Professional Documents
Culture Documents
BANKING
Banks have played a pivotal role in the process of development of the district over the
years, especially after the formation of the district in 1993.
Apart from dispensing credit, the Banks have also brought about social changes. The
contribution of the banking sector in the field of overall development of the district is
elaborated in the following paragraphs.
At the beginning of the 20th century, Indian economy was passing through a relative period
of stability. Around five decades have elapsed since the India's First war of Independence,
and the social, industrial and other infrastructure have developed.
At that time there were very small banks operated by Indians, and most of them were
owned and operated by particular communities.
The banking in India was controlled and dominated by the presidency banks, namely, the
Bank of Bombay, the Bank of Bengal, and the Bank of Madras - which later on merged to
form the Imperial Bank of India, and Imperial Bank of India, upon India's independence, was
renamed the State Bank of India.
There were also some exchange banks, as also a number of Indian joint stock banks. All
these banks operated in different segments of the economy.
The presidency banks were like the central banks and discharged most of the functions of
central banks. They were established under charters from the British East India Company.
The exchange banks, mostly owned by the Europeans, concentrated on financing of
foreign trade. Indian joint stock banks were generally undercapitalized and lacked the
experience and maturity to compete with the presidency banks, and the exchange banks.
There was potential for many new banks as the economy was growing. Lord Carson had
observed then in the context of Indian banking:
"In respect of banking it seems we are behind the times. We are like some old fashioned
sailing ship, divided by solid wooden bulkheads into separate and cumbersome
compartments.
Under these circumstances, many Indians came forward to set up banks, and many banks
were set up at that time, a number of which have survived to the present such as Bank of
India and Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank.
Indian banking sector can be divided mainly into four broad categories namely public sector
Banks, old private sector banks, new private sector banks, and foreign banks.
The other categories of banks include co-operative banks and regional rural banks. Since
these banks dont form a substantial chunk of the banking system, we will focus on the first
four categories.
BANKS IN INDIA
CENTRAL BANK
NATIONALISED
PRIVATE BANKS
FOREIGN BANKS
BANKS
CENTRAL BANK:
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Oriental Bank of Commerce
Punjab & Sind Bank
Punjab National Bank
Syndicate Bank
Union Bank of India
the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a
bank in the private sector.
Axis Bank
Bank of Rajasthan
Catholic Syrian Bank
Centurion Bank of Punjab
City Union Bank
Development Credit Bank
Dhanalakshmi Bank
Federal Bank
Ganesh Bank of Kurundwad
HDFC Bank
ICICI Bank
IDBI Bank
IndusInd Bank
ING Vysya Bank
Jammu & Kashmir Bank
Karnataka Bank Limited
KarurVysya Bank
Kotak Mahindra Bank
7
CBS NETWORKING
Core Banking Solutions is new jargon frequently used in banking circles of India.The
advancement in technology especially internet and information technology has led to new
way of doing business in banking.
The technologies have cut down time ,working simultaneously on different issues and
increased efficiency. The platform where communication technology and information
technology are merged to suit core needs of banking is known as Core Banking Solutions.
Here computer software is developed to perform core operations of banking like recording
of transactions, passbook maintenance, interest calculations on loans and deposits,
customer records, balance of payments and withdrawal are done.
This software is installed at different branches of bank and then interconnected by means
of communication lines like telephones, satellite, internet etc.
It allows the user (customers) to operate accounts from any branch if it has installed core
banking solutions. This new platform has changed the way banks are working.
HISTORY OF BANKING
The period during the First World War (1914-1918) through the end of the Second World
War (1939-1945), and two years thereafter until the independence of India were challenging
for the Indian banking.
The years of the First World War were turbulent, and it took toll of many banks which
simply collapsed despite the Indian economy gaining indirect boost due to war-related
economic activities.
At least 94 banks in India failed during the years 1913 to 1918 as indicated in the following
table:
Years
Number
of
banks Authorized
capital Paid-up
that failed
(Rs. Lacs)
(Rs. Lac)
1913
12
274
35
1914
42
710
109
1915
11
56
1916
13
231
1917
76
25
1918
209
Capital
POSTINDEPENDENCE
The partition of India in 1947 had adversely impacted the economies of Punjab and West
Bengal, and banking activities had remained paralyzed for months.
India's independence marked the end of a regime of the Laissez-faire for the Indian
banking. The Government of India initiated measures to play an active role in the economic
life of the nation, and the Industrial Policy Resolution adopted by the government in 1948
envisaged a mixed economy.
10
This resulted into greater involvement of the state in different segments of the economy
including banking and finance. The major steps to regulate banking included:
1. In 1948, the Reserve Bank of India, India's central banking authority, was nationalized,
and it became an institution owned by the Government of India.
2. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank
of India (RBI) "to regulate, control, and inspect the banks in India."
3. The Banking Regulation Act also provided that no new bank or branch of an existing
bank may be opened without a license from the RBI, and no two banks could have
common directors.
However, despite these provisions, control and regulations, banks in India except the State
Bank of India, continued to be owned and operated by private persons. This changed with
the nationalization of major banks in India on 19th July, 1969
NATIONALISATION
By the 1960s, the Indian banking industry has become an important tool to facilitate the
development of the Indian economy.
At the same time, it has emerged as a large employer, and a debate has ensued about the
possibility to nationalize the banking industry.
Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the
annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on
Bank Nationalisation." The paper was received with positive enthusiasm.
Thereafter, her move was swift and sudden, and the GOI issued an ordinance and
nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969.
Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of
political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed
the Banking Companies (Actuation and Transfer of Undertaking) Bill, and it received the
presidential approval on 9th August, 1969.
11
A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery.
With the second dose of nationalization, the GOI controlled around 91% of the banking
business of India.
After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the
average growth rate of the Indian economy.
LIBERALISATION
In the early 1990s the then NarasimhaRao government embarked on a policy of
liberalization and gave licenses to a small number of private banks, which came to be
known as New Generation tech-savvy banks, which included banks such as UTI Bank(now
re-named as Axis Bank) (the first of such new generation banks to be set up), ICICI Bank
and HDFC Bank. This move, along with the rapid growth in the economy of India, kick
started the banking sector in India, which has seen rapid growth with strong contribution
from all the three sectors of banks, namely, government banks, private banks and foreign
banks.
The next stage for the Indian banking has been setup with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given
voting rights which could exceed the present cap of 10%, at present it has gone up to 49%
with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were
used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The
new wave ushered in a modern outlook and tech-savvy methods of working for traditional
banks. All this led to the retail boom in India. People not just demanded more from their
banks but also received more.
CURRENT SITUATION
Currently (2007), banking in India is generally fairly mature in terms of supply, product
range and reach-even though reach in rural India still remains a challenge for the private
sector and foreign banks.
12
In terms of quality of assets and capital adequacy, Indian banks are considered to have
clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region.
The Reserve Bank of India is an autonomousBody with minimal pressure from the
government.
The stated policy of the Bank on the Indian Rupee is to manage volatility but without any
fixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking,
mortgages and investment services are expected to be strong.
One may also expect M & A as, takeovers, and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced
norms in 2005 that any stake exceeding 5% in the private sector banks would need to be
vetted by them.
Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that
is with the Government of India holding a stake), 29 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 31
foreign banks.
They have a combined network of over 53,000 branches and 17,000 ATMs. According to a
report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of
total assets of the banking industry, with the private and foreign banks holding 18.2% and
6.5% respectively.
BANKING NETWORK
The total number of branches has gone up from 81 to 93 during the last decade to cater to
the banking need of the growing population of the district. The number of branches of each
bank operating in the district is as under.
13
S No
No. of Branches.
1.
Andhra Bank
2.
Bank of Baroda
3.
Bank of India
4.
Canara Bank
5.
6.
Indian Bank
7.
8.
14
9.
United Bank
10.
14
11.
Union Bank
12.
Syndicate Bank
13.
DhenkanalGramya Bank
27
14.
12
15.
CARD Bank
16.
17.
Total
93
14
Apart from a good network of Bank branches, NABARD is having its district office at
Dhenkanal with operational area in Angul district also.
The major activities of NABARD in the areas of Planning, Coordination, Monitoring and
Development is being accomplished through preparation of Potential Linked Credit Plan
as a fore runner of SAP, participation in various meetings and with an effective rapport with
the officials of government, banks, NGOs etc.
Under the Lead Bank Scheme evolved by Reserve Bank of India, the lead bank
responsibility is shouldered by United Commercial Bank having its office at Angul.
The Lead District Manager coordinates and monitors the preparation and implementation
of Annual Credit Plans and various government programmes.
Dhenkanal Gramya Bank sponsored by Indian Overseas Bank is operating in this district.
DEPOSITS
The overall deposits of the banks together has increased manifold during the last decade.
The total deposits of Rs.161.45 crores at the end of March, 1994 have swelled to a tune of
Rs.961.99 crores by the end of financial year 2002-2003. The Commercial Banks have a
lions share in the deposit portfolio having 80% of the market share followed by RRB and
CCB with 11% and 9% market share respectively.
ADVANCES
The overall advances of the banks have shown an increasing trend during the last decade.
At the end of March 1994 the total outstanding advances stood at a level of Rs.62.41
crores, which has gone up to a level of Rs.390.96 crores at the end of March, 2003.
The priority sector has a share of Rs.259.29 crores i.e. 66% of the total advances, of which
Agriculture constitute Rs.87.93 crores i.e. 22% of the total advances.
15
The Commercial Banks have the maximum share of 55% in the advances portfolio,
followed by RRB, CCB and other financing institutions with 22%, 15% and 8% share
respectively.
The credit dispensed has also increased manifold during the last decade. Rs.154.99 crores
of credit was dispensed during 2002-03 compared to Rs.16.02 crores dispensed during
1993-94.
Under this portfolio, the share of commercial banks was also highest at Rs.85.30 crores
constituting 55% of the total credit deployment followed by RRB, CCB and other financial
institutions with a share of 27%, 17% & 1% respectively.
The trend in credit deployment under various purposes has also undergone change by
addition of new areas of financing like housing, education, consumer durable, transport etc.
Nevertheless agriculture enjoys due importance. Rs. 42.95 crores has gone to this sector
during 2002-03 as against Rs. 3.66 crores in 1993-94.
GOVERNMENT SPONSORED PROGRAMMES
In order to fulfill social commitments, the banks in the district have come forward to extend
financial assistance in respect of a plethora of government sponsored programmes so as to
improve the living condition of the target groups through gainful employment. Some of the
major programmes having the participation of banks are as under.
The details of credit deployment of various banks operating in the district under the annual
credit plans during the last decade are as under
.(Rs.in lakes)
Year/
Particulars
Agricultur
Non-
Other
Total
Non
Total
Farm
priorit
priorit
priorit
advanc
secto
sector
sector
1,005
455
Sector
s
r
Sector
1993-
Target
576
132
297
1,460
16
94
Achieveme
366
128
375
869
733
1,602
Target
471
187
326
984
263
1,247
Achieveme
572
191
610
1,373
597
1,970
Target
859
255
705
1,819
304
2,123
Achieveme
1,024
272
1,065
2,361
544
2,905
Target
1,137
420
1,188
2,745
380
3,125
Achieveme
1,235
353
1,348
2,936
1,091
4,027
Target
1,881
531
1,855
4,267
492
4,759
Achieveme
1,668
205
1,962
3,835
1,511
5,346
2,183
289
2,074
4,545
1,998
6,543
nt
199495
nt
199596
nt
199697
nt
199798
nt
1998-
Target
99
17
Achieveme
2,182
289
2,074
4,545
1,998
6,543
Target
2,747
857
2,334
5,938
1,238
7,176
Achieveme
2,602
267
2,089
4,958
2,522
7,470
Target
2,538
719
2,744
7,001
1,704
8,705
Achieveme
2,782
478
2,391
5,651
3,775
9,426
Target
4,126
821
2,948
7,895
2,200
10,095
Achieveme
3,340
346
5,479
9,165
5,607
14,772
Target
4890
895
4,323
10,098 2,945
13,043
Achieveme
4295
211
5,176
9,682
15,499
nt
19992000
nt
20002001
nt
20012002
nt
20022003
5,817
nt
18
The recovery of bank dues has not been commensurate with the growth of loans and
advances. Though in terms of absolute figures the recovery has gone up substantially, the
same in percentage term has shown a moderate change and has settled at 45-50% during
the last few years. The poor recovery has adversely affected the CARD bank, which has
weakened the financial strength of this part of the banking structure. The liberal measures
to augment recovery like One Time Settlement Scheme of RBI and the various
compromise settlement schemes of respective banks have contributed in the percentage
increase in recovery of bank dues.
ICICI Bank
HDFC Bank
IDBI Bank
Indusland Bank
Centurian Bank
Axis Bank
Role of Banks:
Banks play a positive role in economic development of a country as repositories of
communitys savings and as purveyors of credit. Indian Banking has aided the economic
development during the last fifty years in an effective way.
The banking sector has shown a remarkable responsiveness to the needs of planned economy. It
has brought about a considerable progress in its efforts at deposit mobilization and has taken a
number of measures in the recent past for accelerating the rate of growth of deposits.
As recourse to this, the commercial banks opened branches in urban, semi-urban and rural areas
and have introduced a number of attractive schemes to foster economic development.
The activities of commercial banking have growth in multi-directional ways as well as multidimensional manner.
Banks have been playing a catalytic role in area development, backward area development,
extended assistance to rural development all along helping agriculture, industry, international trade
in a significant manner. In a way, commercial banks have emerged as key financial agencies for
rapid economic development.
20
By pooling the savings together, banks can make available funds to specialized institutions
which finance different sectors of the economy, needing capital for various purposes, risks
and durations.
By contributing to government securities, bonds and debentures of term-lending institutions
in the fields of agriculture, industries and now housing, banks are also providing these
institutions with an access to the common pool of savings mobilized by them, to that extent
relieving them of the responsibility of directly approaching the saver.
This intermediation role of banks is particularly important in the early stages of economic
development and financial specification..
A country like India, with different regions at different stages of development, presents an
interesting spectrum of the evolving role of banks, in the matter of inter-mediation and
beyond.
Mobilization of resources forms an integral part of the development process in India. In this process
of mobilization, banks are at a great advantage, chiefly because of their network of branches in the
country.
And banks have to place considerable reliance on the mobilization of deposits from the public to
finance development programmes.
Further, deposit mobIlization by banks in India acquired greater significance in their new role in
economic development.
Commercial banks provide short-term and medium-term financial assistance. The short-term credit
facilities are granted for working capital requirements. The medium-term loans are for the
acquisition of land, construction of factory premises and purchase of machinery and equipment.
These loans are generally granted for periods ranging from five to seven years.
They also establish letters of credit on behalf of their clients favouring suppliers of raw
materials/machinery (both Indian and foreign) which extend the bankers assurance for payment
and thus help their delivery.
Certain transaction, particularly those in contracts of sale of Government Departments, may require
guarantees being issued in lieu of security earnest money deposits for release of advance money,
supply of raw materials for processing, full payment of bills on the assurance of the performance
etc. Commercial banks issue such guarantees also.
Main Objective:
Monetary Authority
Objective: maintain public confidence in the system, protect depositors interest and
provide cost-effective banking services to the public.
The Banking Ombudsman Scheme has been formulated by the Reserve Bank of
India (RBI) for effective redressal of complaints by bank customers
Objective: to facilitate external trade and payment and promote orderly development
and maintenance of foreign exchange market in India.
Issuer of currency
Issues and exchanges or destroys currency and coins not fit for circulation.
Objective: to give the public adequate quantity of supplies of currency notes and
coins and in good quality.
Developmental role
Banker to the Government: performs merchant banking function for the central and
the state governments; also acts as their banker.
Owner and operator of the depository (SGL) and exchange (NDS) for government
bonds.
There is now an international consensus about the need to focus the tasks of a central bank
upon central banking. RBI is far out of touch with such a principle, owing to the sprawling
mandate described above.
Supervisory Functions:
In addition to its traditional central functions, the Reserve bank has certain nonmonetary functions of the nature of supervision of banks and promotion of sound banking in India.
The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949 have given the RBI wide
powers of supervision and control over commercial and cooperative banks, relating to licensing and
establishments, branch expansion, liquidity of their assets, management and methods of working,
amalgamation, reconstruction and liquidation.
The RBI is authorized to carry out periodical inspections of the banks and to call for returns and
necessary information from them.
23
The nationalization of 14 major Indian scheduled banks in July 1969 has imposed new
responsibilities on the RBI for directing the growth of banking and credit policies towards more rapid
development of the economy and realization of certain desired social objectives.
The supervisory functions of the RBI have helped a great deal in improving the standard of banking
in India to develop on sound lines and to improve the methods of their operation.
Promotional Functions:
With economic growth assuming a new urgency since Independence, the range of
the Reserve Banks functions have steadily widened.
The Bank now performs a variety of developmental and promotional functions, which, at one time,
were regarded as outside the normal scope of central banking.
The Reserve Bank was asked to promote banking habit, extend banking facilities to rural and semiurban areas, and establish and promote new specialized financing agencies.
Accordingly, the Reserve bank has helped in the setting up of the IFCI and the SFC: it set up the
Deposit Insurance Corporation of India in 1963 and the Industrial Reconstruction Corporation of
India in 1972.
These institutions were set up directly or indirectly by the Reserve Bank to promote saving habit
and to mobilize savings, and to provide industrial finance as well as agricultural finance.
As far back as 1935, the RBI set up the Agricultural Credit Department to provide agricultural credit.
But only since 1951 the Banks role in this field has become extremely important.
The Bank has developed the co-operative credit movement to encourage saving, to eliminate
money-lenders from the villages and to route its short term credit to agriculture. The RBI has set up
the Agricultural Refinance and Development Corporation to provide long-term finance to farmers.
Co-operative Banks:
The Co-operative bank has a history of almost 100 years. The Co-operative
banks are an important constituent of the Indian Financial System, judging by the role
assigned to them, the expectations they are supposed to fulfill, their number, and the
number of offices they operate.
The co-operative movement originated in the West, but the importance that such banks
have assumed in India is rarely paralleled anywhere else in the world.
24
Their role in rural financing continues to be important even today, and their business in the
urban areas also has increased phenomenally in recent years mainly due to the sharp
increase in the number of co-operative banks.
While the co-operative banks in rural areas mainly finance agricultural based activities
including farming, cattle, milk, hatchery, personal finance etc.
along with some small scale industries and self-employment driven activities, the cooperative banks in urban areas mainly finance various categories of people for selfemployment, industries, small scale units, home finance, consumer finance, personal
finance, etc.
Some of the co-operative banks are quite forward looking and have developed sufficient
core competencies to challenge state and private sector banks.
According to NAFCUB the total deposits &lendings of Co-operative Banks is much more
than Old Private Sector Banks & also the New Private Sector Banks.
This exponential growth of Co-operative Banks is attributed mainly to their much better
local reach, personal interaction with customers, their ability to catch the nerve of the local
clientele.
Though registered under the Co-operative Societies Act of the Respective States (where
formed originally) the banking related activities of the co-operative banks are also regulated
by the Reserve Bank of India. They are governed by the Banking Regulations Act 1949 and
Banking Laws (Co-operative Societies) Act, 1965.
There are two main categories of the co-operative banks.
(a) Short term lending oriented co-operative Banks within this category there are three sub
categories of banks viz state co-operative banks, District co-operative banks and Primary
Agricultural co-operative societies.
(b) Long term lending oriented co-operative Banks within the second category there are land
development banks at three levels state level, district level and village level.
Features of Cooperative Banks
Co-operative Banks are organized and managed on the principal of co-operation, self-help, and
mutual help.
25
They function with the rule of one member, one vote. Function on no profit, no loss basis. Cooperative banks, as a principle, do not pursue the goal of profit maximization. Co-operative bank
performs all the main banking functions of deposit mobilization, supply of credit and provision of
remittance facilities.
Co-operative Banks provide limited banking products and are functionally specialists in agriculture
related products. However, co-operative banks now provide housing loans also.
UCBs provide working capital loans and term loan as well.
The State Co-operative Banks (SCBs), Central Co-operative Banks (CCBs) and Urban Co-operative
Banks (UCBs) can normally extend housing loans uptoRs 1 lakh to an individual. The scheduled
UCBs, however, can lend uptoRs 3 lakh for housing purposes.
The UCBs can provide advances against shares and debentures also. Co-operative bank do
banking business mainly in the agriculture and rural sector. However, UCBs, SCBs, and CCBs
operate in semi urban, urban, and metropolitan areas also.
The urban and non-agricultural business of these banks has grown over the years. The cooperative banks demonstrate a shift from rural to urban, while the commercial banks, from
urban to rural.
Co-operative banks are perhaps the first government sponsored, government-supported,
and government-subsidized financial agency in India.
They get financial and other help from the Reserve Bank of India NABARD, central
government and state governments.
They constitute the most favoured banking sector with risk of nationalization.
For commercial banks, the Reserve Bank of India is lender of last resort, but co-operative
banks it is the lender of first resort which provides financial resources in the form of
contribution to the initial capital (through state government), working capital, refinance.
Co-operative Banks belong to the money market as well as to the capital market.
Primary agricultural credit societies provide short term and medium term loans.
26
Land Development Banks (LDBs) provide long-term loans. SCBs and CCBs also provide
both short term and term loans. Co-operative banks are financial intermediaries only
partially.
The sources of their funds (resources) are (a) central and state government, (b) the
Reserve Bank of India and NABARD, (c) other co-operative institutions, (d) ownership
funds and, (e) deposits or debenture issues.
It is interesting to note that intra-sectoral flows of funds are much greater in co-operative
banking than in commercial banking.
Inter-bank deposits, borrowings, and credit from a significant part of assets and liabilities of
co-operative banks.
This means that intra-sectoral competition is absent and intra-sectoral integration is high for
co-operative bank.
Some co-operative banks are scheduled banks, while others are non-scheduled banks.
For instance, SCBs and some UCBs are scheduled banks but other co-operative bank are
non-scheduled banks. At present, 28 SCBs and 11 UCBs with Demand and Time Liabilities
over Rs 50 crore each included in the Second Schedule of the Reserve Bank of India Act.
Co-operative Banks are subject to CRR and liquidity requirements as other scheduled and nonscheduled banks are.
However, their requirements are less than commercial banks.
Since 1966 the lending and deposit rate of commercial banks have been directly regulated by the
Reserve Bank of India.
Although the Reserve Bank of India had power to regulate the rate co-operative bank but this have
been exercised only after 1979 in respect of non-agricultural advances they were free to charge any
rates at their discretion.
Although the main aim of the co-operative bank is to provide cheaper credit to their members and
not to maximize profits, they may access the money market to improve their income so as to remain
viable.
Retail Banking.
Trade Finance.
Treasury Operations.
Retail Banking and Trade finance operations are conducted at the branch level while the wholesale
banking operations, which cover treasury operations, are at the hand office or a designated branch.
Retail Banking:
Deposits
Remittances
Trade Finance:
Treasury Operations:
The banks can also act as an agent of the Government or local authority. They insure, guarantee,
underwrite, participate in managing and carrying out issue of shares, debentures, etc.
Apart from the above-mentioned functions of the bank, the bank provides a whole lot of other
services like investment counseling for individuals, short-term funds management and portfolio
management for individuals and companies.
It undertakes the inward and outward remittances with reference to foreign exchange and collection
of varied types for the Government.
The customer never overspread because the amount spent is debited immediately from the
customers account. So, for the debit card to work, one must already have the money in the account
to cover the transaction.
There is no grace period for a debit card purchase. Some debit cards have monthly or per
transaction fees.
Debit Card holder need not carry a bulky checkbook or large sums of cash when he/she goes at for
shopping.
This is a fast and easy way of payment one can get debit card facility as debit cards use ones own
money at the time of sale, so they are often easier than credit cards to obtain.
The major limitation of Debit Card is that currently only some 3000-4000 shops country wide
accepts it. Also, a person cant operate it in case the telephone lines are down.
3)
Automatic Teller Machine: The introduction of ATMs has given the customers the facility
of round the clock banking.
The ATMs are used by banks for making the customers dealing easier. ATM card is a device that
allows customer who has an ATM card to perform routine banking transaction at any time without
interacting with human teller.
It provides exchange services. This service helps the customer to withdraw money even when the
banks are closed.
This can be done by inserting the card in the ATM and entering the Personal Identification Number
and secret Password.
ATMs are currently becoming popular in India that enables the customer to withdraw their money
24 hours a day and 365 days.
It provides the customers with the ability to withdraw or deposit funds, check account balances,
transfer funds and check statement information.
The advantages of ATMs are many. It increases existing business and generates new business. It
allows the customers.
To order cash.
To receive cash.
Advantages of ATMs:
To the Customers
Privacy in transaction
The transaction is completely secure you need to key in Personal Identification Number
(Unique number for every customer).
To Banks
ATMs can be installed anywhere like Airports, Railway Stations, Petrol Pumps, Big Business
arcades, markets, etc. Hence, it gives easy access to the customers, for obtaining cash.
The ATM services provided first by the foreign banks like Citibank, Grind lays bank and now by
many private and public sector banks in India like ICICI Bank, HDFC Bank, SBI, UTI Bank etc.
The ICICI has launched ATM Services to its customers in all the Metropolitan Cities in India. By the
end of 1990 Indian Private Banks and public sector banks have come up with their own ATM
Network in the form of SWADHAN.
Over the past year up to 44 banks in Mumbai, Vashi and Thane, have became a part of
SWADHAN a system of shared payments networks, introduced by the Indian Bank Association
(IBA).
4) E-Cheques: The chequing system uses the network services to issue and process payment that
emulates real world chequing.
The payer issue a digital cheques to the payee and the entire transactions are done through
internet. Electronic version of cheques are issued, received and processed.
A typical electronic cheque transaction takes place in the following manner:
The customer accesses the merchant server and the merchant server presents its goods to
the customer.
The consumer selects the goods and purchases them by sending an e-cheque to the
merchant.
The merchant validates the e-cheque with its bank for payment authorisation.
The merchants bank forwards the e-cheque to the clearing house for cashing.
31
The clearing house jointly works with the consumers bank clears the cheque and transfers
the money to the merchants banks.
The consumers bank updates the consumers account with the withdrawal information.
The e-chequing is a great boon to big corporate as well as small retailers. Most major banks accept
e-cheques. Thus this system offers secure means of collecting payments, transferring value and
managing cash flows.
(5) Electronic Funds Transfer (EFT): Many modern banks have computerised their cheque
handling process with computer networks and other electronic equipments.
These banks are dispensing with the use of paper cheques. The system called electronic fund
transfer (EFT) automatically transfers money from one account to another.
This system facilitates speedier transfer of funds electronically from any branch to any other
branch.
In this system the sender and the receiver of funds may be located in different cities and may even
bank with different banks.
Funds transfer within the same city is also permitted. The scheme has been in operation since
February 7, 1996, in India.
The other important type of facility in the EFT system is automated clearing houses. These are the
computer centers that handle the bills meant for deposits and the bills meant for payment. In big
companies pay is not disbursed by issued cheques or issuing cash.
The payment office directs the computer to credit an employees account with the persons pay.
5)
6)
To get a particular work done through the bank, the users may leave his instructions in the
form of message with bank.
Facility to stop payment on request. One can easily know about the cheque status.
Mobile Banking: A new revolution in the realm of e-banking is the emergence of mobile banking.
32
On-line banking is now moving to the mobile world, giving everybody with a mobile phone access
to real-time banking services, regardless of their location. But there is much more to mobile banking
from just on-lie banking.
It provides a new way to pick up information and interact with the banks to carry out the relevant
banking business.
The potential of mobile banking is limitless and is expected to be a big success. Booking and paying
for travel and even tickets is also expected to be a growth area.
According to this system, customer can access account details on mobile using the Short
Messaging System (SMS) technology6 where select data is pushed to the mobile device.
The wireless application protocol (WAP) technology, which will allow user to surf the net on their
mobiles to access anything and everything.
This is a very flexible way of transacting banking business.
Already ICICI and HDFC banks have tied up cellular service provides such as Airtel, Orange, Sky
Cell, etc. in Delhi and Mumbai to offer these mobile banking services to their customers.
7)
Internet Banking: Internet banking involves use of internet for delivery of banking products and
services. With internet banking is now no longer confirmed to the branches where one has to
approach the branch in person, to withdraw cash or deposits a cheque or request a statement of
accounts. In internet banking, any inquiry or transaction is processed online without any reference
to the branch (anywhere banking) at any time.
The Internet Banking now is more of a normal rather than an exception due to the
fact that it is the cheapest way of providing banking services. As indicated by McKinsey Quarterly
research, presently traditional banking costs the banks, more than a dollar per person, ATM banking
costs 27 cents and internet banking costs below 4 cents approximately. ICICI bank was the first one
to offer Internet Banking in India.
Benefits of Internet Banking:
Reduce the transaction costs of offering several banking services and diminishes the need
for longer numbers of expensive brick and mortar branches and staff.
Increase convenience for customers, since they can conduct many banking transaction 24
hours a day.
33
Easy online application for all accounts, including personal loans and mortgages
Demat: Demat is short for de-materialization of shares. In short, Demat is a process where at the
customers request the physical stock is converted into electronic entries in the depository system.
In January 1998 SEBI (Securities and Exchange Board of India) initiated DEMAT ACCOUNTANCY
System to regulate and to improve stock investing. As on date, to trade on shares it has become
compulsory to have a share demat account and all trades take place through demat.
How to Operate DEMAT ACCOUNT?
One needs to open a Demat Account with any of the branches of the bank.
After opening an account with any bank, by filling the demat request form one can handover the
securities.
The rest will be taken care by the bank and the customer will receive credit of shares as soon as it
is confirmed by the Company/Register and Transfer Agent.
There is no physical movement of share certification any more. Any buying or selling of shares is
done via electronic transfers.
1) If the investor wants to sell his shares, he has to place an order with his broker and give a
Delivery Instruction to his DP (Depository Participant).
34
2) The DP will debit hi s account with the number of shares sold by him.
3) If one wants to buy shares, he has to inform his broker about his Depository Account
Number so that the shares bought by him are credited in to his account.
4) Payment for the electronic shares bought or sold is to be made in the same way as in the
case of physical securities.
BANKING SERVICES
Banking covers so many services that it is difficult to define it. However, these basic services have
always been recognized as the hallmark of the genuine banker. These are
ii.
iii.
iv.
v.
vi.
vii.
COMPANY PROFILE
36
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
Social responsibility
The social responsibility function at HDFC is not just restricted to a few specialists or
narrowly defined set of activities packaged somewhere out of sight.
It is a daily part of what the company strives to be: responsive, imaginative and sensitive in
the way we treat our customers, business associates, shareholders, employees and the
wider world in which we operate.
The brief accounts of select grants from the Shelter Assistance Reserve and other
initiatives described in the following pages are suggestive of our approach.
The year 2005-06 marked a decade of HDFCs varied initiatives in the area of micro-finance
with continued bulk-lending operations towards micro-enterprises and low-income housing.
The year also saw India facing a terrible succession of natural calamities, from the floods in
Mumbai and other parts of Maharashtra to the earthquake in the Himalayan region of
Kashmir.
37
HDFC joined hands with local level organisations to provide relief to the victims in the
affected areas.
In each case, the spirit and response of the people involved was characteristically generous
and inspiring.
Shelter Assistance Reserve
During the year, HDFC extended support towards several social causes resulting in an
overall utilisation of Rs. 476.56 lacs from the Shelter Assistance Reserve.
This involved the funding of numerous development initiatives by way of grants to over 150
partner NGOs.The segment-wise break-up of the utilisation is highlighted in the chart below.
Cited below are a few examples of projects funded by way of grant support out of the
Shelter Assistance Reserve during 2005-06:
Anandwan A way of life
It is said that there is no greater force in the universe than the one that drives the human
spirit. Anandwan is a living epitome of the sheer dominance of the human spirit over an
overtly misunderstood and stigma associated disease viz. leprosy.
A township(just off the NagpurChandrapur highway)set up almost five decades ago by the
non agenarianGandhian activist ShriMurlidharDevidas alias Baba Amte, Anandwan is
synonymous with the welfare and settlement of persons afflicted by leprosy who are cast
away by their families and society due to the shame and dishonor linked with this disease.
Over a period of time the township has extended its humanitarian activities to any individual
suffering from a physical handicap who is discarded by society.
Today, the township accommodates nearly 5000 inmates who are either leprosy inflectedor
suffer from some physical handicap.
These inmates are encouraged to lead a normal life and become self-reliant by way of
gainful employment in a plastic re-cycle project and as agriculturists tending to the fields
where cotton and wheat is grown.Residential units, which were built for the seinmates
nearly 45 years ago, are now in a dilapidated condition and some of these,need to be
reconstructed entirely.
38
HDFC along with Sir Ratan Tata Trust has joined hands with the Maharogi SewaSamiti (a
trust founded by Baba Amte) for part funding of the reconstruction and retrofitting expenses.
Free boarding and lodging was provided to the children but as the numbers grew the
Mission decided to set up a Residential High School.
Along with academic training the school also started providing vocational training and has
now developed into a Residential Technical Institute.
Currently the Home provides boarding, lodging and education to 400 orphaned /destitute
boys in the age bracket of 10-19.As part of its centenary, the school wants to add two new
courses to the existing syllabus- Mechanical Engineering and Computer Technology.
With the increase in the number of students attending the courses, the Home is building
additional hostel facilities.
HDFC has taken up the boarding and lodging expenses of the new students for a period of
two years.
40
It became difficult for the existingcenter to reach the child within the hour hence an
extension of the center was required. HDFC has committed to partnering with Childline on
this project for a period of 3 years.
NGOMela 2005
Concern India Foundation has been organising NGO Melas (trade fair / exhibition)every
year since 1995.
This large-scale event serves as a platform for NGOs to present themselves, market their
products and create awareness on their work.
The Melas include demonstrations of various arts and crafts by skilled artisans who are
otherwise unable to reach their products to the metropolitan clientele.
The event also helps raise much needed financial resources for NGOs from across the
country and enables them to network with each other while exposing them to a competitive
market scenario.
This year, the NGO Mela was organised in Mumbai with HDFC as the main sponsor. Over
100 NGOs from all over the country participated in the event.
These included NGOs working with youth, destitute children, women in distress, disabled
persons, tribal communities and on issues such as environment, rural livelihoods etc.
A team of highly trained teachers and professionally qualified therapists, each of whom has
hands on experience, look at making the best use of the capabilities and skills of the
students such as nurturing the special talents each individual manifests and encouraging
him/her to work on them.
Years of such experience have crystallized into a five-year vocational course, which, while
tapping a trainees special gift and fostering it, aims to equip that student to be launched
into a self-reliant and productive life.
The course covers training in art and crafts, tailoring, fast-food cookery and office. skills.
Some of the projects of the SPJ Sadhana School have successfully metamorphosed into
separate entities now operating as sister concerns, namely (i) The Shraddha Charitable
Trust and (ii) Om Creations.
The Shraddha Charitable Trust is a workshop providing productive support and training to
students who have passed out of Sadhana School and takes pride in producing eco-friendly
items only.
The autistic adults receive intensive training for income-generating activities including
sticking, painting, packing, sorting etc. and are then integrated into the workshop as full
time workers for products ranging from bags to office folders to paper weights and several
other household items.
The Om Creations on the other hand is a pioneering project of the Sadhana School for the
girl students.
Om Creations has a Catering section wherein the students are trained to make cookies,
biscuits, pickles, sweets and other snacks with the help of instructors.
The Trust also has an Art & Craft section wherein a variety of articles like handbags, gift
bags, napkins, mats, jewelry pouches, trays, plates, mugs etc. are made.
These items are bought by retail department stores, grocery shops, corporate bodies and
individuals and a part of the sales proceeds goes back to the adults giving them a sense of
economic independence.
42
HDFC has been regularly supporting the SPJ Sadhana School and its two sister
organizations by providing grant funds towards their programme and infrastructure
expenses and sponsoring their fund-raising events.
43
EMPLOYEE INITIATIVES
Run Mumbai Run and it did!!
Some ran with spirit, some with determination and some with causes but all with a heart.
Seasoned athletes and puffing minnows alike hit the tarmac with a bang at the 3rd Mumbai
Marathon held on January15, 2006.
This year, the marathon saw the pounding of nearly 30,000 pairs of feet, setting the cash
registers ringing. The event raised money for over 100 charities with the committed amount
reaching close to Rs. 5 crore.
Not to be left behind was team HDFC. A majority of the Mumbai region staff
(148employees, almost twice of last year) and some with their families and friends
participated in the Dream Run of 7 Km in support of two Mumbai-based NGOs ALERT
India and Child line India Foundation.
Aids Walk for Life
13 States
300 cities
36 exemplary individuals
After covering 6,800 Kms across thirteen states in the country, The AIDS Walk for Life
reached its pinnacle in New Delhi. Today, more than 5 million people in India are infected
with HIV/AIDS. Yet, very little is known about the disease.
On December 1,2005 World AIDS Day, our HDFC Delhi team joined the 36 heroes in
propagating awareness creation for combating HIV/AIDS. The Walk is a unique and
theatrical way of spreading awareness in the interiors of the country where conventional
awareness campaigns may not penetrate.
HDFC is proud to be associated with Project Concern India as a corporate sponsor
supporting the cause of AIDS awareness. .
44
45
In spite of this catastrophe, the Mumbaikar spirit was clearly visible in every nook and
corner of the city with people coming out to aid those stranded on the road through the
night.
HDFC partnered with famous singer Ms. UshaUthup to capture this never-say-die spirit of
Mumbai through the videoMumbaiMeriHai.
The song encapsulates the Mumbaikar spirit of reaching out in times of need and rising
back with full zeal and enthusiasm in spite of the adversities.
Not to be left behind was our Mumbai region staff. A collection drive for relief material was
organized immediately after the disaster through our Church gate, Parel and Vashi offices.
Our staff donated wholeheartedly to this cause. The relief material was distributed to floodaffected families in the slums of Mumbai and Navi Mumbai through local NGOs having a
strong
community
presence.HDFC
was
also
able
to
obtain
medicines
from
GlaxoSmithKline, which were distributed among NGOs conducting health camps in various
slums and low-income neighborhoods in the city.
46
Further, HDFC extended grants to several NGOs coordinating relief and rehabilitation
efforts in various parts of Mumbai and NaviMumbai.
The relief process included provision of dry ration, potable water, emergency medical aid,
provision of blankets and plastic sheets etc.
HDFC partnered with the Sir Ness Wadia Foundation and The Bombay Community Public
Trust to provide education material (specifically note books, uniforms and stationery) to
municipal school children in the severely affected areas.
Kashmir Earthquake
An earthquake of magnitude 7.6 struck the Himalayan region of Kashmir on October 8,
2005 resulting in colossal loss of life and property in Pakistan as well as India.
On the Indian side, it is reported that the disaster left more than 1300 people dead and
some 2500 injured, while over 1500 were missing. Through our Jammu, Ludhiana and
Chandigarh offices, HDFC provided relief material in the form of blankets, pulloversand milk
powder for the immediate needs of the victims of the earthquake.
In this initiative, HDFC partnered with Child line India Foundation (CIF) and their partner
organization Youth Technical Training Society(YTTS), Srinagar.
YTTS worked very closely with the Indian Army in planning and carrying out the relief
measures. The packaged relief material was transferred from Ludhiana to Chandigarh from
where it was airlifted to Jammu.
HDFC also partnered with The SOS Childrens Villages of India, who had already started
emergency relief work for families with a primary focus on children.
SOS has offered (with the willingness of the J&KGovt.) to undertake long-term care of 100
orphaned
children
from
this
tragedy
through
their
existing
SOS
village
in
Srinagar.Contribution from HDFCs employees and a matching grant from HDFC have
helped further SOSs commitment for long-term rehabilitation of orphaned children in
Kashmir.
47
HDFC has been associated with WWA since 2003 in the area of housing loans to the
economically weaker section (EWS) households.
HDFC has sanctioned threehousing loans amounting to Rs. 134 lacs for onward lending to
the members of WWA.The cumulative disbursement as onMarch 31, 2006 stood at Rs.
98.62 laces for construction of 219 dwelling units. With the active involvement of all the
stakeholders including the beneficiaries, WWA project staff and HDFC officials, the
ABHAYA housing project has become a steppingstone to achieve the goal of housing for
allinWayanad district.
The implementation of the scheme is being carried out in three phases the preparatory
stage followed by physical implementation and development of appropriate recovery
mechanisms.
In the preparatory stage, WWA gives emphasis on Save and Build concept. The
beneficiaries mobilize their own contribution towards the house construction by way of small
thrifts or savings, which ultimately helps WWA to select the beneficiaries in accordance with
the basic principles of credit, viz. character, capacity and capital.
The orientation given by the HDFC officials also helps to generate transparency and a
clear understanding about the housing loan products. There payment of the loan is
structured based on affordability of the WWA members and the recovery mechanism is also
being developed in a participatory way.
48
Voice from Mrs. Sainaba, one of the project beneficiaries....We have lost our property
which was mortgaged for the treatment of our son and we have been residing in a rented
house, giving Rs. 750/- per month for the last four years. With the support of WWA, we
have got Rs. 54,000/- from HDFC and we could construct a small house. I am glad that the
loan which I could never dream of getting, as per advice from other banks has now been
granted to me by HDFC within the shortest period and I find it much convenient to pay Rs.
581/- as monthly payment to HDFC.
49
The first site-visit report generated by the representatives of FREED provides a clear
understanding about the borrower extent of land, location sketch, type of house to be
constructed, plinth area, total estimated cost, allocation of funds, application of cost
reduction technologies, etc.
The subsequent visits by HDFC officials to the project locations, helps in orienting the
clients on various issues while advising them on certain dos and donts. The actionreflection praxis at FREED has further led to evolving appropriate tools for better
implementation of the scheme.
ASA follows the Grameen Bank model and has evolved its products and delivery systems in
accordance with the felt needs of the community. ASA-GV provides collateral-free credit to
poor women organised in groups of five (known as Grameen Banking Groups) at the village
level.
These groups are federated into centers, each centre being constituted with 20 groups.
The centers are further federated into branches. ASA-GV now operates in 11 districts of
Tamil Nadu with 45 branches serving more than 90,000 members spread over 2,500
villages.
50
HDFC has been associated with ASA since 2002 when the first loan of Rs. 50 laces was
sanctioned under the micro-enterprise finance facility (MFF). The total loan sanctioned
under MFF to ASA is Rs. 250 laces for onward lending to 3000 members and the amount
disbursed as of March 31, 2006 is Rs. 150 laces. In addition, HDFC has sanctioned Rs. 200
laces towards housing up gradation loans of which Rs. 100 lacesstood disbursed.
Through the provision of micro-finance and development services, ASA has empowered
their women clients and improved their access to and control over financial resources. The
following case is an illustration of the impact of ASAs micro-finance initiative:
Lakshmi, aged 28 hails from a backward family and was unable to study beyond 4th
standard due to intense poverty. She did menial jobs to support her familys survival. It was
at this juncture, that the ASA-GVmicro-finance program came to her rescue. Borrowing the
first loan of Rs. 3,000, she purchased a sewing machine to support her parents and save
money for her wedding expenses.
She married Ayappan, a hired laborer of a cycle shop. Ayappans low income was
insufficient for the family expenses. Here again, she sought the aid of ASAGV and
borrowed the 2nd loan of Rs. 7,000 which was invested in their cycle shop with 5 bicycles.
Renting out these cycles, they earned Rs. 500 per week.
After repayment of the 2nd loan, Lakshmi took the 3rd loan ofRs. 9,000 to purchase tape
recorders, mic and sound system to be rented out for functions and weddings. Now she is a
proud mother and is able to provide good education to her two sons.
Lakshmi says My life would have been in chaos if GV had not helped me. Going for a 4th
loan of Rs. 10,000 she has recently bought additional bicycles and also sells spare parts for
them.
51
ESAF first approached HDFC in 2001 for an MFF loan of Rs. 20 laces. It was a small
beginning, but the outcome was a multi-faceted impact in the community. The members
started thinking of initiating group enterprises and the same materialized through
subsequent loans from HDFC. HDFC has sanctioned three MFF loans to ESAF amounting
to Rs. 220 laces of which Rs. 170 laces stood disbursed as on March 31, 2006.
Women in business can sometimes find it difficult to assert themselves, but- a member of
JyothisSangam, Kodungallur and her friends dared to poke into what we understand as a
mans stronghold. They collectively undertook concrete brick manufacturing with the
support of credit made available to them by HDFC through ESAF. Subhashini and her
friends found that coming together as a group helped them to be bold in their approach and
to create a thriving business.
Our activity brings us happiness. Not only to us but to our clients and even to those who
visit and see us.says Subhashini. After finishing their household work they gather together
at around 11o clock everyday and make more than 100 bricks in a day. Today, they stand
52
as a group of 25 members having three enterprises viz, concrete brick manufacturing, goat
rearing and mat weaving. Having availed loans of more than Rs. 2 lace, the group is proud
to say that they have always been regular in repayment of their loans
Organizational Goals
HDFCs main goals are to
Maintain its position as the premier housing finance institution in the country,
Corporate strengths
Strong brand
Awards
2002 - Rated as the best non banking financial company in Asia by institutional
investor research group
2001 - Asia money declared HDFC as Indias second best managed company
1999 - IMC Ramakrishna Bajaj national quality award in service category financial
institutions
1998 - excellence in service industry by IIMM and top management club (Pune)
53
1998 - best company in India for strategy and management and industrial relations
by Asia money
1994-95 and 1996-97 - best presented accounts in SAARC region by south Asian
HISTORY
The Standard Life Assurance Company ("Standard Life") was established in 1825 and the
first Standard Life Assurance Company Act was passed by Parliament in 1832. Standard
Life was reincorporated as a mutual assurance company in 1925.
The Standard Life group originally operated only through branches or agencies of the
mutual company in the United Kingdom and certain other countries.
The groups Hong Kong subsidiary, Standard Life Asia Limited (SL Asia), was incorporated
in 1999 as a joint venture and became a wholly-owned subsidiary of Standard Life in 2002.
The groups operations in Hong Kong were established to give the group a presence in the
Far East from which it could expand into China. The groups joint ventures in India with
Housing Development Finance Corporation Limited (HDFC) were incorporated in 2000 (in
relation to the life assurance and pensions joint venture) and 2003 (in relation to the
investment management joint venture). The groups joint venture in China with Tianjin
Economic Development Area General Company (TEDA) became operational in 2003.
commenced
in
2006.
Service company
Following the groups strategic review in 2004, the group established a service company
structure for the provision of central corporate services to the groups business units.
Standard Life Employee Services Limited (SLESL) supplies a wide range of central
services to the rest of the group, including IT, facilities, legal and human resources services,
and employs staff working in the groups UK and Irish operations (other than SLI, SLB and
SLH, which employ their staff directly). This service company structure was created to
enable Standard Life to comply with regulatory restrictions on the provision of noninsurance services and to exploit group-wide synergies.
55
On 31 May 2006, Standard Life's voting members voted in favor of the Special Resolution
for the demutualization of The Standard Life Assurance Company and the flotation of
Standard Life plc on the London Stock Exchange.
Structure of Standard Life plc
Standard Life plc owns all of the businesses and companies in the group. Standard Life plc
is a holding company which is owned by its shareholders (including those Eligible Members
who received and retained shares received as a result of demutualization).
56
Underneath Standard Life plc are Standard Life Healthcare Limited, Standard Life
Investments (Holdings) Limited (and underneath it, Standard Life Investments Limited),
Standard Life Oversea Holdings Limited, Standard Life Employee Services Limited,
Standard Life Assurance Limited and Standard Life's Joint Venture interest in China
Underneath Standard Life Oversea Holdings are Standard Life Asia Limited and Standard
Life Financial Inc (and underneath it, The Standard Life Assurance Company of Canada).
Underneath Standard Life Assurance Limited are Standard Life Direct Limited, Standard
Life Savings Limited, Standard Life Direct Limited, Standard Life Trustee Company Limited,
Standard Life Bank Limited, Standard Life Pensions Funds Limited, Standard Life
International Limited and The Standard Life Assurance
Customer statistics
Customers
Statistics
Worldwide customers
Approximately 7 million
Customers in the UK
Over 5 million
2.4 million
Life
Investments
launched
Standard
Life
Assurance
Company's
60
2004-Strategic Review of business announced Group Chief Executive Iain Lumsden retires
Sandy
Crombie
appointed
Trevor
Matthews
appointed
Funds
under
management
as
as
Chief
exceed
Group
Executive
100
Chief
UK
billion
Life
Executive
and
for
first
Pensions
time.
proposal
to
demutualise
and
float
on
the
stock
exchange.
Standard Life floats on the London Stock Exchange on 10 July 2006 with the Offer Price set
at 230p. Standard Life joins the FTSE 100 index on 18 July.
The next three years were filled with uncertainty, due to changes in government and
ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act
passed in parliament. Despite this both companies remained firmly committed to the
venture.
In October 1998, the joint venture agreement was renewed and additional resource made
available. Around this time Standard Life purchased 2% of Infrastructure Development
Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC
Treasury department to advise them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising and both
companies agreed the time was right to move the operation to the next level. Therefore, in
January 2000 an expert team from the UK joined a hand picked team from HDFC to form
the core project team, based in Mumbai.
Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in
HDFC Bank.
In a further development Standard Life agreed to participate in the Asset Management
Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was
launched on 20th July 2000
62
HDFC as on March 31, 2007 holds 81.9 per cent of equity in the joint ventureGiven
Standard Life's existing investment in the HDFC Group, this is the maximum investment
allowed under current regulations.
HDFC and Standard Life have a long and close relationship built upon shared values and
trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies
and be the yardstick by which all other insurance company's in India are measured.
VARIABLE RATE DEPOSIT: - Interest rate on variable deposit is linked to the benchmark
rate and will vary from time to time with benchmark rate. Benchmark rate is that rate which
is applicable on HDFC fixed rate deposit product for the corresponding period. Rate of
interest on the first day of interest period will be applicable for the entire interest period.
Deposit once placed cannot be interchanged between fixed and variable rate till the date of
maturity.
These benefits can be explained as follows: 1. Highest Safety: 'FAAA' and 'MAAA' rating affirmed for the eleventh consecutive year by
CRISIL and ICRA respectively.
2. Quick Loan Facility: Loan against deposit is available after 3 months from the date of
deposit up to 75% of the deposit amount subject to the other terms and conditions framed
by HDFC. Interest on such loans will be 2% above the deposit rate
3. Tax Benefits: TDS: No tax deduction at source on interest from deposits upto Rs.
5,000/- per branch in a Financial Year.
4. Attractive Returns: HDFC deposits are Available throughout the year and offer
Attractive, Assured returns to investors. Interest rates offered are higher than that offered
by most of the commercial banks.
5. Nomination Facility: Individual depositors, singly or jointly, can nominate under this
facility. In case the deposit is placed in the name of a minor only a person lawfully entitled to
act on behalf of the minor can make the nomination.
Power of attorney holder or any person acting in representative capacity as holder of an
office or otherwise cannot nominate.
The nominee shall have the right to receive the amount due in respect of deposit on death
of all the depositors and payment by HDFC to the nominee shall constitute full discharge to
HDFC of its liability in respect of the deposit.
64
6. Demand Draft Facility: Outstation depositors can send demand drafts after deducting
demand draft charges. This facility is not available to investors under Easy way Savings.
This facility is applicable for places where HDFC does not have an office.
7. High Service Standards: Depositors are offered across the counter services for new
deposits, renewals, repayments and loan against deposit facility. Further, all enquiries
through email, post, telephone and in person are attended to immediately.
Presently
this
facility
is
being
offered
by
us
at
the
following
centers
PERIOD
(MONTHS)
TDS (Rs)
INDIVIDUALS
SENIOR
CITIZENS
12-23
5.75
86,000
80,000
24-35
6.00
83,000
76,000
65
36-59
6.50
76,000
71,000
60-84
6.75
74,000
68,000
Other main features attached to HDFC deposits: 1. Mode of acceptance: -Deposits can be made by cash/cheques/demand drafts. Cheques
and drafts are drawn in the favors of HOUSING DEVELOPMENT FINANCE
CORPORATION Ltd or HDFC Ltd and should be marked Account Payee Only.
2. Renewals and Repayment: - For renewals or repayment of deposit, the duly discharged
deposit receipt must be surrendered to HDFC at least a week before the date of maturity. A
crossed Account Payee cheque favoring the first named depositor will make repayment of
deposit amount.
3. Agents: - HDFC invites deposits through the channel of authorized agents. HDFC has
agent network of over 50,000 and a depositor base of around 1 million.
TABLE FOR PREMATURE WITHDRAWALS: Months completed from the date of Rate of interest payable
deposit
3 less than 6
No interest
6 less than 12
3.50% p.a
66
completed
period
under
67
POSITION OF HDFC DEPOSITS: HDFC has a depositor base of 1 million. Public deposits constitute approximately 80% of
the total deposits of the corporation. Deposits of HDFC for past few years are as follows: YEARS
DEPOSITS
1995-96
2512.69
1998-99
3502.19
1999-00
4423.79
2000-01
5252.40
2001-02
6223.85
2002-03
7249.83
2003-04
8491.02
2004-05
9121.55
2005-06
9337.65
2006-07
7840.09
Fixed deposits can be shown with the help of following diagram. The graph shows that
HDFC deposits are increasing upto 2005-06and showed a decline in 2006-07
68
10000
9000
8000
7000
6000
5000
DEPOSITS
4000
3000
2000
1000
0
1997-981998-991999-002000-012001-022002-032003-042004-052005-062006-07
FIXED
DEPOSITS FOR HDFC
69
Liquidity
o
Internet Banking
Phone banking
70
LIC Policy
Voters Identity Card
Pension Payment Order
Birth Certificate issued by the competent authority
Passport
Defence ID Card / Govt ID Card (Provided they have the cardholder's photo, signature
and date of birth)
PSU Issued ID Cards
Senior Citizen Cards issued by Indian Airlines / Indian Railways
PAN Card
INTEREST RATES ON FIXED DEPOSITS OF DIFFERENT BANKS
Indian Banks - Public Sector
BANK NAME / DURATION
1 - 2yrs
2 - 3yrs
3 - 5yrs
Allahabad Bank
8.00
8.25
8.25
Andhra Bank
9.00
9.25
8.60
Bank of Baroda
8.75
8.75
8.50
Bank of India
8.75
8.25
7.75
Bank of Maharashtra
8.30
8.30
8.30
Canara Bank
8.75
8.75
8.50
8.25
8.25
8.50
Corporation Bank
9.15
9.25
9.25
Dena Bank
8.50
8.50
8.25
IDBI Bank
8.75
9.00
9.25
Indian Bank
8.50
8.50
8.50
8.25
8.25
8.75
8.50
8.50
8.50
8.50
9.00
9.00
71
8.75
8.50
8.50
8.50
9.25
9.00
8.50
8.75
8.75
7.75
8.25
8.25
8.75
8.50
8.50
8.50
9.00
8.25
8.50
8.75
8.75
Syndicate Bank
9.00
9.00
9.00
UCO Bank
8.00
8.25
8.25
8.00
8.75
8.75
8.25
8.50
9.00
Axis Bank
8.75
8.25
7.00
9.00
9.00
9.00
7.50
7.75
7.75
HDFC Bank
8.00
8.25
8.25
ICICI Bank
8.00
8.25
8.50
IndusInd Bank
9.00
8.75
8.75
8.50
8.75
8.75
Karnataka Bank
9.75
9.50
9.25
Kotak Bank
8.75
9.00
9.00
9.25
9.25
8.75
8.00
8.25
8.50
8.60
8.80
8.80
8.60
8.75
8.75
72
9.25
8.75
8.75
8.50
8.50
8.50
10.00
9.75
9.00
10.10
9.00
7.75
9.25
8.75
8.75
TNSC Bank
9.00
8.50
8.50
Yes Bank
8.25
8.50
8.75
Bank
Interes
t
Rates
9.50% 10.25%
ICICI Bank
10% 10.75%
HDFC Ltd
9.75%10.25%
LIC Housing
9.90% 10.75%
DHFL
10.25% 11%
India Bulls
9.75% 10.25%
10.50% 11.75%
Bank of Baroda
10.50% 12%
73
Personal Loan
Req_Loan_Perso
Full Name :
PL main page
Please Select
City :
/apply-personal-lo
Occupation :
Please Select
DD
Annual
Income :
DOB :
MM
Other City :
Other City
Loan Amount :
YYYY
+91
Mobile :
Pincode :
Email ID :
Company
Name :
I have read the Privacy Policy and agree to the Terms And Condition.
Yes
No
Submit
What
is
a
Personal
loan?
Personal Loan is an unsecured loan for personal use which doesnt require any security or
collateral and can be availed for any purpose, be it a wedding expenditure, a holiday or
purchasing consumer durables, the personal loan is very handy & caters to all your needs.
The amount of loan can be ranged from Rs. 50,000 Rs. 20 lakh & the tenure for repaying
the loan varies from 1 to 5 years. More Information about personal loan section click articles
about personal loan and Personal loan must read.
Name Of
Effective
EMI
No.Of EMI
Processing
74
Interest
Fee
Bank
Rate
HDFC
14%
3491
36
2%
ICICI BANK
15.5%
3418
36
2% to 3%
PNB
13%
3369
36
BANK
75
RESEARCH METHDOLOGY
INTRODUCTION
Research in common parlance refers to a search for knowledge. One can also define
research as a scientific and systematic search for pertinent information on a specific topic.
Infact, research is an art of scientific investigation. Research is a systematized effort to
gain new knowledge
Research is an original contribution to the existing knowledge for its advancement. It is the
pursuit of truth with the help of study,observation, comparison and experiment. In short
knowledge through objective and systematic method of finding solution to a problem is
research. Research refers to the systematic method consisting of enunciating the problem,
formulating the hypothesis, collection of the facts .
Problem Definition / Title of the Study:A Study On Comparative Analysis Of Fixed Deposits, Home Loan & Personal Loan Of
HDFC Bank With PSUs.
Duration of the project:My report on Comparative Analysis Of Fixed Deposits, Home Loan & Personal Loan Of
HDFC Bank With PSUs., have been completed in 22 days.
The basic objective of my comparative analysis was to analyze the general view of public
on HDFC fixed deposits, personal loans$ home loans.
The main aim of the project is to study the current position of HDFC deposits , personal
loans$ home loans as compared to PSUs by taking public view with the help of
questionnaire and then afterwards study the feedback got from the same.
76
The researchs one of the aims was to find out the current position of HDFC deposits
personal loans $ home loans as compared to other competitive PSUs banks and finding
out different areas of improvement where HDFC is lagging behind.
Type of Research :Descriptive Research: Descriptive research includes fact finding enquiries of different
kinds. The major purpose of descriptive research is description of the state of affairs as it
exists at present. Researcher has no control over the variables of this type of research.
Data Collection:
Primary Data: Data is collected primarily through personal contact, meeting, interview and
questionnaire with the concerned authority of the organization and respondents
Secondary Data:
Secondary data was collected by gathering information from concerned personnel at these
firms and the rest was collected from the various journals and websites
Sample Size & Method Of Selecting Sample:The sampling method so as to obtain a representative sample is the Non-probability
sampling methods. Under Non-probability sampling, the question addressed the basic
questions relating to the Customer Preferences Regarding To The Fixed Deposits, Home
Loan & Personal Loan Of HDFC Bank.
A random sample of 100 people was taken. I selected the respondents to the survey on the
basis of judgment sampling with convenience taken into account.
The survey is conducted in very short time. Hence shortage of time is a big limitation for the
survey.
In the Jaipur city, Peoples are very busy in work. They do not give enough time to answer
questions.
Due to time constraint the survey could be conducted only in Jaipur. This proved to be a
limitation because the results thus obtained cannot be accurately generalized for the entire
country.
78
52% customers are banking with private banks and these are the most preferred banks.
Income and growth are the basic purpose of investment in the Banks
Brand and timings are the important factor while choosing a bank
85% customers feel that services of private banks are satisfactory and above the mark of
80
1. OCCUPATION:
Govt. Service
Bus. Man
Professional
Others
8
32
14
46
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
81
In my survey, I got a good mix of respondents from all sectors. I studied the responses of
14% Professionals, 8% Govt. Service personnel, 32% businessman and 46% from other
categories.
26
150000-300000
42
300000-450000
18
450000$above
14
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
The income group I got in my survey was very beneficial as it covers wide range of income
groups. 42% respondents were belong to income group of 1,50,000-3,00,000; 26% were
below 1,50,000; 18% were of 3,00,000-4,50,000 and 14% were having income 4,50,000 &
above.
Savings
12
Growth
22
Income
12
Safety
22
Tax saving
32
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
People invest in banks for various reasons. Most of the respondents in survey were
interested in Tax saving factor followed by income, savings and growth.
4. Which bank you are banking with and which is your most preferred
bank?
83
PSU bank
10
Private bank
44
Cooperative bank
26
Foreign bank
20
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
I found that private banks are more preferred upon PSU banks as 44% respondents were in
favor of the same. 10%respondents are comfortable in dealing with PSU banks while only
26% and 20% were in favor of cooperative and Foreign banks.
Services
Brand
Timing
Network
Investment services
10
18
22
18
32
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
Survey reveals that respondents have different preference in choosing a bank. 18% give
preference to brand, 22% were concerned with timings; services provided by banks were
given preference by 10% of respondents. Network 18% and Investment services 32% were
preferred by respondents.
85
6. Do you feel that services of private bank like HDFC are satisfactory
and above the mark of public sector banks?
YES
40
NO
60
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Documentation
INTERPRETATION:
Survey reveals that most of the customers of private banks are not satisfied their services
offered. It constitutes of 40% while 60% feels that the performance of Private bank were not
up to the mark.
86
7. From which bank you would like to borrow personal loan as well as
home loan after HDFC?
SBI
16
PNB
10
BOB
18
Allahabad bank
38
Other psu's
18
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
Survey reveals that respondents would prefer first Allahabad bank to borrow loans af. BOB
and other psu were second option as 18% of the respondents were in their favor. Rest
would go to other PNB banks for the same.
87
12
Interest rate
42
Brand image
46
30%
25%
20%
15%
10%
5%
0%
INTERPRETATION:
Chart shows that most of the respondents i.e. 46% give brand image as a preference while
borrowing loan. Interest rates is preferred by 42% while time saving is preferred by 12% of
the respondents.
88
22
PNB
24
BOB
28
Allahabad bank
12
Other psu's
14
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
28% of the respondents feel that Interest rates of BOB in personal loans are highly
competitive with what HDFC offers. 24% of respondents think PNB is competitive enough in
same terms while 22% feels that SBI has good interest rate to offer in personal loan.
89
28
32
20
12
8
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION
pnb provides very good and competitive loan as compared to other PSUs when compared
to HDFC bank as, 32% of the respondents were in favor of it. SBI and BOB were rated as
second and third with 28% and 20% respectively.
90
SBI
PNB
BOB
Allahabad bank
other psu's
32
18
22
16
12
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
SBI again has the highly competitive rates to offer on Home Loan as compared to HDFC
rates. BOB and PNB again rated as second and third spot with 22% and 18% were in favor.
16% feel that Allahabad bank has a competitive rates to offer with HDFC.
91
12. Are you satisfied with the skills of HDFC employees as compared to
psu?
YES
80
NO
20
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Documentation
INTERPRETATION:
Survey reveals that most of the respondents were highly satisfied with the skills of HDFC
bank employees which constitute 80%.Only 20% of the respondents feel that there is a
scope to improve skills of the employees.
+
92
22
28
22
28
30%
25%
20%
15%
10%
5%
0%
Banking staff operation
Interest rates
INTERPRETATION:
Survey reveals that there are some serious drawbacks in HDFC bank as far as loans and
deposits are concerned. 22% of the respondents feels that it is their interest rates; equally
with it Bank staff operations and handling process also contribute to the drawbacks. 28%
feels that the documentation poses a problem in dealing with HDFC.
93
STRENGTHS
94
WEAKNESS
95
OPPORTUNITIES
THREATS
97
CONCLUSION
A survey of the people has been conducted to know the general view of public on HDFC
fixed deposits, personal loans$ home loans and to find out the current position of HDFC
deposits, personal loans $ home loans as compared to other competitive PSUs banks .
It is observed that 52% customers are banking with private banks and these are the most
preferred banks.
Customer gives importance to Brand and timings while choosing a bank. It is also
observed that mostly customers are satisfied with the skills of HDFCs employees as
compared to PSUs.
It is concluded from the facts collected that customers feel that services of private bank like
HDFC are satisfactory and above the mark of public sector banks.
98
Bank should provide effective publicity of new product launched & educate the customer so
that they can easily use and avail all the facilities available on the entire product.
HDFC bank should be very careful while reconsidering the price & offering rate of interest of
99
Questionnaire
Name :
Age:
1. Occupation
a) Govt. service
b) Business man
c) Professional
d) Others
c)1,50,000-3,00,000
d) 4,50,000 & above
3. When the respondents were ask about their basic purpose of investment in banks?
a) Savings
c) Growth
b) Income
d) Safety
e)Tax saving
100
4. Which bank you are banking with and which is your most preferred bank?
a) PSU bank
c)Private bank
b) Cooperative bank
d) oreign bank
5. Which factor you consider most while choosing a bank?
a)Services
c)Brand
b)Timings
d)Network
e)Investment services
6. Do you feel that services of private bank like HDFC are satisfactory and above
the mark of public sector banks?
a)Yes
b) No
7. From which Bank you would like to borrow personal loan as well as home loan?
a) SBI Bank
c)PNB
b) BOB
d) Allahabad Bank
e) Other PSUs
9. Which of the following banking organization providing the rate of personal loan
interest found competitive with HDFC Bank?
a) SBI Bank
c) PNB
b) BOB
d) Allahabad Bank
e) Other PSUs
10. Which of the following banking organization providing the rate of Fixed Deposits
found competitive with HDFC Bank?
a) SBI Bank
c) PNB
b) BOB
d) Allahabad Bank
e)Other PSUs
11. Which of the following banking organization providing the rate of Home loans
interest found competitive with HDFC?
a) SBI Bank
c) PNB
b) BOB
d) Allahabad Bank
101
e) Other PSUs
12. Are you satisfied with the skills of HDFCs employees as compared to PSU?
a) YES
b) NO
13. What could be the possible drawbacks of HDFC bank in providing loans and
deposits?
a) Banking staff operations
b) Documentation
c) Interest rates
d) Delay in Handling grievances & queries
102
103
BIBLIOGRAPHY
BOOKS:
Kothari C. R.: Research Methodology=methods and techniques.
Kotler Phillip: Marketing Management Eleventh revised edition, 2002.
Gupta S. P.: Statistical Methods Thirteen revised edition, 2001.
Khan, M Y , Financial services, Tata McGraw-Hill, New Delhi 2006.
Khan, M Y ,Indian Financial system, Tata McGraw-Hill, New Delhi 2007
WEBLIOGRAPHY
http://finance.indiamart.com/investment_in_india/banking_in_india.html
http://finance.indiamart.com/investment_in_india/nationalisation_banks.html
http://en.wikipedia.org/wiki/banking_in_india
http://en.wikipedia.org/wiki/indian_bank
http://www.citefin.com/1405-history-banking-india.html
http://en.wikipedia.org/wiki/bank
http://moneycentral.msn.com/banking/services/home.asp
Http://catalogs.indiamart.com/services/banking-services.html
http://www.hdfcbank.com/personal/default.htm
http://www.hdfcbank.com/personal/accounts/default.htm
http://www.hdfcbank.com/personal/loans/default.htm
http://www.hdfcbank.com/personal/cards/default.htm
http://www.hdfcbank.com/personal/investments/default.htm
http://www.hdfcbank.com/personal/forex/default.htm
http://www.hdfcbank.com/personal/payments/default.htm
http://www.hdfcbank.com/personal/preferred/default.htm
http://www.hdfcbank.com/personal/pvt_banking/default.htm
http://www.hdfcbank.com/personal/access/default.htm
http://www.hdfcbank.com/personal/prd_glance.htm
104
S.no
Questionnaire1
Q1
d
Q2
a
Q3
E
Q4
a
Q5
c
Q6
a
Q7
d
Q8
c
Q9
c
Questionnaire2
Questionnaire3
Questionnaire4
Questionnaire5
Questionnaire6
Questionnaire7
Questionnaire8
Questionnaire9
Questionnaire1
0
Questionnaire11 a
Questionnaire1
2
Questionnaire1
3
Questionnaire1
4
Questionnaire1
5
Questionnaire1
6
Questionnaire1
7
Questionnaire1
8
105
Questionnaire1
9
Questionnaire2
0
Questionnaire2
1
Questionnaire2
2
Questionnaire2
3
Questionnaire2
4
Questionnaire2
5
Questionnaire2
6
Questionnaire2
7
Questionnaire2
8
Questionnaire2
9
Questionnaire3
0
Questionnaire3
1
Questionnaire3
2
Questionnaire3
3
D
106
Questionnaire3
4
Questionnaire3
5
Questionnaire3
6
Questionnaire3
7
Questionnaire3
8
Questionnaire3
9
Questionnaire4
0
Questionnaire4
1
Questionnaire4
2
Questionnaire4
3
Questionnaire4
4
Questionnaire4
5
Questionnaire4
6
Questionnaire4
7
Questionnaire4
8
107
Questionnaire4
9
Questionnaire5
0
S.no
Questionnaire51
Q1
d
Q2
a
Q3
E
Q4
a
Q5
c
Q6
a
Q7
d
Q8
c
Q9
c
Questionnaire52
Questionnaire53
Questionnaire54
Questionnaire55
Questionnaire56
Questionnaire57
Questionnaire58
Questionnaire59
Questionnaire60
Questionnaire61
Questionnaire62
Questionnaire63
Questionnaire64
Questionnaire65
Questionnaire66
Questionnaire67
Questionnaire68
Questionnaire69
A
108
Questionnaire70
Questionnaire71
Questionnaire72
Questionnaire73
Questionnaire74
Questionnaire76
Questionnaire77
Questionnaire78
Questionnaire79
Questionnaire80
Questionnaire81
Questionnaire82
Questionnaire83
Questionnaire84
Questionnaire85
Questionnaire86
Questionnaire87
Questionnaire88
Questionnaire89
Questionnaire90
Questionnaire91
Questionnaire92
Questionnaire75
109
Questionnaire93
Questionnaire94
Questionnaire95
Questionnaire96
Questionnaire97
Questionnaire98
Questionnaire99
Questionnaire10
0
110