. Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility andcaring for others GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page19
  20. 20. HDFC Bank LtdCo-operative banks are deeply rooted inside local areas and communities. They are involvedin local development and contribute to the sustainable development of their communities, astheir members and management board usually belong to the communities in which theyexercise their activities. By increasing banking access in areas or markets where other banksare less present - SMEs, farmers in rural areas, middle or low income households in urbanareas - co-operative banks reduce banking exclusion and foster the economic ability of millionsof people. They play an influential role on the economic growth in the countries in which theywork in and increase the efficiency of the international financial system. Their specific form ofenterprise, relying on the above-mentioned principles of organization, has proven successfulboth in developed and developing countries. Structure of banking industry in India Indian banks can be broadly classified into nationalized banks/public sector banks, private banks and foreign banks Banks Scheduled banks Non-scheduled banks Scheduled commercial banks Scheduled co-operative banks GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page20
  21. 21. HDFC Bank Ltd Private Public Foreign Regional Urban State Sector Sector Banks Rural Co-op Co-op Banks Banks Banks Banks BanksChallenges facing by Indian BanksThe main challenges facing by Indian banking are the role of financial instrumentation indifferent phases of the business cycle, the emerging compulsions of the new prudential normsand benchmarking the Indian financial system against international standards and bestpractices. The need for introduction of new technology in the banking and the importance ofskill building and intellectual capital formation in the banking industry are also equal important. COMPANY PROFILEHDFC BANKThe Housing Development Finance Corporation Limited (HDFC) was amongst the first toreceive an in principle approval from the Reserve Bank of India (RBI) to set up a bank in theprivate sector, as part of the RBIs liberalization of the Indian Banking Industry in 1994. Thebank was incorporated in August 1994 in the name of HDFC Bank Limited, with its registeredoffice in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bankin January 1995. HDFC Bank currently has an nationwide network of 2,544 Branches and9,709 ATMs in 1,399 Indian towns and cities. HDFC Banks mission is to be a World-ClassIndian Bank.The objective is to build sound customer franchises across distinct businesses so as to bethe preferred provider of banking services for target retail and wholesale customer GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page21
  22. 22. HDFC Bank Ltdsegments, and to achieve healthy growth in profitability, consistent with the banks riskappetite. The bank is committed to maintain the highest level of ethical standards,professional integrity, corporate governance and regulatory compliance. HDFC Banksbusiness philosophy is based on four core values - Operational Excellence, CustomerFocus, Product Leadership and People. HDFC Bank offers a wide range of commercial andtransactional banking services and treasury products to wholesale and retail customers.The bank has three key business segments: The Bank also has 5,471 networked ATMsacross these cities. Moreover, HDFC Banks ATM network can be accessed by all domesticand international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and AmericanExpress Credit/Charge cardholders. HDFC Bank was the first bank in India to launch anInternational 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. ByMarch 2010, the bank had a total card base (debit and credit cards) of over 14 million. TheBank is also one of the leading players in the ―merchant acquiring‖ business with over90,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchantestablishments. The Bank is well positioned as a leader in various net based B2Copportunities including a wide range of internet banking services for Fixed Deposits, Loans,Bill Payments, etc.VisionTo be customer driven best managed enterprise that enjoys market leadership in providinghousing related finance.Mission GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page22
  23. 23. HDFC Bank LtdTo provide a package of attractive financial services for housing purposes through a competentand motivated team of employees using the state of the art technology to maintain financialstability and growth of the organization whilst contributing to the national goal of providingdecent housing to all.Our ObjectivesCustomersTo provide a caring customer service anticipating solutions required by our customers andinnovatively satisfying them beyond expectations.ShareholdersTo optimize return on shareholders funds. .EmployeesTo motivate, develop, recognize and reward our employees. Industry Setting industrybenchmarks of international standard in delivering customer value throughout comprehensiveproduct range, customer service and all our activitiesEthicsmaintaining the highest ethical standards worth of a leading corporate citizenREGISTERED OFFICEHDFC Bank House,Senapati Bapat Marg,Lower Parel,Mumbai 400 013. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page23
  24. 24. HDFC Bank LtdTel: + 91 22 66521000Fax: + 91 22 24960737Website: C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July2010. Mr. Vasudev has been a Director of the Bank since October 2006. A retired IAS officer,Mr. Vasudev has had an illustrious career in the civil services and has held several keypositions in India and overseas, including Finance Secretary, Government of India, ExecutiveDirector, World Bank and Government nominee on the Boards of many companies in thefinancial sector.The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years andbefore joining HDFC Bank in 1994 was heading Citibanks operations in Malaysia.The Banks Board of Directors is composed of eminent individuals with a wealth of experiencein public policy, administration, industry and commercial banking. Senior executivesrepresenting HDFC are also on the Board.Senior banking professionals with substantial experience in India and abroad head variousbusinesses and functions and report to the Managing Director. Given the professional expertiseof the management team and the overall focus on recruiting and retaining the best talent in theindustry, the bank believes that its people are a significant competitive strength.BOARD OF DIRECTORSMr. C. M. Vasudev, ChairmanMrs. Renu KarnadMr. Ashim SamantaDr. Pandit Palande GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page24
  25. 25. HDFC Bank LtdMr. Partho DattaMr. Bobby ParikhMr. Anami N RoyMr. Keki Mistry (re-appointed on 19.01.2012)Mr. Aditya Puri, Managing DirectorMr. Harish Engineer, Executive DirectorMr. Paresh Sukthankar, Executive DirectorSENIOR MANAGEMENT TEAMMr. A ParthasarthyMr. Abhay AimaMr. Anil JaggiaMr. Anil NathMr. Bhavesh ZaveriMr. G. SubramanianMr. Jimmy TataMr. Kaizad BharuchaMr. Navin PuriMr. Pralay MondalMr. Rahul BhagatMr. Rajender SehgalMr. Sashi JagdishanGROWTH OF HDFC GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page25
  26. 26. HDFC Bank LtdFinancial analysis is mainly done in order to judge the growth of the banks but diagnosing theinformation contained in the financial statements. Financial analysis is done to identify thefinancial strengths and weaknesses of banks by properly establishing relationship between theitems of balance sheet and profit and loss account. It helps in better understanding of banksfinancial position and growth and performance by analyzing the financial statements withvarious tools and evaluating the relationship between various elements of financial statements.The term ―financial statement analysis‖ includes both ―analysis‖ and ―interpretation‖. The term―analysis‖ is used to mean the generalization of data given in the financial statements bysystematic arrangements and classification of data and ―interpretation‖ means explaining themeaning and significance of the data so simplifiedEstablished market positionHDFC Bank has an established presence in the banking system, especially on the retail side.Its geographical presence has improved after the purchase of CBoP; as on April 30, 2011, thebank has 2,000 branches spread across 996 cities in India. It is the second largest private bankin India, with reported total assets of Rs 2,218 bn as on March 31, 2010, and a share a 3.5%and 3.6%, respectively, in system deposits and advances. Retail advances constituted 51.7%of the bank‘s gross advances as on September 30, 2010. The bank is a market leader innon‐mortgage retail segments such as commercial vehicles and car financing. It has access toa large deposit base for cross‐selling its loan products; this has proven especially beneficial inthe credit cards and personal loans businesses.Technology Banking GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page26
  27. 27. HDFC Bank LtdInnovation in technology and world-wide revolution in information and communicationtechnology are perceived to be the catalyst of productivity growth. The relationship between ITand Banking is fundamentally symbiotic. It is expected to reduce costs, increase volumes andfacilitate customized products. Technology adoption is a dire necessity for the public sectorbanks to complete with new generation private sector and foreign banks. It is a `compulsionrather than a `choice. Retention of existing customer is the primary concern of majority of thebanks today. The major challenge for banks is to fall in line with the emerging scenario andadopting the require technology to provide stake-of-the-art services to the customers.Introduction of on-line, inter-connected automatic teller machines (ATM), telephone banking,on-line bill payment and Internet banking are some of the high tech facilities. Banks have toprovide in order to survive in the competitive scenario. Technology should ultimate results inbetter customer service, low cost and quick delivery.NUMBER OF BRANCHESThe branch expansion policy seeks to achieve to broad objectives (a) narrowing down regionalimbalance and (b) providing banking facilities to rural and neglected areas. The policy mainlyemphasize on opening more offices in rural and semi-urban areas and centers which have fewor no branches without jeopardizing branch expansion in urban and metropolitan cities. Themain emphasis of branch licensing policy is on areas where population per branch is higherthan the national average.DEPOSITSDeposits serve as the basis for capital formation and facilitate the process of economicdevelopment. Deposits are one of the important growth oriented functions of banking industry. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page27
  28. 28. HDFC Bank LtdIn our country the great emphasis has been placed on deposits mobilization by banks. Banksobtain a major amount of their working capital from deposits. Since their lending and profitearning capacities depend upon deposits. The management of banks is always engaged inworking out plans and schemes to mobilize deposits. The total deposits depend upon the no. offactors like the monetary policy and depositmobilization by other commercial banks. Growth in deposits YEAR Deposits (Rs. In crores) 2004-2005 36354 2005-2006 55797 2006-2007 68298 2007-2008 100769 2008-2009 142812 2009-2010 167404 2010-2011 208586 2011-2012 246706(Source: Compiled from annual reports of the bank for the period 2004-2005 to 2009-2010)NETWORK GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page28
  29. 29. HDFC Bank LtdAs of June 30, 2012, the Bank‘s distribution network was at 2,564 branches and 9,709 ATMs in1,416 cities as against 2,111 branches and 5,998 ATMs in 1,111 cities as of June 30, 2011.Growth in number of branches of HDFC HDFC YEAR 2004-2005 467 2005-2006 535 2006-2007 684 2007-2008 761 2008-2009 1422 2009-2010 1729 2010-2011 2109 2011-2012 2544Strong resource profile, with large proportion of CASA depositsHDFC Bank has a large proportion of low‐cost CASA deposits, so its cost of deposits remainssignificantly below the industry average. As on March 31, 2010, CASA constituted 52% of the GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page29
  30. 30. HDFC Bank Ltdbanks total deposits, the highest proportion in the banking industry and well above the industryaverage of 35%. The banks proportion of saving accounts, at 29.8% of total deposits, washigher than the industry average of 23.3%. HDFC Bank also benefits from the synergiesbetween its liabilities and transaction banking businesses, especially cash management andexchange clearing, which bolster the banks current account base. As on March 31, 2010,current account deposits constituted 22% of total deposits, compared with 12% for the industry.Healthy capitalizationThe bank has a net worth of Rs 214.4 bn as on March 31, 2010. In FY10, its Tier‐I capitaladequacy ratio(CAR) increased to 13.3% from 10.6% in FY09, driven primarily by infusion of Rs 36.1 bnthrough warrant conversion by Housing Development Finance Corporation Ltd during FY10.The bank‘s CAR stood at ~17% under Basel‐II norms, as on March 31, 2010. The CARprovides strong coverage for asset side risks; the bank had a net worth‐to‐net non‐performingassets ratio of 54 times, as on March 31, 2010.FINANCIAL RESULTS (INDIAN GAAP) FOR THE QUARTER ENDED JUNE30, 2012The Board of Directors of HDFC Bank Limited approved the Bank‘s (Indian GAAP) accounts for thequarter ended June 30, 2012, at their meeting held in Mumbai on Friday, July 13, 2012.FINANCIAL RESULTS:Profit & Loss Account: Quarter ended June 30, 2012 GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page30
  31. 31. HDFC Bank LtdThe Bank‘s total income for the quarter ended June 30, 2012, was ` 9,536.9 crores as against `7,098.0 crores for the quarter ended June 30, 2011. Net revenues (net interest income plusother income) were at ` 5,013.5 crores for the quarter ended June 30, 2012, an increase of26.3% over ` 3,968.0 crores for the corresponding quarter of the previous year. Net interestincome (interest earned less interest expended) for the quarter ended June 30, 2012, grew by22.3% to ` 3,484.1 crores. This was driven by loan growth of 21.5% and a net interest marginfor the quarter of 4.3%.Other income (non-interest revenue) for the quarter ended June 30, 2012, was ` 1,529.5crores, up 36.6% over that in the corresponding quarter ended June 30, 2011. The maincontributor to other income for the quarter was fees & commissions of ` 1,143.3 crores, up by23.9% over ` 922.7 crores in the corresponding quarter ended June 30, 2011. The two othercomponents of other income were foreign exchange & derivatives revenue of ` 314.8 crores (`230.1 crores for the corresponding quarter of the previous year) and profit on revaluation / saleof investments of ` 66.5 crores (loss of ` 41.3 crores for the quarter ended June 30, 2011).Operating expenses for the quarter ended June 30, 2012, were ` 2,432.6 crores, an increase of25.7% over ` 1,934.6 crores during the corresponding quarter of the previous year. The corecost-to-income ratio for the quarter was, therefore, at 49.2% as against 48.3% for thecorresponding quarter ended June 30, 2011. Provisions and contingencies were ` 487.3 crores(including specific, general and floating provisions of ` 474.8 crores) for the quarter ended June30, 2012, as against ` 443.7 crores for the corresponding quarter ended June 30, 2011. Afterproviding ` 676.2 crores for taxation, the Bank earned a net profit of ` 1,417.4 crores, anincrease of 30.6% over the quarter ended June 30, 2011.Balance Sheet: As of June 30, 2012 GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page31
  32. 32. HDFC Bank LtdTotal net advances as of June 30, 2012, were ` 213,338 crores, an increase of 21.5% overJune 30, 2011. The mix of loans between the retail and wholesale segments was 52:48 as onJune 30, 2012, as against 54:46 as on March 31, 2012. Total deposits were at ` 257,531crores, an increase of 22.0% over June 30, 2011. Savings deposits grew 18.4% to ` 76,674crores and current deposits grew 7.4% to ` 41,682 crores. With the term deposits growth at29.4%, the CASA ratio was at 46.0% of total deposits as at June 30, 2012.Capital Adequacy:The Bank‘s total Capital Adequacy Ratio (CAR) as at June 30, 2012, (computed as per Basel IIguidelines) stood at 15.5% as against the regulatory minimum of 9.0%. Tier-I CAR was 10.9%as of June 30, 2012 GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page32
  33. 33. HDFC Bank LtdASSET QUALITYAsset quality remained healthy and stable with gross non-performing assets as on June 30,2012, at 1.0% of gross advances, and net non-performing assets at 0.2% of net advancesas of June 30, 2012. The Bank‘s provisioning policies for specific loan loss provisionsremained higher than regulatory requirements. The NPA coverage ratio based on specificprovisions (not including write-offs, technical or otherwise) was at 81% as on June 30, 2012.Total restructured loans (including applications received and under process forrestructuring) were at 0.3% of gross advances as of June 30, 2012.Retail Banking ServicesThe objective of the Retail Bank is to provide its target market customers a full range offinancial products and banking services, giving the customer a one-shop window for allhis/her banking requirements. The Bank also has a wide array of retail loan productsincluding Auto Loans, Loans against marketable securities, Personal Loans and Loansfor Two-wheelers. It is also a leading provider of Depository Participant (DP) services forretail customers, providing customers the facility to hold their investments in electronic form.HDFC Bank was the first bank in India to launch an International Debit Card in association withVISA (VISA Electron) and issues the MasterCard Maestro debit card as well. TheBank launched its credit card business in late 2001. By September 30, 2005, the bank had atotal card base (debit and credit cards) of 5.2 million cards. The Bank is also one of the leadingplayers in the "merchant acquiring" b u s i n e s s w i t h o v e r 5 0 , 0 0 0 P o i n t - o f - s a l e( P O S ) t e r m i n a l s f o r d e b i t / c r e d i t cards acceptance at merchant establishments.Treasury GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page33
  34. 34. HDFC Bank LtdWithin this business, the bank has three main product areas - Foreign Exchange andDerivatives, Local Currency Money Market & Debt Securities, and Equities. These services areprovided through the banks Treasury team. To comply with statutory reserve requirements, thebank is required to hold 25% of its deposits in government securities. The Treasury business isresponsible for managing the returns and market risk on this investment portfolio.Awards and Achievements2012Dun & Bradstreet Banking Awards 2012 - Overall Best Bank - Best Private Sector Bank - Asset Quality - Private Sector - Retail Banking -Private SectorIDRBT Banking Technology Excellence Best Bank in IT for Operational EffectivenessAwards 2011-12 categoryAsia Money 2012 Best Domestic Bank in IndiaIndias Top 500 Companies -Dun & Best Bank in IndiaBradstreet Corporate AwardsFinance Asia - Best Managed Company - Best CEO - Mr. Aditya PuriUTI Mutual Fund CNBC TV 18 Financial - Best Performing Bank - PrivateAdvisor Awards 2011 GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page34
  35. 35. HDFC Bank LtdAsian Banker International Excellence in - Best Retail Bank in IndiaRetail Financial Services Awards 2012 - Best Bancassurance - Best Risk Management5th Loyalty Summit award Customer and Brand LoyaltySkoch foundation 2012 SHG/JLG linkage programmeICAI Awards 2011 Excellence in Financial Reporting2011 Outlook Money Best Bank Award - Best Bank - Runner Up 2011 Best Commercial Vehicle - Driving Positive Change Financier Businessworld Best Bank award - Best Bank BCI Continuity & Resilience - Most Effective Recovery of the Year Award Financial Express Best Bank - Best in Strength and Soundness Survey 2010-11 - 2nd Best in the Private Sector CNBC TV18s Best Bank & - Best Bank GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page35
  36. 36. HDFC Bank Ltd Financial Institution Awards - Mr. Aditya Puri, Outstanding Finance Professional Dun & Bradstreet Banking Awards Best Private Sector Bank - SME Financing 2011 ISACA 2011 award for IT Best practices in IT Governance and IT Security Governance IBA Productivity Excellence New Channel Adopter (Private Sector) Awards 2011 DSCI (Data Security Council of Security in Bank India) Excellence Awards 2011 Euromoney Awards for Best Bank in India Excellence 2011 FINANCE ASIA Country Awards - BEST BANK 2011: India - BEST CASH MANAGEMENT BANK - BEST TRADE FINANCE BANK Asian Banker Strongest Bank in Asia Pacific BloombergUTVs Financial Best Bank Leadership Awards 2011 GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page36
  37. 37. HDFC Bank Ltd IBA Banking Technology Awards Winner - 2010 1) Technology Bank of the Year 2) Best Online Bank 3) Best Customer Initiative 4) Best Use of Business Intelligence 5) Best Risk Management System Runners Up - Best Financial Inclusion IDC FIIA Awards 2011 Excellence in Customer ExperienceMAJOR PLAYER IN INDIA 1. 2. ICICI BANK LTD 2. STATE BANK OF INDIA LTD 3. PUNJAB NATOINAL BANK LTD 4. BANK OF BARODA LTD 5. FEDERAL BANK LTD 6. AXIS BANK LTD 7. ING VYSYA BANK LTD 8. IDBI BANK LTD 9. INDUSIND BANK LTD 10. YES BANK LTD GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page37
  38. 38. HDFC Bank Ltd Rates for deposit below 15 Lacs last updated on 1st September 2012 1 3 6 9 1 2 3 5 >5 PromotionBanks Mont Mont Month Month Year Year year Year Year al Offer h h s s s s s s s 9.25 (390ICICI 5.00 7.00 7.00 7.75 8.00 9.25 9.25 9.25 8.50 Days to 5Bank Years)SBI Bank 7.00 7.00 7.25 7.25 9.00 9.00 9.00 9.00 8.50 9.25 (1or 2HDFC 5.00 7.00 7.25 7.25 9.00 9.25 9.25 9.25 8.25 yr 16 DaysBank to 5 Years)Punjab 9.00 (400National 4.50 6.75 7.50 7.50 9.00 8.75 8.75 8.75 8.50 & 1111Bank days) 9.25 (1.5 toAxis Bank 5.00 7.00 7.50 7.50 9.00 9.25 9.25 9.25 8.50 5 Years)Allahabad 9.50 (1 to 2 5.00 7.30 8.00 8.00 9.50 9.50 9.00 8.75 8.5Bank Years)Andhra 9.25 (1 to 3 4.50 7.25 8.50 8.50 9.25 9.25 9.25 9.00 9.00Bank Years)Bank of 9.35 (555 5.50 7.25 8.00 8.25 9.25 9.25 9.00 9.00 9.00India days)Central 9.30 (555Bank Of 5.00 7.30 8.25 8.75 9.25 9.25 9.25 9.00 8.50 days)IndiaCorporati 9.50 6.50 8.00 9.00 9.00 9.25 9.25 9.25 9.25 9.00on Bank (1Year)Dhanlaxm 10.00 ( 3 to 7.00 7.25 8.75 8.75 9.00 9.50 9.50 9.25 9.00i Bank 5 Years) GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page38
  39. 39. HDFC Bank LtdFederal 9.25 (1 5.00 7.00 8.50 8.50 9.25 9.00 9.00 9.00 9.00Bank year)Kotak 9.40(390Mahindra 5.75 7.50 8.25 8.50 9.25 9.25 9.00 9.00 9.00 Days)BankBank of 9.15 (111 4.50 7.00 7.50 7.75 9.00 9.00 9.00 9.00 9.00Baroda days ) Products & Services of HDFC Bank1. Accounts & Deposits Savings Accounts A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate. Depending on the specific type of savings account, the account holder may not be able to write checks from the account (without incurring extra fees or expenses) and the account is likely to have a limited number of free transfers/transactions. Savings account funds are considered one of the most liquid investments outside of demand accounts and cash. In contrast to savings accounts, checking accounts allow you to write checks and use electronic debit to access your funds inside the account. Savings accounts are generally for money that you dont intend to use for daily expenses Salary Accounts A salary bank account or a salary account as it is more commonly called, is nothing but a regular bank account but one in which your employer will credit your monthly GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page39
  40. 40. HDFC Bank Ltd salary/paycheck every month. If you have a salary account with a bank, banks usually provide you with additional facilities like 0 balance account, credit cards, overdraft facilities etc. Current Accounts Current Account is primarily meant for businessmen, firms, companies, public enterprises etc. that have numerous daily banking transactions. Current Accounts are cheque operated accounts meant neither for the purpose of earning interest nor for the purpose of savings but only for convenience of business hence they are non-interest bearing accounts. In a Current Account, a customer can deposit any amount of money any number of times. He can also withdraw any amount as many times as he wants, as long as he has funds to his credit. Generally, a higher minimum balance as compared to Savings Account is required to be maintained in Current account. As per RBI directive banks are not allowed to pay any interest on the balances maintained in Current accounts. However, in case of death of the account holder his legal heirs are paid interest at the rates applicable to Savings bank deposit from the date of death till the date of settlement. Because of the large number of transactions in the account and volatile nature of balances maintained, banks usually levy certain service charges for operating a Current account. Demat Account The term "demat", in India, refers to a dematerialized account for individual Indian citizens to trade in listed stocks or debentures in electronic form rather than paper, as GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page40
  41. 41. HDFC Bank Ltd required for investors by the Securities and Exchange Board of India (SEBI). In a demat account, shares and securities are held electronically instead of the investor taking physical possession of certificates. A demat account is opened by the investor while registering with an investment broker (or sub-broker). The demat account number is quoted for all transactions to enable electronic settlements of trades to take place. Access to the demat account requires an internet password and a transaction password. Transfers or purchases of securities can then be initiated. Purchases and sales of securities on the demat account are automatically made once transactions are confirmed and completed. Safe Deposit Locker Rural Accounts TRAVELLERS CHEQUES Travellers Cheques are a safe and easy way to protect your money when you travel. You can encase them only when you need to, and only against your signature, unlike cash which can be stolen and misused by anybody, immediately. CREDIT CARD Credit Card can be used for all your requirements, be it shopping, eating out, holidaying, fuelling up your vehicle, railway ticket reservations - just about any financial requirement, planned. HOME LONE Home loans for individual to purchase or construct houses. PERSONAL LOAN The procedure of personal loan is simple, documentation is minimal and approval is quick. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page41
  42. 42. HDFC Bank Ltd FOREIGN CURRENCY CASHForeign Currency Cash is a convenient way of meeting personal expenses along your journey,paying for taxis / internal travel, food expenses etc. FOREIGN CURRENCY DEMAND DRAFTSDemand Drafts are issued in seven currencies like United States Dollars (USD), GreatBritainPounds (GBP), EURO, Japanese Yen (JPY), Australian Dollars (AUD), Canadiandollars (CAD)and New Zealand Dollars (NZD). FOREIGN CURRENCY CHEQUE DEPOSITSWe can directly deposit our foreign currency cheques in to our saving or current account. REMITTANCESHDFC Bank offers the remittance facilities by which we can send and receive money toanyone. They are categorized depending on location and the urgency with which we want themoney transferred. TRADE SERVICEHDFC Bank have people with high level of expertise and experience in trade services toprovide services to suit specific requirements and structure solutions for business needs.HDFC Bank has 500 branches for trade services. MUTUAL FUNDSMutual funds are funds that pool the money of several investors to invest in equity or debtmarkets. INSURANCEHDFC Bank offers a world of choice in insurance. Like children future plans, retirements plans,standard life, etc GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page42
  43. 43. HDFC Bank LtdFINANCIAL SERVICESWEALTH SERVICES (earlier known as Wealth Advisory Services)This exclusive service comes to you with an array of unmatched benefits, which include:a) Structured Process considering your risk profile, investment objectives and financial goals.b)Recommendations from HDFC Banks in-house research team.c) Choice of convenient Mutual Fund execution platforms.MUTUAL FUNDSInvest through the Mutual Fund route to meet your varied investment objectives.TAX PLANNINGAt HDFC Bank we offer a number of advantageous tax saving investment options.INSURANCELife insurance is designed to offer financial protection for you and your family during the timesof uncertainties. Choose from a range of traditional insurance and unit linked plans designedto help you with your savings, retirement, investment and protection needs.TRADITIONAL PLANS UNIT LINKED PLANHDFC SL New Money Back Plan HDFC SL Crest PlanHDFC Term Assurance Plan HDFC SL Young Star Super II PlanHDFC Loan Cover Term Assurance Plan HDFC SL Re growth Super II PlanHDFC Single Premium Whole of Life Insurance Plan HDFC SL Young Star Super PremiumHDFC Savings Assurance Plan HDFC SL Re growth Maxi miserHDFC SL Classic Assure Insurance PlanBONDSA secure investment avenue giving, you stable returns with tax benefits. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page43
  44. 44. HDFC Bank Ltd KNOWLEDGE CENTER Profit from our research and make informed investment decisions. EQUITIES & DERIVATIVES Leverage our vast information repository and transact online. MUDRA GOLD BAR Buy 24 Karat gold bars made in Switzerland and certified by Assay.MUDRA SILVER BARBuy 24 Karat Silver bars made in Switzerland and certified by Assay.MUDRA SILVER BARBuy 24 Karat Silver bars made in Switzerland and certified by Assay. Ways to HDFC bank  Bank Online  Credit Cards Online  Email Statements  Net Banking  Loan Accounts Online  Bank with your Phone  Instant Alerts - SMS & Email  Mobile Banking through browser  Mobile Banking App for iPhone GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page44
  45. 45. HDFC Bank Ltd  Mobile Banking App for BlackBerry  Mobile Banking App for Android  Mobile Banking Credit Card Information  SMS Banking  Phone BankingHDFC Bank was the first Bank to launch Mobile Banking in India on 1st January, 2000.In keeping with our philosophy of leveraging technology to provide banking Solutions, HDFCBank has a slew of Mobile Banking options for every segment, be it SMS based or GPRSenabled or capitalizing on the launch of 3G services. To support our Financial Inclusionobjectives, mobile based Service allowing customers to conduct banking transactions securelyusing mobile phones and a Business Correspondent network. Now Mukesh, working in Jaipur,can open an HDFC Bank Mobile Bank Account using the most basic mobile handset. Hismobile account allows him to deposit and withdraw money as well as earn interest.Importantly, it helps him send money home to his family in nearby Sikar. From the busyprofessional in Mumbai, balancing her work and home commitments, to the migrant worker inRajasthan sending money to his family in the village, access to banking services throughmobile phones continues to transform lives.  Bank in Person  ATMs  Branch Network  Cash @ Shop GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page45
  47. 47. HDFC Bank Ltd PERINTHALMANNA BRANCH PERINTHALMANNA, when compared to other places in the MALAPPURAM District is(KERALA) more developed, and has been the centre of business activities.Malappuram (1)Branch Name: PerinthalmannaAddress: Sree Complex Calicut Road opposite Kalyan Jwellers Malappuram Perinthalmanna-679322 Kerala IndiaTel. 9895663333Fax. 4933220505 ATM Yes (12) Lockers Yes GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page47
  48. 48. HDFC Bank Ltd IFSC Code HDFC0000436 High Value Cut of Timing NA MICR Cut Off Timings 11.30 am Weekday : Monday to Friday, Timings : 10.00 am - 04.00 pm Weekend : Saturday, Timings : 10.00 am - Branch Working & Timing 01.00 pm, Weekly Off : Sunday Gold Bars available YesAccepts Payments Through Debit/Credit Cards (Gold Bars) Yes Silver Bars available NoAccepts Payments Through Debit/Credit Cards (Silver Bars) No Gold Loans available Yes DEPARTMENT STUDY Departments are the entities of organizations formed to organize people, reporting relationships, and work in a way that best supports the accomplishment of the organizations goals. Departments are usually organized by functions such as human resources, marketing, administration, and sales. HDFC Bank has various departments which are classified on the basis of the functions what they are performing, which are listed below: GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page48
  49. 49. HDFC Bank Ltd 1) Finance Department 2) Marketing & sales Department 3) Wholesale banking 4) Foreign-exchange and NRI Department 5) Human Resource Department 6) Personal Banking Department FINANCE DEPARTMENT GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page49
  51. 51. HDFC Bank Ltd Finance is the life blood of business. Finance is the base of all corporate activities inthe day to day world. Management of finance is broadly concerned with the acquisition and useof funds by a business firm. HDFC Bank has a very efficient Finance Department headed by Manager Finance.All the Finance Department staffs are professionals. Finance Department consist of a team ofprofessionals headed by Manager Finance, having sufficient industry experience in the field ofaccounting, costing, taxation, company law and financial managementOBJECTIVES OF FINANCE DEPARTMENT 1. To manage & account for the financial resource of the organization, to forecast its requirement in the future and plan accordingly and to check for deviation. 2. Report the financial performance of the organization, to comply with the government rules and regulation.FUNCTIONS OF FINANCE DEPARTMENTThe main functions of finance department are defined as follows. 1. Recording of day-to-day business transaction. 2. Receiving payments from customers and accounting these funds. 3. Preparations of sales budgets and revenue budgets and expenditure budgets on a quarterly basis. 4. Preparations and, maintenance of costing records. 5. Preparations of fund flow and cash flow statement for every month. 6. Preparing and filling of quarterly and final income tax returns. 7. Preparations and implementation of cost reduction and cost control methods GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page51
  52. 52. HDFC Bank Ltd 8. Conduct and co-ordinate internal and stationary audits. 9. Perpetual stock verification and asset evaluation.JOB DESCRIPTION OF PEOPLE IN FINANCE DEPARTMETResponsibility of people in finance departmentEstablishing and controlling the financial systems and administrative services of theorganization, and providing financial information to Board of Directors.MANAGER (FINANCE) Main duties Directing the establishment of financial/accounting principles, procedures and practices in line with legal and corporate requirements. Ensuring accurate and timely financial reports and forecasts for the whole organization so as to provide a clear insight into its financial condition. Ensuring that the profits of the organization are protected through the establishment of effective financial controls; implementing and maintaining appropriate management accounting and reporting systems, budgetary controls and expenditure proceduresADMINISTRATIVE OFFICER (FINANCE)Main duties Providing accurate and timely financial reports and forecasts and general accounting and administrative services. Ensuring effective costing and contribution analysis. Implementing policies to ensure the security of funds and assets. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page52
  53. 53. HDFC Bank LtdCASHIERMain duties Maintain an awareness of all promotions and advertisements. Accurately and efficiently ring on registers and accurately maintain all cash and media at the registers. Communicate customer requests to top management.INTERNAL AUDIT The audit of all branch office departments of the bank is completing every year financialyear. In keeping with practice of improving our systems and procedures through the use of ITas a tool, audit packages are being used so that our auditors are able to carry out the audit in aFront End Applications package environment. INSPECTION The inspection of all the branches of the HDFC in India is completing within time schedule. Implementation of inspection package in all our offices led to transparency by on-line report writing, acceptance of compliance and closure process. VIGILANCE Special efforts were made to focus on disposal of vigilance cases pending for more than one year. Besides expediting disposal of vigilance cases, emphasis is also laid on preventive vigilance through the dissemination of information on areas susceptible to vigilance. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page53
  54. 54. HDFC Bank Ltd Marketing DepartmentThe activities of a company associated with buying and selling a product or services. It includesadvertising, selling and delivering products to people. People who work in marketingdepartment of companies try to get the attention of target audiences by using slogans,packaging design, and celebrity endorsements and general media exposure.Aiay Kelkar, Head, Marketing, HDFC Bank, said that these initiatives are especially targeted atthose consumers who are not aware about the bank‘s various value added services such asdirect banking facilities.Marketing Initiatives Taking By the BankHDFC Bank is possibly the only bank in India, and one of the very few in Asia, to haveembarked on a data-led marketing analytics campaigns initiative, using marketing automationtechnology provided by Unica. Unica has been recognized by Gartner as the leading player inthis field. Through this tool, we have been able to intelligently use the 4-5 terabytes of customerdata available in its warehouse. We have set up a team to conduct marketing campaigns in ascientific manner using customer data, usage patterns, preferences, lifecycle, etc, the bankalso conducts event-based marketing.These initiatives also complement our media-based marketing as well as on-the-groundmarketing activities, which remain important in thebigger scheme of things. However, the marketing analytics initiative enables us to measure theefficacy of the campaigns, testing every campaign every step of the way, experimenting withcreative, messages, media, etc. There are earnings that can immediately be absorbed andincorporated in the next campaigns, and these campaigns in a way provide us with informationabout customer choices and preferences that can be used for mass media communication,marking those more effective. GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page54
  55. 55. HDFC Bank Ltd4 PS OF HDFC BANKProductThe product itself is the first element. Products most satisfy consumer needs. The managementmust, first decide the products to be produced, by knowing the needs of the consumers.PriceThe second element to affect the volume of sales is the price. The market or announcedamount of money asked from a buyer is known as basic value placed on a product.PromotionThe product may be known to the consumers. Firms must undertake promotion work-advertising, publicity, personal selling etc. which are the major activities.PlacePhysical distribution is the delivery of products at the rights time and at the right place. Thedistribution mix is the combination of decisions relating to marketing channels, storage facilityinventory control, location transportation warehousing etc.Market SegmentationMarket segmentation is an effort to increase a company‘s precision marketing. A marketsegment consists of large identifiable group within a market with similar wants, purchasing power,buying attitudes or buying habits As HDFC bank is a service sector industry they introducedifferent schemes for different people. Each person is different in nature and each have differcriteria for investment like risk factor, return, liquidity, tax benefits etcTarget Marketing GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page55
  56. 56. HDFC Bank Ltd―Market Specialization is a business term meaning the market segment to which a particulargood or service is marketed. It is mainly defined by age, gender, geography, socio-economicgrouping, or any other combination of demographics. It is generally studied and mapped by theorganization through list and reports containing demographicinformation that may have an effect on the marketing of key products /services. A productfocusing on a specific target market contrasts sharply with one, following the market strategy ofmass marketing‖.“Continuing a Tradition of Trust”It is accurate positioning strategy because it signifies a trust with its clients. Here is specialRelationship Manager dedicated towards customer service and satisfaction and give themguidance about various schemes which helps them to get right scheme which suit their needs.In this way it continues to maintain a trust with its clients Wholesale Banking DepartmentThe wholesale banking segment provides loans, non-fund facilities and transaction services tolarge corporate, emerging corporate, public sector units, government bodies, financialinstitutions and medium scale enterprises. Revenues of the wholesale banking segment consist GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page56
  57. 57. HDFC Bank Ltdof interest earned on loans made to customers, interest / fees earned on the cash float arisingfrom transaction services, earnings from trade services and other non-fund facilities and alsoearnings from foreign exchange and derivatives transactions on behalf of customers. Theprincipal expenses of the segment consist of interest expense on funds borrowed from externalsources and other internal segments, premises expenses, personnel costs, other directoverheads and allocated expenses of delivery channels, specialist product groups, processingunits and support groups. Corporate Banking reflects HDFC Banks strengths in providing ourcorporate clients in India, a wide array of commercial, transactional and electronic bankingproducts. We achieve this through innovative product development and a well-integratedapproach to relationship managementCorporate serviceCorporate Banking reflects HDFC Banks strengths in providing our corporate clients in India,awide array of commercial, transactional and electronic banking products. We achieve thisthrough innovative product development and a well-integrated approach to relationshipmanagement. Large Corporate Supply Chain Partners Agricultural Lending Small & mediumterm enterprises HDFC Bank understands how much of hard work goes into establishing asuccessful SME. Bank also understands that business is anything but "small" and asdemanding as ever. And as business expands and enters new territories and markets, personneed to keep pace with the growing requests that come in, whichmay lead to purchasing new, or updating existing plant andequipment, or employing new staffto cope with the demand. Thats why HDFC Bank has assembled products, services, resourcesand expert advice to help ensure that your business excels. Foreign-exchange Department GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page57
  58. 58. HDFC Bank LtdHDFC Banks Foreign-exchange Department has two desks, viz. the Inter Bank Desk and theCorporate Desk. The Inter Bank Desk (IB) does cover operations of the positions generated bythe Corporate Desk. Besides, it trades on its own account. The IB desk is based at Mumbai,India . The Corporate Desk, named Treasury Advisory Group (TAG), caters to the needs of allthe customers needs in foreign exchange, from three centers: Mumbai, Delhi and Chennai.The bank has a state-of-the-art Dealing Room and is an active player in the local interbankmarket. The dealing room is manned by highly trained professionals, who have earned namesin dealing in volumes normally associated with very large banks. Because of its involvement inthe development of the market in the country, the bank has been taken into various importantcommittees of Foreign Exchange Dealers Association of India (FEDAI) as well as of ReserveBank of India (RBI). The TAG, on the other hand, focuses on the development of client-specificsolutions for the customers. While the small value transactions are handled by our branchesspread over the whole of the country, the large value ones are handled directly by the TAGfrom its centers at Mumbai, Delhi, Chennai and Calcutta.Foreign Exchange department in a bank has following functions:EXPORTS Pre-shipment Advances Post-shipment Advances Export Guarantees Advising/Confirming Letter of Credit Facilitating project exports Bills for collection IMPORTS GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page58
  59. 59. HDFC Bank Ltd Opening letters of credit Advance bills Import loans and guarantees. EXCHANGE DEALINGS Rate computation Nostro/Vostro Accounts Forward contracts Derivatives Exchange position and cover operations REMITTANCES Issue of DD, MT, TT etc. Encashment of cheques, DD, MT, TT etc. Issue and encashment of travelers cheques Sale and encashment of foreign currency notes Non-resident deposits STATISTICS Submission of returns Collection of credit information  Services Provided  Prompt and competitive pricing  Economic, fundamental and technical analysis GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page59
  60. 60. HDFC Bank Ltd  Research-based recommendation  24-hour dealing capacity  Inward and outward remittance  Spot and forward transactions  Interest rate swaps  Forward rate agreements  Interest rate options  Currency options Human Resource DepartmentThe total number of employees of your Bank was 66,076 as of March 31, 2012. The Bankcontinued to focus on training its employees both – on the job as well as through trainingprograms conducted by internal and external faculty. The Bank has consistently believed that GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page60
  61. 61. HDFC Bank Ltdbroader employee ownership of its equity shares has a positive impact on its performance andemployee motivation. Your Bank lists ‗people‘ as one of its stated core values. The Bankbelieves in empowering its employees and constantly takes various measures to achieve thisobjective.STATUTORY DISCLOSURESThe information required under Section 217(2A) of the Companies Act, 1956 and the rulesmade there under as amended, are given in an annexure and forms part of this report. In termsof section 219(1)(iv) of the Act, the Report and Accounts are being sent to the shareholdersexcluding the aforesaid annexure. Any shareholder interested in obtaining a copy of the saidannexure may write to the Company Secretary at the Registered Office of the Bank. The Bankhad 66076 employees as on March 31, 2012. 120 employees employed throughout the yearwere in receipt of remuneration of more than ` 60 lack per annum and 12 employees employedfor part of the year were in receipt of remuneration of more than ` 5 lack per month. Theprovisions of Section 217(1) (e) of the Act relating to conservation of energy and technologyabsorption do not apply to your Bank. The Bank has, however, used information technologyextensively in its operations. The report on the Corporate Governance is annexed herewith andforms part of this report.Human resource is considered as the most vital asset of an organization. ESCORT has a welldefined employee power.It helps the organization to perform well in the market. Humanresources department is headed by manager, HRD, who organizes the training programsfor workers and managerial staff. The manager HRD is responsible only for training anddevelopment. MHRD does not come under the personnel department for workers and managerialstaff.MAIN FUNCTION OF THE DEPARTMENT GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page61
  62. 62. HDFC Bank Ltd Identifying training needs Impacting the required training Maintaining the training records HRD organizes training programs using internal faulty or engaging faculties from reputed organizations. The department in consultation with concerned department heads to organize house training programsHuman Resource planningThis is handled by doing the planning at the beginning of every year. At the end of the year, theHuman Resource department from each Branch receives the requirement for the person forwhole year. Then the planning of recruitment and training is done by training manager andrecruiting manager which is approved from Head of HR Department.. RecruitmentRecruitment is a process of searching for prospective candidates for the given job in theindustry. As we know it is very important for an industrial concerns to have efficient andeffective personnel with right quality and at right time and at right place available wheneverthey are needed. Every organization needs employee time by time because of promotion orretirement of an employee. For this purpose an organization need to search for the rightcandidate. And so it needs to encourage this type of right candidates whenever they require.VARIOUS TRAINING PROGRAMMESThese are the training programmers giving by PERINTHALMANNA branch 1. GENERAL TRAINING GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page62
  63. 63. HDFC Bank Ltd In order to provide this type of training, one has to determine what would be the trainee‘s growth potentials, up to what level he can grow in the organization etc. A performance appraisal has to be done to evaluate his present performance. Training is given on the basis of appraisal 2. NEED BASED TRAINING Need based training will be done o the basis of determining the level of knowledge and skill one requires for a particular job. Next is to find out how many employees have to be given this training. On the basis of these needs training is given to the employees 3. CUSTOMER TRAININGCustomers are given training on handling of machines and other equipments in varioussituations. INDUCTION TRAINING It is the training provided to the newly recruited employeesto familiarize with the activities, rules, policies of the organization. It is also done to introducethe new employees to the other employees of the organization 4. TECHNOLOGY TRAININGCompany provides advanced training for workers to cope up with the technological changes.Feed backis obtained from employees and the effectiveness of the training programmer isascertained after a period of 2-3 months 5. PERSONALITY DEVELOPMENT PROGRAMESPersonality development programmers are conducted in a regular time period for thedevelopment of both workers and manager. Personal Banking Department GARDEN CITY COLLEGE OF SCIENCE & MANAGEMENT STUDIES Page63