Professional Documents
Culture Documents
SUBMITTED BY
PRIYANKA.J.SARAWAGI
SUBMITTED TO
UNIVERSITY OF MUMBAI
SK COLLEGE OF
ARTS, SCIENCE AND COMMERCE
VIDYAVIHAR, MUMBAI-400077
ACADEMIC YEAR-2009-2010
Declaration
Signature of Student
Acknowledgement
Many people’s input underlies any effective outlay. We would like to acknowledge
our indebtedness to every individual whose inquisitive mind and feedback made us
to attempt to bring about a project study on “Rural Credit and NBFCs”.
We present this project study to our college for BBI course, as part of semester VI.
This project has been prepared under the guidance of Prof. Neel Kantan who has
given positive feedback with regard to the project thus encouraging us in bringing
forth the project.
We express our gratitude towards college library for their unflagging support.
Last but not the least our heartfelt gratitude to family and friends for their
continued support and constant encouragement.
Table of contents
Executive summary
With the expansion and boom in banking industry the scenario have changed to
great extent from its traditional activities
It has taken a great leap with the new dimensions in the market showcasing better
understanding, displaying dynamic role, exhibiting innovations and exploring new
creative areas to encourage banking perception.
The scope of banking has widened with changes made by RBI. It has started
rendering more of facilities and services to its valued customers other than its core
activities of term lending and accepting deposits.
It has created room in the economy for its self by acting as a financial
conglomerates and providing one stop shop of services. It is like all the things
available under one roof.
The term used for its services other than traditional ones is known as “Para”
Para banking includes services such as merchant banking, venture capital, ATM
services, and debit/credit cards, net banking, discounting and so on…
The following chapters’ deals with the meaning of services covered under the
parameters of Para banking as per the guidelines issued by RBI the regulatory
authority and the ones which are offered by the HDFC Bank.
Research methodology
The information has been collected with the help of research methodology tools i.e
by collecting primary data as well as secondary data.
Primary data is in conduit to “interview method” and direct communication with
the concerned person in relation to the Indian banking sector.
Secondary source of information are gathered
➢ Through visit to relevant web sites
➢ Through reference books
➢ The friends, family who have helped to solve the problems of related topic
and collect data from the HDFC Bank.
Chapter.1
The object of Para banking shall consist of one or more of the following:
a) Management of collective investment undertakings which raise capital from
the public, namely
1. Securities;
2. Collective investment undertakings units;
3. Money market instruments;
4. Financial instruments futures, including other derivative instruments which may
be settled in cash;
5. Forward rate agreements (FRAs);
6. Interest rate swaps, currency swaps or equity swaps;
7. Put or call options on the abovementioned instruments, including cash
instruments; this category includes currency and interest rate options.
The Para banking Division has been accorded the status of Mother Division
amongst all division.
Para banking has a wide scope in the financial market because it offers more
and is the requirement of the competitive financial market. It will strengthen
the rural sector along with its great impact in the urban sector.
A bank shall carry out all the acts and transactions which are deemed necessary for
or incidental to the smooth running of the managed collective investment
undertakings and assets, according to normal standards of diligence and
professional skills. It is wider term used for banking activities.
It can also be said that an institution which mobilizes the savings of the community
and diverts them for financing different activities. It needs to be registered. Para
banking is a boon to the industry and has a great impetus in the society as it
contributes greatly to the economy under the supervision of the regulatory
authority.
Commercial banks render these services with the aim to target the right
market as well corporate sector which adds to the national economy.
The whole lot of directions to be followed by the banks in order to undertake
Para activities is given by RBI. It has a good scope as well as bright
future in upcoming years.
Chapter2.
• Definitions of each
services
Services incorporated under Para banking
Equipment leasing, Hire purchase business and factoring services
In case of hire purchase the goods are delivered by the owner to another person on
the agreement that such person pays the agreed amount in periodical installments.
Mutual fund business refers to fund raised by pooling the savings of small
investors and deploys it in various investments to earn considerable returns.
Smart / Debit Card Business
Smart /debit cards is an instrument of payment. The cards are plastic cards issued
by banks to their customer. It avoids the risk of handling cash.
Money market mutual funds should comply with the provisions held by RBI before
publishing in the market.
The leasing of houses and property is taken care of in real estate initiatives by
the bank
Micro finance
Banking Regulation Act, 1949, banks have been advised that they may now
undertake Pension Funds Management (PFM) through their subsidiaries set up for
the purpose.
It provides security measures one must follow by making the use of internet
facility to carry out their banking operations or transactions.
Merchant banking
Venture capital
Net banking
Internet is a channel of service to banking customer. One can carry out its
banking operations through internet facilities.
ATM Services
• Company profile
• Management
• Technology usage
• Business
classification
The Housing Development Finance Corporation Limited (HDFC) was amongst
the first to receive an 'in principle' approval from the Reserve Bank of India (RBI)
to set up a bank in the private sector, as part of the RBI's liberalization of the
Indian Banking Industry in 1994. The bank was incorporated in August 1994 in
the name of 'HDFC Bank Limited', with its registered office in Mumbai, India.
HDFC Bank commenced operations as a Scheduled Commercial Bank in
January 1995.
HDFC was ideally positioned to promote a bank in the Indian environment.
HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team
determined to accomplish the vision of becoming a World-class Indian bank
The business philosophy is based on four core values –
• Customer Focus,
• Operational Excellence,
• Product Leadership and
• People.
It is believed that the ultimate identity and success of bank will reside in the
exceptional quality of people and their extraordinary efforts. For this reason,
HDFC Bank is committed to hiring, developing, motivating and retaining the
best people in the industry
HDFC Bank is one of the most preferred employers in banking industry in India
Senior banking professionals with substantial experience in India and abroad head
various businesses and functions and report to the Managing Director. Given the
professional expertise of the management team and the overall focus on recruiting
and retaining the best talent in the industry, the bank believes that its people are a
significant competitive strength.
The Bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world class
bank. The Bank's business is supported by scalable and robust systems which
ensure that clients always get the finest services it offer.
The Bank has prioritized its engagement in technology and the internet as one of
its key goals and has already made significant progress in web-enabling its core
businesses. In each of its businesses, the Bank has succeeded in leveraging its
market position, expertise and technology to create a competitive advantage and
build market share.
HDFC Bank had initiated Para banking services and activities to increase its
income by way of earning commission. When it offers these services it helps it to
not only provide new products and benefits to its customers but also ensures its
stability and growth in the market segment.
It offers varied variety of treasury, custodian, wholesale, retail services.
The Bank has its deposit programs rated by two rating agencies - Credit Analysis
& Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's
Fixed Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE,
which represents instruments considered to be "of the best quality, carrying
negligible investment risk"
The bank was one of the first four companies, which subjected itself to a Corporate
Governance and Value Creation (GVC) rating by the rating agency, The Credit
Rating Information Services of India Limited (CRISIL).
Leading Indian and international publications have recognized the bank for its
performance and quality. HDFC bank provides better safety too.
Chapter .4
Merchant banking/services
A merchant bank is a financial institution primarily engaged in offering financial
services and advice to corporations and to wealthy individuals. The term can also
be used to describe the private equity activities of banking. It refers to issue
management.
Merchant banking has been a very lucrative-and risky-endeavor for the small
number of bank holding companies.
The term merchant banking is generally understood to mean negotiated private
equity investment by financial institutions in the unregistered securities of either
privately or publicly held companies.
Both investment banks and commercial banks engage in merchant banking, and the
type of security in which they most commonly invest is common stock.
They also invest in securities with an equity participation feature; these may be
convertible preferred stock or subordinated debt with conversion privileges or
warrants. Other investment bank services-raising capital from outside sources,
advising on mergers and acquisitions
Merchant bank invests its own capital in a client company whereas an investment
bank purely distributes (and trades) the securities of that company in its capital
raising role
Provide fee based corporate advisory services
Venture Finance
Venture financing refers to organized private or institutional financing
that can provide substantial amount of capital, mostly through equity
purchases and occasionally through debt offerings. It denotes investors
that provide equity financing to young business and play active role in
advertising their managements.
It is provided for early stage projects, high potential growth companies in
the interest of generating a return through IPO of a company.
a) Business Cycle
b) Industry
c) Investment
d) Location
e) Return
f) Involvement
The process of venture capital initiates with the entrepreneur developing a novel
idea of starting up a techno based project.
He will approach venture capitalist who assess the capabilities of the entrepreneur
and if satisfied than it will finance the project and advertise for the subscription of
the issue
With all due diligence and skill the process is carried out and when the
entrepreneur reaches advanced stage of maturity at this instance venture capitalist
may either sell his part of shares to the promoters or in the market.
Centurion Bank of Punjab got amalgamated with HDFC Bank in March 2006 with
effect from March 2008.
This venture enabled both the banks to expand their data base and widen the
services offered to their customer which in turn would enhance its position.
Whereas, concerned regarding venture capital financing activities in relation to
HDFC Bank it is not provided by it.
Stages of financing involved in venture capital
It is in precise a four way method used by companies. Reasons of growth for
venture finance
Venture capital is at take off stage in India. It can play a catalytic role in the
development of entrepreneurship skills that remains unexploited among the
young and energetic technocrats and other professionally qualified talents. In
order to ensure success of venture capital in India following suggestions are
offered:
a) Exemptions or concessions for capital gains
b) Development of stock market
c) Fiscal incentives
d) Private sector participation
e) Reviewing existing laws
The guidelines to be followed by banks as prescribed by RBI are as follows:
1. The banks have to ensure that underwriting commitments taken up by them
in respect of primary issue of shares or convertible bonds or convertible
debentures or units of equity-oriented mutual funds comply with the ceiling
prescribed for the banks’ exposure to the capital market.
2. Banks should not underwrite issue of Commercial Paper by any Company or
Primary Dealer.
3. Bank should not extend Revolving Underwriting Facility to short-term
Floating Rate Notes/Bonds or debentures issued by corporate entities.
4. Banks/ merchant banking subsidiaries of banks undertaking underwriting
activities are also required to comply with the guidelines contained in the
SEBI (Underwriters) Rules and Regulations, 1993, and those issued from
time to time.
5. An annual review covering the underwriting operations taken up during the
year, with company-wise details of such operations, the shares/debentures
devolved on the banks, the loss (or expected loss) from unloading the
devolved shares/debentures indicating the face-value and market value
thereof, the commission earned, etc. may be placed before their Boards of
Directors within 2 months of the close of the fiscal year.
Chapter.5
Loans that are originated by a retailer to its customers and are then sold to a bank
or other third-party financial institution.
The bank purchases these loans at a discount and then collects principle and
interest payments from the borrower. Also called an indirect loan.
On the sales side, HDFC Bank offers a range of solutions for funding dealers and
end customers. Facilities are offered on a standalone basis against collateral as well
as through structured transactions.
Dealer financing is an effective tool that meets the funding requirements of
dealers at a competitive rate. It results in a satisfied and loyal dealer network, helps
in increasing sales and streamlines working capital management.
Bill discounting
Bill discounting refers to discounting the trade bill by the party with the bank
before the expiry of the bill at a price lower than the payable amount. The amount
lower is referred to as discount by the bank and it is a form of income for it. It is
highly negotiable.
Bill discounting is one of the essential activity performed by the HDFC Bank
under the head of Para banking services. It is the special feature of this commercial
bank
At HDFC Bank it dedicate trade finance set-up that combines the rich experience
in understanding customer needs and a nationwide network of branches and
correspondent banks to offer bill discounting. These are customized to suit the
requirement for short term finance, from the date of sale to the date of receipt of
payment thereon.
Its highlights are as under:
4. Minimum documentation
Factoring solutions
Limits and parameters are set by the card issuing banks regarding amount of cash
withdrawal, withdrawal limit, number of PIN log-in attempts, transaction set
allowed and declines
Can I use the HDFC Bank ATM Card at Citibank/Standard Chartered/Other
Bank's ATMs?
No. Your HDFC Bank ATM Card can only be used at our ATMs.
What is the cash withdrawal /cash advance limit for me?
HDFC Bank customers can withdraw up to Rs.10, 000/- per day using ATM Card
and Rs. 15,000 using Debit Card. For non-HDFC Bank customers, the limit is as
decided by the bank issuing the card.
How do I use my ATM?
To use the HDFC Bank ATM, just follow these easy steps:
Insert your card into the slot provided.
Select the language in which you want to be led through the transactions. Most
ATMs offer you the options of conducting your transactions in English or Hindi.
At some locations, you will be able to select between languages.
Debit cards
A debit card is also addressed as a bank card that provides an
alternative payment method to cash when making purchases.
It may be called as an electronic cheque as the funds are drawn directly
from either their bank account or from the remaining balance on the card.
In some cases, the cards are designed exclusively used on the internet and so
there is no physical card. It is termed as virtual card.
The use of debit cards has become widespread in many countries and has
overtaken the cheque and in some instances cash transactions by volume.
Like credit card, debit cards are used widely for telephone and internet
purchases and funds are transferred from the bearers account instead of having
bearer to pay back on a later date. Debit cards are used as an instant withdrawal of
cash, acting as the ATM card for withdrawing cash and as a bank guarantee card.
Merchants can also offer “cash back”/ “cash out” facilities to customers.
Various types of debit cards are offered by HDFC Bank depending upon the
preferences and different type of customers.
HDFC bank debit cards
Discover the power and convenience of HDFC Bank Debit Cards that not only let
to withdraw cash from ATMs but also let to shop cashless and hassle-free. It helps
to enhance the spending ability within the limits of the amount available in the
account.
Cash Back*: For every Rs. 200 that you will spend, you will receive Re. 1 as cash
back. This cash back is valid on all purchases made through the Card, at all times
of the year!!!
Insurance cover*: The following are included in the insurance covers:
Fire & Burglary for the items purchased under Debit Card (up to 6 months) -
Sum assured Rs. 2, 00,000
Loss of checked baggage - Sum assured Rs. 1, 00,000
with effect 1st March 09, for Claims under Loss of Checked Baggage and Fire
& Burglary insurance to be accepted & processed, the cardholder should have
carried out at least 1 purchase transaction using the Debit Card, within 6 months
prior to the event date.
1. Daily Limits
Rs. 15,000 at ATMs for Withdrawal and Rs. 25,000 at merchant
establishments for shopping.
2. Domestic Validity
The Debit Card can be used only in India to make purchases at Merchant
locations and withdraw local currency at ATMs. The NRO Debit Card can
be used at the following locations :
3. HDFC Bank ATMs for all ATM transactions
4. Visa / NFS ATMs in India for Balance Inquiry and Cash Withdrawal only.
5. Merchant Locations in India for Purchases / Shopping
5.) Kisan card:
Credit cards
A credit card is a part of system of payments named after a small card issued to
users of the system. It is a card entitling its users to buy goods and services
based on the holders promise to pay for these goods and services. Credit cards
allow the consumers to revolve their balance at the cost of having interest charged.
Most credit cards are issued by local banks and are the shape and size specified by
the ISO/IEC 7810 standard as ID-1.This is defined as 85.60 X 53.98mm in size
with exclusive
Platinum Plus Credit travel and
Card preferential
benefits -
Corporate credit
cards It's a designation
credit card
solution given to
corporate by
Purchase card HDFC Bank to
facilitate quick
payments for
business expenses
It eliminates the
Distributor card use of cheques and
cash and speeds up
the turnaround
time of
transactions
a) Titanium Rewards
The unique reward points structure gives 2 reward points for every Rs150 on
domestic spends and 5 reward points for every Rs150 on international
spends
b) Applicable for Transactions between Rs. 400 - 5000
a) Utility bills through your credit card -Platinum plus Credit Card with
Smart Pay, HDFC Bank's Utility Bill payment service. Ensure that all utility
bills are paid on time, without any hassle.
a) Signature Access
HDFC Bank Visa Signature Credit card entitles a Priority pass that provides
access to exclusive airport lounges across the world. Priority Pass is the
world's largest independent airport lounge program, which gives the
cardholder access to more than 500 airport lounges in more than 275 cities
worldwide.
Priority Pass is Priced at Rs. 500/annum.
Earn 2 Reward Points for every Rs.150 spent on your card and double
Reward Points (2 extra points) for every Rs. 150 spent above Rs. 15000.
b) Signature benefits
c) interest free period up to 50 days, the lowest interest rate of 3.05% on
revolving credit facility (36.6% annually)# and petrol surcharge waiver of
2.5% across all petrol pumps in the country
World Luxury -HDFC Bank World Master Card entitles you to an exclusive
"Taj Epicure" membership. Taj Epicure Membership is Priced at Rs. 1500/annum
World rewards- Earn up to 4 reward points per Rs 150/- using the HDFC Bank
World Credit Card.
6) HDFC Bank Corporate Platinum Card -which comes with a unique 24x7
Expense management solution called SMART DATA ONLINE,
powered by Master card International.
A. 24x7 online MIS availability.
6) Purchase cards
The HDFC Bank Corporate Purchasing Solution helps reduce purchasing costs
considerably as follows
a) Eliminates the delay and cost of traditional purchase transactions.
Business benefits
1. 1. Reduces transaction processing time, cost of high volume and low value
transactions for the Corporate.
6) Distributor card
Benefits to Corporate
a) Increases distributor's appetite for the corporate products.
b) Shorter working capital cycle and improved cash flow management
c) Removal of cheque and cash payments and consequent problems for
Corporate
d) Easy reconciliation of transactions
e) Helps quick delivery of goods or services
Benefits to Distributor
Attractive finance charges and interest free credit periods.
Flexibility of scheduling payments: part payment, pre-payment and post-
payments possible.
Reduces operational hassles in processing and reconciling transactions.
Reduces time for procurement of goods
Chapter.7
Mutual funds
Meaning
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Mutual funds
A mutual fund is a professionally managed type of collective investment scheme
that pools money from many investors and invests it in stocks, bonds, short-term
money market instruments, and/or other securities.
The mutual fund will have a fund manager that trades the pooled money on a
regular basis. The net proceeds or losses are then typically distributed to the
investors annually.
What is mutual fund through diagrammatic representation for better
understanding?
Mutual funds are funds that pool the money of several investors to invest in equity
or debt markets. Mutual Funds could be Equity funds, Debt funds or balanced
funds. Funds are selected on quantitative parameters like volatility, FAMA Model,
risk adjusted returns, and rolling return coupled with a qualitative analysis of fund
performance and investment styles through regular interactions / due diligence
processes with fund managers.
∝ a) Potential of return -The fund managers who take care of your Mutual
Fund have access to information and statistics from leading economists
and analysts around the world. Because of this, they are in a better
position than individual investors to identify opportunities for your
investments to flourish.
∝ a) Low Costs - The benefits of scale in brokerage, custodial and other fees
translate into lower costs for investors.
HDFC Asset Management Company Ltd (AMC) was incorporated under the
Companies Act, 1956, on December 10, 1999, and was approved to act as an
Asset Management Company for the HDFC Mutual Fund by SEBI
In terms of the Investment Management Agreement, the Trustee has appointed the
HDFC Asset Management Company Limited to manage the Mutual Fund. The
paid up capital of the AMC is Rs. 25.161 Crore.
Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund,
following a review of its overall strategy, had decided to divest its Asset
Management business in India. The AMC had entered into an agreement with ZIC
to acquire the said business, subject to necessary regulatory approvals.
Products
Equity / Growth Fund Liquid Funds
Invest primarily in equity Provide high level of liquidity
and equity related by investing in money market
instruments. and debt instruments.
Children's Gift Fund Debt/ Income Fund
Children's Gift Fund Invest in money market and
debt instruments and provide
optimum balance of yield, ...
HDFC Mutual Fund is one of the largest mutual funds and well-established fund
house in the country with consistent and above average fund performance across
categories since its incorporation on December 10, 1999. While past experience
does make it a veteran, but when it comes to investments, it has never believed that
the experience is enough.
Investment Philosophy
The single most important factor that drives HDFC Mutual Fund is its belief to
give the investor the chance to profitably invest in the financial market, without
constantly worrying about the market swings. The strong emphasis on managing
and controlling portfolio risk avoids chasing the latest “fads” and trends.
Offer
It believe, that, by giving the investor long-term benefits, it can constantly review
the markets for new trends, to identify new growth sectors and share this
knowledge with investors in the form of product offerings Besides, it also offer
Portfolio Management Services.
Achievements
HDFC Asset Management Company (AMC) is the first AMC in India to have been
assigned the ‘CRISIL Fund House Level – 1’ rating.
As on 30 September 09
Average Asset under Management: Rs. 90,427.25 cr.
No. of investors: 3,283,463
No. of ARN certified distributors: 30,282
Vision statement
Chapter 8
Micro finance
T
M
•
Micro finance
Over the last several decades the banking sector in the country has taken
significant strides to achieve profitability, financial stability and competitiveness to
cater to the increasing demand for financial services.
However, much of the benefits accrued due to the growth in banking services have
been limited to a minority of the total population of the country. Banks have not
been able to reach a vast segment of the population particularly in the rural areas
and take even basic banking services to the under served and disadvantaged
masses, for various reasons.
Banks have confined to only areas around their branch network whereas the need
for cheap and timely credit transcends the boundaries of these branches to remote
areas which lack even basic infrastructure.
Micro-credit is a process. Poor people ensure their development through this
process.
The poor becomes aware, efficient and hopeful. Credit is provided without any
security. People are motivated to be engaged in productive activities and inspired
to carry on trades and commerce
Savings, Credits, Insurance etc. are included in micro-credit management.
Although the poor people has got a very little entrance in the conventional finance
institutions used to get different types of financial assistance in micro-credit
Role of HDFC Bank
HDFC Bank is one of the first new generation private sector banks to enter the
microfinance sector four years back. Enthused by our experience and considering
the huge positive impact on
generation of livelihoods, financial empowerment to the rural women and poverty
alleviation, the bank has rapidly adopted different business models for providing
rural micro credit in unbanked areas to achieve the larger socio-economic objective
of inclusive growth through financial inclusion.
Financial inclusion can be defined as providing affordable access to basic banking
products and banking services like savings,loans, remittances, insurance, etc. to the
hitherto excluded and often underprivileged and disadvantaged sections of the
society.
This disadvantaged section of the population comprises of marginal farmers, daily
wage landless labourers, unorganised sector employees, urban slum dwellers, oral
lessees,minority communities, SCs/STs, socially excluded groups and women.
To conclude, HDFC Bank has a deeply felt commitment to financial inclusion and
has been the pioneer in using the business correspondent model to achieve this
purpose. A dedicated team of specialized and trained officers across the country
are working exclusively on the various initiatives of the bank on Financial
Inclusion and Literacy. With the introduction of technology and market linkage
initiatives by the bank, the scalability, viability and sustainability of financial
inclusion and literacy can be reasonably ensured. We expect that our efforts in
promoting financial inclusion would not only improve access to financial services
on competitive terms but also positively affect a market imperfection which can
have a potential demonstrative effect on the banking sector thereby bringing in
other players to serve the historically disadvantaged and under-served population
in the country.
HDFC Bank states that providing this type of financing not only open channels of
banking towards rural but also widens the scope of conduction of activity from the
bank’s point of view.
This vicious circle will enable the farmers and self help groups to overcome their
financial help and raise their standard of living without being explicated
Chapter 9
+ =
The outlook for banc assurance remains positive. Given the current relatively low
banc assurance penetration in emerging markets, it will likely see further
significant development in the coming years.
Though banc assurance has traditionally targeted the mass market, banc assurers
have begun to finely segment the market, which has resulted in tailor-made
products for each segment
In India the concept of banc assurance appears to be gaining ground quite rapidly
both through commission based arrangements and joint ventures between banks
and insurance companies
Strong Promoter
Our brand has managed to set a new standard in the Indian life insurance
communication space. We were the first private life insurer to break the ice
using the idea of self-respect instead of ‘death’ to convey our brand
proposition (Sar Utha Ke Jiyo). Today, we are one of the few brands that
customers recognize, like and prefer to do business. Moreover, our brand
thought, Sar Utha Ke Jiyo, is the most recalled campaign in its category.
Investment Philosophy
Despite the criticality of life insurance, sales in the industry have been
characterized by over reliance on tax benefits and limited advice-based
selling. Our eight-step structured sales process ‘Disha’ however, helps
customers understand their latent needs at the first instance itself without
focusing on product features or tax benefits. Need-based selling process,
'Disha', the first of its kinds in the industry, looks at the whole financial
picture. Customers see a plan not piecemeal product selling.
Focus on Training
Training is an integral part of our business strategy. Almost all employees
have undergone training to enhance their technical skills or the softer
behavioural skills to be able to deliver the service standards that our
company has set for itself. Besides the mandatory training that Financial
Consultants have to undergo prior to being licensed, we have developed and
implemented various training modules covering various aspects including
product knowledge, selling skills, objection handling skills and so on.
HDFC Standard Life do not focus in the business of ramping up the topline
only, but to create maximisation of stakeholder's value. Today, we are
extremely satisfied with the base that we have created for the long-term
success of this company.
Transparent Dealing
We are one of the few companies whose product details, pricing, clauses are
clearly communicated to help customers take the right decision.
All Products
• Protection Plans - Safeguard your family’s financial independence
• Security against uncertainties
• Financial cushion in case of an eventuality
Types of Protection Plans
Our range of Protection Plans includes
Retirement Plans-
• Monetary security
• Financial independence even after retirement
• Live carefree in your golden years
Types of Retirement Plans
Our range of Retirement Plans includes
• Savings & Investment Plans - Dual benefit of protection and long term
savings
• Provide an assured sum for future needs
• Inculcate a habit of regular savings
• Types of Savings & Investment Plans
Our range of Savings & Investment Plans includes
• Health Plans
• Group Plans
• The most comprehensive list of products for progressive employers who
wish to provide the best and most innovative employee benefit solutions to
their employees
Life insurance products at customers’ disposal by HDFC Bank:
Group Term Insurance Plan
This plan offers Protection to organization employees
Para Banking reflects HDFC Bank's strengths in providing clients in India, a wide
array of commercial, transactional and electronic banking products. It achieves this
through innovative product development and a well-integrated approach to
relationship management.
HDFC Bank can extend import financing through Letters of Credit, which are well
accepted globally and supported by a strong trade finance set-up. We are direct
members of SWIFT and have correspondent banking arrangements with more
than 370 banks worldwide. We also structure complex Letters of Credit.
Guarantees
Cash Management Services (CMS) is one of HDFC Bank’s thrust areas. This has
been a result of a robust, end to end cash management product which offers
innovative and reliable solutions by combining an efficient collections and
disbursements product, backed by state of the art systems to ensure customized
delivery. The Bank has constructed a wide range of CMS products covering
collections and disbursements of operating flows, as well as specialized cash flow
streams such as rights/public issue collections, dividends, We operate out of a large
and expanding network of over 175 outlets across the country.
This is the largest network of online, electronically linked branches in the country.
This provides us with a clear competitive advantage, which naturally translates into
a lower cost and faster credit to corporate.
Forex desk
HDFC Bank's Foreign Exchange Department has two desks, viz. the Inter
Bank Desk and the Corporate Desk.
The Inter Bank Desk (IB) does cover operations of the positions generated
by the Corporate Desk. Besides, it trades on its own account.
The bank has a state-of-the-art Dealing Room and is an
active player in the local Inter Bank market. The Dealing Room is manned
by highly trained professionals. Because of its involvement in the
development of the market in the country, the Bank is a number of various
important committees of Foreign Exchange Dealers' Association of
India (FEDAI) as well as of Reserve Bank Of India (RBI). Currency
swaps, outward and inward remittances, prompt and competitive pricing,
economic and technical analysis.
Debt market instruments
Government of India securities: These are sovereign (credit risk-free)
coupon bearing instruments which are issued by the Government of India.
Securities are available in primary and secondary market in wide range. It is
highly liquid able and can be holded in physical form or in demat form
Commercial papers: It represents short term unsecured promissory notes
issued by top rated corporate, primary dealers (PDs), satellite dealers (SDs) and the
all-India financial institutions (FIs).
1. CP can be issued for a minimum
period of 15 days and a maximum up
to one year.
2. Minimum amount invested is
5,00,000 or multiples
3. Cps are issued at a discount to face
value
4. Issued in demat form
Treasury bills
It is a discounted instrument issued by the Central Government.
The main features of Treasury Bills are:
d) Issued at a discount to face value i.e., investors will buy the Treasury
Bills at discount to face value of Rs.100 and on maturity the face value
of Rs.100 is received by the investor.
Derivatives desk
HDFC Bank has established itself as a leading player in the derivatives market.
The bank has a team exclusively dedicated to the area of derivatives.
In line with the bank's commitment of adding value to clients, the bank actively
advises its corporate clients on the use of derivatives to manage their currency and
interest rate risks.
The products offered by the desk include interest rate swaps, caps, floors, short
dated as well as long dated currency options, cross currency swaps embedded with
options and swaptions
The bank has carved a special niche for itself in rupee derivatives market. It takes
pride in being one of the most aggressive players in this market.
Custodial services
The Bank has set up the Custody Services group offering quality and reliable
custody services to the clients and has in place a customised Information system,
high security storage vaults and premises for processing / safekeeping securities.
HDFC Bank also has the capability to offer "Straight-through Processing"(STP)
through NSDL, NSE-IT and FT
The Bank has been appointed Custodian by the National Stock Exchange - the
country's leading automated exchange in respect of the securities deposited by the
trading members.
Chapter 11
NET BANKING
Net banking- popularly known as internet banking or E-banking by individuals.
Net Banking is a system of banking in which customers can view their account
details, pay bills, and transfer money by means of the Internet. Internet
banking, sometimes called online banking, is an outgrowth of PC banking. Internet
banking uses the Internet as the delivery channel by which they conduct banking
activity
For example, transferring funds, paying bills, viewing checking and savings
account balances, paying mortgages, and purchasing financial instruments and
certificates of deposit.
An Internet banking customer accesses his or her accounts from a browser—
software that runs Internet banking programs resident on the bank’s World Wide
Web server, not on the user’s PC.
Net Banker defines a “true Internet bank” as one that provides account
balances and some transactional capabilities to retail customers over the
World Wide Web. Internet banks are also known as virtual, cyber, net,
interactive, or web banks.
Net safe schemes
A typical Internet bank site specifies the types of transactions offered and
provides information about account security.
Pay Bills
Net Safe, the latest technology offering from HDFC Bank, is a unique
service which makes online shopping completely secure. With Net Safe
you create a virtual card (Net Safe Card) from your HDFC Bank Visa
Credit / Debit Card or Master card Credit/Debit Card number that
provides you with complete security while shopping online. The key
benefits of Net Safe are as follows:
1. Your HDFC Bank credit / debit card number is never used on the
merchant website
2. The Net Safe card you create is a onetime use card
3. You can set your own limit for the Net Safe cards you generate
4. You can use it on any merchant website that accepts VISA/Master
card cards
5. All purchases you make with Net Safe Cards will appear on your
statement, just like any other transaction.
Net Safe offers a unique security feature, wherein your credit/debit card
number is never revealed on the Internet. Instead, you generate a virtual
card number, drawing funds from either your credit or debit card account
[for debit card, you can generate up to 5 virtual cards daily subject to your
Point of Sale(POS) limit per day, provided there is available balance in
your savings/current account and for your credit card up to available credit
limit]. You can then use this virtual card number at any online merchant
site and complete your shopping with security and ease.
Conclusion
We live in a world of rapid change. Today’s world is certainly more complex and
ambiguous than the world of yesterday, us new approach has to be different from
what we have been doing traditionally.
The emphasis on understanding what Para banking services and activities are and
research in this area is a relatively new development.
Financial institutions and banks through their Para-banking activities have played a
useful role in financing various sectors of the economy. Considering the current
scenario of branch banking, it will take some more time to reach the wider
population across the country and provide financial services in a cost-effective
manner from the larger banks. Para-banking services have to be carefully regulated
and supervised by the regulator both on financial health of the service provider as
well as customer protection.
Whilst there is a greater need for Para-banking services for the wider population
and supporting greater participation in the financial services “network coverage”, it
is important to evolve new workable models for appropriate supervision.
Finally, any thought and decision on banning Para banking activity or institution or
class of institutions should be considered after significant deliberations and giving
due weight age to the contributions and negative roles over the last few decades
rather than be motivated by some recent incidents relating to a certain entity.
Bibliography
Sources:
India's banking and financial sector in the new millennium, Volume 2-Uma Kapila
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ustodial_Service.htm