“Customer preference & Attributes towards saving-Account”

OF

“HDFC BANK AT BANGALORE”

Submitted in partial fulfillment of the requirements for the award of the degree of

Master of Business AdministrationSubmitted to:

Punjab Technical University

Jalandhar

By:

“RAMKRISHNA PAKHIRA”

“Regd No-911240053”

Under the guidance of

Prof. Satya Sidhartha Panda

MBA, MJMC, CCMM (PhD).

(Senior .faculty of IIBS, BANGALORE)

#70, 2nd Main Road, 3rd Cross, Kanaka Nagar, Nagawara,

BANGALORE – 560 032

2009 – 11

1

Date:

CERTIFICATE

This is to certify that the Project titled “Customer preference & Attributes

towards saving-Account of HDFC BANK” carried out by Mr. Ramkrishna

pakhira( REG No.911240053) is a bonafide student of International

Institute of Business Studies, Bangalore. This Project Work has been

carried out in partial fulfillment for the award of Degree of Master of Business Administration under Punjab Technical University, during the

year 2009-2011.

It is hereby certified that he has completed the project satisfactorily.

Asst. Dean Director

* * * * *

2

Date:

GUIDE CERTIFICATE

This is to certify that the Project titled “Customer preference & Attributes

towards saving-Account of HDFC BANK” is a bonafide work carried out

by Mr. Ramkrishna pakhira in partial fulfillment for the award of Degree

of Master of Business Administration under Punjab Technical

University, during the year 2009-201.

This Project Report has been approved as it satisfies the academic

requirements in respect of project work prescribed for the award of MBA

Degree.

Signature of the Guide:

Name of the Guide: Prof. SATYA SIDHARTHA PANDA

Signature of the Student:

Name of the Student: RAMAKRISHNA PAKHIRA

External Examiner Internal Examiner

3

DECLARATION

I hereby declared that this project titled ““Customer preference & Attributes towards

saving-Account” , is submitted to the Punjab Technical University as a partial

requirement for the award of Degree of Master of Business Administration, during

the year 2009-2010.

It is the record of an original & independent study carried out by me, under the

guidance and supervision of Prof. Satya Sidharatha panda, senior faculty of

International Institute of Business Studies, Bangalore. This project report has not

been submitted earlier by me or by anybody else for the award of any other degree

in any University in India or abroad.

Date:

Place: (RAMKRISHNA PAKHIRA )

* * * * *

4

Ref. No. : Date :

CERTIFICATE

This is to certify that Mr. Ramkrishna pakhira of International Institute of

Business Studies, Bangalore, has completed the Project titled “Customer

preference & Attributes towards saving-Account of HDFC BANK” under

the guidance of Mr.Thaiseer during the period of 10th may to 13th july

2010.

During the stay in our organization, Mr. Ramkrishna was very useful to

our organization, with his Managerial knowledge & has successfully

completed the dissertation. We wish him the best of luck in all future

endeavors.

For HDFC BANK Ltd,

Mr. THAISEER

(SALES MANAGER)

* * * * *

5

ACKNOWLEDGEMENT

I would like to express my sincere thanks to the Director & Management of

International Institute of Business Studies, Bangalore, for their valuable guidance &

support. I am extremely thankful & grateful to Prof. Satya Sidharatha panda for his

constant guidance & encouragement throughout the study.

I would like to express my sincere thanks & gratitude to Mr. Thaiseer, sales manager

of HDFC Bank for his support & guidance during my stay in their organization.

I would also like to express my devoted thanks to my beloved parents & my friends

for their relentless support & assistance to make this project a reality. Last but not

the least; I would like to thank all my respondents for their co-operation &

participation in data collection, which has enabled me to complete the project

successfully.

Date:

Place: (Ramkrishna Pakhira)

* * * * *

6

EXECUTIVE SUMMARY:

Private banking is a concept which is fast emerging in the world of banking where

changes have become a necessity in order for banks to survive in this competitive

environment vis-à-vis not only from the public and private sector banks but also from

the foreign banks.

Customer preference with the opening of savings account in the company is a very

important factor. Potential customer may choose to open account with other banks

which are offering almost same facilities to the accountholder. Here, company will

have to make business strategy designed to delight customer and be proactive to

solidifying customer loyalty. It's a strategy used to learn more about customers'

needs and behaviors in order to develop stronger relationships with them. After all,

customer preference is at the heart of business success.

The title of the project is “Customer preference & Attributes towards saving-

Account”(HDFC Bank)”. The approach of this project was to understand the

measures adopted by HDFC Bank to promote fair relationship between the bank

and customers, helping the customer in understanding product and services, how to

increase the value of existing customer and know their level of satisfaction and

ultimately increases the bank profitability. Hence, to be the customer preferred bank

in the market through customer satisfaction.

7

CONTENTS PAGE NO

1 Introduction 10-162 Research Methodology 17-203 Review of Literature 21-254 Profile of the company /

Organization.26-60

5 Analysis and Interpretation of Data

61-69

6 Summary of Finding, Conclusion and Recommendations

70-74

7 Bibliography 75-7677-828 Annexure

TABLE/ GRAPH NO.

CONTENTS PAGE NO.

8

1 Table Present status of the organization 29

2 Table What is the monthly transaction in your account? 62

3 Table Do you have savings account? 63

4 Table In which bank? 64

5 Table Which transaction do you consider for opening savings account?

65

6 Table Which mode of transaction do you avail of frequently?

67

7 Table Which types of transaction do you make? 68

8 Table Questioners 79

9 Table Questioners 80

1 chart Organizational chart 39

2 chart What is the monthly transaction in your account? 62

3 chart Do you have savings account? 63

4 chart In which bank? 64

5 chart Which transaction do you consider for opening savings account?

66

6 chart Which mode of transaction do you avail of frequently?

67

7 chart Which types of transaction do you make? 68

9

CHAPTER 1

INTRODUCTION

General Introduction:-

10

The project was carried out for understanding the customer preference & attributes

towards saving Account of HDFC Bank and its market potential. HDFC Bank was

established in the year 1994, they are old player in banking sector, and the bank has

two principle client segments –customer and asset management. The bank follows

values such as – Integrity, teamwork, respect, professionalism, & Mission. The

segment of bank we are considering here is- Corporate banking. Those products out

of which I have chosen for research is Savings Accounts. This research helps us in

finding out the customers view regarding the product and Services offered by the

HDFC bank and awareness by promotion and also identifying the market potential of

the product offered by the HDFC bank.

a.) Origin and development of the industry:-

Banking in India originated in the first decade of 18th century. The first banks were

The General Bank of India, which started in 1786, and Bank of Hindustan, both of

which are now defunct. The oldest bank in existence in India is the State Bank of

India, which originated in the "The Bank of Bengal" in Calcutta in June 1806. This

was one of the three presidency banks, the other two being the Bank of Bombay and

the Bank of Madras. The presidency banks were established under charters from the

British East India Company. They merged in 1925 to form the Imperial Bank of India,

which, upon India's independence, became the State Bank of India. For many years

the Presidency banks acted as quasi-central banks, as did their successors. The

Reserve Bank of India formally took on the responsibility of regulating the Indian

banking sector from 1935. After India's independence in 1947, the Reserve Bank

was nationalized and given broader powers.

A couple of decades later, foreign banks such as Credit Lyonnais started their

Calcutta operations in the 1850s. At that point of time, Calcutta was the most active

trading port, mainly due to the trade of the British Empire, and due to which banking

activity took roots there and prospered.

11

First of all we must note the fact that these institutions have changed very much in

character since their origin, and consequently nowadays perform many functions

unknown to those of former times. The first banks seem to have arisen in connection

with the business of exchanging money. In ancient times and especially in the Middle

Ages the varieties of coins were greater even than at the present day, and they were

much less perfectly and honestly minted. Specialists were, therefore, required to

determine their exact value and equivalence and to exchange coins of one mintage

for those of another, and their BANK were in great demand at fairs and other places

where merchants of different nations met for purposes of trade. In as much as they

kept their boxes or chests of coins on benches or "banker," the name bankers came

to be applied to them. On account of their technical knowledge and the fact that they

were obliged constantly to keep on hand considerable quantities of the precious

metals, this business in the early Middle Ages was usually carried on by goldsmiths,

but later it was sometimes assumed by the governments of large commercial cities,

as, for example, by Amsterdam in 1609, by Hamburg in 1619, and by Nurnberg in

1621. Of these latter the Bank of Amsterdam was the most important and may be

regarded as typical of these early institutions.

From the earliest times also, bankers have been the chief agents through which

foreign exchanges have been conducted. As dealers in coin and bullion they had

international connections and knowledge of international affairs not possessed by

other merchants, and was, therefore, in a position to undertake the settlement of

international accounts by means of orders drawn on bankers in other countries or

other cities with whom they had regular business transactions. As keepers of other

people's money they also promoted saving, and banks thus became in time the chief

savings institutions of the country.

b. Growth and present status of the industry:-

12

Currently (2010), banking in India is generally fairly mature in terms of supply,

product range and reach-even though reach in rural India still remains a challenge

for the private sector and foreign banks. In terms of quality of assets and capital

adequacy, Indian banks are considered to have clean, strong and transparent

balance sheets relative to other banks in comparable economies in its region. The

Reserve Bank of India is an autonomous body, with minimal pressure from the

government. The stated policy of the Bank on the Indian Rupee is to manage

volatility but without any fixed exchange rate-and this has mostly been true.

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 M&A, takeovers, and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its

stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an

investor has been allowed to hold more than 5% in a private sector bank since the

RBI announced norms in 2005 that any stake exceeding 5% in the private sector

banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks

(that is with the Government of India holding a stake)after merger of New Bank of

India in Punjab National Bank in 1993, 29 private banks (these do not have

government stake; they may be publicly listed and traded on stock exchanges) and

31 foreign banks. They have a combined network of over 53,000 branches and

17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public

sector banks hold over 75 percent of total assets of the banking industry, with the

private and foreign banks holding 18.2% and 6.5% respectively.

Introduction of many more products and facilities in the banking sector in its reforms

measure. In 1991, under the chairmanship of M Narasimham, a committee was set

up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are

being put to give a satisfactory service to customers. Phone banking and net banking

13

is introduced. The entire system became more convenient and swift. Time is given

more importance than money.

In 1995, the Brookings Institution published a paper entitled “The Transformation of

the U.S. Banking Industry: What a Long, Strange Trip It’s Been.” Using a

breathtaking array of facts and figures, the paper described in great detail the

dramatic changes that had occurred in the U.S. commercial banking industry over

the 15 years from 1979 to 1994. The banking industry was transformed during that

period, according to the paper (p. 127), by “the massive reduction in the number of

banking organizations; the significant increase in the number of failures; the dramatic

rise in off-balance sheet activities; the major expansion in lending to U.S.

corporations by foreign banks; the widespread adoption of ATMs; . . . and the

opening up of interstate banking markets.” The paper went on to explain that most

of these major changes in banking could be traced to two developments: (1) the

extraordinary number of major regulatory changes during the period, from deposit

deregulation in the early 1980s to the relaxation of branching restrictions later in the

decade; and (2) clearly identifiable innovations in technology and applied finance,

including improvements in information processing and telecommunication

technologies, the securitization and sale of bank loans, and the development of

derivatives markets. Other research would later confirm the paper’s assessments

and its explanation of the course of events in the banking industry over the period

1979–1994.

Over the two decades 1984–2003, the structure of the U.S. banking industry indeed

underwent an almost unprecedented transformation—one marked by a substantial

decline in the number of commercial banks and savings institutions and by a growing

concentration of industry assets among a few dozen extremely large financial

institutions. This is not news. As mentioned above, the decline in the number of

banking organizations has been ongoing for more than two decades and has been

well documented in the literature. Nevertheless, a brief overview will serve to clarify

both the scope of the decline and the increasing concentration of assets among the

nation’s largest banking organizations

At year-end 1984, there were 15,084 banking and thrift organizations (defined as

commercial bank and thrift holding companies, independent banks, and independent

14

thrifts). By year-end 2003, that number had fallen to 7,842—a decline of almost 48

percent (figure 1). Distributed by size, nearly all the decline occurred in the

community bank sector (organizations with less than $1 billion in assets in 2002

dollars), and especially among the smallest size group (less than $100 million in

assets in 2002 dollars). Yet the community banking sector still accounts for 94

percent of banking organizations

c. Future of the industry:-

The burden of reporting and other regulatory requirements will fall heavily and

disproportionately on small banks unless remedial action is taken. Further advances

in information technology will permit the development of new products, BANK, and

risk-management techniques but may also pose important competitive and

supervisory issues. Nonbank entities will continue to offer bank-like products in

competition with banks, raising anew the question of whether banks are still “special”

and, more fundamentally, whether banks are sufficiently different from nonblank

firms to justify the maintenance of a safety Net for banks. It is useful, therefore, to try

to chart the course of the banking industry in the next five to ten years and to

consider what policy issues the industry and regulators will face. The authors of this

study do not pretend to be clairvoyant. They are mindful of the many financial

predictions that were once offered with confidence but turned out to be wrong or

premature. This study is perhaps best described as an exercise in strategic thinking.

Its approach is to analyze what has happened in the recent past, consider in detail

reasons for expecting recent trends to continue or to change, and draw the

consequences for bank and regulatory policies. As always, uncertainties abound,

and events that may now appear fairly improbable may in fact shape the future. This

paper closes with a discussion of a number of such possible events.

The future-of-banking study addresses three broad questions:

15

1. What changes in the environment facing banking can be expected in the next five

to ten years?

2. What are the prospects for different sectors of the banking industry in this

anticipated environment? Because the banking industry is not monolithic and

different segments of the industry have, to some degree, different opportunities and

vulnerabilities, the study considers separately the prospects for large, complex

banking organizations; regional and other midsize banks; community banks; and

limited-purpose banks.

3. What policy issues are the industry and regulators likely to face in the years

ahead? Separate consideration is given to

16

CHAPTER 2

RESEARCH METHODOLOGY

What is research?

17

The term research is also used to describe an entire collection of information

about a particular subject.

Research is defined as human activity based on intellectual application in the

investigation of matter. The primary purpose for applied research is

discovering, interpreting, and the development of methods and systems for

the advancement of human knowledge on a wide variety of scientific matters

of our world and the universe

What is research Methodology ?

► The underlying theory and analysis of how research does or should proceed,

often influenced by discipline.

► "methodology is a theory and analysis of how research does or should

proceed"

PROBLEM RECOGNITION:

Customer preference is an important factor in the finance market. Customer may

prefer to open a savings account with the bank which nearby his place, provide

better service, etc. The main problem here is to identify the need of customer and

make arrangement accordingly. Need analysis is very important to market banking

service. Bank cannot open branches to each and every place in the city, it is almost

impossible. Only the thing can be done in this regard is can have more number of

branches and ATM facilities in the city. So that, customer will have easy to walk any

branch of his choice as benefit of Core Banking Solutions and will have other

facilities of banking.

The communication technique and dealing with the customers is also a problem to

the sales executives.

18

1. OBJECTIVES OF RESEARCH PROJECT:

To find out the customer preferences while opening Savings A/c.

To study brand image of the bank.

To increase the business of the bank.

2. Research Design and Methodology

Primary data source: All the people from different profession were personally

visited and interviewed. They were the main source of Primary data. The method of

collection of primary data was direct personal interview through a structured

questionnaire.

Secondary Data Source: It was collected from internal sources. The secondary

data was collected on the basis of organizational file, official records, news papers,

magazines, management books, preserved information in the company’s database

and website of the company.

SAMPLING PLAN:

19

Since it is not possible to study whole universe, it becomes necessary to take

sample from the universe to know about its characteristics.

Sampling Units: Customers

Sample Technique: Random Sampling.

Research Instrument: Structured Questionnaire.

Contact Method: Personal Interview.

SAMPLE SIZE:

My sample size for this project was 100 respondents. Since it was not possible to

cover the whole universe in the available time period, it was necessary for me to take

a sample size of 100 respondents.

The final draft of the questionnaire was prepared on the basis of the observations

from the pilot study. These were then finally filled by 100 customers, for the

conclusive study.

Finally the data collected was fed into the data analysis to be analyzed using

statistical techniques.

Types of Primary Data collected:

20

To go to the field (Shantinagar, Bangalore) and meet with the customer and asked

some question about savings account of HDFC Bank. And wanted to know what

about their preference about savings account? What are the problem they faced

about the service which provided by HDFC Bank? And in two months I met 100

peoples.

RESEARCH LIMITATIONS:

It was not possible to understand thoroughly about the different marketing

aspects of the sales executive within 60 days. As stipend, money was not given it

was difficult to continue the project work. All the work was limited in some limited

areas of Bangalore (especially shantinagar area) so the findings should not be

generalized.

All the findings and conclusions obtained are based on the survey done in the

working area within the time limit. I tried to select the sample representative of the

whole group during my job training. I have collected data from people linked with

different profession at Bangalore.

Many of the customers where not cooperative when they are asked give few

minutes.

As HDFC Bank is a big brand, many times the answers of the respondent may be

affected by his good or bad experience about some other product.

To convince the people for a proper interviewing process is also difficult.

Compilation of data on competitor analysis was difficult due to non- availability of

correct information.

21

CHAPTER 3

– REVIEW OF LITERATURE -

22

1. Problems faced by HDFC Bank:

BOTTLENECKS in infrastructure can play a spoilsport in an otherwise booming

banking sector cautioned industry experts at a finance conference organized recently

by the Indian banking association.

 

Experts emphasized on companies first concentrating on supply chains and logistics

before going ahead with expansion plans.

Market: Market is a physical place where buyers and sellers gathered to buy and sell

goods. Market is a collection of buyers & sellers who transact over a particular

product or services.

Marketing: Marketing is simply ‘meeting needs profitably’. In other words marketing is an

organizational function and a set of process for creating, commutating and delivering

value to customers and for managing customer relationships for beneficial of

organization as well as customers.

…………… (Kotler)

Customer: Who buys a product or services is customer. Customers are very important

part of any organization, because customer generates sales and profit for any

organization.

Bank:A bank is defined as a commercial institution licensed as a received and payment by

various ways like different types of account.

Section 5(1)(B) of banking Regulation Act, 1949 defines banking as, “the accepting

for the purpose of lending or investment, of deposits from the public, repayable on

demand or otherwise, and withdrawal by cheque, draft, order or otherwise”.  

23

2. Literature Search:

2.1Business Definition for: customer satisfaction

Satisfaction is a person’s feelings of pleasure and disappointment that result from

comparing a product’s perceived performance to their expectations. If the product’s

performance falls short of expectations, the customer is dissatisfied. If the

performance matches the expectations, the customer is satisfied.

2.2. Factors of Customer satisfaction

Customer satisfaction refers to a general attitude which an customer retains on

account of many specific attitudes in the following areas:

1) Proactive service,

2) Individual characteristics, and

3) Relationships with customer.

(1) Personal factors: They include workers’ sex, education, age, marital status

and their personal characteristics, family background, socio-economic

background and the like.

(2) Factors Inherent in the Process:- These factors have recently been

experience by the customer in the process of banking with the bank. Having

listen to him and giving proactive services will delight the customer.

24

(3) Factors Controlled by the Management:- This includes the policies and

practices adopted by the management towards providing better services to

customers.

3. Analyze and Interpret Findings:

I would like say that Customer satisfaction means when the organizational product

and productiveness will increase, there should be effective relationship, better co-

ordination, and co-operation with the customer and customer should satisfied by the

service of the organization.

Employee’s contribution is related with customer satisfaction, Employees moral,

Motivation theory, and organization culture, employee’s welfare, and Opportunist..

Employees’ performance and customer satisfaction is very important for any

organization because Organization and company get right and proper Manpower at

the right time who have more enthusiasm and who are so motivate for their individual

goal and Organization goal.

They have massive knowledge and confidence for their achievement.

25

CHAPTER - 4

PROFILE OF THE COMPANY/ORGANISATION

26

4.1 Origin of the Organization:-

Housing Development Finance Corporation Limited, more popularly known as HDFC

Bank Ltd, was established in the year 1994, as a part of the liberalization of the

Indian Banking Industry by Reserve Bank of India (RBI). It was one of the first banks

to receive an 'in principle' approval from RBI, for setting up a bank in the private

sector. The bank was incorporated with the name 'HDFC Bank Limited', with its

registered office in Mumbai. The following year, it started its operations as a

Scheduled Commercial Bank.

HDFC Bank Limited. The Group's principal activities are to provide banking and

other financial BANK. The Group operates through four segments: Treasury, Retail

Banking, Wholesale Banking and Other Banking Business. The Treasury BANK

segment consists of net interest earnings on investments portfolio of the bank and

gains or losses on investment operations. The Retail Banking segment serves retail

customers through a branch network and other delivery channels. This segment

raises deposits from customers and makes loans and provides advisory BANK to

customers. The Wholesale Banking segment provides loans and transaction BANK

to corporate and institutional customers. The Other Banking Operations segment

provides BANK relating to credit cards, debit cards, third party product distribution

and primary dealership business and other associated costs. The Bank was

incorporated on 30th August 1994. A new private sector Bank promoted by housing

Development Corporation Ltd. (HDFC), a premier housing finance company. The

bank is the first of its kind to receive an in-principle approval from the RBI for

establishment of a bank in the private sector. Certificate of Commencement of

Business was received on 10th October 1994 from RBI. The Bank transacts both

traditional commercial banking as well as investment banking. HDFC, the promoter

of the bank has entered into an agreement with National Westminster Bank Pc. and

its subsidiaries (Nat west Group) for subscribing 20% of the banks issued capital and

providing technical assistance in relation to the banks proposed banking business.

27

4.2 Growth and Development of the Organization:-

1994.

On 16.1.1995, 90, 79,930 No. of equity shares were allotted to Jarrington Pte.

Ltd. Another 400, 00,000 equity shares were allotted on private placement basis to

NatWest Group on 9.5.1995. 500,00,000 shares were allotted to the public on

9.5.95 The Bank opened its first branch in Ramon House at Church gate, Mumbai on

January 16th.

The Bank has created an efficient operating system using well tested state-of-the-art

software.

1995

70 No. of equity shares issued to subscribers to the Memorandum &Articles of

Association on 30th August 1994. On the same date 500, 00,000 equity shares

were allotted to HDFC promoters. 509, 20,000 shares were allotted to HDFC

Employees Welfare Trust and HDFC Bank Employees Welfare Trust on 22nd

December,

1996

HDFC Bank has entered the banking consortia of over 50 corporate, including

some leading multinational companies, flagship companies of local business houses

and strong public sector companies.

HDFC Bank has set up a state-of-the-art dealing room to handle all transactions

possible in Indian financial markets.

The Certificates of Deposits were awarded a PP1+ rating which is the highest rating

for short term instruments indicating superior capacity for repayment.

28

2001

The Bank has opened its first branch in Aurangabad. HDFC Standard Life

Insurance has entered into a memorandum of understanding with the Chennai-

based Indian Bank. The Bank has launched the international Maestro debit card in

association with Master Card. HDFC Bank will launch its credit card in June through

link-ups with MasterCard and Visa.LTtrade.com has entered into a strategic tie-up

with HDFC Bank to provide Net banking BANK to online investors. Standard

Chartered Bank, HDFC Bank and Bharat Petroleum Corporation have joined the

eCash Forum which has been set up by the Smart Card Forum of India. HDFC Bank

has launched a new campaign for its age savings account. HDFC Bank entered into

a strategic tie-up with Tally Solutions Pvt. Ltd. to offer online real time accounting

BANK to small and medium enterprises.

Today HDFC Bank has 1,412 branches and over 3,295

ATMs, in 528 cities in India, and all branches of the bank are linked on an online

real-time basis. ] As of September 30, 2008 the bank had total assets of INR

1006.82 billion. For the fiscal year 2008-09, the bank has reported net profit of Rs.2,

244.9 crore, up 41% from the previous fiscal. Total annual earnings of the bank

increased by 58% reaching at Rs.19, 622.8 crore in 2008-09.

2.3 Present Status of the Organization:-

Table_1

March 2007 March 2008 March 2010

Citied 228 316 771

Branches 535 684 1725

ATMs 1323 1605 3898

29

Housing Development Finance Corporation Limited, more popularly known as HDFC

Bank Ltd, was established in the year 1994, as a part of the liberalization of the

Indian Banking Industry by Reserve Bank of India (RBI). It was one of the first banks

to receive an 'in principle' approval from RBI, for setting up a bank in the private

sector. The bank was incorporated with the name 'HDFC Bank Limited', with its

registered office in Mumbai. The following year, it started its operations as a

Scheduled Commercial Bank. Today, the bank boasts of as many as 1725 branches

and over 3898 ATMs across India. Amalgamation

In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector

bank promoted by Bennett, Coleman & Co. / Times Group). With this, HDFC and

Times became the first two private banks in the New Generation Private Sector

Banks to have gone through a merger. In 2008, RBI approved the amalgamation of

Centurion Bank of Punjab with HDFC Bank. With this, the Deposits of the merged

entity became Rs. 1,22,000 crore, while the Advances were Rs. 89,000 crore and

Balance Sheet size was Rs. 1,63,000 crore.

4.3. MILESTONES IN THE HISTORY

HDFC Bank began its operations in 1995 with a simple mission: to be a "World-class

Indian Bank". They realized that only a single-minded focus on product quality and

service excellence would help us get there. Today, they are proud to say that they

are well on our

Way Towards that goal. It is extremely gratifying that their efforts towards providing

customer convenience have been appreciated both nationally and internationally.

30

2007

Business Today-Monitor Group survey

One of India's "Most Innovative Companies".

Financial Express-Ernst & Young Award

Best Bank Award in the Private Sector category.

Global HR Excellence Awards – Asia Pacific HRM Congress:

‘Employer Brand of the Year 2007-2008’-Award- First Runner-up.

Business Today

‘Best Bank Award’.

Dun & Bradstreet – American Express Corporate Best Bank Award 2007

‘Corporate Best Bank’-Award.

The Bombay Stock Exchange and Nasscom Foundation's Business for Social

Responsibility Awards 2007

‘Best Corporate Social Responsibility Practice’ Award.

Outlook Money & NDTV Profit

Best Bank Award in the Private sector category.

The Asian Banker Excellence in Retail Financial Services Awards

Best Retail Bank in India.

Asian Banker

Managing Director Aditya Puri

Won The Leadership Achievement Award For India.

31

2006

Business Today

Best Bank in India.

Forbes Magazine

One of Asia Pacific's Best 50 companies.

Business world

Best listed Bank of India.

The Asset Magazine's Triple A Country Awards

Best Domestic Bank.

Asia money Awards

Best Local Cash Management Bank in Large and Medium segments.

Euro money Awards

"Best Bank" in India.

14

2005

Best Domestic Commercial Bank

Asia money Awards

Best Cash Management Bank - India.

The Asian Banker Excellence

Retail Banking Risk Management Award in India.

Hong Kong-based Finance Asia magazine

32

Best Bank in India

Economic Times Awards

"Company of the Year" Award for Corporate Excellence.

The Asset Triple A Country Awards

Best Domestic Bank in India Region -

2005

The Business Today-KPMG Survey

Best Local Cash Management Bank in India US$11-100m - 2005

The Business Today-KPMG Survey

"Best Bank in India" for the third consecutive year in 2005.

Economic Times - Avaya Global Connect Customer Responsiveness Awards

"Most Customer Responsive Company -Banking and Financial Services - 2005

2004

Best Local Cash Management Bank in India US$11-100m

Best Local Cash Management Bank in India >US$501m

Best Local Cash Management Bank in India 1989-2004 (poll of polls)

Best Overall Domestic Trade Finance Services in India - 2004

Most Improved Company for Best Management Practices in India – 2004

33

One of India's Most Respected Companies - 2004

Forbes Global

Best under A Billion, 100 Best Smaller Size Enterprises in Asia/Pacific and

Europe - 2004

Asian Banker Awards

Operational Excellence in Retail Financial Services - 2004

The Asset Triple A Country Awards

Best Domestic Bank in India - 2004

Head Office

HDFC Bank

Ramon House, 169, Backbay Reclamation,

H T Parekh Marg, Churchgate

Mumbai - 400020

Phone: +91 (22) 66316000, 66636000, 66316060

Fax: +91 (22) 22048834

Website: www.hdfc.com

Tech-Savvy

34

HDFC Bank has always prided itself on a highly automated environment, be it

in terms of information technology or communication systems. All the branches of

the bank boast of online connectivity with the other, ensuring speedy funds transfer

for the clients. At the same time, the bank's branch network and Automated Teller

Machines (ATMs) allow multi-branch access to retail clients. The bank makes use of

its up-to-date technology, along with market position and expertise, to create a

competitive Advantage and build market Share

Capital Structure

At present, HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5

billion), of this the paid-up amount is Rs 424.6 crore (Rs.4.2 billion). In terms of

equity share, the HDFC Group holds 19.4%. Foreign Institutional Investors (FIIs)

have around 28% of the equity and about 17.6% is held by the ADS Depository (in

respect of the bank's American Depository Shares (ADS) Issue). The bank has about

570,000 shareholders. Its shares find a listing on the Stock Exchange, Mumbai and

National Stock Exchange, while its American Depository Shares are listed on the

New York Stock Exchange (NYSE), under the symbol 'HDB'

4.3. Functional Departments of the Organization:-

The functional departments of the organization consist of the HR department,

the administrative department and the executive department. The HR department of

the organization consists of the people who employ the Persons who they think

would be able to do justice with the job handled. The administrative department of

the organization consists of the director and the manager of the organization. They

preside the organization and control all the operations of the organization such that

the organization could run in a smooth and effective manner. The executive

department of the organization consists of the various employees who execute the

job undertaken by them.

The employees consist of the team leaders, the corporate financial

consultants, the telesales, various staffs and junior staffs who are the main structural

35

framework of the organization. The organization thus runs with the effective

coordination of the HR department, the administrative department and the executive

department such that the supervisors of the organization preside over the

subordinate employees to give them directions about fulfilling their works most

efficiently and effectively. Technical Consultancy Department: The Technical

Consultancy Department is responsible for technical appraisal of industrial projects.

The mission of the division is aimed towards the verification of the technical viability

of industrial projects and assisting the Funds management in taking the decisions

that require technical expertise. Moreover, it is responsible for conducting technical

studies and rendering technical consultancy BANK to certain industrial sectors for

the purposes of investigating modern technologies and productivity levels for local

manufacturing plants.

H R Department:

HDFC Human Resources department plans and direct for the employee population

as well as they are having the following functions as:-

Hiring

Promotions

Reassignments

Position classification and grading

Salary determination

Performance appraisal review and processing

Personnel data entry and records maintenance

Policy development

Workers’ compensation

Finance Department:

36

The Finance Manager is responsible for all aspects of the accounting and financial

administration of the HDFC, the supervision of the implementation of the HDFC

financial policies, directives and procedures and the initiation of the financial plans

within the guidelines of HDFC The department contains several distinct sections,

each of which is responsible for a proportion of the activities taking place within the

finance department.

Marketing Consultancy Department:

The Marketing Consultancy Department plays an important role within the Fund as it

studies and analyzes marketing information in order to build solid base for

management decisions. The division also assists projects sponsors in formulating

solid marketing strategies to improve their industries and strengthen their position in

the local and international markets

Research Department:

The Research Department is having the capacity to act through four composing units

i.e., the market research unit, economic studies unit, and statistical studies unit. It is

the mission of the division to provide support BANK for information and consultancy

to the senior management and division in the areas of economic, statistical and

marketing information and consultancy through data analysis, processing of

economic and statistical data, market research studies and publishing related

periodical reports.

4.4. Organization Structure and Organization Chart:-

37

The organization structure of the company HDFC is such that it comprises of the

departments and the employees in the hierarchical order so that they are able to

perform their functions and duties smoothly and effectively doing their job in a

manner in which it should be done. The organization is headed by the administrative

department which coordinates and controls the executive department. The executive

department is a link from the top and the bottom comprising of the lower level

employees such that they work together to fulfill the common objective of getting

business from the persons who get in touch with them and see to it that they are

provided with the best of the BANK which constitute giving financial advice to

providing Account to the customers. The lower level employees and the corporate

financial consultants work together to see to it that the database for providing

financial BANK to sufficient number of people is made . Team leaders who form the

part of the administrative department of the Organization make sure that the clients

that turn up for the financial BANK are dealt with most efficiently and effectively.

Organization Chart:-

38

39

Each team lead has a team comprising only of both senior as well as junior market

research analyst who aid the team lead in the entire market research process as it

has been discussed previously. This is the basic organizational structure followed by

HDFC BANK.

4.5. Product and service profile of the organization:-

HDFC Bank offers a bunch of products and services to meet the every need of the

people. The company cares for both, individuals as well as corporate and small and

medium enterprises. For individuals, the company has a range accounts, investment,

and pension scheme, different types of loans and cards that assist the customers.

The customers can choose the suitable one from a range of products which will suit

their life-stage and needs. For organizations the company has a host of customized

solutions that range from funded services, Non-funded services, Value addition

services, Mutual fund etc. These affordable plans apart from providing long term

value to the employees help in enhancing Goodwill of the company. The products

and services of the company are categorized into various sections which are as

follows:

1. PERSONAL BANKING

A. Accounts & Deposits

- Regular Savings Account

- Savings plus Account

- SavingsMax Account

- Senior Citizens Account

- No Frills Account

- Institutional Savings Account

- Payroll Salary Account

40

- Classic Salary Account

- Regular Salary Account

- Premium Salary Account

- Defense Salary Account

- Kid's Advantage Account

- Pension Saving Bank Account

- Family Savings Account

- Kisan No Frills Savings Account

- Kisan Club Savings Account

- Plus Current Account

- Trade Current Account

- Premium Current Account

- Regular Current Account

- Apex Current Account

- Max Current Account

- Reimbursement Current Account

- RFC - Domestic Account

- Regular Fixed Deposit

- Super Saver Account

- Sweep-in Account

- HDFC Bank Preferred

- Private Banking

41

B. Loans

- Personal Loans

- Home Loans

- Two Wheeler Loans

- New Car Loans

- Used Car Loans

- Overdraft against Car

- Express Loans

- Loan against Securities

- Loan against Property

- Commercial Vehicle Finance

- Working Capital Finance

- Construction Equipment Finance

- Offers & Deals

- Customer Center

C. Investments & Insurance

- Mutual Funds

- Insurance

- Bonds

- Financial Planning

- Knowledge Centre

- Equities & Derivatives

42

- Mudra Gold Bar

D. Forex Services

- Trade Finance

- Travelers’ Cheques

- Foreign Currency Cash

- Foreign Currency Drafts

- Foreign Currency Cheque Deposits

- Foreign Currency Remittances

- Cash To Master

- ForexPlus Card

E. Payment Services

- Net Safe

- Prepaid Refill

- Bill Pay

- Direct Pay

- Visa Money Transfer

- E-Monies Electronic Funds Transfer

- Excise & Service Tax Payment

F. Access Your Bank

- One View

43

- Insta Alerts

- Mobile Banking

- ATM

- Phone Banking

- Branch Network

G. Cards

- Silver Credit Card

- Gold Credit Card

- Woman's Gold Credit Card

- Platinum plus Credit Card

- Titanium Credit Card

- Value plus Credit Card

- Health plus Credit Card

- HDFC Bank Idea Silver Card

- HDFC Bank Idea Gold Card

- Compare Cards

- Transfer & Safe

- Track your Credit Card

H. Get More from Your Card

- Offers & Savings

- My Rewards

- Insta Wonderz

44

- Add-On Cards

- Credit Card Usage Guide

- Easy EMI

- Net safe

- Smart Pay

- Secure Plus

- My City Benefit Card

- Debit Cards

- Easy Shop International Debit Card

- Easy Shop Gold Debit Card

- Easy Shop International Business Debit Card

- Easy Shop Woman's Advantage Debit Card

- Prepaid Cards

- Forex Plus Card

- Kisan Card

I. Customer Centre

- Offers & Deals

- Winners of Contests & Promotions12

2. Wholesale Banking

A. Corporate

Funded Services

Non Funded Services Value Added Services Internet Banking

45

B. Small & Medium Enterprises

Funded Services

Non-Funded Services

Specialized Services

Internet Banking

C. Financial Institutions & Trusts

Banks

Financial Institutions

Mutual Funds

Stock Brokers

In today’s world many companies have emerged who have taken a serious note on

the importance of market research and he advantages of using it for the better

growth and development of the company. Hence, our competitors are those

company’s who are in the market research and development field as well as the

consultancies, since they also make use of market research and business

developers.

The products and BANK of our competitors are as follows:

A. Customer Satisfaction Analysis:

Customer analysis involves gathering data about the customers and their

characteristics. They also conduct tailored customer satisfaction surveys to gauze

customer satisfaction.

B. Risk

These BANKS are used by the competitors in order to gather external information

and research the possible effect on the competitiveness of company.

46

C. Product Research BANK:

The conduction of extensive product research by this service helps the competitors

to find out the marketability of a product or service. The research can be utilized to

leverage the major decisions of a company on the marketing of its products.

D. Advertising Research BANK:

Advertising research strives to gain valuable information about the effects and reach

of advertising the products in different forms of media.

Given below are the steps we follow for every assignment we take up:

1. The timetable for the search is indicated and the search process commences.

2. Target companies are examined, using any prior information provided by business

development executives in conjunction with sources of information and prospective

companies already known to us, augmented with original study by our search team.

3. We maintain a regular channel of communication with the client to keep them

apprised of the results emerging.

4.5 Market profile of the organization:-

HDFC Bank Limited provides various financial products and services. It operates in

three segments: Retail Banking, Wholesale Banking, and Treasury. The Retail

Banking segment provides various deposit products, including savings accounts,

current accounts, fixed deposits, and demat accounts. It also offers auto, personal,

commercial vehicle, home, gold, and educational loans; loans against securities,

property, and rental receivables; and health care finance working capital finance,

construction equipment finance, and warehouse receipt loans, as well as credit

cards, debit cards, depository, investment advisory, bill payments, and transactional

services. In addition, this segment sells third party financial products, such as mutual

funds and insurance, as well as distributes life and general insurance products

through its tie-ups with insurance companies and mutual fund houses. The

wholesale banking segment provides loans, non-fund facilities, and transaction

services to large corporate, emerging corporate, small and medium enterprise,

supply chain, public sector undertaking, central and state government departments,

47

and institutional customers. It offers deposit and transaction banking products,

supply chain financing, working capital and term finance, agricultural loans, and

funded, non-funded treasury, and foreign exchange products. These segments

services include trade services, cash management, money market, custodial, tax

collection, and electronic banking. In addition, it provides correspondent bank

services to co-operative banks, private banks, foreign banks, and regional rural

banks; and wealth management products for non-resident Indians. The Treasury

Services segment operates primarily in areas, such as foreign exchange, money

market, interest rate trading, and equities. HDFC Bank has 1,725 branches and over

4,232 ATMs, in 779 cities in India, and all branches of the bank are linked on an

online real-time basis. As of 30 September 2008 the bank had total assets of

Rs.1006.82 billion. For the fiscal year 2008-09, the bank has reported net profit of.

The company was founded in 1994 and is based in Mumbai, India.

In today’s growing world everyone needs to diversify their business so as to keep in

touch with the rapid development. By analyzing the growing concerns of the market,

HDFC has clients varying from investment banking sector, retail, web designing

companies, etc. Due to this rapid development HDFC Group has many teams

working for the above mentioned sectors.

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class

Indian Bank". We realized that only a single-minded focus on product quality and

service excellence would help us get there. Today, we are proud to say that we are

well on our way towards that goal.

48

2.9 annual reports

Balance Sheet of HDFC Bank in Rs. Cr.

Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 313.14 319.39 354.43 425.38

Equity Share Capital 313.14 319.39 354.43 425.38

Share Application Money

0.07 0.00 0.00 400.92

Preference Share Capital

0.00 0.00 0.00 0.00

Reserves 4,986.39 6,113.76 11,142.80 14,226.43

Revaluation Reserves

0.00 0.00 0.00 0.00

Net Worth 5,299.60 6,433.15 11,497.23 15,052.73

Deposits 55,796.82 68,297.94 100,768.60 142,811.5

8

Borrowings 4,560.48 2,815.39 4,478.86 2,685.84

Total Debt 60,357.30 71,113.33 105,247.46 145,497.4

2

Other Liabilities & Provisions

7,849.49 13,689.13 16,431.91 22,720.62

Total Liabilities 73,506.39 91,235.61 133,176.60 183,270.7

7

49

12 mths 12 mths 12 mths 12 mths

Assets

Cash & Balances with RBI

3,306.61 5,182.48 12,553.18 13,527.21

Balance with Banks, Money at Call

3,612.39 3,971.40 2,225.16 3,979.41

Advances 35,061.26 46,944.78 63,426.90 98,883.05

Investments 28,393.96 30,564.80 49,393.54 58,817.55

Gross Block 1,589.47 1,917.56 2,386.99 3,956.63

Accumulated Depreciation

734.39 950.89 1,211.86 2,249.90

Net Block 855.08 966.67 1,175.13 1,706.73

Capital Work In Progress

0.00 0.00 0.00 0.00

Other Assets 2,277.09 3,605.48 4,402.69 6,356.83

Total Assets 73,506.39 91,235.61 133,176.60 183,270.7

8

Contingent Liabilities

138,898.60 202,126.7

3

582,835.94 396,594.3

1

Bills for collection 5,239.26 7,211.88 17,092.85 17,939.62

Book Value (Rs) 169.24 201.42 324.38 344.44

50

The Bank posted total income and net profit of Rs. 19,980.5 crores and Rs.

2,948.7 crores respectively for the financial year ended March 31, 2010 as against

Rs. 19,622.9 crores and Rs. 2,245.0 crores respectively in the previous year.

Appropriations from net profit have been effected as per the table given above.

DIVIDEND

Your Bank has had a consistent dividend policy that balances the dual

objectives of appropriately rewarding shareholders through dividends and retaining

capital, in order to maintain a healthy capital adequacy ratio to support future growth.

It has had a consistent track record of moderate but steady increases in dividend

declarations over its history with the dividend payout ratio ranging between 20% and

25%. Consistent with this policy, and in recognition of the Banks overall performance

during this financial year, your directors are pleased to recommend a dividend of Rs.

12 per share for the financial year ended March 31, 2010, as against Rs. 10 per

share for the year ended March 31, 2009. This dividend shall be subject to tax on

dividend to be paid by the B

51

CORPORATE SOCIAL RESPONSIBILITY

Your Bank is a socially responsible corporate citizen committed to deliver a

positive impact across social, economic and environmental parameters. The Bank

acknowledges its responsibility on the manner that its activities influence its

consumers, employees, and stake holders, as well as the environment. Your Bank

strives to proactively encourage community growth and development thereby

contributing in building a sustainable future

Your Bank’s CSR initiatives range across the spectrum of purely operational

and financial parameters at one end to social and altruistic at the other. Together,

these elements go towards fulfilling its CSR objectives.

The Bank seeks to achieve its corporate and social objectives by focusing on

the following Strategic areas

• Environmental Responsibility

• Employee Engagement

• Community Initiatives

52

Environmental Responsibility

Your Bank is aware of its role of an influencer towards the environment, which

is embodied in its approach to Carbon Emission Reduction. The Bank demonstrates

this commitment to contribute positively to the environment and sustainable

development by calculating its carbon footprint and preparing a carbon management

plan to reduce it. In addition, in order to create awareness amongst employees on

climate change and the need to reduce and recycle various drives to conserve the

environment including tree plantation are organized on a regular basis.

Employee Engagement

The Bank’s employees are encouraged to volunteer time and skills through the

‘Corporate Volunteering Program’. This year your Bank’s employees have engaged

in activities such as academic support classes, held English speaking courses and

helped in organizing special events in order to celebrate festivals with the

underprivileged. Additionally the Bank has facilitated employee donations to charities

of their choice through ‘Give India’, a donation platform that enables individuals to

support social causes by donating to over 200 charities that have been screened for

transparency and credibility. The bank makes a donation matching the amounts

donated by its employees on a monthly basis.

Community Initiatives

As a responsible Corporate Citizen your Bank strives for community empowerment

through socio-economic development of underprivileged and marginalized sections

53

of society. The Bank partners with NGOs across India to support educational

initiatives and livelihood training programs.

In the year ended March 31, 2010 the Bank supported a variety of educational

programs ranging from educational sponsorships for girls, adoption of state-run

schools, running of academic support classes and reading classes. The Bank also

supports projects that provide skills training to school dropouts, youth, women and

other disadvantaged groups. The Bank’s social development programs have so far

touched the lives of over 73,000 children and 700 women and youth.

FINANCIAL INCLUSION

Over the last few years, your Bank has been working on a number of initiatives to

promote Financial Inclusion across identified sections of rural, under-banked and un-

banked consumers. These initiatives target segments of the population that have

limited or no access to the formal banking system for their basic banking and credit

requirements, by building a robust and sustainable model that provides relevant

services and viable and timely credit that ultimately result in the economic upliftment

of its customers. The Banks financial inclusion initiatives have been integrated

across its various businesses, across product groups. Over the next five years your

Bank will endeavor to bring 10 million households currently excluded from basic

banking services under the fold of this program.

Rural Initiative

The Bank has approximately 33% of its branches in rural and under banked

locations. In these branches the Bank offers products and services such as savings,

current, fixed & recurring deposits, loans, ATM facilities, investment products such

as mutual funds and insurance, electronic funds transfers, drafts & remittances, etc.

The Bank also leverages these branches as hubs for other inclusion initiatives such

54

as direct linkages to self help groups and joint liability groups, bank on wheels, point

of sale (POS) terminals and information technology enabled kiosks, and other

information & communication technology (ICT) backed initiatives in these locations.

A number of retail credit products such as two-wheeler loans, car loans, mortgages

etc. are typically consumption products in urban centers. These however are means

of income generation for of rural consumers. We believe that apart from agricultural

loans, there are many other credit products that the Bank can use to aid financial

betterment in rural locations. The Bank has extended provision of its retail loans to

large segments of the rural population where the end use of the products acquired

(by availing our loans) are used for income generating activities. For example, loans

for tractors, commercial vehicles, etc. supplement the farmer’s income by improving

productivity and reducing expenses.

No Frills Savings Accounts

A savings account is the opening requirement for the provision of other banking

services; the account promotes the habit of saving, provides a security, and

inculcates confidence among the target segment in the banking sector.

The Bank provides ‘No Frills’ savings accounts through all its branches as a stepping

stone towards financial inclusion. These accounts are offered only to customers who

do not have any other bank account (are un-banked) and who are either

beneficiaries of a government welfare scheme or have annual incomes less than a

defined threshold (constitute the bottom of the economic pyramid). Apart from the

basic no frills savings account your Bank also offers these segments other accounts

such as no frills salary accounts and limited KYC accounts.

55

Lending to self help groups and Microfinance Institutions

Your Bank has been working with various self help groups in order to cover a wider

consumer base than through its own branch network. The groups that the Bank

partners work with the objective of providing credit for income generation activities,

(often by providing training, vocational guidance, and marketing support to their

members).Leveraging their distribution, credit expertise and on-ground knowledge,

the Bank funds these groups who in turn lend to the end consumer. Till date the

Bank has lent to over 45,000 self help groups covering approximately 7 lakh

households supporting their income generation activities. The Bank works with

these groups either by appointing business correspondents or through its own

branch network. To this effect the Bank has opened 27 branches catering exclusively

to this target segment.

The Bank also extends loans to Microfinance Institutions for on-lending to financially

excluded households or in many cases to them through self help groups. This

program is currently spread across the country covering 18 states with tie-ups with

110 accredited microfinance institutions. The above institutions typically face

challenges in the areas of funding, credit underwriting and scaling up of operations.

The Bank brings in the necessary expertise related to these areas and enters into a

symbiotic arrangement that benefits all parties involved.

As on March 31, 2010 with a micro lending book of over Rs. 1,400 crores the Bank’s

micro lending initiative has reached approximately 2 million households.

HUMAN RESOURCES

The total number of employees of your bank was 51,888 as of March 31, 2010. The

Bank continued to focus on training its employees, both on-the-job as well as

56

through training programs conducted by internal and external faculty. The Bank has

consistently believed that broader employee ownership of its shares has a positive

impact on its performance and employee motivation.

HDFC Bank lists ‘people’ as one of its stated core values. The Bank believes in

empowering its employees and constantly takes various measures to achieve this.

STATUTORY DISCLOSURES

The information required under Section 217(2A) of the Companies Act,1956 and the

rules made there under, are given in the annexure appended hereto and forms part

of this report. In terms of section 219(1)(iv) of the Act, the Report and Accounts are

being sent to the shareholders excluding the aforesaid annexure. Any shareholder

interested in obtaining a copy of the said annexure may write to the Company

Secretary at the Registered Office of the Bank. The Bank had 51,888 employees as

on March 31, 2010. 630 employees employed throughout the year were in receipt of

remuneration of Rs. 24 lacs per annum and 35 employees employed for part of the

year were in receipt of remuneration of more than Rs. 2 lacs per month.

The provisions of Section 217(1)(e) of the Act relating to conservation of energy and

technology absorption do not apply to your Bank. The Bank has, however, used

information technology extensively in its operations.

The report on the Corporate Governance is annexed herewith and forms part of this report.

The Ministry of Corporate Affairs has issued “Corporate Governance Voluntary

Guidelines” in December 2009. While these guidelines are recommendatory in

nature, the Bank has adopted most of these guidelines as detailed in the Corporate

Governance Report. The Bank will examine the possibilities of adopting the

remaining guidelines in an appropriate manner.

57

RESPONSIBILITY STATEMENT

The Board of Directors hereby state that

i) In the preparation of the annual accounts, the applicable accounting standards

have been followed along with proper explanation relating to material departures;

ii) We have selected such accounting policies and applied them consistently and

made judgments and estimates that are reasonable and prudent so as to give a true

and fair view of the state of affairs of the Bank as on March 31, 2010 and of the profit

of the Bank for the year ended on that date;

iii) We have taken proper and sufficient care for the maintenance of adequate

accounting records in accordance with the provisions of the Companies Act, 1956 for

safeguarding the assets of the Bank and for preventing and detecting the fraud and

other irregularities;

iv) We have prepared the annual accounts on a going concern basis.

DIRECTORS

Mr. C.M.Vasudev and Dr. Pandit Palande will retire by rotation at the ensuing Annual

General Meeting and are eligible for re-appointment.

The Board at its meeting held on 15th January 2010 re-appointed Mr.Aditya Puri as

Managing Director of the Bank for a period of 3 years from 1st April 2010 to 31st

March 2013 subject to the approval of the shareholders at the ensuing Annual

General Meeting and the Reserve Bank of India. The Reserve Bank of India has

since approved the re-appointment of Mr. Puri as Managing Director and the terms

of re-appointment are being placed before the shareholders for approval at the

ensuing Annual General Meeting.

The Board at its meeting held on 24th April 2010 also approved the re-appointment

of Mr. Harish Engineer and Mr. Paresh Sukthankar as Executive Directors for further

58

periods from the expiry of their current terms subject to the approval of the

shareholders at the ensuing Annual General Meeting and the Reserve Bank of India.

AUDITORS

M/s. Haribhakti & Co., Chartered Accountants have been the Statutory Auditors of

your Bank since 2006. As per the regulations of the Reserve Bank of India, the same

auditors cannot be re-appointed for a period beyond four years. It is proposed to

appoint M/s. BSR & Co., Chartered Accountants as the new Statutory Auditors of the

Bank, subject to the approval of the members and the Reserve Bank of India. Your

Directors place on record their sincere appreciation of the professional services

rendered by M/s.Haribhakti & Co., as Statutory Auditors of the Bank.

59

CHAPTER 5

ANALYSIS AND INTERPRETATION OF DATA

4.4 Data Analysis

Q 1: What is your Monthly Transaction in your account? Table-2

60

0%

10%

20%

30%

40%

50%

60%

70%

05L- 20L 20L - 40L

40L - Above

05L- 20L

20L - 40L

40L - Above

Monthly transactions No. of respondents % (percentage)

5-20 lakhs 28 28%

20-40 lakhs 59 59%

40 lakhs and above 13 13%

Total 100 100%

Chart 2:

Analysis:

59% respondents gave their answer in 20-40 lakhs transactions.

28% respondents gave their answer in 0-20 lakhs transactions.

13% respondents gave their answer in 40 lakhs and above transactions.

Question 2

2. Do you have a Saving Account? Table-3

Response No. of respondents %

61

Yes 97 97%

No 3 3%

Chart 3:

97%

3%

Yes No

Analysis: 97% respondents have the saving accounts and only 3% do not have

saving account.

Question 3 .in Which Bank? Table-4

Bank No. of respondents %

62

Kotak mahindra 3 3%

HDFC 33 33%

Co-operative 48 48%

ICICI 5 5%

Nationalized 31 31%

Chart 4:

HDFC, 33%

ICICI, 5%

Nationalized, 31%

Co- Operative Bank, 48%

Kotak Mahindra Bank, 3%

HDFC ICICI Nationalized Co- Operative Bank Kotak Mahindra Bank

Analysis: 48% have saving account in co-operative, 3% in kotak mahindra, 33% in

HDFC, 5% in ICICI, and 31% in nationalized bank.

Question 4.Which Factors do you consider for opening a Savings Account?

Table-5

63

No. of respondents %

Accessibility 10 10

Minimum balance 20 20

DD/pay order 13 13

Free cheque 10 10

Debit card 8 8

Cash deposit 7 7

Cheque pick up 2 2

Net banking 16 16

Mobile banking 7 7

At per cheque 3 3

NEFT 2 2

RTGS 2 2

Total 100 100

Chart 5:

64

0

2

4

6

8

10

12

14

16

18

20

AccessibilityMinimum balanceDD/pay order Free chequeDebit cardCash depositCheque pick upNet bankingMobile bankingAt per chequeNEFTRTGS

Analysis:

Respondents gave their answer

10% respondents gave their answer in accessibility, 20% Minimum balance, 13 %

DD/pay order,10% Free cheque, 8% Debit card, 7% Cash deposit, 2% Cheque pick

up, 16% Net banking, 7% Mobile banking, 3% At per cheque, 2% NEFT, 2% RTGS.

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Question 5.Which mode of transaction do you avail of frequently? Table-6

Response No. of response %

Pay order 12 12

DD 22 22

Cheque 76 76

Total 100 100

Chart 6:

Cheque, 76%

DD, 32%

Pay Order, 12%

Cheque DD Pay Order

Analysis:

12% Response in pay order, 32% like DD, and 76 % costumer want from cheque

mode.

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Inter city, 33%

Both, 52%

Outside City

, 15%

Question 6.Which types of transaction do you make ?

Table-7

Response No. of respondents %

Intercity 33 33

Outside city 15 15

Both 52 52

Total 100 100

Chart 7

Analysis:

33% account holder transaction intercity, 52 % Both, and 15% outside city.

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Question 7.Does your bank assists you in case of any problem?

Response No. of respondents %

Yes 90 90

No 10 10

Total 100 100

Chart 7

90%

10%

Yes No

Analysis:

90% say yes bank will assist you in case of any problem, only 10% say no.

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CHAPTER 6

SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

69

6.1 Summary of Findings:

All the private and public sector banks are recognizing importance of the

relationship management in their growth and customer retention.

Most of the respondents are having more than two accounts and holds more

than two products with HDFC Bank.

Bank has shown better utilization of cash balance of customer by cross selling

other products.

According to respondents feedback it is observed that bank is in need to

increase their branches in Shantinagar region as well as pay concern to

increase their ATM network.

With the help of research it has been found that most of them prefer brand

name and service facilities and some of them are influenced by existing

customer

Greater retention of customers is being needed as they are offering various

products and services. This enables a great understanding of what customers

may expect from the bank and what to offer to them. This leads to defining

where each customer is in his relationship with the bank so that cross-selling

can be done.

The sales officer tries to make best relation with the customers by findings

what the customer need and requirement?

Staff member gives regular updates to their customers and information of the

product and their services.

The registers and files are systematically maintained on a daily basis and in

an organized manner.

Officials employed find themselves in much burden as there are very less

number of sales executives.

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6.2 Summary of Learning Experience

Almost all the Banks offer similar features and facilities with their Savings accounts.

There are certain reasons for existing customers of Saving Account of any Bank to

shift to another Bank.

The level of service in terms of delivering whatever is promised, fast response in

case of problems, is the most important benefit that the customers seek, from the

Bank they have a Saving Account with.

1. Network reach and visibility of a Bank is a very important criterion for the

customer while opening a Saving Account. We can also conclude from our analysis

that network reach in terms of Branches and ATMs is directly proportional to the

market share in case of Private Players.

2. In case of a new customer, if a bank approaches it first for opening a Saving

Account with them, then there is a good chance for the bank of getting many future

businesses and cross sales from the deal.

3. Aggressive Marketing is the key to increasing the market share in this area,

since the market has a lot of potential both in terms of untapped market.

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Conclusions and Recommendations:

CONCLUSION:

HDFC Bank has a strong brand name in the Bangalore city market. The people

of Bangalore city are good in investment part and most of them go for opening

savings account rather investing in Mutual fund products.

Thus there is a need to convert the people in investing fixed deposit for

increasing profitability of bank.

HDFC Bank has always sought profitable customers and generated profit from

them and taken steps by converting the non profitable customer to profitable

customers.

Customers preferred are those savings accounts which have given most of the

facility like savings max account which is given the locker facility and also

premium account which have given 6th family members account free with no

maintenances balance.

Customers can be pulled into profitability band when the customer is satisfied

with the product and services which he is using.

Customer satisfaction plays an important role as customers are satisfied they

will look for some other product.

At this state sales officer is very important who can suggest the customer

which product to use with reference to his need.

They must maintain mutual relationship between the sales officers and

customer.

The project was full of learning and experiments and provides me with a great

knowledge about banking sector. I have interacted with a lot of people personally

during these two months. A study of Company profile and Product profile was done

before starting my project which helps me a lot while interacting with the people. If

the interviewer is not having adequate knowledge of the company and product profile

then he will not be able to get the desired information from the respondent. During

the course of time, I tried to get all the objective of the project to be fulfilled.

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Recommendations:

1. Contract Sales Executive (CSE) should be trained to explain the product

features and its value added services to make customer’s product selection

convenient.

2. Contract Sales Executive (CSE) should recommend right product to the right

customer so as to ensure a high degree of satisfaction among the customer.

3. The bank needs to make people aware about their products and the basic

benefits they can derive out of it. And also the differential features of its savings

account as compared to other banks.70% of the people did not even know about the

concept, benefits and features of its saving accounts.

4. The bank should also target small business unit for whom maintenance of the

AQB is not a problem as this segment is not much penetrated.

5. Though the bank offers free doorstep banking once a day this fact is also not

known to many customers or they still do not trust this service whatever the reason

the bank can popularize this service to gain an edge over nationalized banks and

Co-operative Banks.

6. Quality of service has been rated highly important by all demographic factors

as a reason for banking with a particular bank, Standard Chartered needs to improve

the services provided to its existing customers before attracting more in the future

and use word of mouth as a promotional tool to increase the sales potential of its

savings account.

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CHAPTER 7

BIBLIOGRAPHY:

74

BOOKS:

“Kothari C.R.” Research Methodology in Management 10th edition in 2009.

“Beri G.C.” Research Methodology 8th Edition in 2008.

33rd Annual Report 2009-10 of HDFC Ltd.

Advertisement material provided by the HDFC Sales

Marketing Management by Philip Kotler, Thirteenth Edition

MAGAZINES:

• Business Today

• Business World.

WEBSITE:

www.google.com

www.hdfcbank.com

www.rbi.com

75

CHAPTER 7

ANNEXURE:

76

QUESTIONNAIRE FOR RESPONDENTS

I, hereby, declare that all the information provided by you is strictly for the purpose

of research and shall not be used for any other purpose. I am grateful to you for

your support and thank you for your honest response. I request you to read the

following before you proceed further.

Please tick only one option unless mentioned otherwise.

All the information in the questionnaire is for academic purpose and shall be kept

confidential.

PART-A

1. Respondents Name : ___________ _

2. Sex:

[ ] M [ ] F

3. Age (In yrs) :

18-20 [ ] 20-30 [ ] 30-40 [ ]

40-50 [ ] 50-60 [ ] 60 & above [ ]

4. Your marital status

□ Married □Unmarried

77

5. Your educational background

□Only up to 10th

□10+2

□ Graduate

□ Post graduate and above

6. Which of these best describes your occupation?

Occupation Remark

Working/salaried-Government

Working/salaried- Private

Business

Professional (Doctor,

Engineer, CA, Tax consultant

etc.)

7. You consider yourself as belonging to which annual income group

□ <Rs.1 lacs

□ 1-3lacs

□ 3-5lacs

□ 5-10lacs

□ >10 lacs

PART -B

78

8. How satisfied are you with each of the product that you invested in? (The satisfaction could be based on different parameters e.g. in terms of the returns that product has offered to you / quality of serviced offered by the company / quality of service offered by the consultant who sold you the product etc.)

Satisfaction level

Invested in Highly

dissatisfied

Dissatisfied Neither

satisfied nor

dissatisfied

Moderately

satisfied

Completel

y satisfied

Fixed

Account

Savings

Account

Salary

Account

Current

Account

9. DO YOU HAVE AN ACCOUNT IN ANY SCHEDULED BANK?

1- HDFC BANK

2- ICICI BANK

3- UTI BANK

4- IDBI BANK

79

10. WHAT TYPE OF ACCOUNT DO YOU HAVE?

1- SAVING ACCOUNT

2- CURRENT ACCOUNT

3- FIXED ACCOUNT

4- SALARY ACCOUNT

11. HOW LONG ARE YOU BEING ASSOCIATED WITH THE BANK?

YEARS________ MONTHS______

12. WHAT ATTRACTS YOU MOST? (RANK)

1. ATM

2. LOCATION

3. EMPLOYEE BEHAVIOUR

4. FACILITIES

5. SERVICE

6. ATMOSPHARE

13. Do you HDFC Bank would be able to position itself as a strong financial institution?

□ yes □ no

14. Are you satisfied with the bank?

80

□ yes □ no

15. If yes do you want to open another account?

□ yes □ no

16. If no then what are the reasons for dissatisfaction?

17. If you are offered a good savings plan from HDFC Bank with good rate and benefit will you be interested?

□ yes □ no

18. Which type of transaction does you made?

(a) Intercity (b) Intra city (c) Both

19. What are the additional Benefits do you expect from a Saving Account?

___________________________________________________________________

___________________________________________________________________

_______.

Your address & phone no .________________________________

_________________________________

_________________________________

_________________________________

Thank you!!!

Date___________________

Place__________________ Signature

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