Professional Documents
Culture Documents
The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an in principle approval from the Reserve Bank of India (RBI) to set up a
bank in the private sector, as part of RBIs liberalization of the Indian Banking Industry in
1994. The bank was incorporated in August 1994 in the name of HDFC Bank Limited,
with its registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.
HDFC Banks objective is to build sound customer franchises across distinct businesses
so as to be the preferred provider of banking services for target retail and wholesale
customer segments, and to achieve healthy growth in profitability, consistent with the
banks risk appetite. The bank is committed to maintain the highest level of ethical
standards, professional integrity, corporate governance and regulatory compliance. HDFC
Banks business philosophy is based on five core values: Operational Excellence,
Customer Focus, Product Leadership, Sustainability and People.
S.no
Particulars
1.
Name
2.
Logo
Details
HDFC Bank Ltd.
3.
Address
4.
Registered Office
5.
Branches
6.
Website
www.hdfcbank.com
7.
amit.munjal@hdfcbank.com
where
the
NSE/BSE
have
strong
and
active
member
base.
The Bank also has a network of 11,256 ATMs across India. HDFC Banks ATM network
can be accessed by all domestic and international Visa / MasterCard, Visa Electron /
Maestro, Plus / Cirrus and American Express Credit / Charge cardholders.
Figure No - 1.1
Figure No - 1.2
Figure - 1.1 & 1.2 Increase in Branches and Locations over the years
4
Figure No 1.3
Figure - 1.3 Distribution Network in the country
Wholesale Banking
b.
Retail Banking
c.
Treasury
The Bank is also one of the leading players in the merchant acquiring business with over
270,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant
establishments. The Bank is well positioned as a leader in various net based B2C
opportunities including a wide range of internet banking services for Fixed Deposits,
Loans, Bill Payments, etc.
1.23 Treasury
Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporates need more sophisticated risk
management information, advice and product structures. These and fine pricing on various
treasury products are provided through the banks Treasury team. To comply with
statutory reserve requirements, the bank is required to hold 25% of its deposits in
government securities. The Treasury business is responsible for managing the returns and
market risk on this investment portfolio.
(b) Operational Excellence: With a dedicated team to monitor quality and service standards,
several of HDFC Banks process segments, including HR Operations are ISO certified.
Over 2200 quality improvement projects, aimed at improving operational excellence have
been successfully implemented. Over 550 employees have qualified for Six Sigma
Certification and over 80 have earned the yellow belt.
(c) Product Leadership: HDFC Bank has consistently developed innovative products and
services that attract its targeted customers. Focusing on high earnings growth and low
volatility, HDFC Bank continues to develop and distribute products / services that reduce
cost of funds, by leveraging its extensive branch network. The Bank actively tracks the
performance of various products and depending on the feedback received, tweaks product
features, to better address the customer needs.
(d) Sustainability: HDFC Bank recognize Social and Environmental aspects as essential
elements of a Sustainable business philosophy and is committed to enhance its
performance on these fronts.
(e) People: People are the Banks greatest strength. HDFC Bank believes that the ultimate
identity and success of Bank will reside in the exceptional quality of its people and their
extraordinary efforts. For this reason, the Bank is committed to hiring, developing,
motivating and retaining the best people in the industry.
10
11
Figure No - 1.4
Figure No - 1.5
Figure No - 1.6
Figure - 1.5 & 1.6 Increase in Balance Sheet and Advances over the years
Figure No - 1.7
Figure No - 1.8
Figure - 1.7 & 1.8 Increase in Deposits and Saving Deposits over the years
13
14
Board Of Directors
Mr. C. M. Vasudev (Ch.)
Mr. A. N. Roy
Mr. Bobby Parikh
Mr. Keki Mistry
Dr. Pandit Palande
Mr. Partho Datta
Mrs. Renu Karnad
Mr. Vijay Merchant
Table No 1.2: HDFC Banks Board of Directors
Name
Designation
Managing Director
Business Heads
Abhay Aima
Anil Jaggia
Ashish Parthasarthy
Treasury
Bhavesh Zaveri
Operations
Jimmy Tata
Navin Puri
Branch Banking
Rahul Bhagat
Sashi Jagdishan
V. Chakrapani
Audit
Deepak Maheshwari
15
Figure 1.9: HDFC ranks first amongst Top Performing Banks in Country
16
Names of Employees
S.no
Particulars
Details
Amit Munjal
Nikhil Rahi
Nirmal Kalra
Credit Manager
Mahinder Seth
Branch Manager
17
Personal Observation also played an important role to get to know about organizations
internal environment and client dealing.
18
CHAPTER 2
SWOT ANALYSIS
19
2. SWOT ANALYSIS
The technique is credited to Albert Humphrey, who led a convention at the Stanford
Research Institute (now SRI International) in the 1960s and 1970s using data from
Fortune 500 companies. The degree to which the internal environment of the firm
matches with the external environment is expressed by the concept of strategic fit.
Setting the objective should be done after the SWOT analysis has been performed. This
would allow achievable goals or objectives to be set for the organization.
Strengths: are the characteristics of the business that give it an advantage over others.
Weaknesses: are the characteristics that place the business or project at a disadvantage
relative to others.
Opportunities: elements that the project could exploit to its advantage
Threats: elements in the environment that could cause trouble for the business or project
20
Existing businesses can use a SWOT analysis, at any time, to assess a changing
environment and respond proactively. New businesses can use a SWOT analysis as a part
of their planning process.
Helpful in achieving
the Objective.
Harmful to achieving
the Objective.
Strengths
Weakness
a. Less Credit Facility in Remote
Areas.
Competitor
compared to competitors.
d. Cost Conscious.
d. No Global Existence.
e. Strong Management.
Opportunities
Threats
a.
b.
c.
d.
e.
a.
21
2.12 Strengths
(a) Top Performer amongst the Competitor:
HDFC Bank has emerged as the best large bank because of good asset quality, high loan
growth, a healthy capital adequacy ratio and an improvement in returns on capital
employed
(b) Vast Distribution Network:
Banks distribution network was at 3,403 branches in 2,171 locations.
(c) Large Employee Strength:
Bank has huge employee base of 69,065 people as of 31st March 2013.
(d) Cost Conscious:
Bank has its unique cost management practices which helps in controlling the operating
cost within defined budgetary parameters.
(e) Strong Management:
Senior banking professionals with substantial experience in India and abroad, head various
businesses and functions
22
2.13 Weakness
(a) Less Credit Facility in Remote Areas
Bank is conservative in providing credit facility in rural areas as compared to the urban
area.
(b) Lacks in marketing strategies as compared to competitors:
Bank does not follow extensive marketing techniques as competitor banks do.
(c) Low per employee productivity:
Even after having a huge employee base, per employee productivity is not adequate
(d) No Global Existence:
HDFC Bank operates with in the country it only have 2 Branches outside the nation.
2.14 Opportunities
(a) Opportunity in Global Markets:
HDFC Bank can achieve new horizons in global markets looking at the performance within
the country.
(b) Could seek better customer deals:
Bank could come up with fairer customer deals to increase their existing and prospect
customers.
23
2.15 Threats
(a) Upcoming Private Banks:
Entry of new private banks into the market may act as a threat to the Bank.
(b) Better Performing Competitors:
Competitors like ICICI Bank and Axis Bank is not far behind. Their performance is also
improving.
(c) Introduction of Foreign Bank:
Entry of big foreign Banking players in Indian market will be a threat to the bank
(d) Decreasing Profits Margins:
Bank is performing well however its profits margin are increasing but at a decreasing rate
and that can be seen in the financials of the Bank.
24
25
b) Rewards and Recognition: Rewards and Recognition play a key role to attract, retain
and engage employees. Bank is committed to ensure that employees are competitively
positioned vis--vis market with respect to both fixed as well as variable pay.
26
27
The Bank has infused the philosophy of corporate governance into all its activities. The
philosophy on corporate governance is an important tool for shareholder protection and
maximization of their long term values. The cardinal principles such as independence,
accountability, responsibility, transparency, fair and timely disclosures, credibility,
sustainability etc. serve as the means for implementing the philosophy of corporate
governance in letter and spirit.
2.3 Deviations
a. Even after having strong HR Policies job security is a concern for employees.
b. Customer Satisfaction is always treated as the main focus of any Organization in books
however in real life scenario completion of targets on time is a bigger priority
28
CHAPTER 3
DATA COLLECTION & PRESENTATION
29
3.1 Marketing
3.11 Product Lines and Width
Retail Banking
Loan Products:
Deposit Products:
Auto Loans
Savings Accounts
Personal Loans
Current Accounts
Private Banking
Education Loans
NRI Services
POS Terminals
Debit Cards
Foreign Exchange Service
30
Wholesale Banking
Commercial Banking:
Key Segments:
Working Capital
Large Corporate
Term Loans
Emerging Corporates
Financial Institutions
Government / PSUs
Wholesale Deposits
Letters of Credit
Guarantees
Agriculture
Commodities
Transactional Banking:
Investment Banking:
Cash Management
Custodial Services
Project Finance
Correspondent Banking
Tax Collections
Banker to Public Issues
31
Treasury
Products / Segments:
Other Functions:
Foreign Exchange
Debt Securities
Derivatives
Equities
Table 3.1 Showing Different Product Line of HDFC BANK (cont.)
The Bank has a distribution network of 3,403 branches in 2,171 locations. All branches
are linked on an online real-time basis. Handling Customer base of over 28 million, new
customer acquisition of 3 million in FY 2014.
32
(a) The bank selected CRMnext's solution in 2008 which promised to fulfill the banks
needs. Including the following
i.
Creating a unified customer view by collating and massaging data from various
sources including the data warehouse.
ii.
iii.
Enabling aces to single view across various channels like branch, phone banking,
etc.
iv.
(b) Cross Selling Capability The platform operates across all channels, providing global
visibility and status of offers. Various systems integrated to provide event based
triggering such as large deposits, channel usage, etc. Marketing team continuously
generates cross-sell offers and next best products to be sold and provides one stop
solution for all customer needs.
33
BASIS
Marketing
ICICI BANK
YES BANK
AXIS BANK
Aggressive Marketing
Knowledge banking
Rebranding from
approach
Outlook
CRM as
Focus Area
Online
Popularity
previous UTI
Marketing and
To have more
To have broader
competitive sales
interactive
approach
approach.
It is now ranked as
Establishing market
Following
2nd
through Social
footsteps of others
markets
networking sites
Market
Retail segment
Segment
partner in
women account
progress.
34
As a preferred
35
HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team
determined to accomplish the vision of becoming a world-class Indian bank. Believing
that the ultimate identity and success of bank will reside in the exceptional quality of
people and their extraordinary efforts. For this reason, HDFC is committed to hiring,
developing, motivating and retaining the best people in the industry
Banks Total employee strength is 69,065 as of 31st March 2013.Which is a big advantage
to the Bank.
Recruiting and selecting the right people is paramount to the success of the HDFC BANK
LTD. and its ability to retain a workforce of the highest quality. This recruitment and
selection policy sets out the procedure to ensure that the best people are recruited on merit
and that are the recruitment process is free from bias and discrimination.
36
Internal Sources
Whenever any vacancy arises, the possibility of fulfilling the requirement internally via
reassignment and relocation, re-allocation of the responsibilities or internal promotion will
be explored by the hiring function along with the HR Department. Internal job postings to
explore internal candidates.
Employee Referrals HDFC encourages employees to refer suitable candidates for open
positions.
ii.
External Sources
All candidates are required to undergo a face to face interview with the interview
panel before selection.
ii.
iii.
37
iv.
For recruitment at junior levels, job fairs, universities etc, where large volume of
candidates, HDFC will use recruitment tests for purpose of short listing. The
candidate may be tested on the basic aptitude, analytical skills or other skills
required for the job of the candidates.
v.
The interview process will focus on the evaluating the candidates suitability in
terms of the job description and fit within the organization.
vi.
Each interviewer will complete the interview feedback form and submit it to HR.
HR will compile the results from a various interviews and provide these to the
line manager for the final decision.
This will include both a professional reference check as well as the background
check.
ii.
quality
of
previous
work
experience
and
key
personal
For key positions in areas, HDFC will also perform a background check to assess
the integrity / conduct of the candidate.
38
iv.
v.
vi.
Date
of
birth
Proof
of
previous
employment
(service
certificate)
Any negative feedback and comment in the reference check will be investigated
by HR and if found genuine shall be a cause for disqualification of the candidate
or dismissal from employment.
Once the hiring decision is finalized, HR will prepare an offer / fitment as per
the compensation structure and grade and keeping in mind the internal equity.
ii.
Probation is a trial that is mutual opportunity for the employee and HDFC to confirm
suitability for continued employment. The probation period is to establish a stronger
understanding of mutual capabilities, expectations and understanding which may include
39
functional training. The employee must demonstrate suitability for continued employment.
An assessment will be based on factors related to work performance, work habits,
productivity, attitude and compatibility, attendance and punctuality, and any other matter
that is linked to job performance and expectations.
All new hires will be placed on probation for a period of 6 months from the date of joining
HR will initiate the confirmation process by sending an appraisal form to the immediate
supervisor before the completion of probationary period.
The appraisal form will need to be approved by the supervisors leadership
all letters of confirmation or extension of probation will be signed by the HR head and
will be stored in employee file for records.
Total Employees
12295
9075
56770
41831
2013
2014
Female Employee
12295
9075
Male Employee
56770
41831
Figure 3.2
40
Total Employees
Total Employees
69,065
50,906
2013
2014
Total Employees
Figure 3.3
Total Number of Banks Employees reduced from 69,065 to 50,906 as per the Business
Responsibility Report for year 2013 and 2014. Which shows that 18,159 employees left
the organization and the annual attrition rate was reported at 26% approx.
as
well
as
training
were
conducted through the year where employees were trained in aspects of innovative
banking operations and behavioral solutions such as effective planning & decision making
41
In the reporting period (2013-2014), the average duration of training undergone by each
employee was 39 hours.
Josh Unlimited:
An in-house series of multi-city, multi-discipline sports events held in over 15 cities
in 2013-14
Stepathlon:
An international pedometer-based team event that encourages activity in a simple,
inclusive, fun and relevant manner to compliment hectic schedules and healthy
lifestyles.
42
Sensations:
An 'In-house Musical Band' where employees across locations & functions come
together to share their passion for music & form their bands
Other Wellness/Diversity Initiatives:
Celebrations during Diwali/ Christmas, Special workshops during Women's day
Creating forums for employees to connect
43
The Bank makes contributions to funds administered by trustees and managed by insurance
companies for amounts notified by the said insurance companies.
(c) Superannuation
Employees of the Bank, above a prescribed grade, are entitled to receive retirement benefits
under the Banks Superannuation Fund. The Bank contributes a sum equivalent to 13% of
the employees eligible annual basic salary (15% for the Managing Director, Executive
Directors and for certain eligible erstwhile Centurion Bank of Punjab (eCBoP) staff) to
insurance companies, which administer the fund. The Bank has no liability for future
superannuation fund benefits other than its contribution, and recognises such contributions
as an expense in the year incurred, as such contribution is in the nature of defined
contribution.
44
3.3 Finance
3.31 Financial Performance
The financial performance of Bank during the financial year ended March 31, 2014
remained healthy with total net revenues (net interest income plus other income)
increasing by 16.5% to ` 26,402.3 crore from ` 22,663.7 crore in the previous financial
year. Revenue growth was driven by an increase
in both, net interest income and other income. Net
interest
income
grew
by 16.9% due to
45
46
Other income grew 15.6% over that in the previous year to ` 7,919.6 crore during the
financial year ended March 31, 2014. The largest component of other income was fees and
commissions, which increased by 11.0% to ` 5,734.9 crore with the primary drivers being
commissions on debit and credit cards, transactional charges, fees on deposit accounts,
processing fees on retail assets and
commission
on
distribution
Other Income
of
8,000.00
7,800.00
7,919.64
7,600.00
7,400.00
7,200.00
7,000.00
6,800.00
recoveries
from
6,400.00
written-off
6,200.00
6,852.62
6,600.00
Other Income
2013
2014
6,852.62
7,919.64
47
Total provisions and contingencies were ` 1,588 crore for the financial year ended March
31, 2014 as compared to ` 1,677.0 crore during the previous year. Banks provisioning
policies for specific loan loss provisions remain higher than regulatory requirements. The
coverage ratio based on specific provisions alone without including general and floating
provisions was 176% as on March 31, 2014. Bank made general provisions of ` 221.3 crore
during the financial year ended March 31, 2014.
Banks Profit Before Tax was` 12,772.1 crore, an increase of 31.0% over the year ended
March 31, 2013. With the effective tax rate for the year at 33.6% as against 31.0% for the
previous year.
The Bank posted total income and net profit of ` Rs. 49,055.2 crore and ` Rs. 8,478.4 crore
respectively for the financial year ended March 31, 2014 as against ` Rs. 41,917.5 crore
and ` Rs. 6,726.3 crore respectively in the previous year.
48
As at March 31, 2014, Banks total balance sheet was at ` 491,600 crore, an increase of
22.8% over ` 400,332 crore as at March 31, 2013. Total deposits increased 24.0% from `
296,247 crore as on March 31, 2013 to ` 367,337 crore as on March 31, 2014.
These included US$ 3.4 billion deposits raised under the RBI window for attracting
Foreign Currency Non-Resident (FCNR) deposits. Under this window the Bank could raise
foreign currency denominated deposits and swap them into rupees with RBI at a
concessional rate. Savings account deposits grew by 16.9% to ` 103,133 crore while current
account deposits grew by 17.5% to ` 61,488 crore as on March 31, 2014. The proportion
of current and savings deposits to total deposits was at 44.8% as on March 31, 2014.
Figure No 3.10
Figure No 3.11
Figure 3.10 & 3.11 Showing Balance Sheet Size and Deposits Made with Bank
During the financial year under review, net advances grew by 26.4% to ` 303,000 crore.
Banks retail advances grew by 20.8% to reach ` 164,763 crore. Adjusted for the one time
49
increase in FCNR deposits swapped with RBI under the special window and the related
foreign currency loans, core deposits and advances growth for the year ended March 31,
2014 was 16.9% and 21.8% respectively. The Bank had a market share of approximately
4.4% and 4.7% in total domestic system deposits and advances respectively.
B
C
D
E
Figure No 3.13
E
B
D
D
B
E
F
Figure 3.12 & 3.13 Structure of Expenses and Earnings
50
Shares
(ADS)
Global
and
Depository
Receipts
SHAREHOLDING PATTERN
HDFC Group
23%
Others
26%
Institutional
ADS / GDR
Depositories
17%
FII's
34%
has
422,314
shareholders.
HDFC Group
FII's
Others
The shares are listed on the Bombay Stock Exchange Limited and The National Stock
Exchange of India Limited. The Bank's American Depository Shares (ADS) are listed on
the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global
Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No
US40415F2002.
51
3.35 Dividends
Bank has had a dividend policy that balances the dual objectives of appropriately rewarding
shareholders through dividends and retaining capital in order to maintain a healthy capital
adequacy ratio to support future growth. It has had a consistent track record of moderate
but steady increase in dividend declarations over its history with the dividend payout ratio
ranging between 20% and 25%.
52
Consistent with this policy and in recognition of the overall performance during this
financial year, directors were pleased to recommend a dividend of ` 6.85 per equity share
of ` 2 for the year ended March 31, 2014 as against ` 5.50 per equity share of ` 2 for the
previous year ended March 31, 2013. This dividend shall be subject to tax on dividend to
be paid by the Bank.
53
Bank continues to make substantial investments in its technology platforms and systems
and spread its electronically linked branch network. Banks direct banking platforms
continue to be stable and robust, supporting ever increasing transaction volumes, as
customers adopt newer self-service technologies.
Over 215,000 of your Banks Point-of
Sale terminals have been made safer
and
more
secure,
following
IT Enabled Communication:
Video Conference and Video Chatting on IP phone reduces travelling cost and time.
Virtualization of Systems:
Server and desktop virtualization reducing power consumption
54
Integrated Printing:
Printer consolidation over many offices to reduce the printing hassles and power
saving.
Going Paperless:
Engaging in electronic media rather than print communication. Encouraging retail
customers to subscribe to e-statements
Figure 3.17 ITs Initiatives
55
2004
2014
10%
10%
25%
53%
55%
15%
27%
5%
ATM
Branches
ATM
Branches
Phone Banking
Phone Banking
Figure 3.19
Figure 3.20
Figure 3.19 and 3.20 Changes in technology trends over the decade
(The charts above cover transactions initiated by banks customers at banks channels &
which could have been transacted at the Banks branches)
56
CHAPTER 4
FUNCTIONAL ANALYSIS
57
58
59
played by its stakeholders both internal and external, which has helped HDFC
Bank to maintain its position among the leaders in the financial sector.
e. Bank uses Customer Relationship Management Technology to retain a huge
customer base. It helps to understand customer needs and also helps in providing
different solutions accordingly.
f. Bank has an effective systems that ensure transparency and accuracy in-line with
the Corporate Communications Policy. Complete and correct information is passed
onto customers to help them make informed decisions.
g. Bank takes many initiative as a part of Social Responsibility including
environmental responsibility.
60
4.13 Finance
It is impossible for an organization to achieve long-term and short-term goals without
effectively managing finances. It is significant for business growth, market competition,
and to keep business operational and maintain your customer base.
Here are some Highlights of Banks Finances and Financial Performance
a. The Financial Performance of HDFC Bank during Financial year 2013-2014
remained healthy.
61
b. Bank recorded a growth of 16% approx. in its total income which led to the
increase in its profits.
c. HDFC Bank has emerged as the best large bank because of good asset quality, high
loan growth, a healthy capital adequacy ratio and an improvement in returns on
capital employed
d. Financial Performance of subsidiary companies, HDFC SECURITIES LIMITED
and HDB FINANCIAL SERVICES LIMITED remained also strong.
62
d. Bank has taken various technology initiatives and same has been applied amongst
the employees
63
a. Threat of new entry: Profitable markets attract new entrants, which erodes
profitability and intensify the rivalry. Unless incumbents have strong and durable
barriers to entry, for example, patents, economies of scale, capital requirements or
government policies, then profitability will decline to a competitive rate. If barriers to
entry are low then the threat of new entrants will be high, and vice versa.
64
b. Supplier power: An assessment of how easy it is for suppliers to drive up prices. This
is driven by the: number of suppliers of each essential input; uniqueness of their product
or service; relative size and strength of the supplier; and cost of switching from one
supplier to another.
c. Buyer power: An assessment of how easy it is for buyers to drive prices down. This is
driven by the: number of buyers in the market; importance of each individual buyer to
the organization; and cost to the buyer of switching from one supplier to another. If a
business has just a few powerful buyers, they are often able to dictate terms.
d. Threat of substitution: Where close substitute products exist in a market, it increases
the likelihood of customers switching to alternatives in response to price increases. This
reduces both the power of suppliers and the attractiveness of the market.
e. Competitive rivalry: The main driver is the number and capability of competitors in
the market. Many competitors, offering undifferentiated products and services, will
reduce market attractiveness.
65
Bank is fearful of being squeezed out of the payments business, because it is good
source of fee-based revenue. Another drift that poses a threat is companies offering
other financial services e.g.; an insurance company offering mortgage and loan
services. As far as regional banks are concerned the possibility of a mega bank
entering into the market poses a real threat to HDFC Bank.
b. Supplier power: The providers of capital might not posture a gigantic hazard, but the
threat of suppliers luring away human capital does. Retention of talent becomes
difficult in a situation wherein a talented individual working in bank may be stolen
away by other bigger banks, investment firms, etc.
c. Buyer power: One single retail customer may not really pose much of a threat to the
Bank, but one major factor affecting the power of buyers is relatively high switching
costs. If a person has a mortgage, car loan, credit card, checking account and mutual
funds with one particular bank, it can be extremely tough for that person to switch to
another bank. In an attempt to lure in customers, competitor banks try to lower the
price of switching, but many people would still rather stick with their current Bank.
On the other hand, large corporate clients have banks running after them, offering
innovative plans and schemes. Financial institutions - by offering better exchange
rates, more services, and exposure to foreign capital markets - work extremely hard to
get high-margin corporate customers.
66
d. Threat of substitution: Our market, as is well known, has a parallel economy based
on black money and grey operators. Even if, for a moment, we discard such realities,
there would still be plenty of substitutes in the banking industry. Banks offer a suite
of services over and above taking deposits and lending money, but whether it is
insurance, mutual funds or fixed income securities, chances are there is a non-banking
financial services company that can offer similar services.
On the lending side of the business, banks are seeing competition rise from
unconventional companies that offer preferred financing to customers who buy big
items. If a company is offering 0% financing, why would anyone want to get a loan
from the bank for the same commodity and pay expensive interest?
e. Competitive rivalry: The banking sector is highly competitive. The financial services
industry has been around for a good amount of time and simply put across, anyone
and everyone who needs banking services, already has the access to such services.
Banks, therefore, have no choice but to make attempts to lure clients away from their
competitors.
A bank may do so by offering lower financing, preferred rates and investment services
but such an action may cause banks to experience pretty lower profit margins. In such
a scenario, concerned bank(s) have an incentive to take on high-risk projects. In the
long run, we're likely to see more consolidation in the banking industry. Big fish may,
logically, prefer to digest smaller fish rather than spending or cutting on own margins.
67
The Indian banking sector is linked to the world economy but the Indian banking
system has had no direct exposure to the sub-prime mortgage assets or to the failed
institutions. It has very limited off-balance sheet activities or securitized assets. In fact,
our banks continue to remain safe and healthy. The Indian banking sector has been
well shielded by the central bank and has managed to sail through most of the crisis
with relative ease. It is hoped that the trend would continue for a foreseeable future.
4.22 In a Nutshell
It is true that banks have been under tremendous pressure, especially during the present
fiscal. It is wrong to see such a trend in isolation as a host of factors have been contributing
to such a trend. With new RBI Governor at the helm of affairs, banking industry is
optimistic even though the pressure would continue for a while. Even though SBI remains
the biggest of all, banks like HDFC and AXIS Bank have been successful in leading with
their operational efficiencies and resultant productivity. The future that envisages growth
of the nation, cannot ignore a parallel growth of banking sector and that being something
inevitable, future looks bright for the industry despite present hiccups and glitches.
68
CHAPTER 5
SUMMARY & CONCLUSIONS
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5.1 Findings
a. HDFC Bank is among the top banks in the private sector domain. The bank boasts of
a huge amount of operational efficiencies for over the years.
b. Having strong competitors like ICICI Bank, AXIS Bank and Kotak Mahindra Bank,
HDFC Bank has managed its customer base and market share very competently.
c. Bank has a very strong market reputation which holds the loyalty factor within its
customers.
d. Bank doesnt runs after the sales as it follows a conservative approach which
eventually reduces the risk of losses.
e. Banks enormous distribution network is well positioned in India which makes HDFC
Bank easily accessible by customers from different parts of the country.
f. Bank provides variety of financial products and services which targets different
customer segments in the market and which also provides competitive advantage to
bank.
g. Bank has got a very good asset quality, high loan growth and good coverage ratios and
thats what makes HDFC Bank the best performer among other private banks.
h. Bank recorded a consistent growth in its total income over the year which has also
increased the profit margins.
i. As explained in previous chapter, the bank has positive net interest margins (NIMs) of
almost 4.5% and it is felt and believed that it would be able to maintain that for the
foreseeable future, especially so when the worst appears to be over.
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j. The Banks stock has been giving healthy returns in terms of appreciation. Even
though it may not be the sector leader as far as dividend is concerned, it has been
consistent nevertheless.
k. HDFC Bank has large employee base which helps the bank to facilitate its operations
and also enhances the productivity of the Bank.
l. HDFC Bank acknowledge the roles of internal and external stakeholders and it also
maintains the communication with both.
m. HDFC Bank keeps on taking initiatives for employees wellness and their development
and it also works for the development of the society and protection of environment.
n. Technology is a key strategy for bank, technology has played an important role in
overall growth of bank, Bank always welcome new and advanced technologies for
improving its efficiency.
5.2 Learnings
HDFC Bank is one of the prestigious organizations of the country where carrying out a
management internship is really a big opportunity. It has been a wonderful experience
working with HDFC Bank where the researcher had given a chance to work as a part of
the Organization.
This practical exposure gave an opportunity to the researcher to put the previous
educational knowledge gained so far into use and enhance the existing knowledge by
facing the real life corporate world.
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The whole Training tenure was full of opportunities and learnings for the researcher.
a. Being a management intern researcher worked with Mortgage Team of HDFC
Bank which looks after the Sales of Mortgage Loan Products.
b. The researcher was allotted with all major responsibilities that are usually being
done by other employees.
c. Researcher learned how to interact with clients during different client meetings
which is really essential for a marketing personnel.
d. Researcher has gained knowledge about different Mortgage products so as to
offer the right product to the clients.
e. Follow-ups of sales lead by making calls to the team members was also done by
researcher during the training period.
f. Researcher interacted with different Branch Managers in regards to the sales data
and sales leads of their respective branches.
g. Interaction with other employees of the organization also helped the researcher to
know more about the work culture and organizations internal environment.
h. HDFC Banks knowledge center enabled researcher to learn about organizations
code of conduct, rules and governance.
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i. Researcher participated in monthly sales closing which takes place at the end of
every month where reports are prepared for the business generated during the
month.
j. Researcher also learned the effectiveness of cross-selling in banking industry as it
does not only helps in increasing the sales but also helps to retain customers by
providing them one-stop solution for their needs.
5.3 Suggestions
a. More training opportunities must be given to management students to peruse their
training in HDFC Bank.
b. HDFC Bank is a great platform for trainees for exposure to the corporate world.
c. Different functional departments of the organization may help an intern to
improve his/her functional skills.
d. HDFC is the right place for an intern to learn customer interaction and client
dealings which is an essential for a management learner.
e. Banks internal environment improves the practical as well as conceptual
learnings.
f. Dedicated workforce motivates the trainee and boosts up the morale.
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