TABLE OF CONTENT

TABLE OF CONTENT............................................................................................. 1
INTRODUCTION................................................................................................... 2
HISTORY OF BANKING........................................................................................... 3
INTRODUCTION ABOUT THE BANKING SECTOR.................................................................4
A. ORIGIN AND DEVELOPMENT OF THE INDUSTRY...........................................................4
B .BANKING STRUCTURE IN INDIA:........................................................................................ 5
GROWTH AND PRESENT STATUS OF THE INDUSTRY................................................................8
FUTURE OF THE INDUSTRY................................................................................................... 9
INDIAN BANKING INDUSTRY ANALYSIS:..................................................................12
STUDY OF HDFC BANK.........................................................................................14
INTRODUCTION.................................................................................................................. 16
COMPANY PROFILE............................................................................................................. 17
MANAGEMENT PROFILE OF THE BANK................................................................................21
MISSION, BUSINESS STRATEGY AND APPROACH TO BUSINESS.............................................................23
BUSINESS OF HDFC BANK................................................................................................... 24
TECHNOLOGY USED BY HDFC BANK...................................................................................27
VISION STATEMENT OF HDFC BANK....................................................................................28
MANAGMENT FUNCTION PERFORMED BY HDFC BANK...............................................29
SERVICE QUALITY INITIATIVES........................................................................................... 30
RISK MANAGEMENT AND PORTFOLIO QUALITY...................................................................31
INTERNAL CONTROLS, AUDIT AND COMPLIANCE.................................................................32
CORPORATE SOCIAL RESPONSIBILITY.................................................................................33
HUMAN RESOURCE MANAGMENT.......................................................................................35
PRODUCTS OF HDFC BANK...................................................................................42

Savings Accounts........................................................................................................ 42
Current accounts........................................................................................................ 44
Demat account service................................................................................................. 45
LOAN SERVICES......................................................................................................... 46
CARD SERVICES......................................................................................................... 48
INVESMENT AND INSURANCE SERVICE......................................................................49

AWARDS........................................................................................................... 50
CREDIT RATING................................................................................................. 52
CONCLUSION & SUGGESTIONS..............................................................................53
BIBLIOGRAPHY................................................................................................. 54

INTRODUCTION

THE TOPIC: MANAGEMENT IN PRIVATE BANKS IN STUDY OF HDFC BANK

At HDFC Bank, I was assigned with the topic asMANAGEMENT IN PRIVATE BANKS IN
STUDY OF HDFC BANK for my project work. I researchd for this topic and try my best to
prepare this project report and know about the role played by management in the private banks
i.eHDFC BANK. The selection of the topic was to know the how the effective management leads
the very success to the bank.
REASON FOR SELECTION OF THIS TOPIC:
The financial sector is one of the booming and increasing sectors in India. In this growing
banking industry private banks are the major players of the vast grand success and the reason
behind every successful bank is their effective management which plays a role of a to planning
strategies, plans for the future and all

HISTORY OF BANKING
Banking is nearly as old as civilization. The history of banking could be said to have started with
the appearance of money. The first record of minted metal coins was in Mesopotamia in about
2500B.C. the first European banknotes, which was handwritten appeared in1661, in Sweden.
cheque and printed paper money appeared in the 1700s and 1800s, with many banks created to
deal with increasing trade.The history of banking in each country runs in lines with the
development of trade and industry, and with the level of political confidence and stability. The
ancient Romans developed an advanced banking system to serve their vast trade network, which
extended throughout Europe, Asia and Africa.
Modern banking began in Venice. The word bank comes from the Italian word ban co,
meaning bench, because moneylenders worked on benches in market places. The bank of Venice
was established in 1171 to help the government raise finance for a war. At the same time, in
England merchant started to ask goldsmiths to hold gold and silver in their safes in return for a
fee. Receipts given to the Merchant were sometimes used to buy or sell, with the metal itself
staying under lock and key. The goldsmith realized that they could lend out some of the gold and
silver that they had and charge interest, as not all of the merchants would ask for the gold and
silver back at the same time. Eventually, instead of charging the merchants, the goldsmiths paid
them to deposit their gold and silver.The bank of England was formed in 1694 to borrow money
from the public for the government to finance the war of Augsburg against France. By 1709,
goldsmith were using bank of England notes of their own receipts.New technology transformed
the banking industry in the 1900s round the world, banks merged into larger and fewer groups
and expanded into other country.
3

INTRODUCTION ABOUT THE BANKING

SECTOR

The Indian economy is emerging as one of the strongest economy of the world with the GDP
growth of more than 8% every year. This has given a great support for the development of
banking industry in the country .Due to recession it has come down to 5.7%. But market now
stabilizing.Due to globalization, competition among the banks has drastically been increased .As
India has a substantial upper and middle class income hence the banks have immense
opportunities to increase their market shares. The consumer being on the receiving end is in the
comfortable position but the banks trying to increase their market share have to continuously add
value for consumers in order to increase market share and sustain their growth.

BANKING SECTOR
The banking sector is the most dominant sector of the financial system in India. Significant
progress has been made with respect to the banking sector in the post liberalization period. The
financial health of the commercial banks has improved manifolds with respect to capital
adequacy, profitability, and asset quality and risk management. Further, deregulation has opened
new opportunities for banks to increase revenue by diversifying into investment banking,
insurance, credit cards, depository services, mortgage, securitization, etc. Liberalization has
created a more competitive environment in the banking sector

A. ORIGIN AND DEVELOPMENT OF THE INDUSTRY

The origin of banking in India is traceable in ancient time through the modern banking hardly 200
years old. The main function of bank is to accept deposits and grant loans. There is evidence of
these functions being performed by a section of the community in the Vedic periods. There are
many references of debt in the Vedic literature. During the Ramayana and Mahabharata areas
banking, which was a side business during the Vedic period, become a full-time business activity
for the people. During the smriti period, which followed the Vedic period and the Epic age,
bankers performed the function of the modern banks. The members of the Vaish community
4

carried on the banking business and Manu speaks of earning through interest as the business of
Vaishays. He accepted deposits from the public, granted loans against pledges and personal
security, granted simple open loans, acted as bailee for his customers, subscribed to public loans
by granting loans to kings, acted as treasurer and banker to the state and managed the currency of
the country. Indigenous bankers used to maintain a regular system of accounts and borrowers used
to sign the loan deeds.

B .BANKING STRUCTURE IN INDIA:

In todays dynamic world banks are inevitable for the development of a country. Banks play a
pivotal role in enhancing each and every sector. They have helped bring a draw of development
on the worlds horizon and developing country like India is no exception.
Banks fulfils the role of a financial intermediary. This means that it acts as a vehicle for moving
finance from those who have surplus money to (however temporarily) those who have deficit. In
everyday branch terms the banks channel funds from depositors whose accounts are in credit to
borrowers who are in debit.Without the intermediary of the banks both their depositors and their
borrowers would have to contact each other directly. This can and does happen of course. This is
what has lead to the very foundation of financial institution like banks. Before few decades there
existed some influential people who used to land money. But a substantially high rate of interest
was charged which made borrowing of money out of the reach of the majority of the people so
there arose a need for a financial intermediate. The Bank have developed their roles to such
an extent that a direct contact between the depositors and borrowers in now known as
disintermediation.
Banking industry has always revolved around the traditional function of taking deposits, money
transfer and making advances. Those three are closely related to each other, the objective being to
lend money, which is the profitable activity of the three. Taking deposits generates funds for
lending and money transfer services are necessary for the attention of deposits. The Bank have
introduced progressively more sophisticated versions of these services and have diversified
introduction in numerable areas of activity not directly relating to this traditional trinity.

INDIAN BANKING SYSTEM

RESERVE
BANK OF
INDIA

NONSCHEDULE
BANKS

SCHEDULE
BANKS

STATE CO-OP
BANKS

COMMERCIAL
BANKS

INDIAN

CENTRAL COOP BANKS &

PRIMARY CR .
SOCITIES

COMMERCIAL
BANKS

FOREIGN

PUBLIC
SECTOR

PRIVATE SEC
TOR

SBI AND ITS

SUBSIDIARIES

HDFC
ICICI

OTHER
NATIONALISED
BANKS

Retail banking
According to investopedia.com, retail banking is typical mass-market banking where individual
customers use local branches of larger commercial banks. Services offered include: savings and
checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth.

Types of retail banks

Private bank
Private Banks is a bank that is not incorporated. Either an individual or a general partner(s) with
limited partner(s) owns a non-incorporated bank. In any such case, the creditors can look to both
the "entirety of [the bank's] assets" as well as the entirety of the sole-proprietor's/general-partners'
assets. These banks have a long tradition in Switzerland, dating back to at least the revocation of
the Edict of Nantes (1685).
Commercial banking
A commercial bank is a type of financial intermediary and a type of bank. Commercial bank has
two possible meanings:
Commercial bank is the term used for a normal bank to distinguish it from an investment bank.
This is what people normally call a "bank". The term "commercial" was used to distinguish it
from an investment bank. Since the two types of banks no longer have to be separate companies,
some have used the term "commercial bank" to refer to banks which focus mainly on companies.
In some English-speaking countries outside North America, the term "trading bank" was and is
used to denote a commercial bank. It raises funds by collecting deposits from businesses and
consumers via checkable deposits, savings deposits, and time (or term) deposits. It makes loans to
businesses and consumers. It also buys corporate bonds and government bonds. Its primary
liabilities are deposits and primary assets are loans and bonds. Detailed information on banks
sectoral exposure of credit reveals that over two-thirds of the credits flow has been on account of
retail, housing and other priority sector loans. Banks credit flow exposure to large Enterprises
continues to remain buoyant with recent indications that credit to agriculture and Micro credit has
8

also picked up. The Investment Banking and Markets division brings together the advisory and
financing, equity securities, asset management, treasury and capital markets, and private equity
activities of the Group to complete the CIBM structure and provide a complete range of financial
products to our clients. Increasingly, ECA financing is being considered by customers and we
work closely with our project export finance teams, both onshore and offshore, to provide
structured solutions.

GROWTH AND PRESENT STATUS OF THE INDUSTRY

Commercial banking can also refer to a bank or a division of a bank that mostly deals with
deposits and loans from corporations or large businesses, as opposed to normal individual
members of the public (retail banking). as in the Indian banking.. The most prominent on our
minds in the context of banking these days, perhaps, are the implications arising out of the Basel
II accord. Banks, as we all know, are subjected to more intense regulation as compared to the nonfinancial firms. This is probably because the banks possess certain 'special' characteristics: Banks
are much more leveraged than the other firms due to their capacity to garner public deposits. The
asset - liability structure of the banks is also different from not only the non-financial firms but
also the financial firms. To illustrate, the risk in an insurance company arises mainly from the
liability side of the balance sheet in the form of insurance claims whereas for the bank the risk
mainly comes from the diminution of asset values (for example, illiquid loans that are not fully
recoverable). The deposits which constitute a major part of the liability of banks are repayable on
demand, unsecured and their principal amount does not change in value whereas the loans of a
bank are illiquid and there can be erosion in the value of loans or of other assets. The liquidity
transformation by an insurance company is in the reverse direction as compared to a bank. The
balance-sheet structure of an insurance company is the least likely to give rise to systemic risk,
whereas banks due to their typical asset liability mismatches i.e. long term assets funded by short
term liabilities, may be prone to run and pose a very high degree of potential systemic risk. The
resolution costs of systemic bank insolvencies and significant problems can be substantial.
weighted differently.

Basel I proposals forced the banks to look at credit risk and regulatory capital more closely than
they had done earlier. As banks found ways to arbitrage regulatory capital, some of the provisions
of Basel I became less relevant. Simultaneously, banks in the G-10 countries developed newer
approaches to manage credit risk by building portfolio models for pricing, provisioning and
allocating economic capital for the credit portfolios. These developments made the weaknesses in
the Basel I framework more apparent and this set the stage for the creation of 'International
Convergence of Capital Measurement and Capital Standards: A Revised Framework', popularly
known as Basel II.
The Basel Committee on Banking Supervision has observed that the fundamental objective in
revising the 1988 Accord has been, and I quote, 'to develop a framework that would further
strengthen the soundness and stability of the international banking system while maintaining
sufficient consistency that capital adequacy regulation will not be a significant source of
competitive inequality among internationally active banks. The (Basel) Committee believes that
the revised Framework will promote the adoption of stronger risk management practices by the
banking industry, and views this as one of its major benefits' Unquote

FUTURE OF THE INDUSTRY

Reflecting on future prospects in banking, immediate focus has to be on the cleaning up of the
remnants of undercapitalized banks, while concentrating on improvements in the rural cooperative credit system. It is also necessary to ensure improvements in their governance and
financial management. In the banking system as a whole, a healthy credit culture encompassing
appropriate pricing, quality of service, financial inclusion and contract-enforcement would be
vital.
The Reserve Bank of India has, in the service of our country, a proven track record and
professionalism, which have lent it considerable credibility - both domestically and globally. This
credibility enables the RBI to confidently carry the reforms forward to credibly maintain price and
financial stability, while enabling self-accelerating equitable growth at elevated levels. The Indian
10

financial sector is ready for consolidation, said 95 per cent of the respondents. Given the
increased competition, and the implementation of Basel II norms in the near future, the banking
industry of the country would be better off with six to seven banks as big as State Bank of India,
said the survey. However, voluntary mergers are better than forced ones. A majority of the public
sector banks also demanded more autonomy to fix salary levels proportionate to performance. In
order to improve employee productivity it is essential to offer competitive compensation packages
at all levels, the survey said. About 92 per cent of the public sector banks respondents voiced that
they do not have sufficient autonomy to offer attractive incentive packages to employees to ensure
commitment levels.Some banks also said that in one-year's time, banks should be permitted to
issue preference shares. According to the survey, some of the strengths of the banking industry are
regulatory systems, economic growth, technological advancement, risk assessment systems and
credit quality. Areas that need improvement include diversification of markets beyond big cities,
human resources systems, size of banks, high transaction costs, infrastructure and labour
inflexibilities. As per the survey some strategies that can help India achieve a world class banking
system are consolidation, strict corporate governance norms, regional expansion within the
country and outside, higher FDI limits and Free Trade Agreements with countries where India has
comparative advantage in banking sector.
"Availability and reach of quality products is confined to just big cities. Thus it is essential now to
expand the gamut of banking services both within India as well as outside," the survey said.
However, banks in India are yet to effectively leverage technology. ICICI Bank has been
acknowledged to be among the first to explore new mediums like Internet.
India has among the lowest penetration of retail loans in Asia. Though the sector has been
growing at around 15 per cent, there is still a huge opportunity to tap into. Middle and -highincome homes in India has increased from 1.16 crore (11.6 million) in 1995 to 2.57 crore (25.7
million) in 2002. Interest rates on retail loans have been dropping rapidly too. For instance
residential mortgages slumped by 7 per cent over the last four years"The entry of a number of
banks in India in the last few years has helped provide increased coverage and a number of new
products in the market," says Kamath.

11

Sector

Share of GDP %

Growth of Q1 FY

Growth in Q2 FY

Services

56.1

2003
7.4

2003
9.8

Industry

21.8

5.8

6.3

Agricultur

22.1

1.7

7.4

5.7

8.4

e
GDP

banking sector today is estimated to be at Rs 17 trillion and total deposits are estimated at Rs 13
trillion.The Indian banking market is growing at an astonishing rate, with Assets expected to
reach US$1 trillion by 2010. An expanding Economy,

middle class,

and technological

innovations are all Contributing to this growth.The countrys middle class accounts for over 320
million people. In correlation with the growth of the economy, rising income levels,Increased
standard of living, and affordability of banking products Are promising factors for continued
expansion?

12

The Indian banking Industry is in the middle of an IT revolution, Focusing on the expansion
of retail and rural

banking. Players are becoming increasingly customer - centric in

Approach, which has resulted in innovative methods of offering new Banking

services.

Banks are now realizing

focus their Attention on mergers

and/or comply with Basel II

their

products and

the Importance of being a big player and are beginning to

and acquisitions to take advantage of Economies of scale

regulation. Indian banking industry assets are expected to reach

US$1 trillion by 2010 and are poised to receive a greater infusion of foreign capital, Says Parthia
Rajan, analyst in Celent's banking group and author of The report. The banking industry should
focus on having a small Number of large players that can compete globally rather than havingA
large number of fragmented players."

INDIAN BANKING INDUSTRY ANALYSIS:

The banking scenario in India has been changing at fast pace from being just the borrowers and
lenders traditionally, the focus has shifted to more differentiated and customized product/service
provider from regulation to liberalization in the year 1991, from planned economy to
market.Economy, from licensing to integration with Global Economics, the changes have been
swift. All most all the sector operating in the economy was affected and banking sector is no
exception to this. Thus the whole of the banking system in the country has undergone a radical
change. Let us see how banking has evolved in the past 57 years of independence.
After independence in 1947 and proclamation in 1950 the country set about drawing its road map
for the future public ownership of banks was seen inevitable and SBI was created in 1955 to
spearhead the expansion of banking into rural India and speed up the process of
magnetization.Political compulsions brought about nationalization of bank in 1969 and lobbying
by bank employees and their unions added to the list of nationalized banks a few years
later.Slowly the unions grew in strength, while bank management stagnated. The casualty was to
the customer service declined, complaints increased and bank management was unable to item the
rot.
13

In the meantime, technology was becoming a global phenomenon lacking a vision of the future
and the banks erred badly in opposing the technology up gradation of banks. They mistakenly
believed the technology would lead to retrenchment and eventually the marginalization of unions.
The problem faced by the banking industry soon surfaced in their balance sheets. But the
prevailing accounting practices unable banks to dodge the issue.
The rules of the game under which banks operated changed in 1993. Norms or income
Recognition, Assets classification and loan loss provisioning were put in place and capital
adequacy ratio become mandatory. The cumulative impact of all these changes has been on the
concept of state ownership in banks. It is increasingly becoming clear that the state ownership in
bank is no longer sustainable.

The amendment of banking regulation act in 1993 saw the entry of new private sector banks and
foreign banks.
MAJOR PLAYER IN PRIVATE BANKING IN INDIA:
1. HDFC BANK LTD
2. ICICI BANK LTD
3. STATE BANK OF INDIA LTD
4. PUNJAB NATOINAL BANK LTD
5. BANK OF BARODA LTD
6. FEDERAL BANK LTD
7. AXIS BANK LTD
8. ING VYSYA BANK LTD
9. IDBI BANK LTD

14

10. INDUSIND BANK LTD

11. YES BANK LTD

STUDY OF HDFC BANK

FOR THE
COMPLITION

15

OF PROJECT WORK
ON MANAGEMENT
OF PRIVATE BANKS

REASON FOR SLECTING HDFC BANK FOR THIS PROJECT REPORT:

HDFC bank is on the top of list in private banks and it is possible of jst because of its effective
and innovative management.
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. Business philosophy of HDFC
BANK is based on four core values - Customer Focus, Operational Excellence, Product
Leadership and People. They believe that the ultimate identity and success of their bank will
reside in the exceptional quality of our people and their extraordinary efforts. For this reason, we
are committed to hiring, developing, motivating and retaining the best people in the industry.
The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in
public policy, administration, industry and commercial banking. Senior executives representing
16

HDFC are also on the Board. 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.

WE UNDERSTAND YOUR WORLD

INTRODUCTION
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
17

office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in
January 1995.
HDFC is Indias premier housing finance company and enjoys an impeccable track record in India
as well as in international markets. Since its inception in 1977, the Corporation has maintained a
Consistent and healthy growth in its operations to remain the market leader in mortgages. Its
outstanding loan portfolio covers well over a million dwelling units. HDFC has developed
significant expertise in retail mortgage loans to different market segments and also has a large
corporate client base for its housing related credit facilities. With its experience in the financial
markets, a strong market reputation, large shareholder base and unique consumer franchise,
HDFC was ideally positioned to promote a bank in the Indian environment.
HDFC Bank began operations in 1995 with a simple mission to be a World Class Indian Bank.
It realized that only a single minded focus on product quality and service excellence would help
us get there. Today, the Bank is proud to say that it is well on its way towards that goal.

COMPANY PROFILE
HDFC bank ltd 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 and property 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
18

chain, Public sector undertaking, central and state government departments, 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. This segments services include trade services, cash management, and 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. The
Treasury Services segment operates primarily in areas, such as foreign exchange, money market,
interest rate trading, and Equities. As of March 31, 2009 HDFC bank had a network of 1,142
branches And 3,295 automated teller machines in 528 cities in India. The company was founded
in 1994 and is based in Mumbai, India.
The Banks retail advances grew by 27.3% to ` 136,388 crore during the nancial year ended
March 31, 2013 driven primarily by a growth in business banking, auto loans, personal loans
and credit cards.
During year 2012-13HDFC Bank expanded its distribution network from 2,544 branches in 1,399
cities / towns as on March 31, 2012 to 3,062 branches in 1,845 cities / towns as on March 31,
2013. Its ATMs increased from 8,913 to 10,743 during the same period. The increase of 518
branches during the year includes193 micro branches which are primarily two or three member
branches to expand and deepen the penetration in rural markets including in unbanked areas. The
Banks focus on semi-urban and under-banked markets continued, with over 88% of the Banks
new branches in semi-urban and rural areas. The Banks customer base currently stands at 28.7
million customers.
In order to provide its customers greater choices, exibility and convenience, HDFC Bank
continued to make signicant headway in its multichannel servicing strategy, offering its
customers the use of ATMs, internet, phone and Mobile Banking in addition to its expanded
branch network to serve their banking needs. The increase in the Banks debit card base this year
coupled with a growth in its ATM network translated to an increase in ATM transactions by 30%.
HDFC Bank now offers Phone Banking across all Retail Branch locations. Additionally, Phone
Banking services are available for Non Resident Indian (NRI) customers of your Bank across the
globe.
19

The Bank continued its focus on internal customers for its credit cards portfolio with 75% of new
cards issued to internal customers. During the year, the Bank launched two variants of co -brand
card viz; Jet Privilege-HDFC Bank Credit Card, an exclusive range of Credit Cards offering
unique benets and rewards in the form of air miles in partnership with Jet Airways and Times
Card, an exclusive, co-branded credit card that provides customers the widest range of discounts
and deals on dining, movies and shopping in partnership with the Times of India Group. As part
of its strategy to drive usage of its credit cards the Bank also has a signicant presence in the
merchant acquiring business with the total number of point-of-sale (POS) terminals installed at
over 240,000.

20

RUPEE EARNED AND RUPEE SPENT CHART OF HDFC BANK

21

KEY HIGHLIGHTS OF HDFC BANK

Net profit: RS 6,726 crore. An increase of 30.2% compared to the previous year.
Balance Sheet size: RS 400,332 crore. An increase of 18.5% compared to the previous

year.
Total Deposits:RS 296,247 crore. An increase of 20.1 % compared to the previous year.
Total Advances: RS 239,721 crore. An increase of 22.7% compared to the previous year.
Capital Adequacy Ratio: 16.8%.
Tier I Capital Ratio: 11.1%.
Gross Non Performing Assets: 0.97% of Gross Advance.
Network:
Branches: 3,062
ATMs: 10,743
Cities/Towns: 1,845
22

MANAGEMENT PROFILE OF THE BANK

Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July
2010. Mr. Vasudev has been a Director of the Bank since October 2006. A retired IAS officer, Mr.
Vasudev has had an illustrious career in the civil services and has held several key positions in
India and overseas, including Finance Secretary, Government of India, Executive Director, World
Bank and Government nominee on the Boards of many companies in the financial sector.
The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and
before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.
The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in
public policy, administration, industry and commercial banking. Senior executives representing
HDFC are also on the Board.
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
SENIOR MANAGEMENT TEAM
industry,
the
bank
believes that its people
are

Mr. A Parthasarthy
Mr. Abhay Aima
Mr. Anil Jaggia
BOARD OF DIRECTORS
Mr. Anil Nath
Mr. Bhavesh Zaveri
Mr C. M. Vasudev, (Chairman)
Mr. Jimmy Tata
Mrs Renu Karnad
Mr. Kaizad Bharucha
Dr. Pandit Palande
Mr. Navin Puri
Mr Partho Datta
Mr. Rahul Bhagat
Mr Bobby Paril
Mr. Rajender Sehgal
Mr A. N. Roy
Mr. Sashi Jagdishan
Mr Keki Mistry
on
Mr.14.03.2013)
V Chakrapani
Mr Vijay Mercliant (appointed

significant

Mr Aditya Puri, (Managing Director)

Mr Harish Engineer, (Executive Director)
Mr Paresh Sukthankar, (Executive Director)

competitive strength.

Mission,
Business
Strategy and
Approach to
Business
HDFC Banks mission is

to be a World Class Indian Bank, benchmarking itself against international standards and best
23

practices in terms of product offerings, technology, service levels, risk management, audit and
compliance. The objective is to continue building sound customer franchises across distinct
businesses so as to be a preferred provider of banking services for its target retail and wholesale
customer segments, and to achieve a healthy growth in protability, consistent with the Banks risk
appetite. From inception, your Banks business philosophy has been based on four core values:
Operational Excellence, Customer Focus, Product Leadership and People. During the year, we have
added Sustainability as the fth core value. Based on these cornerstones, it is our aim to build an
Indian Bank that meets the nancial needs, and provides services of a high quality to its customers
across the country.
HDFC Bank is committed to do this while ensuring the highest levels of ethical standards,
professional integrity, corporate governance and regulatory compliance. The Bank understands and
respects its duciary role and responsibility to all stakeholders and strives to meet their
expectations. The cardinal principles of independence, accountability, responsibility, transparency,
fair and timely disclosures, etc. serve as the basis of our approach to corporate governance.
HDFC Bank believes that diversity and independence of the Board, transparent disclosures, and
shareholder communication and effective regulatory compliance are necessary for creating and
sustaining shareholder value. HDFC Bank has infused these principles into all its activities. HDFC
Bank also has a well-documented Code of Ethics / Conduct Policy which denes the high business
responsibility and ethical Standards to be adhered to while conducting the business of the Bank and
mandates compliance with legal and regulatory requirements. Every employee, including senior
management has to afrm annually that they will abide by the conduct rules. Consistent with the
mission and approach, your Banks business strategy emphasises the following:

Develop innovative products and services that attract its target customers and address in

efficiencies in the Indian nancial sector;

Increase its market share in Indias expanding banking and nancial services industry by
following a disciplined growth strategy focusing on balancing quality and volume growth

while delivering high quality customer service;

Leverage its technology platform and open scalable systems to deliver more products to

more customers and to control operating costs;

Maintain high risk standards for asset quality through disciplined credit risk management;
24

Continue to develop products and services that reduce its cost of funds;
Focus on healthy earnings growth and low volatility;
And, Integrate our activities in community development, social responsibility and
environmental responsibility with our business practices and operations

BUSINESS OF HDFC BANK

HDFC Bank caters to a wide range of banking services covering commercial and investment
banking on the wholesale side and transactional / branch banking on the retail side. The bank has
three key business segments:
Wholesale Banking
HDFC Bank's target market is primarily large, blue-chip manufacturing companies in the Indian
corporate sector and to a lesser extent, small & mid-sized corporates and agri-based businesses.
For these customers, the Bank provides a wide range of commercial and transactional banking
services, including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions, which combine cash
management services with vendor and distributor finance for facilitating superior supply chain
management for its corporate customers. Based on its superior product delivery / service levels
and strong customer orientation, the Bank has made significant inroads into the banking consortia
of a number of leading Indian corporate including multinationals, companies from the domestic
business houses and prime public sector companies. It is recognised as a leading provider of cash
management and transactional banking solutions to corporate customers, mutual funds, stock
exchange members and banks.

Retail Banking
25

The objective of the Retail Bank is to provide its target market customers a full range of financial
products and banking services, giving the customer a one-stop window for all his/her banking
requirements. The products are backed by world-class service and delivered to customers through
the growing branch network, as well as through alternative delivery channels like ATMs, Phone
Banking, Net Banking and Mobile Banking.
HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the
Investment Advisory Services programs have been designed keeping in mind needs of customers
who seek distinct financial solutions, information and advice on various investment avenues. The
Bank also has a wide array of retail loan products including Auto Loans, Loans against
marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of
Depository Participant (DP) services for retail customers, providing customers the facility to hold
their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit Card in association with
VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank launched
its credit card business in late 2001. By March 2012, the bank had a total card base (debit and
credit cards) of over 19.71 million. The Bank is also one of the leading players in the "merchant
acquiring" business with over 180,000 Point-of-sale (POS) terminals for debit / credit cards
acceptance at merchant establishments. The Bank is well positioned as a leader in various net
based B2C opportunities including a wide range of internet banking services for Fixed Deposits,
Loans, Bill Payments, etc.

Treasury
Within this business, the bank has three main product areas - Foreign Exchange and Derivatives,
Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the
financial markets in India, corporates need more sophisticated risk management information,
advice and product structures. These and fine pricing on various treasury products are provided
through the banks Treasury team. To comply with statutory reserve requirements, the bank is
required to hold 25% of its deposits in government securities. The Treasury business is
responsible for managing the returns and market risk on this investment portfolio.

26

 International Operations
HDFC Bank currently has two overseas branches: a wholesale banking branch in Bahrain and a
branch in Hong Kong. HDFC Bank also has three representative offices in Dubai, Abu Dhabi and
Kenya. The Bank also has RBI approval to open a branch at DIFC Dubai and is currently in the
process of obtaining local regulators approval to start the operations in the next nancial year.
The overseas branches offer multiple mbanking services including treasury products, trade nance
and loans to customers. The representative ofces are engaged in offering wealth management
products, remittance facilities and marketing deposits to the non-resident Indian (NRI)
community. As of March 31, 2013 the combined balance sheet size of both the overseas branches
was over USD 2.62 billion. During the year, the Bank raised USD 500 million through its maiden
issuance of senior bonds in the international markets under the MTN Program.

27

TECHNOLOGY USED BY HDFC BANK

HDFC Bank continues to make substantial investments in its technology platform and systems
and spread its electronically linked branch network. Your Banks direct banking platforms
continue to be stable and robust, supporting ever increasing transaction volumes as customers
adopt newer self-service technologies.
HDFC Bank successfully and seamlessly upgraded its switch platform which is at the heart of the
Banks ATM, POS and IVR networks. Many additional services have now been made available on
your Banks NetBanking platform, which will enhance usage. The NetBanking services can now
be accessed on a wide variety of commonly available handheld phones and devices. With the
implementation of micro-ATMs, your Bank has leveraged technology to enable business in the
under-banked and unbanked areas, while addressing Financial Inclusion mandates.
HDFC Bank had initiated an elaborate program to refresh its Retail Core Banking System to the
latest technology platform. During the year, 41% of the Retail Accounts have been migrated to
this new platform and the remaining accounts will be migrated in the coming months. The new
Retail Core Banking System, deployed on a more robust and highly available architecture, has
also enabled the Bank to provide more features to its customers and respond faster to business /
market needs. Live switch-over and switch-back drills of major IT applications have successfully
been completed, as part of your Banks m Business Continuity and Disaster Recovery
management strategy, thereby enhancing your Banks readiness in responding to emergency
situations.
In April 2011, RBI issued Guidelines on Information Security, Electronic Banking, Technology
Risk Management and Cyber Frauds and provided recommendations for implementation.
HDFC Bank embarked on a program to implement these guidelines and considerable progress
has been made. A third-party consultant, engaged to verify compliance, has independently
conrmed that your Bank has complied with a signicant portion of the guidelines. HDFC Bank
continues to focus on the remediation and enhancements required in this regard.

28

VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards, professional
integrity and regulatory compliance. HDFC Banks business philosophy is based on four core
values such as:1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
The objective of the HDFC Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-step window for all his/her
requirements. The HDFC Bank plus and the investment advisory services programs have been
designed keeping in mind needs of customers who seeks distinct financial solutions, information
and advice on various investment avenues.

EVALUATION OF MERGER OF HDFC BANK AND CENTURION BANK

OF PUNJAB
The merger between HDFC Bank and Centurion Bank of Punjab (CBOP) was billed as one of the
biggest mergers in the banking history of India in 2008. The talk at the time of merger revolved
around leveraging the strengths of HDFC bank and CBOP in terms of branches, serving different
segments of the market and the general synergy brought about by mergers. It is interesting to note
that citigroup was the single largest shareholder of HDFC, the parent company of HDFC bank.
Also, all the top executives of HDFC and CBOP like Aditya Puri, Rana Talwar and Shailendra
Bandari were ex citi bankers. It is about four years since the merger was completed and hence the

29

synergy effect that was envisaged at the time of merger would have played out its part. It is in this
context that this exercise of evaluating the merger was taken up.

MANAGMENT FUNCTION PERFORMED BY

HDFC BANK

30

SERVICE QUALITY INITIATIVES

HDFC Bank was one of the few in the country to establish a dedicated team to carry out
improvement in service quality. This goal by implementing Lean and Six Sigma methodologies
with focus on right origination, cost effective and error free operations and effective complaint
resolution.
HDFC Bank continued its drive towards improvements in service quality across all customer
touch points namely branches, ATMs, Phone Banking, and NetBanking and email channels. With
a view to ensure comprehensive improvement, HDFC Bank extended its service quality
initiatives to the back office support are workplace organization, staff behaviour, lobby
management, complaints handling processes, improvement in turn-around times, compliance with
the Banks internal processes as well as regulatory processes pertaining to customer service.
HDFC Bank regularly captures voice of customers and voice of employees and uses those
towards simplication of processes to delight customers. Your Bank has also augmented the
training and skill development mechanism to empower and equip the employees to deliver
improved quality of customer service.
HDFC Bank has taken various steps to improve the effectiveness of its grievance redressal
mechanism across its delivery channels. The effectiveness of grievance handling in particular and
overall customer service initiatives are periodically reviewed at different levels including by the
Board of Directors of the Bank. All these initiatives have helped in consistent reduction in the
total number of customer complaints as well as reduction in escalation of cases to the banking
ombudsman. As a result of the continued focus on customer service, HDFC Bank has not only
received written appreciation from some of the Banking Ombudsmen appointed by the Reserve
Bank Excellence Award for Best Customer Service Result at The Six Sigma project on
31

Customer Service and Winner in Best Customer Relationship Initiative in Indian Banks
Association Annual Awards to name a few.

RISK MANAGEMENT AND PORTFOLIO QUALITY

Taking on various types of risk is integral to the banking business. Of the various types of risks
HDFC Bank is exposed to, the most important are credit risk, market risk and operational risk.
The identication, measurement, monitoring and management of risks remain a key focus area for
the Bank. Sound risk management and balancing risk-reward trade-offs are critical to the Banks
success. Business and revenue growth are therefore to be weighed in the context of the risks
implicit in the Banks business strategy. The Board of Directors of your Bank endorses the risk
strategy and approves the risk policies. The Risk Policy & Monitoring Committee of the Board
supervises implementation of the risk strategy. It guides the development of policies, procedures
and systems for managing risk. The Committee periodically reviews the portfolio composition
and the status of impaired credits as well as approves and reviews the limits for treasury
operations.
HDFC Bank has a comprehensive centralized risk management function, independent from the
operations and business units of the Bank. For credit risk, distinct policies, processes and systems
are in place for the retail and wholesale businesses. In the retail loan businesses, the credit cycle is
managed through appropriate front-end credit, operational and collection processes. For each
product, programs dening customer segments, underwriting standards, security structure etc., are
specied to ensure consistency of credit buying patterns. Given the granularity of individual
exposures, retail credit risk is monitored largely on a portfolio basis, across various products and
customer segments. The retail credit underwriting unit is ISO 9001: 2008 certied for 28 sites.
For wholesale credit exposures, management of credit risk is done through target market
denition, appropriate credit approval processes, ongoing post-disbursement monitoring and
remedial management procedures. Overall portfolio diversication and periodic as well as
proactive reviews facilitate risk mitigation and management.

32

In accordance with RBIs guidelines on Basel II, the Bank is currently on the Standardized
Approach for Credit Risk, the Basic Indicator Approach for Operational Risk and the
Standardized Approach for Market Risk. Parallely, the Bank is progressing with its initiatives for
migrating to the advanced approaches for these risks under Basel II. The framework of the
advanced approaches is in harmony with the Banks objective of adopting best practices in risk
management.

INTERNAL CONTROLS, AUDIT AND COMPLIANCE

HDFC Bank has always adhered to the highest standards of compliance and governance and has
put in place controls and an appropriate structure to ensure this. Segregation of frontline sales
activities and back-office operations, and post transaction monitoring processes at the back-end
ensure independent checks and balances, and adherence to the laid down policies and procedures
of the Bank and to all applicable regulatory guidelines. Further, the monitoring of various
transactions by independent surveillance and control units serves as a check to mitigate the risk of
non-adherence to regulations, policies or procedures. This system of checks and controls has been
robust and held the bank in good stead over the years. Nonetheless, in the light of media reports in
March 2013, the Bank has taken steps to further strengthen its internal controls and systems, in
particular in the area of KYC / AML. These issues are also the subject of review by the regulator
and further measures would be adopted by the Bank as required by them. In addition, HDFC
Bank has Internal Audit and Compliance functions which are responsible for independently
evaluating the adequacy of all internal controls and ensuring operating and business units adhere
to internal processes and procedures as well as to regulatory and legal requirements. The audit
function also proactively recommends improvements in operational processes and service quality.
To ensure independence, the audit department has a reporting line to the Chairman of the Board of
Directors and the Audit and Compliance Committee of the Board and only a dotted line to the
Managing Director. To mitigate operational risks, the Bank has put in place extensive internal
controls including restricted access to the Banks computer systems, appropriate segregation of
front and back office operations and strong audit trails. The Audit and Compliance Committee of

33

the Board also reviews the performance of the audit and compliance functions and reviews the
effectiveness of controls and compliance with regulatory guidelines.

CORPORATE SOCIAL RESPONSIBILITY

For HDFC Bank, Corporate Social Responsibility or Sustainability represents creating a
business that creates economic value while contributing to a healthy ecosystem and strong
communities. It is HDFC Banks endeavour to integrate sustainability into its strategy and
operations. Since inception, HDFC Banks business philosophy has been based on four core
values i.e. Customer Focus, Operational Excellence, Product Leadership and People. These values
have made your Bank one of India's premier nancial institutions. As your Bank has grown and
evolved, so has its business philosophy. Sustainable Development has been a part of its corporate
strategy for a while, and this year your Bank has recognized and formally incorporated
sustainability as its aft core value, integrating the concept across its business practices.
HDFC Banks sustainability vision states that, We recognise that a long-term sustainable
business model must take social and environmental factors into consideration during every
decision

making process, viewing these aspects as opportunities rather than risks. We are

committed to consistently enhancing our performance on these fronts. Our endeavour is to

integrate community development, social responsibility and environmental sustainability into our
CSR strategy and formalize the integration of sustainability into our business practices.
HDFC Bank has embarked on the journey towards becoming a truly sustainable organisation by
incorporating environmental and social responsibility into its operations through various
initiatives.
34

Environmental Sustainability
HDFC Bank is making efforts to ensure that its business decisions and actions protect, preserve
and minimise its impact on the environment. HDFC Bank has leveraged state-of-the art
technology to ensure that its customers have multiple banking channels available to them, such as
ATMs, Phone Banking, Net Banking and Mobile Banking. These technology-enabled solutions
have played a large role in increasing paperless banking and reducing the need to commute to the
branches, thereby reducing your Banks carbon footprint. HDFC Bank has also launched a pilot
program for solar-powered ATMs and hopes to increase the number of such machines over time.
HDFC Bank has made changes to the way it works, ensuring that many of its major locations
have energy-efficient lighting systems in place. Reusable cups and plates are the norm and motion
sensors in some locations are able to switch off lights when a room is empty. Employee awareness
campaigns are conducted to modify employee behaviour and promote sustainable practices.
Employees are urged to switch off lights and computers when not in use. These are just some of
the examples of the many energy saving measures undertaken bythe various stakeholders.
HDFC Bank has put in place various initiatives to create a paperless environment. Availability of
the full bouquet of alternative transaction channels such as ATMs, NetBanking, Phone Banking
and Mobile Banking allowed customers to conduct nearly a billion transactions through these
channels last year. New functionality was added to enhance these channels. Now customers can
add nominees for their accounts download 5 year account statements in a format of their choice,
buy general insurance and more through NetBanking. Mobile Banking were made available to a
wider cross section of customers through introduction of Apps and SMS banking in Hindi.
Remote channels substantially reduce usage of paper by eliminating the need to use application or
account opening forms and other administrative paperwork. E-statements have also helped in the
reduction of paper usage and your Bank now has more than 66 lakh retail customers subscribing
for them. Further, email communication is also used for direct marketing campaigns. Paper based
direct communication campaigns are not conducted unless absolutely necessary.

35

Social Responsibility
HDFC Bank has the utmost regard for the values and norms of society and consistently operates
in line with society's expectations. Our policies and practices reect the highest level of Corporate
Governance and Ethical Practices and ensure a culture that promotes equal opportunities for all.
Social responsibility stems from the notion that your business should help make the world a better
place. This forms the basis of all your Banks social initiatives, in line with its guiding principle
which is: Changing Lives by empowering individuals through Finance, Education and Training.
An essential element of HDFC Banks Corporate Responsibility is its community initiatives
which aim at empowering individuals at the bottom of the pyramid not just nancially but also
through developmental initiatives such as education and livelihood support.
HDFC Bank undertakes several community projects through the year to create a positive impact
on society. These projects take shape in many ways from corporate philanthropy, to employee
driven projects. The Bank has partnered with over 15 NGOs to implement projects impacting the
twin causes of education and livelihood training reaching out to over 67,000 children and 1,600
youth.

HUMAN RESOURCE MANAGMENT

Constant focus on the Human Resources dimension is an

integral part of the Banks values.

Attracting, retaining and developing our workforce to meet the current and future needs of our
business is a key focus area. The organisation is committed to achieve the above through
comprehensive interventions in training and development, providing career growth opportunities
and creating an entrepreneurial culture.

Employee Development
Performance Management is one of the most critical dimensions pertaining to the management of
human resources and the organisation has a comprehensive Performance Management System
36

(PMS) to assess performance. The PMS facilitates the differentiation between the various
categories of performance. Higher rewards for higher levels of performance have been a
fundamental philosophy of the bank. Apart from rewards, the PMS also allows for identication
of training and development needs for employees. Employee development and growth is realized
through an array of functional and behavioural programmes that the bank conducts throughout the
year as well as on the job training. The bank lays emphasis in rotating key talent for professional
development and growth and building a leadership pipeline for the future. Development
interventions of the Bank are supplemented by the conducting of Development Centres for high
performing mid-level managers.

Rewards and Recognition

It is the endeavour of the organisation to ensure that employees are competitively positioned vis-vis market with respect to both xed as well as variable pay. In order to align employee efforts
to the creation of shareholder value the bank also grants employee stock options to a certain
segment of the employee population. Apart from the standard compensation the organisation also
has a well institutionalized recognition program called Star Awards to recognize outstanding
achievement of individuals.

Employee Engagement
Fun at work is something your Bank feels should be an integral part of every HDFC bank
employees life. Keeping in mind the aforementioned statement, the organisation believes in
conducting activities that help individuals showcase their talent or pursue their interests other than
work. HDFC Bank conducted comprehensive sports activities like Josh Unlimited, a multi-city,
37

multi sports event, held across eight cities, a pedometer based race event and online musical
classes with an established musical academy. The organisation received a very strong
participation for such activities which is a testimony to their success.

38

VARIOUS SERVICE INITIATIVES

PERFORMED BY HDFC BANKS

Rural Initiatives

The HDFC Bank offers products and services such as savings, current, xed and recurring
deposits, loans, ATM facilities, investment products such as mutual funds and insurance,
electronic funds transfers, drafts and remittances etc. in its branches located in rural and under
banked locations. The Bank also leverages some of these branches as hubs for other inclusion
initiatives such as direct linkages to self-help groups and to promote Joint Liability Group Loans,
POS terminals and information technology enabled kiosks. The Bank covers over 8,000 villages
in the country through various distribution set ups, which include branches, bank staff reaching
out to the villages and business correspondents. Around 40% of the above mentioned villages
have a population of less than 2,000 that have largely been nancially excluded from the formal
banking sector. A number of retail credit products such as two-wheeler loans, car loans, mortgages
etc. that are consumption products in urban centers happen to be means of income generation for
rural consumers. Apart from loans directly linked to agriculture such as pre and post harvest
credit, there are many other credit products that the Bank uses to aid nancial betterment in rural
locations. HDFC 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 Banks loans) is used for
income generating activities. For example, loans for tractors, commercial vehicles, two wheelers
etc. supplement the farmers income by improving productivity and reducing expenses.

39

 Basic Banking Saving Deposit and Micro Deposits

A savings account is the primary requirement for the provision of other banking services; the
account promotes the habit of savings, provides security, and inculcates condence among the
target segment in the banking sector. This product was launched by HDFC Bank with a specic
objective to provide customers a platform that enables them to inculcate the habit of savings.
Given the specic segment that is being targeted, namely customers who do not have any other
Bank account, this product truly addresses the cause of Financial Inclusion. Additionally the Bank
also periodically tracks the behaviour in these accounts to ensure that the accounts opened
maintain a balance and are active. The total number of Basic Banking Saving Deposit accounts
opened as on March 2013 was at 15.80 lakh accounts as against 7.60 lakh accounts as on March
2012.

Sustainable Livelihood Initiative

Over the last two years, HDFC Bank has accelerated its direct linkage program to self-help
groups, where the Bank itself works at the grass root level with women in villages, conducts
nancial literacy programs, forms groups and then funds these groups for income generating
activities. This enables the delivery of viable credit to the rural poor in a sustainable manner and
at the same time also inculcates saving and banking habits. Till date HDFC Bank has covered
approximately 17.38 Lakh households.
HDFC Bank also disburses loans to its rural customers under the Joint Liability Group product.
This product works on the principle of group guarantees and provides clean (not backed by any
collateral) loans to the borrowers based on a guarantee by other borrowers. As of March 31, 2013,
the Bank has lent to more than 85,000 groups with outstanding balance of ` 742 crores

40

 Agriculture and Allied Activities

A large portion of Indias un-banked population relies on agriculture as the main source of
livelihood. We believe provision of credit to farmers through various methods that HDFC Bank
has employed replaces the traditional money lending channel, while simultaneously providing
income generating activities.
HDFC Bank provides various loans to farmers through its suite of specically designed products
such as the Kisan Gold Card, tractor and cattle loans etc. In addition, the Bank offers post-harvest
cash credit, warehouse receipt nancing and bill discounting facilities to mandi (markets for grain
and other agricultural produce) participants and farmers. These facilities enable the mandi
participants to make timely payments to farmers. The Bank carries out this business through
branches that are located in close proximity to mandis. The Bank targets specic sectors to
capture supply chain of certain crops from the production stage to the sales stage. On the basis of
these cashows, your Bank is able to nance specic needs of the farmers. This model has
currently been implemented with dairy and sugarcane farmers. The initiative currently underway
includes the appointment of dairy societies and sugarcane co-operatives as business
correspondents, through whom the Bank opens accounts of individual farmers attached to these
societies. The societies route all payments to the farmers through this account. The use of
appropriate technology is necessary to bring about efficiency in the agri value chain. One such
technology initiative is the Milk to Money Terminal (MFT) used in Dairy supply chain. The
technology captures milk quality and quantity data at a farmer level each time milk is poured by
connecting to the fat tester and weighing machine. It converts this data into an accounting entry
instantaneously and credits the farmer's account. The MFT contains a cash dispenser that
functions as standard ATM, thus the farmer can withdraw the amount from his account
immediately if needed. The transparency in the milk collection process benets both farmers and
corporates as they get data at farmer level accurately and quickly, which enables the corporates
to improve farmer productivity through their direct intervention.

41

 Loans against Gold Jewellery

This offering allows customers a reliable source of credit in times of need. In the absence of this
product, customers might be unable to access credit or alternatively might avail of credit at much
higher rates in the form of unsecured loans from money lenders. Gold loans provide an alternate
source of funds by monetising the household gold. It provides nancial independence to small
traders, small entrepreneurs and house wives. It also substitutes borrowing at usurious rates,
particularly by small borrowers and weaker sections.

Small and Micro Enterprises

HDFC Bank offers complete banking solutions to micro, small and medium scale enterprises
across industry segments including manufacturers, retailers, wholesalers / traders and services.
The entire suite of nancial products including cash credit, overdrafts, term loans, bills
discounting, export packing credit, letter of credit, bank guarantees, cash management services
and other structured products are made available to these customers. One of the means to nancial
inclusion is by supporting small and micro enterprises which in turn provide employment
opportunities to the nancially excluded. Though indirect, we believe this model may in many
instances be more effective than providing subsidies that are often unsustainable, or never reach
the intended beneciary.

42

PRODUCTS
OF
HDFC BANK

43

PRODUCTS OF HDFC BANK

ACCOUNT & DEPOSITS SERVICE
Banking should be effortless. With HDFC Bank, the efforts are rewarding. No matter what a
customer's need and occupational status, we have a range of solutions that are second to none.
Whether you're employed in a company and need a simple Savings account or run your own
business and require a robust banking partner, HDFC Bank not only has the perfect solution for
you, but also can recommend products that can augment your planning for the future.It includes
these services:

Saving accounts.
Current accounts.
Fix deposits.
Demate account.
Safe deposits lockers.

Savings Accounts
These accounts are primarily meant to inculcate a sense of saving for the future, accumulating
funds over a period of time. Whatever persons occupation, bank have confident that person will
find the perfect banking solution. There some saving accounts like: 1. Regular Saving Account:
An easy-to-operate savings account that allows you to issue cheques, draw Demand Drafts and
withdraw cash. Check up on your balances from the comfort of your home or office through Net
Banking, Phone Banking and Mobile Banking. If you need money urgently then you can take
money from the ATM machine. There are 10,743 ATM centres across the country.
2. Saving plus Account

44

Introducing the best banking option for you with HDFC Bank Savings plus Account. Now you
can get access to some of the finest banking facilities with HDFC Bank's Savings plus Account.
All you have to do is maintain an Average Quarterly Balance of Rs. 10,000/-.

3. Saving Max Account

Welcome to a world of convenience. Presenting Savings Max account, loaded with maximum
benefits to make your banking experience a pleasure. By maintaining an average quarterly
balance of just Rs. 25,000/- you get a host of premium services from HDFC Bank absolutely free.
4. Senior Citizen Account
HDFC Bank appreciates your needs and endeavors, which is why, they present an account
especially dedicated to customer, which like a dutiful child will help you fulfill your needs in the
best manner possible.
5. No frills Account
In an effort to make banking simpler and more accessible for customers, bank has introduced the
'No Frills' Savings Account, which offers customer all the basic banking facilities. Customer can
even avail of services like Net Banking, Mobile banking free of cost. In this customer can put
Zero Initial Pay-in and a Zero Balance account.
6. Institutional saving accounts
A specially designed account that offers twin benefits of a savings as well as a current account.
Customers funds continue to earn you interest while he enjoys hassle-free banking & a host of
other features. All this and more in a zero balance account.
7. Salary Accounts
In this account customer can get salary from where he/she doing such job and organization or
company at where the customer of the bank in doing job deposit their salary in to the salary
account a person can get salary.

45

There are various kinds of saving accounts in the HDFC Bank like:

Pay roll account.

Classic salary account.
Regular salary account.
Premium salary account.
Defense salary account.
No frills salary account.
Reimbursement salary account.

8. Kids advantage account

Start saving for your child today and secure his/her future a sentence tells by the HDFC bank.
Open a Savings Account and transfer money every month into customers Kids Advantage
Account and watch the savings grow as customers child grows. The accumulated savings in the
Kids Advantage Account can over the years help in meeting customer child's needs.

Current accounts
HDFC Bank Current Account gives the power of inter-city banking with a single account and
access to more than cities. From special cheques that get treated at par with local ones in any city
where branch, faster collection of outstation cheques (payable at branch locations), free account to
account funds transfer between HDFC Bank accounts to Free inter-city clearing of up to 100
lakhs per month, banks priority services have become the benchmark for banking efficiency.
Now, with an HDFC Bank Current Account, experience the freedom of multi-city banking. Person
can have the power of multi-location access to his account from any of our 761 branches in 327
cities. Not only that, he can do most of his banking transactions from the comfort of his office or
home without stepping out.
There are various kinds of current account in this bank like: - Plus current account HDFC Bank
plus Current Account gives the power of inter-city banking with a single account and access to
more than cities. Plus Current Account requires maintaining an average quarterly balance of Rs.
100,000.

46

Other Current Accounts:

1.
2.
3.
4.
5.
6.

Trade current account

Premium current account
Regular current account
Reimbursement Current Account
RFC Domestic Account
Flexi current account

Fix deposits service

Long-term investments form the chunk of everybody's future plans. An alternative to
simply applying for loans, fixed deposits allow to borrow from own funds for a limited
period, thus fulfilling needs as well as keeping savings secure.
Other Fixed Deposits Account:
1.
2.
3.
4.

Regular fix deposit

year tax saving fix deposit
Super saver facility
Sweep-in facility

Demat account service

Nowadays share market is becoming is the main occupation of the person. So to avoid
faulty processes demat account is really most important for the share market and for the
safety of shares it is most important. HDFC BANK is one of the leading Depository
Participant (DP) in the country with over 8 Lac demat accounts. HDFC Bank Demat
services offers a secure and convenient way to keep track of securities and investments,
over a period of time, without the hassle of handling physical documents that get mutilated
or lost in transit. HDFC BANK is Depository participant both with -National Securities
Depositories Limited (NSDL) and Central Depository Services Limited (CDSL).

LOAN SERVICES
47

1) Personal loan
A person has so many dreams but some time due to scarcity of money a dream cant be
satisfy. So, here one solution for that person this is personal loan. From this he/she can
fulfill their needs or requirement. It can be any thing either a dream of vacation or
son/daughters admission to college or any wedding, so personal loan can be helpful in
this entire requirement.As person ordered in the hotel for tea or coffee and it is
immediately came fast, same over here any person want to get a personal loan with the
nominal documents he can get the loan.

2) Home loan
HDFC Bank brings, HDFC home loans to doorstep. With over 30 years of
experience, a dedicated team of experts and a complete package to meet all housing
finance needs, HDFC Home Loans, help people realize dream.
3) Vehicles loan
Nowadays the life is being so fast, time value is becoming more important so to reach at
the destination of any business related occasion or for a boy to reach college or any where
at the fix time there are so many requirement of vehicles. But every people have no
capacity to purchase vehicles with cash so for that here in the HDFC bank vehicles loan is
available. There are many types of vehicles loan. Types of vehicles loan: Two wheeler
loans. New car loan. Used car loan. Tractor loan (for agree culture business). Commercial
vehicle loan.So, as per the requirement of the person there are these types of loans are
available this are at the chip rate and hassel free from more documentation and other
procedure. And commercial businessman can get the benefits of the commercial vehicles
loans. Thus as per the need of different people there are vehicle loans available. And also
terms and condition are different as per the requirement.
4) Express loan plus
Bank offer Express Loans Plus at person Doorstep to help fulfill all his/her needs. The
procedure is simple, documentation is minimal and approval is quick. It is helpful to
person in repairing of house, School admission or also in the family holiday.

5) Gold loan
48

With HDFC Bank's Gold Loan, person can get an instant loan against gold jewellery
and ornaments. The procedure is simple, documentation is minimal and approval is quick.
A person can get 70% loan on the value of the gold jewellery and ornaments.There is also
availability of the overdraft on the gold jewellery. With this a customer can get free
additional services like free personalized cheque book, free international debit card, and
free net banking phone banking services.

6) Educational loan
Nowadays important of education becoming very high. ASs it important becoming high it
is becoming costly. So in the higher education some time people can not effort a high price
at a same time. So, there is education loan is also available for the student.A person can
get loan up to 10 lakhs to study in India and 20 lakhs if he wants to study in abroad. Loan
available up to tenure of 7 years including moratorium period. Loans disbursed directly to
the educational institution. It is released as per fee schedules of institutes. Exclusive
Telegraphic Transfer facility available for courses abroad. Loans available for short
duration/ job oriented courses also.

CARD SERVICES
In todays competitive and fast time card services providing by the banks are really very
important to every person and every business needs or to take meal in to the hotel or to purchase
jewellery from the jewellery shops cards are playing good role in the banking sectors. Bank
ranges of Cards help to meet financial objectives. So whether persons are looking to add to his
buying power, conducting cashless shopping, or budgeting his expenditure, he will find a card
that suits him.

Credit cards

49

A person wants many things like, a trip to Bali, a diamond ring for wife's dreams. Some
dreams can't wait. If there's something person has always wanted. If a person wanted
fulfill his wants he can get benefits from the HDFC banks credit cards facilities.
different types of credit Classic cards
Silver Credit Card.
Value plus Credit Card.
Health Plus Credit Card. :
Gold Credit Card
Titanium Credit Card
Woman's Gold Card
Platinum Plus Credit Card
Visa Signature Credit Card
World MasterCard

Debit card
HDFC Bank Debit Cards give person complete and instant access to the money in his

accounts without the risk or hassle of carrying cash. Types of debit card: Easy shop international Debit card.
Easy shop gold Debit card.
Easy Shop International Business Debit Card.
Easy Shop Woman's Advantage Debit Card.
Easy Shop NRO Debit Card.
Kisan Card.

Prepaid card
Besides offering convenience, Prepaid Cards have been tailored to answer travel and
gifting needs. ForexPlus Cards Prepaid Travel Card. Gift Plus Cards Prepaid Gift Card.
Food Plus Cards Prepaid Food Plus card. Money Plus Card The Corporate Payment card.

INVESMENT AND INSURANCE SERVICE

50

Nowadays a ward investment is becoming more popular. Person invest their money in to various
schemes or in to the gold or share market etc. but some time he is in to the difficult situation, for
that bank help person invest wisely through financial and investment services.
Types of investment: Mutual Funds
Invest through the Mutual Fund route to meet varied investment objectives.

Insurance
Traditional Plans
HDFC children's PLAN.
HDFC Money Back Plan.
HDFC Savings Assurance Plan.

Unit Linked Plans

HDFC Unit Linked Young Star Plus II.
HDFC Unit Linked Young Star Suvidha.
HDFC Unit Linked Young Star Suvidha Plu

HDFC Assurance Plan.

HDFC Term Assurance Plan.
HDFC Loan Cover Term Assurance Plan.

HDFC Unit Linked Pension.

HDFC Unit Linked Pension Plus.
HDFC Unit Linked Endowment Plus II.

HDFC Endowment Assurance Plan.

HDFC Unit Linked Endowment Suvidha.
HDFC Single Premium Whole of Life Insurance HDFC Unit Linked Endowment Suvidha
HDFC Unit Linked Enhanced Life Protection
GENERAL AND HEALTH INSURANCE
Complete protection for business, health, travel & more.
Bonds
A secure investment avenue giving stable returns with tax benefits. Financial Planning
Start Now Plan investments to meet financial goals Knowledge Centre Profit from
research and make informed investment decisions. Equities & Derivatives Leverage
banks vast information repository and transact online. Mudra Gold Bar Buy 24
gold

bars

made

in

Switzerland

and

certified

by

Karat

Assay.

51

AWARDS
As in the past years, awards and recognition were conferred on HDFC Bank by leading domestic
and international organizations and publications during the financial year ended March 31,2013.
Some of them are :
1) Asia Money Best Bank Awards
2)

12) Dun & Bradstreet Corporate Awards-

Best Domestic Bank in India

3) Business world Awards for Banking

Excellence
Most tech-friendly Bank
Deal of the year (Rupee bonds)
4) CNBCTV18 India Best Banks

India's Top 500 Companies

13)
Best Bank in India
14) Economic Times Awards for Corporate

&

Financial Institutions Awards

Best Private Sector Bank
5) CSO Forum Information Technology
Awards
Best Information Security Practice
6) DSCI Information Technology Awards
Security Leader of the year
Security in Bank
7) Dun & Bradstreet Banking Awards
8) Overall Best Bank

Excellence
15)
Company of the year 2012
16) Financial Express Best Bank Awards
17) Best Bank-Private Sector
18)
Best in Strength and Soundness
19)

9) Best Private Sector Bank

Best Banker-Mr. Aditya Puri

20) IBA Banking Technology Awards

10)

Best Asset Quality-Private

Sector
11)
Sector

21)
Best Online Bank

Best Retail Banking-Private

22)
Best use of Business Intelligence
52

23)

Best Customer Relationship

Initiative
24)

25)

Best

use

of

Mobility

Technology in Banking
Best Risk Management &

Security initiative

26) IDRBT Banking Technology Excellence

Awards
Best Bank in IT for Operational
Effectiveness

53

27)

CREDIT RATING

28)

CONCLUSION & SUGGESTIONS

29) HDFC Bank, the banking arm of HDFC is expected to go on stream. The bank already has
good number of employees on board and is recruiting personal banker heavily to take the
headcount to many more. It is on the brim of increasing its customers through its attractive
schemes and offer.
30) The project opportunities provided was market segmentation and identifying prospective
customers in potential geographical location and convincing them to attract more
customers so that new business opportunities of the bank can be explored. Through this
project, it could be concluded that people are not much aware about the various products
of the bank and many of them not interested to open an account, to invest money at all.

services was considered as unsought good which require hard core selling, but in changing
trend in income and people becoming financially literate, the demand for banking sector is
increasing day by day.
31) So, at last the conclusion is that there is tough competition ahead for the company from its
major competitors in the banking sector. Last but not the least I would like to thank HDFC
Bank for giving me an opportunity to work in the field of Marketing and Operation. I hope
the company finds my analysis relevant.

32)
33) SUGGESTIONS:
34) Finally some recommendations for the company are as fallows:

To make people aware about the benefit of becoming a customer of HDFC Bank, following
activities of advertisement should be done through
35) 1. Print Media.
36) 3. Stalls in Trade Fares

2. Hoarding & Banners.

4. Distribution of leaflets containing details information.

37)
38)

39)

BIBLIOGRAPHY

40)

www.bnknetindia/com/banking/finance

http://en.wikipedia.org/wiki/bankingfinancialcompany

www.hdfcbank.com

41)

42)

43)

www.hdfcbank/products/finance

www.google.com

www.iloveindia.com.

44)

45)

46)
47)