Professional Documents
Culture Documents
A
Project Study Report
On
Training Undertaken at
Submitted by
Submitted to
Mrs. Dhwani Mishra
Faculty Member
2007-2009
Preface
Its my pleasure and delight to bring out a comprehensive and concise study in
organization about RETAIL BANKING System. This study will help in identifying
the strength and weakness of the BANKING and also working a quick
comparison with ICICI Bank. It will help in taking strategic decision.
Im highly grateful to Mr. Amit Sharma and my helping co trainees.
There are innumerable persons who have contributed in brining out this study
report of Banking System in India with Specific reference to HDFC Bank Ltd.
Acknowledgement
I express my sincere thanks to my project guide Mrs. Dhwani Mishra
Branch Manager HDFC Bank Ltd. for guiding me right from the inception
till the successful completion of the project. I sincerely acknowledge him
for extending their valuable guidance, support for literature, critical reviews
of project and the report and above all the moral support he had provided
to me with all stages of this project.
I would like to thank supporting staff Javed, Maneesh Sharma, Mrs. Neetu
Sharma, Aalok Sharma, Ashok Sharma for their help and cooperation
trough out our project.
EXECUTIVE SUMMARY
This project report presented contains detail my summer training assignment.
This is a part of my curriculum of M.B.A. program (2007 2009) Rajasthan
Technical University. The Project is based on Retail and Para Baniking in
HDFC Bank.
The main of this project is to deal with customer Various Loan product including
Para Banking Products and their queries in HDFC, Jaipur and also to find the
Market share of Bank in comparison to other banking companies. The aim of this
project was evaluating and managing the Loan Segment among customers on
different parameters, creating awareness about the various plans of the HDFC
and generating leads for future business prospects.
Bright highlight of the methodology used for the survey project: 1) Filling the questionnaires by various individuals, which are given by my
project guide.
2) Sampling on cluster random basis.
3) Coding
4) Analysis
5) Final report construction
In the current business scenario, to know about the competitors marketing
policies and schemes is equally important as emphasizing on companys own
policies.
CONTENTS
S.No.
1.
Details
Industry Profile
Page No
Page 1
2.
Introduction to Organization
2.1. Introduction to HDFC Ltd.
2.2. Company Profile
2.3. Payment Gateway
2.4. Merchant Product Offering
Page 2 - 14
3.
Research Methodology
3.1. Title of the study
3.2. Duration Of the Project
3.3. Objective of the Study
3.4. Type of Research
3.5. Sample Size and method of selecting sample
3.6. Scope of Study
3.7. Limitation of Study
Page 15 19
Page 20 -
4.
5.
6.
SWOT ANALYSIS
Page 99
7.
CONCLUSION
Page 100
8.
Page 101
9.
APPENDIX
Page 102
0.
BIBLIOGRAPHY
Page 104
52
Page 53 98
Introduction to
Industry
Early software
Early electronic cash registers (ECR) were programmed in proprietary software
and were very limited in function and communications capability. In August 1973
IBM announced the IBM 3650 and 3660 Store Systems that were, in essence, a
mainframe computer packaged as a store controller that could control 128 IBM
3653/3663 Point of Sale Registers. This system was the first commercial use of
client-server technology, peer to peer communications, Local Area Network
(LAN) simultaneous backup, and remote initialization. By mid-1974, it was
installed in Pathmark Stores in New Jersey and Dillards Department Stores.
Programmability allowed retailers to be more creative. In 1979 Gene Mosher's
Old Canal Cafe in Syracuse, New York was using POS software written by
Mosher that ran on an Apple II to take customer orders at the restaurant's front
entrance and print complete preparation details in the restaurant's kitchen. In that
novel context, customers would often proceed to their tables to find their food
waiting for them already. This software included real time labor and food cost
reports. In 1986 Mosher used the Atari ST and bundled NeoChrome paint to
create and market the first graphical touchscreen POS software.
8
Vendors and retailers are working to standardize development of computerized
POS systems and simplify interconnecting POS devices. Two such initiatives are
OPOS and JavaPOS, both of which conform to the UnifiedPOS standard led by
The National Retail Foundation.
OPOS, short for OLE for POS, was the first commonly-adopted standard and
was created by Microsoft, NCR Corporation, Epson and Fujitsu-ICL. OPOS is a
COM-based interface compatible with all COM-enabled programming languages
for Microsoft Windows. OPOS was first released in 1996. JavaPOS was
developed by Sun Microsystems, IBM, and NCR Corporation in 1997 and first
released in 1999. JavaPOS is for Java what OPOS is for Windows, and thus
largely platform independent.
Most POS peripherals, such as displays and printers, support several of these
command protocols in order to work with many different brands of POS terminals
and computers.
10
In the fast food industry, a number of configurations may be used in able to aid in
the speed of operations. Registers themselves may be in front counter, drive
through or walk through cashiering and ordertaking modes. Front counter
registers will take and serve orders at the same terminal. Drive through registers
will allow orders to be taken at one or more drive through windows and cashiered
and served at another. In addition to registers, drive through and kitchen monitors
may be used by store personnel to view orders. Once orders appear they may be
deleted or recalled by "bump bars", small boxes which have different buttons for
different uses. Drive through systems are often enhanced by the use of drive
through wireless (or headset) systems which enable communications with drive
through speakers.
11
Private sector
Banks
(28)
(27)
Nationalized Old Private
Bank
Banks
Other Public New
Sector Banks
Private
(IDBI)
Banks
SBI and its
Associates
Foreign
Banks in
India
(29)
Regional Rural
Bank
(102)
Here we more concerned about private sector banks and competition among them.
Today, there are 27 private sector banks in the banking sector: 19 old private sector
banks and 8 new private sector banks.
12
These new banks have brought in state-of-the-art technology and aggressively
marketed their products. The Public sector banks are facing a stiff competition
from the new private sector banks.
The banks which have been setup in the 1990s under the guidelines of
the
13
Banks
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 Prathima Rajan, analyst in
Celent's banking group and author of the report.
focus on having a small number of large players that can compete globally
rather than having a large number of fragmented players."
14
Reserve Bank
of India paving roadmap for foreign banks in India greater freedom in India.
Among them is the world's best private bank by
Switzerland's UBS.
EuroMoney magazine,
15
Introduction to
Organization
16
HDFC Limited.
FC is India's leading housing finance institution and has helped build more than
23,00,000 houses since its incorporation in 1977. In Financial Year 2003-04 its
assets under management crossed Rs. 36,000 Cr. As at March 31, 2004,
outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands
at around
1 million depositors. Rated 'AAA' by CRISIL and ICRA for the 10th
service standards
Awarded The Economic Times Corporate Citizen of the year Award for its longstanding, commitment to community development. Presented the 'Dream Home'
17
award for the best housing finance provider in 2004 at the third Annual Outlook
Money Awards.
Background
HDFC was incorporated in 1977 with the primary objective of meeting a social
need that of promoting home ownership by providing long-term finance to
households for their housing needs. HDFC was promoted with an initial share
capital of Rs. 100 million.
18
Over the past two decades, HDFC has been making inroads into varied spheres
of development, while retaining a focus on low-income
Business Objectives
The primary objective of HDFC is to enhance residential housing stock in the
country through the provision of housing finance in a systematic and professional
manner, and to promote home ownership. Another objective is to increase the
flow of resources to the housing sector by integrating the housing finance sector
with the overall domestic financial markets..
Organisational Goals
HDFC' s main goals are to
a) Develop close relationships with individual households,
b) Maintain its position as the premier housing finance institution in the country,
c) Transform ideas into viable and creative solutions,
d) Provide consistently high returns to shareholders, and
e) To grow through diversification by leveraging off the existing client base.
Company Profile
The company has done away with structural hierarchy, so the front- runner does
not need to seek permission to interact with the CEO of the company. The type of
communication is also two ways i.e. communication follows both vertical and
horizontal type thereby providing maximum interaction and flow of information.
The activities of the different functional departments are directed in such a way
that it meets the goals of the organization. The various activities of the company
are well coordinated, organized and directed and at the same time integrated
too. Decision-making has been made at the Headquarter level.
19
Overview
For Merchants, the world over, accepting payments through cards; both
debit and credit, is an easy and cost effective way to enhance business,
increase revenue, and improve efficiency.
As an acquirer, HDFC Bank makes accepting credit and debit cards easy.
Our valued merchant establishments can now accept all credit and debit
cards issued under the Visa, Visa Electron, MasterCard and Maestro
brands. Our service is backed by superior technology infrastructure and
personalised support from a designated relationship officer.
We offer card acceptance solutions both on EDC machine and on the
Internet through our Payment Gateway product.
With HDFC bank Merchant Services, you can offer your customers the
instructions
payment
options
on
their
cards
to
make
recurring
Terminals, through your ECR (Electronic Cash Registers) or through the website.
20
Greater Profitability
Accepting payments in cash is costly. If you calculate the time spent by you
or your employee in accepting cash, counting the same, making
appropriate stacks, time and cost involved in visiting the nearest bank
branch, waiting time at the branch and the cost of depositing cash (some
banks charge for accepting cash), you will realise that paying a small
discount rate on card transactions is a much more effective way of saving
cost and time.
Reduced Risk
HDFC bank-Merchant Services has a dedicated team working round the
clock and strives to guard our merchant customers against the risk
posed by fraudsters. We have proactive risk management software that
runs checks on the cards swiped on our terminals. We inform our
merchant customers within minutes of a suspicious transaction being
done on our machines to take necessary actions.
Payment Reports
21
W ith HDFC bank Merchant Services, you get an option of taking
payment reports on a daily, weekly, fortnightly or monthly basis. This will
help you match your card transactions against the payment credits in your
current account with us.
Relationship Officers
A dedicated Relationship Officer is assigned to the merchant. This officer acts
as a one point contact for all your requirements concerning the
Merchant Services department and will also facilitate your other banking related
requirements.
Dedicated Helpdesk
We have an, in-house, dedicated, customer service team, which trouble
shoots in case you need any assistance on the machine operations, rolls,
charge backs, reports, etc
Payment Gateway
HDFC Bank Payment Gateway provides a single platform to support
multiple payment technologies. The solution supports Secure Sockets
Layer (SSL), Secure Electronic Transactions, Pseudo Card Numbers
(PCN), 3-D Secure Visa Authenticated Payment protocol and MasterCard Secure
Payment Application (SPA).
HDFC Bank Payment Gateway enables the merchants to stay abreast of
rapidly changing payment technology; it incorporates a hosted payment
page that provides a common interface with the merchant web site,
regardless of which secure payment protocol is used. HDFC Bank
Payment Gateway also provides secure browser-based access for real
time transaction monitoring and reports download.
Our Payment Gateway integrates risk-management and fraud-detection
22
software using a sophisticated, easy-to-manage rules-based system that
monitors merchant and cardholder activity.
P a ym e n t G a t e w a y i s a f l e x i b l e , s c a l a b l e s o l u t i o n d e s i g n e d t o
accommodate the rapidly evolving Internet secure payment environment for
businesses. It offers a user-friendly facility to businesses to sell their products in
a hassle-free manner to their target customers and ensure receipt of
payments upfront.
Payment Gateway integrates risk-management software.
Provides
management
an
integrated,
s ys t e m
th a t
flexible
o p e ra te s
rules-based
wi th
all
proactive
s e cu re
risk
p a ym e n t
protocols
23
industries.
The customer provides his credit card details, which is directly sent to
the Payment Gateway server when he clicks "Pay" .
The credit card details are then switched to the Operator / Bank for
authentication.
24
a n d h a s t h e r e q u i s i t e c r e d i t l i m i t a n d t r a n s m i t s t h e confirmation
back to the Payment Gateway through the Operator / Bank
The entire process integrates seamlessly with the shop and buy application of
the web merchant.
The merchant may then ship the goods and capture the transaction on
the gateway server.
Flexible
Fast
Time to. market - integrating merchants via simple universal payment
adapter (Merchant Plug-In).
25
month on a real time basis..
Provides
extensive
online
query
capabilities
that
support
26
Mai ntain
comple te
dig ital
histo ry
of
o rde rs,
incl udin g
confirmation numbers, payment and shipment details and relevant captured Web
pages.
Card Acceptance:
On the EDC terminals provided by HDFC Bank, all cards issued under the
following brands can be accepted by your outlets
Visa (Credit)
MasterCard (Credit)
Visa Electron (Debit)
27
Maestro (Debit)
As part of our terminal sharing arrangement with American Express, you can
also accept American Express Cards on our terminals. However you
need to have a Merchant relationship with American Express directly and
communicate with American Express to have this activated on the HDFC
Bank Terminal.
Technology infrastructure:
HDFC Bank would install the state of the art latest generation EDC
terminals on which you can accept all signature-based cards. The entire
service is backed by superior technology infrastructure in terms of the
network, systems and processes.
Payment Options:
Payment can be made by credit to current account with the bank or
manager's cheque
Personalised service:
W e o ffe r p e r s o n a l i s e d s e r vi c e t o o u r Me r c h a n t s . O n e m e r ch a n t
relationship officer is designated for taking care of the relationship with our
merchants. This officer will be the one point contact in the bank for all
issues relating to your merchant account.
For more details, write in to us at hdfcbank.meservices@hdfcbank.com
and we will get back to you.
28
EMI Opportunities
Advertise your EMI offers to HDFC Bank credit card customers interested in
29
buying now and paying later in installments coupled with a fantastic
finance offer.
by
Banks
38.6% and
cash
management
volumes
increased by around 80% and trade services volumes by around 40% over the
previous year.
Portfolio quality as of March 31, 2008 remained healthy with gross nonperforming
assets at 1.3% and
net
non-performing
loan
loss
provisions
30
banking
life.
As
we
Technology plays the vital role in the each and every industries and gives the
optimum return from the limited resources.
from
the
customers
and
changed
the queue
Straight
31
Data Warehousing , CRM
HDFC BANK is the very consistent player in the New private sector banks.
New
private sector banks to withstand the competition from public sector banks came up
with innovative products and superior service.
2001
2005
32
Loan Product
Auto Loan
33
Personal loan
Credit card
2-wheeler loan
Home loans
Tractor loan
Education Loan
Gold Loan
34
Reset Clause: In case of Fixed Interest Rate, reset clause will be applied after
every 3 years.
35
Margin: 15% in case of purchase of house, flat, land and construction and
repairs and renovation.
Assessment of Loan Amount:
36
Loans up to Rs 2.00 lacs - 0.50% of sanctioned loan amount
Loans above Rs 2.00 lacs - 1.00% of sanctioned loan amount.
(Valuation, Advocate Fee, Documentation, stamps, inspection charges etc.) to be
recovered from the borrower on actual basis, before release of facility.
Foreclosure Charges: 2% of the prepaid amount. Out of pocket expenses
Sanction Procedure: The decision to sanction the loan is based on scoring
model. The loan can be sanctioned if an applicant scores marks 50 or above. If
the score is 45 to 49, the loan can be sanctioned with additional interest of
0.50%, and if it is between 40 to 44, the loan can be sanctioned at additional
interest of 1%.
Similarly, loans to salaried person can be allowed upto 50 and 60 months of
salary at an additional interest of 0.50% and 1% respectively. Loans to persons
other than salaried class can be allowed upto 4 to 5 times of average annual
income at additional interest of 0.50% or 1% respectively.
37
38
Prepayment Charges: 2% of prepaid amount.
Disbursement: In the SB/CD account of borrower or as per his instruction.
Assessment of Loan Amount:
Salaried Individuals - 5 to 12 months salary, subject to the condition that total
deductions including installment of proposed loan should not exceed 50% of the
net salary (i.e. gross salary less P.F.& income tax). The EMI should not exceed
20%
of
gross
monthly
income. Professional/
Self
employed
persons/
39
d)
40
Personal guarantee / guarantee of owner (s) of the property (in case property is
owned & occupied by person other than the borrower / applicant.). In case of
HUF personal guarantee of Karta, major coparceners.
Interest: Declared on time-to-time basis.
Penal Interest: 4 % above the normal rate applicable on the defaulted amount.
Foreclosure Charges: 2 % of the prepaid amount
Amount of advance:
Four times of the average of gross yearly income as declared in the Income Tax
returns of the immediately completed past two financial years or 70 % of the
property value, assessed by the Banks approved valuer or assessed by the
Branch Manager as per the Spot Visit Report whichever is lower.
(In case of salaried / self employed / professionals / businessmen, the income
of spouse and depreciation can be clubbed for arriving at the eligible
loan/overdraft amount. In such cases the spouse should become co-borrower or
his / her personal guarantee should be obtained.)
Repayment
Loan Maximum 180 equated monthly installments.
Over Draft Repayable on demand subject to yearly review. Interest is to be
recovered on as and when debited basis. Annual review to be based on income
tax, audited balance sheet (wherever applicable) business statistics, conduct of
account, earnings etc. The utilization of the limit should be at least 80%,
otherwise commitment charges @ 2% on the unutilized portion shall be levied. In
41
case of Loan/overdraft facility the annual repayment obligation is subject to
following conditions:
In case of professional / self-employed personals / Businessmen / entrepreneurs
etc the annual repayment obligation (including all other repayment commitments)
should note exceed 75% of the Gross yearly Income.
In case of loan to salaried class, the total future yearly repayment obligation
(including all other repayment commitments) of the borrower should not exceed
60% of the Gross Yearly salary of the borrower. Estimated interest amount for
full year on sanctioned OD amount will be considered as annual repayment
obligation in case of overdraft facility.
Procession charges:
(a) For Loan: - @. 0.50 % of loan sanctioned (one time)
(b) For Overdraft: - @ 0.50 %p.a. on overdraft sanctioned limit and @ 0.50 % for
the subsequent renewal every year for each calendar year basis.
Out of pocket expenses (Valuation, Advocate Fee, Documentation, stamps,
inspection charges etc.) to be recovered from the borrower on actual basis,
before release of facility.
Sanction Procedure:
The decision to sanction the loan is based on scoring model. The loan can be
sanctioned if an applicant scores marks 50 or above.
42
Margin:
10% of cost of Vehicle up to the loan of Rs. 10.00 lac & 20% of cost of Vehicle for
loan of more than Rs. 10.00 lac.
Processing Fee: 0.50% of Loan amount.
Prepayment Charges: 1% of prepaid amount.
Assessment of Loan amount: The total deductions including installment of
proposed loan should not exceed 50% of the salary (gross salary less P.F.&
income tax). The EMI should not exceed 20% of gross monthly salary.
43
Sanction Procedure:
The decision to sanction the loan is based on scoring model. The loan can be
sanctioned if an applicant scores marks 50 or above.
Deposit Product
Saving a/c
Current a/c
Fixed deposit
Demat a/c
Mutual Fund
Bonds
Knowledge Centre
Insurance
Cards
Credit Card
Debit Card
Prepaid Card
Payment Services
NetSafe
Merchant
44
Prepaid Refill
Billpay
Visa Billpay
InstaPay
DirectPay
VisaMoney Transfer
Access To Bank
NetBanking
OneView
InstaAlert
MobileBanking
ATM
Phone Banking
Email Statements
Branch Network
Forex Services
Trade Services
RBI Guidelines
45
WHOLESALE BANKING
Corporate
Funded Services
Internet Banking
Funded Services
Specialized Services
Internet Banking
Clearing Sub-Membership
RTGS submembership
Fund Transfer
ATM Tie-ups
Tax Collection
46
Financial Institutions
Mutual Funds
An investment vehicle that pools savings of various investors with a common
financial goal.
Advantages of investing in a mutual fund
Professional Management of Funds
Well regulated industry
Diversification
Easy Liquidity
Low Cost
Transparency
Higher return potential compared to FDs
47
Sponsor
Person who establishes the mutual fund - role akin to that of a promoter of a
company.
Eligibility criteria
Sound Track record
Holds at least 40% of the net worth of the AMC
Appoint Trustees
Appoint AMC
Trustees
First level regulators for mutual fund schemes
Hold the property of the MF in trust for the benefit of the unit-holders
Prior approval of SEBI needed for appointment
2/3rd to be independent
Ensure that AMC is managing schemes in accordance with Regulations
and scheme mandate
General and Specific Due Diligence
The Asset Management Company (AMC)
Is the Investment Manager
Employs people in marketing, fund management, operations and
compliance
50% independent directors
Can undertake only permitted activities
Reporting to Trustees and SEBI
48
Equity Funds
Debt Funds
Balanced Funds
Liquid Funds
Index Funds
Variants in overseas markets - real estate funds, gold funds, derivative
funds, etc.
49
Avoids Greed and Fear
50
51
Proof of Insurance: When the proposal form reaches the Insurance Company, a
policy is issued by United India Insurance Company Limited and Photo ID card
issued by TPA (Third Party Administrator)
Benefits available under the scheme: The account holder and floater family
who have enrolled under the scheme are eligible for the following benefits:
Subject to maximum of sum insured, hospitalization expenses in the event of
sudden illness, accident, surgery required in respect of disease are covered.
Ambulance expenses upto Rs. 1,000 will be reimbursed during hospitalization
within overall sum assured per policy year.
In case children below 12 years are hospitalized, out of pocket expenses upto
Rs. 1,000/- is reimbursed to parents taking care of the children with in the overall
sum assured per policy year.
Cost of health check up 1% of sum assured is reimbursed after completion of
four continuous claim free policy years. The four continuous claim free policy
years are counted if the policy was obtained from any other Insurance Company
in the earlier years. IMPORTANT: The health check up provision is applicable
only in respect of continuous insurance without break.
Pre existing diseases would be covered after three continuous claim free policy
years which includes policies taken from any other insurance company.
Funeral expenses for maximum amount of Rs. 1,000/- in the case of insured
donating eye(s) is reimbursed over and above the sum assured, subject to
original illness/ accident claim admitted under the policy.
Maternity and Baby care expenses are reimbursed upto 5% of the sum assured.
Waiting Period is 9 months and Baby Care expenses payable to 90 days from the
date of birth.
52
Expenses on treatment taken in hospitals in Nepal and Bhutan are also covered
in Indian currency.
Treatment of NRIs at hospitals in India is covered upto sum assured in Indian
currency.
Cashless hospitalization facility through TPAs is available.
Add on Facility
Personal Accident Insurance Death Benefit (optional) for the family is available
on payment of additional premium. The premium mentioned under the Personal
Accident Insurance Death Benefit should be obtained over and above the
premium as per Plan A. The Personal Accident Insurance Death Benefit is
optional and additional premium is collected only for those who opt for the
scheme.
The Personal Accident (death cover) available for members who are covered
under the scheme is as follows:
Account Holder
Dependent children of
upto 5 yrs of age
Exclusions
The policy does not cover:
53
Pre-existing diseases (however, it is covered after four continuous claim free
policy years which includes policies taken from any other insurance company)
Hospitalization expenses incurred in the first 30 days of commencement of cover
except in cases of injury due to accident
Domiciliary hospitalization
Other standard exclusions applicable to Mediclaim policies will also apply.
Claim Procedure
Cashless treatment can be availed at the network hospitals by showing thee
photo ID cards issued by TPA and in case for any reason cashless service could
not be availed, the customer can meet the hospital bills and claim reimbursement
from TPA. If the insured has not opted for TPA, the claim forms along with bills
should be sent to the nodal office of United India Insurance Company Ltd.
Income Tax Benefit
Income tax benefit as per Section 80D of Income Tax is available to account
holders who enroll under the scheme.
Claims:
The claims will be settled by Company
54
Stock Brokers
Insurance Companies
Commodities Business
Trusts
BUSINESS MIX
Total Deposits
Revenue
Retail
Gross Advances
Wholesale
Net
55
.
NRI SERVICES
Accounts & Deposits
Remittances
North America
UK
Europe
Middle East
56
Africa
India Link
Mutual Funds
Insurance
Private Banking
Loans
Home Loans
Payment Services
NetSafe
BillPay
InstaPay
DirectPay
Visa Money
57
Access To Bank
NetBanking
OneView
InstaAlert
ATM
PhoneBanking
Email Statements
Branch Network
BUSINESS STRATEGY
HDFC BANK mission is to be "A World Class Indian Bank", benchmarking
themselves against
product
growth in
ethical
standards,
professional
and financial
58
Every successful organization have their own strategy to win the race in the
competitive market.
running of business.
59
BENEFIT OF FIVE S
FIVE S Means:S-1
S-2
S-3
S-4
S-5
SORT
SYSTEMATIZE
SPIC-N-SPAN
STANDARDIZE
SUSTAIN
SEIRI
SEITON
SEIRO
SEIKETSU
SHITSUKE
SORT:It focus on eliminating unnecessary items from the work place. It is excellent
way to free up valuable floor space. It segregate items as per require and
wanted.
Frequently
Required
Less Frequently
Required
Remove
everything from
workplace
Junk
60
SPIC- n - SPAN:Spic-n-Span focuses on regular clearing and self inspection. It brings in the
sense of ownership.
LABELLING ON FILE
FILE NUMBER
SUBJECT
61
FROM DATE
TO DATE
OWNER
BOX LABEL
For Example 1 / 3 / A / 6
DEPARTMENT
Welcome Desk
Personal Banker
Teller
Relationship Manager
Branch Manager
62
Demat
Others
In the HDFC BANK each department has their different color coding apply on
the different file. Due to this everyone aware about their particular color file
which is coding on it and they save their valuable time. It is a part of Kaizen and
also included in the system of the Five S. Logic behind it that , the color coding
are always differentiate the things from the similar one.
BUSINESS PROMOTION
As the HDFC POS business is at a very initial stage and growing, the marketing
and business promotion activities will be an ongoing activity for the life of the
product. We have divided the year into two parts. It is known from the market
practice that the season from October to March (six months) is the peak season
for shopping, where as people like to keep themselves indoors during April to
September.
But as the competition is very stiff in the market, it is the merchant who makes
the decision on which machine the card is to be swiped. In most of the cases its
the Sales representative or the person at cash counter who is the correct
person to cultivate relations with to maximize swipes on HDFC machines.
As explained earlier also, When HDFC becomes Issuer and acquirer both then it
is the best deal in terms of earnings because we do not have to share anything
with other banks or MasterCard or Visa International. So we target two different
kind of schemes for which a separate approval from higher authorities will be
taken from time to time after analysis of the situation.
HUMAN RESOURCE
63
The Banks staffing needs continued to increase during the year particularly
in the retail banking businesses in line with the business growth. Total number
of employees increased from
14878
as of March31,2006 to 21477 as of
March 31, 2007. The Bank continues to focus on training its employees on a
continuing basis, both on the job and through training programs conducted by
internal and external faculty.
The Bank has consistently believed that broader employee ownership of its
shares has a positive impact on its performance and employee motivation. The
Banks employee stock option scheme so far covers around 9000 employees.
spending of business. In this diagram it include both things from where Bank
earned Rupee and where to spent.
64
HDFC BANK earned from the Interest from Advances 51.14 % ,Interest from
Investment 27.12 %, bank earned commission exchange and brokerage of
15.25 %. These are the major earning sources of the bank. Bank also earned
from the Forex and Derivatives and some other Interest Income.
Bank spent 39.75 % on Interest Expense, 30.27 % on Operating Expense and
14.58 % on Provision. Bank also spent Dividend and Tax on dividend, Loss on
Investment , Tax. As we discuss above that balancing is must between these two
for every organization especially in the era of globalization where there are stiff
competition among various market players.
RECENT DEVELOPMENT
65
66
On March 27, 2008, the shareholders of the Bank accorded their consent to a
scheme of amalgamation of Centurion Bank of Punjab Limited with HDFC Bank
Limited.
share of Rs.10/- each of HDFC Bank Limited for every 29 equity shares of
Re. 1/- each held in Centurion Bank of Punjab Limited.
This is subject to
exchanges and
accorded their consent to issue equity shares and/or warrants convertible into
equity shares at the rate of Rs.1,530.13 each to HDFC Limited and/or other
promoter group companies on preferential basis, subject
approvals in this regard.
approved an increase
to final regulatory
also
Rs.550 crores.
Finance
Corporation (HDFC),
India's leading housing finance company, HDFC Bank is one of India's premier
banks providing a wide range of financial products and services to its over 11
million customers across hundreds of Indian cities using multiple distribution
channels including a pan-India network of branches, ATMs, phone banking, net
banking and mobile banking. Within a relatively short span of time, the bank has
emerged as a leading player in retail banking, wholesale banking, and treasury
operations, its three principal
strength clearly lies in the use of technology and the ability to deliver world-class
service with rapid response time.
67
Over the last 13 years, the bank has successfully gained market share in its
target customer franchises while maintaining healthy profitability and asset
quality.
As on March 31, 2008, the Bank had a network of 761 branches and 1,977 ATMs
in 327 cities. For the year ended March 31, 2008, the Bank reported a net
profit of INR 15.90 billion (Rs.1590.2crore),up 39.3%, over the corresponding
year ended
As of
crore) up 47.5% over the corresponding year ended March 31, 2007. Total
balance sheet size too grew by 46.0% to INR 1,331.77 billion
(133177 crore).
Leading Indian and international Publications have recognized the bank for
its performance and quality.
Centurion Bank of Punjab is one of the leading new generation private sector
banks in India. The bank serves individual consumers, small
and
medium
businesses and large corporations with a full range of financial products and
services for investing, lending and advice on financial planning. The bank offers
its customers an array of wealth management products such as mutual funds,
life and general insurance and has established a leadership 'position'. The
bank is also a strong player in foreign exchange services, personal loans,
mortgages and agricultural loans.
68
Additionally the bank offers a full suite of NRI banking products to Overseas
Indians. On 29th August 2007, Centurion Bank of Punjab merged with Lord
Krishna Bank (LKB), post obtaining all requisite statutory
approvals.
and
regulatory
the Bank in major towns and cities across the country, especially in the State of
Kerala, in addition to its existing dominance in the northern part of the
country.
Centurion Bank of Punjab now operates on a strong nationwide franchise of
404 branches and 452 ATMs in 190 locations across the country, supported by
employee base of over 7,500 employees.In addition to being listed on the
major Indian stock exchanges, the
Luxembourg
Banks
Stock Exchange.
ACHIEVEMENT IN 2007
Business
Monitor
survey
TodayGroup
Financial
ExpressErnst & Young Award
Global
HR 'Employer Brand of the Year 2007 -2008' Award - First
Excellence Awards - Runner up, & many more
Asia Pacific HRM
Congress:
Business Today
Dun & Bradstreet
American
Express
69
Corporate Best Bank
'Corporate Best Bank' Award
Award 2007
70
SWOT ANALYSIS
STRENGTH
WEAKNESSES
71
unemployment levels
Opportunities
Threats
72
STRENGTHS
S O Strategies
Strength: Large Capital base.
Opportunity: Market Expansion.
Strategy: Deep Penetration into Rural Market.
WEAKNESSES
W O Strategies
Weakness: Workforce Responsiveness.
Opportunity: Outsourcing of Non Core Business.
Strategy: Outsource Customer Care & other E-Helps.
S T Strategies
Detailed Analysis:
73
i.
Strength:
It is well know that ICICI Bank has the largest Authorised Capital Base in the
Banking System in India i.e. having a total capacity to raise Rs.
19,000,000,000 (Non Premium Value).
Opportunity:
Seeing the present financial & economic development of Indian Economy
and also the
market for finance requirements and also the growth in surplus disposal
income of Indian citizens has given a huge rise in savings deposits from
the above point it is clear that there is a huge market expansion possible in
banking sector in India.
Strategy:
From the analysis of Strength & Opportunity the simple and straight
possible strategy for ICICI Bank could be - to penetrate into the rural sector
of India for expanding its market share as well as leading all other Pvt.
Banks from a great gap.
ii.
Strength:
74
ICICI Bank is not only known for large capital but also for having a low
operations cost though having huge number of
branches
and services
provided.
Threat:
After showing a significant growth overall, India is able to attract many
international financial & banking institutes, which are known for their state of
art working and keeping low operation costs.
Strategy:
To ensure that ICICI Bank keeps going on with low operation cost & have
continuous business it should simply promote itself well & provide quality
service so as to ensure customer loyalty, therefore guaranteeing continuous
business.
iii.
Weakness:
It is well known that workforce responsiveness in banking sector is Very low
in Indian banking sector, though ICICI Bank has better responsible staff but
it still lacks behind its counterparts like HSBC, HDFC BANK, CITI BANK,
YES BANK etc.
Opportunity:
In the present world, India is preferred one of the best places for out
sourcing of business process works and many
more.
75
Strategy:
As international companies are reaping huge benefits after out-sourcing
there customer care & BPOs, this same strategy should be implemented by
ICICI Bank so as to have
proper
customer expectations.
iv.
Weakness:
Though having a international presence, ICICI Bank has not been able to
keep up the international standards in providing customer service as well as
banking works.
Threat:
In recent times, India has witnessed entry of many international banks like
CITI Bank, YES Bank etc which posses an external entrant threat to ICICI
Bank as this Banks are known for their art of working and maintain high
standards of customer
Strategy:
service.
76
After having new entrants threat, ICICI Bank should come up with More
additional benefits to its customer or may be even reduce some fees for
any additional works of customers.
PLASTIC MONEY
I give the project on Plastic Money to bank. The objective behind this project is
to increase the rich customers list in a bank. Plastic Money title itself says the
use of Credit Card and Debit Card in day to day transaction of the business. I
prepared the presentation on it and submitted to bank and Bank already
started work on this project.
Idea behind this project is to sale the bulk product. Target customer Of this
project are two parties one is Wholesaler and second is Retailer. Due to
this idea bank also sell their swipe machine to wholesaler and create brand
image in the market.
77
The idea behind this, bank give the credit card swipe machine to wholesalers
and retailers use the credit card of the bank. Bank gives the 50 days credit to
their credit card holders. So here retailers can get benefit of long credit period
and on the other side wholesalers can get the benefit of same day payment. As
a result bank got the wide list of customers of wholesalers and retailers.
78
Idea behind it, to convenience both the parties and create the group transaction
between them so bank can got the maximum benefit from it. Each wholesaler
has more than 15 to 20 retailers, so by this way bank sell the bulk products.
79
This power point slide shows the how idea works behind this project. Meet the
wholesaler first and get the details about their retailers and convince both parties
and shows the benefit of using this type of transaction by plastic money.
80
Bank always find those customers which are more involve in the banking
transaction. These type of group transaction between
retailers maintain the well account in a bank.
81
82
MASTER CARD
MasterCard offers the means for an acquirer bank and an issuer bank involved
in a transaction to clear and settle the transaction. The issuer is the institution
that issues cards to cardholders. The acquirer is an institution that has
agreements with merchants to process payments account transactions
and reimburse the merchants for those transactions. The acquirer enters those
transactions into clearing (through Master Card), thus settling with the issuer
to receive funds that it needs to reimburse to merchants. The acquirer bank
and Master Card must perform a series of steps to accomplish clearing and
settlement.
a) Clearing : Clearing is the process of sending transactions from the
acquirer to the issuer for posting to the cardholder account. Within INET, the
sending of data is determined by the issuer ICA number. Currently, an acquirer
groups its batches by issuing ICA number. When MasterCard receives
the batches (whether through the Banknet telecommunications network,
MasterCard file
express, MasterCard mainframe to member mainframe or on magnetic tape),
MasterCard edits the records, checking the data for accuracy and directs it to.
issuer bank.
83
MasterCard and from MasterCard to the member. Settlement is the process by
which funds are exchanged representing the net equivalent of monetary value
from clearing and billing processing. These funds are exchanged each day
between the banks for net monetary value of the cleared transactions.
MasterCard calculates the net position of each member involved in the clearing
process-and performs the functions of (a) sending advisements (b) Transferring
funds.
b) Means of Transferring Data : Acquiring Bank (HDFC Bank Ltd) sends and
receives data via a Master Card Interface processor (MIP). The file names which
are sent to master card have following description
10121501.512 --- The file name starting with 101 means this is outgoing file
for clearing. Next three digits (215 in this case) represent Julian date (Feb. 1 as
32 date) and next two digits represent the file number for that particular date
being transmitted.
10221501.asc The file name starting with 102 means this is incoming file
for settlement and clearing sent for previous day. Next two digits represent the
Julian date and four files will be received by Bank for everyday whether clearing
for previous day was sent or not.
Bank can also use other transmission methods instead of a MIP connection.
Following transmission methods are as follows :
Transfer data via dial-up access between remote personal computers and
central site based mainframe using modems and communication software
developed and licensed by MasterCard International.
Send and receive data on magnetic tape via the postal service or courier.
Magnetic tapes are used to transmit data when a member is -
84
experiencing problems with connectivity to MasterCard.
Time frame for Clearing
An acquirer has 30 calendar days to process the transaction to the issuer.
An issuer must, however, accept a transaction submitted beyond the 30 day time
frame if the account is in good standing, or the transaction can be honored.
The 30 day time frame is measured as the time between the transaction date
and processing date. When calculating the number of days, do not count the
transaction date as day one, but do count the Central Processing Date. In
case the transaction is submitted to MasterCard for clearing with issuer
bank, issuer bank takes interchange fee of 1.1% of the transaction amount. But
if the transaction is submitted after 5 days then the interchange fee is 1.50% of
the transaction amount. Below is a diagram depicting the relationship of banks
during the various processing cycles.
Calculation of net Positions :
As HDFC Bank Ltd is acquiring Master Credit Cards and Maestro credit
cards along with the issuing of Meastro Debit Cards. MasterCard makes a net
settlement of all POS and ATM transactions for issuer and acquirer transactions.
MasterCard received incoming transaction date from between 9:01 A.M. and the
end of the fourth clearing (9:00A.M.) The next day (St., Louis Time) and then
the net position is calculated and settling bank is advised accordingly by
MasterCard along with the copy of the net position to acquiring and issuing
bank
Below is the diagram how the net position and settlement is done by
MasterCard international.
It is to- be noted that , Maestro Debit card settlement is done online by
MasterCard International and there is no need of sending these transactions
through clearing. But the net position will take into consideration these
85
transactions also.
VISA INTERNATIONAL :
As the bank is acquiring VISA cards also, the settlement procedure with VISA
International for acquiring of VISA cards on HDFC terminals is also one of the
requirements.
The outgoing files which are sent to Visa international will have the name as
ifftl.out. This means the file is for clearing and the file number is 1 for the date.
Similarly incoming files ifft 1.in is the file for incoming.
However VISA sends 16 files for clearing every day as compared to Master cards
4 files everyday.
Time frame of clearing with VISA International
An acquirer has 30 calendar days to process the transaction with the issuer. An
issuer must, however, accept a transaction submitted - beyond the 30 day time
frame if the account is in good standing, or the transaction can be honored.
The 30 day time frame is measured as the time between the transaction date
and processing date. When calculating the number of days, do not count the
transaction date as day done, but do count the Central Processing Date.
86
Credit Cards and Visa Electron Debit Cards also.
As Bank is not issuing any visa cards, so the net position for HDFC Bank Ltd as
on date with Visa transactions must be positive on any given date.
DISPUTED
TRANSACTIONS
BY
MASTER
CARD
AND
VISA
INTERNATIONAL
If a cardholder-disputes the transaction, issuer bank can raise a charge
back on acquiring bank through Master Card or Visa International.
The Charge back rules for MasterCard and VISA International are defined in the
next chapter.
87
Appendix
88
9.1 Appendix
Study Questionnaire
What are the value added services you are providing to your
Customer?
Tourists
Industrialist
Foreign Tourist
Road Shows
Trade Fair
Festival Offers
Hoarding
89
90
:-
91
Details of Discussion with
Property Broker / Estate Broker :Detail of Discussion with
Society / Office
:-
92
PRE SANCTION / PRE RELEASE / POST SANCTION MONITORING
SPOT VISIT / INSPECTION REPORT
(For properties proposed for Equitable Mortgage / Negative Lien )
Name of Account :.
Branch
Date of Visit
Region:
:.............................................. By :.....
............----------.Cnstructed
area...........................
Year of construction..................................
Name of the owner(s)....................
Nature of Ownership : Free-hold / Lease hold/ Private Lease..........
....---------------------------OCCUpied by
: Owners/ Tenants/
Lessee....................................................................
............................................................................................
........
Purchase value / w.d.v. As on :......................................Rs....................lacs.
Valued of the property as per valuation report
dated.......................Rs..............................lacs.
Value of property in opinion of inspecting official :
Rs.............. .lacs.
(To be based on local independent inquiries from property delaers/ estate agent/
brokers)
Details of litigation/claims pending against the property (if
any) :.............................................
Whether complete chain of original title deeds is available for creating mortgage :
Yes / No
93
.................................................................................................................................
.................
Reasons for accepting NegativeLien instead of
mortgage :.......................................................
I have visited the site of above mentioned property and confirm the correctness
of the above information.
(Inspecting Official)
Name / Designation....................
...............................................................................................
Comments / Observations of Branch Manager
Signature
PARAMETERS TOTA
MARKS
94
L
MAR
KS
TYPE OF
APPLICANT
10
AGE
EDUCATIONAL
QUALIFICAT-ION
OBTAINED
SALARIED
PROF-ESSIONAL
SELFEMOTHERS
PLOYED/BUSINESSM
8
AN
10
5
0
UPTO 25
ABOVE 25 & UPTO 40 ABOVE 40 & UPTO5 0 ABOVE 50 YEARS
YEARS
YEARS
YEARS
2
5
4
2
& OTHER GRADUATES INTERMATRIC
Ph.D/BDS/MB POSTGRADUATE
PROFES-SIONALS
MEDI-ATE
BS/BE/B.TECH 4
3
2
1
& ABOVE
Immovable
property 10
ownership (free from all
direct
or
indirect
encumbrance)
PERIOD OF STAY AT 5
CURRENT RESIDENCE
IF Non Salaried INCOME 10
ABOVE RS.2 LACS FOR
HOW MANY YEARS
10
ABOVE 5 YEARS
5
CONTIN-UOUSLY
FOR LAST 3 YEARS
5
ABOVE 2 YEARS & UPTO 5 YEARS
3
CONTUI-UOUSLYFOR LAST 2 YEARS
0
2 YEARS AND LESS
1
LAST YEAR
10
6
2
GOVT/PUBLIC
PUBLIC LIMITED
PRIVATE LIMITED OTHERS
SECTOR
10
6
4
2
ABOVE
10 ABOVE 5 YEARS & ABOVE 3
& ABOVE 1
& OTHERS
YEARS
UPTO 10 YRS
UPTO 5
UPTO 3 YEARS
YEARS
5
4
3
1
0
ABOVE
ABOVE RS.3 LACS ABOVE RS.2 LAC ABOVE RS.1 LAC BELOW
RS.5 LACS
&
UPTO
Rs.5 &
UPTO
RS.3 & UPTO RS.2 LAC
LACS
LACS
LAC
5
4
3
2
1
5
HOUSE/FLAT OWNED HOUSE/FLAT OWNED BY PARENTS OF OTHERS
BY SELF/SPOUSE
SELF/ SPOUSE
NETWORTH
OF 5
APPLICANT AS PER
STATEME-NT
OF
ASSETS & LIABILIITIES
NET WORTH TO LOAN 5
AMT RATIO
RS.1
RATIO OF COL-LATERAL 8
SECU-RITY PROVIDED
TO LOAN AMT
ABOVE 3 Above
Above 2 times Above
1.5 Above 1 times Up to 1
TIMES
2.5times
& & upto 2.5 times & upto 2 & upto 1.5 time
Upto 3 times times
times
times
5
4
3
2
1
0
2.5 times 2 times & less 1.5
times& 1 Times & upto 1.5 times
Less then
and
then 2.5 times Less then 2
1 Time
above
times
10
8
6
4
0
100% & above 50% to <100% 25% to <50%
10% to <25%
Less then
10%
8
4
3
2
0
TYPE OF COLLA-TERAL 2
SECURITY PROVIDED
NSC/LIC
POLICY/FD
GUARANTOR TYPE
GUARANTOR INCOME
SHARES/
Others
IMMOVABLE
PROPERTY
2
1
0
SALARIED
PROFES-SIONAL SELF-EMPLOYED SALARIED
OTHERS
GOVT/PUB.
OTHER
SECTOR
SECTORS
5
4
2
2
0
GREATER THAN LESS
THAN LESS
THAN LESS THAN BORROWER &
BOR-ROWER
BORROWER & IT BORROWER & NON- NON-IT PAYER
PAYER
IT PAYER BUT GOVT
EMPL
5
3
2
0
For last more For last more For last more than 1 For last years For
less
than 3 Years
than 2 years & years and upto 2 and upto 1 years than
and
upto
3 years
Years
Years
10
8
5
3
0
95
TOTAL SCORE =
96
Bibliography
97
10.1 Bibliography
10.1.1 websites
www.hdfc.com
Merchant Establishment Reference Manual
Magazines
Financial Plus
Business India
Economic times
Search Engines
www.google.com
www.yahoo.com
www.altavista.com
www.msn.com
www.live.com
www.wikipedia
www.amazon.com
www.answers.com
98