A PROJECT REPORT ON

A STUDY ON AWARENESS OF DEMAT in HDFC

BANK

CONTENTS
SI.NO
1

PARTICULARS
EXCUTIVE SUMMARY

PAGE NO
1-9

INTRODUCTION
-Constituents in Depository System
-NSDL& CSDL
-Depository Participant
2

-Dematerialisation
RESEARCH METHODOLOGY

10-15

-Title of the project

-Scope of the study
-Objective of the study
-Limitation of the study
-Methodology
-Data collection method
-Tools & techniques used for data collection
-Field work
3
4
5
6

-Research Design
INDUSTRIAL PROFILE
COMPANY PROFILE
DATA ANALYSIS AND INTERPRETATION
SUMMARY OF FINDINGS,SUGGESTIONS AND

16-34
35-43
44-83
84-87

CONCLSION
BIBLIOGRAPHY AND ANNEXURE

88-93

LIST OF TABLES
SI.NO
1
2.
3
4.1

PARTICULARS
Awareness Of Demat Account In Resspondents
Source Of Information
Top Of The Mind Awareness
No. Of. Respondents Having Demat Account

PAGE.NO.
44
46
48
50

4.2
5
6

Respondents Having Demat Account With Different Dps

Tediousness Of Documentation Process
Respondents Considering The Parameter While Selecting

52
54
56

7
8
9
10
11
12
13
14
15
16
17
18
19

Dps
Awareness Of Responses Towards Individual Dps
Minmum Brokerage Charges
Respondents Trading Online
Safety Trading Online
Awareness Of Types Of Demat Account Of Respondents
Investing In Shares
Rank Of Dps/Broking Houses
Investors Dematerialising Securities
Awareness Of Current Bidding Mechanism Of Ipo
Respondents Source Of Knowing About Ipo
Investing In Ipos
Respondents Considering The Factors While Ipo Bidding
No Of Respondents Investing In Ipo In Aggressive Price

58
60
62
64
66
68
70
72
74
76
78
80
82

LIST OF CHARTS

SI.NO
1
2.
3
4.1
4.2
5
6

PARTICULARS
Awareness Of Demat Account In Resspondents
Source Of Information
Top Of The Mind Awareness
No. Of. Respondents Having Demat Account
Respondents Having Demat Account With Different Dps
Tediousness Of Documentation Process
Respondents Considering The Parameter While Selecting

7
8
9
10
11
12
13
14
15
16
17
18
19

Dps
Awareness Of Responses Towards Individual Dps
Minmum Brokerage Charges
Respondents Trading Online
Safety Trading Online
Awareness Of Types Of Demat Account Of Respondents
Investing In Shares
Rank Of Dps/Broking Houses
Investors Dematerialising Securities
Awareness Of Current Bidding Mechanism Of Ipo
Respondents Source Of Knowing About Ipo
Investing In Ipos
Respondents Considering The Factors While Ipo Bidding
No Of Respondents Investing In Ipo In Aggressive Price

PAGE.NO.
45
47
49
51
53
55
57
59
61
63
65
67
69
71
73
75
77
79
81
83

EXECUTIVE SUMMARY
The banking industry is going through a sea change since liberalization. Almost
all the banks today are feeling the heat of competition and are looking to capture
the market. To do so, banks today are coming out with the most innovative
offerings to the customers, be it a corporate or an ordinary customer at a branch.
The main focus is on keeping the customer satisfied or rather delighted. Big
names in the industry such as HDFC Bank, ICICI, Citi Bank etc. have given the

dominating public sector banks a run for their money. Bank plays an important
role in the economic development of a country. Banking institutions form an
important part of the money market and is indispensable in a modern
developing society. In India banking has a wide network reaching every nook
and corner of the country. Indian banking system over past few decades has
played a very effective role in mobilization of savings of the economy,
spreading in banking habit to the furthest corner of the country and enlarged
entrepreneurial base.
HDFC Bank has always been market-oriented and dynamic with respect to
resource mobilization as well as its lending programmer. This renders it more
than capable to meet the new challenges that have emerged. Over the years,
HDFC has developed a vast client base of borrowers, depositors, shareholders
and agents, and it hopes to capitalize on this loyal and satisfied client base for
future growth. Today, HDFC Bank are the market leaders and they are one of
the top 3 players in almost all the products, services and segment that they
operate in.
The Demat account segments are coming up in a big way. HDFC Bank is one of
the leading Depository Participant (DP) in the country with over 8 lakh Demat
account. Such markets are capable of providing good business to banks and help
improve their market share. HDFC Bank Demat Services offers you a way to
keep track of your securities and investments, over a period of time, without the
hassle of handling physical documents that get mutilated or lost in transit.
HDFC Bank is Depository Participant both with National Securities
Depositories Limited (NSDL) and Central Depository Services Limited
(CDSL).
The market research has been successfully conducted as per the requirement of
the partial fulfillment of the MBA programme and as per the instructions given

by HDFC bank, under whom I was doing the project. The objective of the
study is to measure the customers level of awareness and level of
understanding towards Demat account. The bank needs to keep a track on
how aware are the customers about there products & services which in a way
help the bank to provide a better service to the customers. This knowledge can
be used by the bank to increase

there results.

The study was descriptive in nature and it tries to identify the customers level
of awareness & understanding about Demat account. A descriptive research was
conducted and all data were primary. Questionnaire, method was used to collect
primary data.

INTRODUCTION:
In India, a Demat account, the abbreviation for dematerialized account, is a type
of banking account which dematerializes paper-based physical stock shares. The
dematerialized account is used to avoid holding physical shares: the shares are
bought and sold through a stock broker.

This account is popular in India. The Securities and Exchange Board of India
(SEBI) mandates a Demat account for share trading above 500 shares. As of
April 2006, it became mandatory that any person holding a Demat account
should posses a Permanent Account Number (PAN), and the deadline for
submission of PAN details to the depository lapsed on January 2007.
Depository services are the services connected with the recording of allotment
of securities or transfer of ownership of securities in the record of a depository.
To opting these services investors are required to enter into an agreement with
the depository through a participant who will act as an agent of depository.
In the depository system, share certificates belonging to the investors will be Dmaterialised and their names will be entered in the record of depository as
beneficial owners. Consequent to these changes, the investors names in the
companies register will be replaced by the name of depository as the registered
owner of the securities. The depository, however, will not have any voting rights
or other economic rights in respect of the shares as a registered owner. The
beneficial owner will continue to enjoy all the rights and benefits and be subject
to all the liabilities in respect of the securities held by a depository. Shares in the
depository mode will be fungible and will cease to have distinctive numbers.
The ownership changes in the depository will be done automatically on the
basis of delivery vs. payment.
The companies which enter into an agreement with the depository will give an
option to the holders of eligible securities to avail the services of the depository
after entering into an agreement with the depository through participants. The
investors desiring to join the depository will surrender the certificates of
securities to the issuer company in the specified manner and on receipt of
information about D-materialisation of securities by the issuer company; the
depository will enter in its records the names of the investors as beneficial

owners. Similarly, the beneficial owner will have right to opt out of a depository
in respect of any security and claim the share certificates and get his name
substituted in the register of members as the registered owner in place of the
deposit
CONSTITUENTS IN DEPOSITORY SYSTEM
There are four constituents in this system. They are
Depository
The depositories are an important intermediaries in the securities market that is
scrip-less or moving towards such a state. In India, the Depositories Act defines
a depository to mean "a company formed and registered under the Companies
Act, 1956 and which has been granted a certificate of registration under subsection (IA) of section 12 of the Securities and Exchange Board of India Act,
1992." The principal functions of a depository are to D-materialise securities
and enable their transactions in book-entry form.
Eligibility Criteria for a Depository - Any of the following may promote a
depository:
A public financial Institution as defined in section 4A of the Companies
Act, 1956;
A bank included in the Second Schedule to the Reserve Bank of India
Act, 1934;
A foreign bank operating in India with the approval of the Reserve Bank
of India;
A recognized stock exchange;
An institution engaged in providing financial services where not less
than 75% of the equity is held jointly or severally by these institutions;

 A custodian of securities approved by Government of India, and

A foreign financial services institution approved by Government of
India.
The promoters of a depository are also known as its sponsors. A depository
company must have a minimum net worth of Rs. 100 crore. The sponsor(s) of
the depository have to hold at least 51% of the equity capital of the depository
company. Participants of that depository, if any, can hold the balance of the
equity capital. However, no single participant can hold, at any point of time,
more than 5% of the equity capital. No foreign entity, individually or
collectively either as a sponsor or as a DP, or as a sponsor and DP together, can
hold more than 20% of the equity capital of the depository.

NSDL and CDSL

At present there are two depositories in India, National Securities
Depository Limited and Central Depository Services ltd.
National Securities Depository Limited

National Securities Depository Limited is the first depository to be set-up in

India. It was incorporated on December 12, 1995. The Industrial Development
Bank of India (IDBI) - the largest development bank in India, Unit Trust of
India (UTI) - the largest Indian mutual fund and the National Stock Exchange
(NSE) - the largest stock exchange in India, sponsored the setting up of NSDL
and subscribed to the initial capital. NSDL commenced operations on
November 8, 1996.
NSDL is a public limited company incorporated under the Companies Act 1956.
NSDL had a paid up equity capital of Rs. 105 crore. The paid up capital has
been reduced to Rs. 80 crore since NSDL has bought back its shares of the face
value of Rs. 25 crore in the year 2000. However, its net worth is above the Rs.
100 crore, as required by SEBI regulations.
Central Depository Services Ltd.
CDSL received the certificate of commencement of business from SEBI in
February, 1999. It was promoted by Bombay Stock Exchange Limited (BSE)
jointly with leading banks such as State Bank of India, Bank of India, Bank of
Baroda, HDFC Bank, Standard Chartered Bank, Union Bank of India and
Centurion Bank. BSE has been involved with this venture right from the
inception and has contributed overwhelmingly to the fruition of the project. The
initial capital of the company is Rs.104.50 crores. CDSL was set up with the
objective of providing convenient, dependable and secure depository services at
affordable cost to all market participants.
CDSL has over 296 DPs spread around 119 cities/towns across the country,
offering convenience for an investor to select a DP based on his location.

As at the end of Dec 2005, over 5000 issuers have admitted their securities
(equities, bonds, debentures, commercial papers), units of mutual funds,
certificate of deposits etc. into the CDSL system.
Depository Participant
A DP is a representative of securities owner in the depository system and is
similar to the bank branch. DP will maintain its clients securities account
balances and intimate them the status of their holdings from time to time.
According to SEBI guidelines, financial institution banks, custodial, stock
brokers, etc. can become depository participants. Stock Holding Corporation of
India Ltd. (SHCIL) is the first registered DP with National Securities
Depository Limited (NSDL).
Eligibility Criteria
The eligibility criteria are prescribed by the SEBI (Depository & Participants)
Regulations, 1996 and the Bye-laws of NSDL.
Basic Eligibility - Persons belonging to one of the following categories are
eligible to become a DP:
A public financial institution as defined in section 4A of the Companies
Act.
A bank included for the time being in the Second Schedule to the Reserve
Bank of India Act, 1934.
A foreign bank operating in India with approval of the Reserve Bank of
India.
A State Financial Corporation established under the provisions of section
3 of the State Financial Corporations Act, 1951.

D-MATERIALISATION
One of the primary functions of depository is to eliminate or minimise the
movement of physical securities and prevent the problems associated with it.
This is achieved through D-materialisation of securities. D-materialisation is the

process by which physical certificates of an investors are converted into an

equivalent number of securities in electronic form and credited into the
investor's account with his/her depository participant.
Risks associated with physical securities are:

Delay in transfer of shares.

Possibility of forgery on various documents leading to bad deliveries,

legal disputes etc.

Possibility of theft of share certificates.

Prevalence of fake certificates in market.

Mutilation or loss of share certificate in transit

D-materialization Process
In order to D-materialize physical securities one has to fill in a DRF (D-mat
Request Form), which is available with the DP and submit the same along with
the physical certificates one wishes to D-materialize. Separate DRF has to be
filled for each ISIN number. The complete process of D-materialization is
outlined

below:

Steps:
Client/ Investor submits the DRF and physical certificates to DP. DP
checks whether the securities are available for D-mat. Client defaces the
certificate by stamping Surrendered for D-materialisation. DP punches

two holes on the name of the company and draws two parallel lines
across the face of the certificate.
DP enters the D-mat request in his system to be sent to NSDL. DP
despatches the physical certificates along with the DRF to the R&T
Agent.
NSDL records the details of the electronic request in the system and
forwards the request to the R&T Agent.
R&T Agent, on receiving the physical documents and the electronic
request, verifies and checks them. Once the R&T Agent is satisfied, Dmaterialisation of the concerned securities is electronically confirmed to
NSDL.
NSDL credits the D-materialised securities to the beneficiary account of
the investor and intimates the DP electronically. The DP issues a
statement of transaction to the client.
Jointly or severally by any of the institutions mentioned in the four
above-mentioned clauses.
A custodian of securities who has been granted a certificate of registration
by SEBI.
A clearing corporation or a clearing house of a stock exchange.
A stockbroker who has been granted a certificate of registration by SEBI.
A non-banking finance company.
An R&T agent who has been granted a certificate of registration by SEBI

REASEARCH METHODOLOGY
TITLE OF THE PROJECT
A Study on Awareness of Demat in HDFC Bank in Bangalore City

SCOPE OF THE STUDY:

The study helps in knowing the level of awareness towards the Demat
account among the HDFC customers. This in a way helps the bank in
educating the customers about Demat account in HDFC and its various
features provided in accordance with the other depository participants.
This study helps in bringing out various parameters that the customers
consider while selecting the depository participant.
This study helps in understanding the customer perception towards the
various aspects relating to the Demat account
OBJECTIVES OF THE STUDY;
Primary Objective:
To identify the awareness and understanding of Demat account among the
HDFC Bank customers in Bangalore city.
Secondary Objectives:
To find the level of awareness of Demat account among the HDFC Bank
customers.
To identify the major sources from which the customers gather
information about Demat account.
To understand the awareness among the customers towards various
depository participants/ Broking Houses.
To understand customer perception towards online trading.
To analyze the various parameters like reputation, service, charges that
the customer would consider while selecting the Depository Participant or
Broking House.

 To identify the level of understanding among the customers regarding the

importance of Demat account.
To identify level of awareness regarding IPOs bidding among Demat
account holders.
LIMITATION OF THE STUDY:
The study is limited only to Bangalore city.
Due to time constraint the sample size was restricted to 100 respondents
only.
Sample size of 100 was restricted to only HDFC Bank customers.
The study mainly depended on the primary data, which is basically
elicited from the respondents. The answers may be subject to bias.
Field error- The respondents may have provided the response, which may
differ from the actual truth.
METHODOLOGY:
The most important thing about the survey is the component of the research
methodology without which the researchers may not be able to obtain facts and
figures from the respondents. The main strength of the report depends on the
process of collecting, synthesizing and analyzing information, which must have
a bearing on the definition of the problem. The method employed in the
investigation depends on the purpose and the scope of the enquiry, the survey
with the help of questionnaire was useful for the study.

The research procedure covers the following:

i.

Primary data was generated or collected in an investigation with the help

of the structured questionnaire.

ii.

Secondary data was collected from Internet, Journals and Textbooks.

iii.

Problem Area: The study aims in measuring the level of awareness and
understanding about the Demat account among the HDFC customers in
Bangalore city.

Data Collection Method:

When once the research design, methodology and instruments were finalized,
the next step was to proceed with the task of collecting data. The research
activity required both primary and secondary data.
Primary data is collected through the use of sampling. The primary data is
collected through structured questionnaire. Secondary data is collected through
internal and external sources.
Internal sources of information were from business records statistical studies
and miscellaneous records. External sources of information were business
journals reports from specific projects and internet.

Selection of data collection methods:

Primary data:
Primary data is based on the data collected from the sample of 100 customers of
HDFC Bank through a structured questionnaire.
Secondary data:

Secondary data includes the data collection from companies past performance,
magazines and internet information.
Tools and techniques used for data collections:
Research instrument:
Structured questionnaire with open ended and closed ended questions.
Data collection method:
The data was collected through survey.
Measurement technique:
Questionnaire is a formulised instrument for asking the information
directly from the respondents. During this research questionnaire will be used as
measurement technique for getting information from respondents in the
Bangalore city.

Sampling:
Sampling is plan, which describes how the sub-group is to be selected. It is an
integral part of the research design. The contents or components of sampling
are;

Sampling Design:

It is a basic unit containing the elements of population to be sampled. The

sample unit of the study included of HDFC customers.
Sampling Method:
There are two methods one is the probability and the other is non probability
sample.
Selecting the Sample:
Defining the Population:
Element

: HDFC Bank customers

Extended to

: Bangalore City

Time

: 6 Weeks

Sampling Method: Simple Random probability sampling

Sample Size:
Determining the sample size is the most critical aspects of research
activities. A sample size means as pre-determination of the sample to be
observed or surveyed. Sample size of this study is 100 customers of HDFC
Bank.
Field Work:
To conduct the survey and collect the data about the Demat account respondents
were interviewed. The survey was done at main areas in Bangalore city
Research Design:

Research design is a statement or specification of procedures for collecting and

analyzing the information required for the solution of some specific problem.
The research is at the very heart of scientific methodology ; it can be used for
answering practical questions or to test theoretical propositions or hypothesis.
Doing the research is an exercise of tradeoffs.
When researchers make choices about whom they will study, where their
research will be done, the methods they will use to collect data, and so on. They
must make some concessions. Good research designs are not perfect, but they
do carefully reflect the questions being addressed. The research design for the
study was formulated only after identifying the problem and choosing the
success of the information.

INDUSTRY PROFILE:
HISTORY OF INDIAN BANKING
Banking in India was first originated during 18 th century with the existence of
General Bank of India in 1786, this was followed by Bank of Hindustan but
both two not in existence now. The oldest bank in existence in India is State
Bank of India, popularly known as SBI in June 1806. A couple of decades later
there was an entry of foreign banks like HSBC. The first fully Indian owned
bank was The Allahabad Bank set up in 1865.
By 1990s the market expanded with the establishment of banks like Punjab
National Bank, in 1895 in Lahore; Bank of India, in 1906, in Mumbai both of
which were founded under private ownership. Indian banking sector was
formerly regulated by Reserve Bank of India from 1935. After independence in
1947, the Reserve Bank was nationalized and given broader powers.
INDIAN BANKING SCENARIO
India has a well developed banking system that is government regulated and
largely government owned. The organized banking system in India can be
broadly divided into three categories via, the Central Bank of the country
known as Reserve Bank of India, the commercial Banks and Co-operative
Banks. The Reserve Bank of India is the supreme monetary and banking
authority in the country and has the responsibility to control the banking system
in the country. It keeps the reserve of all commercial banks and hence is known
as Reserve Bank.

NATIONALISATION OF COMMERCIAL BANKING

In the historical retrospect of Indian commercial banking, July, 1969 was an
important landmark. On that day, by an ordinance of the president of India, 14
major Indian Scheduled commercial banks, each having aggregate deposits of
not less than Rs. 50 crores on the last Friday of July 1969, were taken over by
the Government of India. It is to recall that the State Bank of India and its seven
associate banks were already nationalized. On April 15, 1980, six more
commercial banks whose total deposits exceeded Rs. 200 crores were
nationalized. Thus the State Bank of India, its seven associate banks and 20
nationalised banks together constitute public sector commercial banks. Thus, the
public sector controls practically the whole banking industry. After
nationalization Indian banking industry has made great achievement in terms of
branch

expansion,

deposit

mobilization,

credit

expansion.

But

after

liberalization in 1990 it has witnessed privatization, higher growth and stiff

competition.
SERVICES PROVIDED BY BANKS
Banks usually provide the following facilities to its customers Taking Deposits and giving interest on it.
Extending loan and taking interest on it.
Cashing Cheques
Money Transfers.
Issuing Credit cards, Debit cards, ATM.
Safe Deposit lockers
Internet Banking.
Mobile Banking
Anywhere Banking
Locker facility, etc.

PROFITS OF BANKS
Main source of profit for banks is the interest income, which is from the
difference between the interest percentage of Deposits and Loans. Other sources
are Credit and Debit cards, ATMs, Money Transfers, etc.
RETAIL BANKING
Retail Banking refers to dealing with individual customer both on assets and
liabilities side of the balance sheet. On the assets side include various kinds of
loans like personal loan, home loan, auto loan, education loan, etc. On the
liabilities side, in the form of Deposits like fixed deposits, current, savings
account. Besides this Retail Banking provides various ancillary services like
mobile-banking, internet banking, anywhere banking, depository services, etc.
BANKS IN THE ECONOMY
A Bank raises funds by attracting deposits, borrowing money in the inter-bank
market, or issuing financial instruments in the money market or a capital
market. The bank then lends out most of these funds to borrowers.
However, it would not be prudent for a bank to lend out all of its balance sheet.
It must keep a certain proportion of its funds in reserve so that it can repay
depositors who withdraw their deposits. Bank reserves are typically kept in the
form of a deposit with a Central Bank. This behaviour is called fractional
reserve banking and it is a central issue of monitory policy. Some
governments (or their central banks) restrict the proportion of a banks balance
sheet that can be lent out, and use this as a tool for controlling the money
supply. Even where the reserve ratio is not controlled by the government, a
minimum figure will still be set by regulatory authorities as part of Bank
Regulation.
Indian Stock Market Overview

The two primary exchanges in India are the Bombay Stock Exchange (BSE)
and the National Stock Exchange of India Ltd (NSE). In addition, there are 24
Regional Stock Exchanges. However, the BSE and NSE have emerged as the
two leading exchanges and account for about 80 percent of the equity volume
traded in India.
The NSE and BSE are almost equal in size in terms of daily traded volume.
The average daily turnover at the exchange has increased from Rs 851 crore in
1997-98 to Rs 5,273 crores in 2002- 2003 and further to 6000 crores. NSE has
around 1900 shares listed with a total market capitalization of around Rs 10,
00,500 crore. The BSE has over 8000 stocks listed and has a market
capitalization of around Rs 10, 68,000 crore.
Most of the key stocks are traded on both the exchanges and hence a investor
can buy these stocks from either of the two exchange. Both the exchange has
same settlement cycle, which does not allow investors to shift their positions.
The primary index of BSE is BSE Sensex comprising 30 stocks.
The BSE Sensex is the older and more widely followed index. Both these
indices are calculated on the basis of market capitalization and contain the
heavily traded shares from key sectors. The timing of trading hours starts from
9.55 am to 3.30 pm. The markets are closed on Saturdays and Sundays.
The key regulator governing Stock Exchanges, Brokers, Depositories
participants, Mutual Funds, FIIs and other participants in Indian secondary
and primary market is the Securities and Exchange Board Of India (SEBI)
Ltd.
India ranked top 10 countries in term of the market capitalization of its stock
market. If you decide to operate through an exchange, you have to avail the
services of a SECURITIES AND EXCHANGE BOARD OF INDIA registered
broker/sub-broker. You have to enter into a broker-client agreement and file a
client registration form. Since the contract note is a legally enforceable
document, you should insist on receiving it.
You have the obligation to deliver the shares in case of sale or pay the money
in case of purchase within the time prescribed. If you have opted for

transaction in physical mode, in case of bad delivery of securities by you, you

have the responsibility to rectify them or replace them with good ones.
To affect a transfer in the physical mode the securities should be sent to the
company along with a valid, duly executed and stamped transfer deed duly
signed by or on behalf of the transferor (seller) and transferee (buyer). It is
essential to send by registered post with acknowledgement due and watch out
for the receipt of the acknowledgement card.
If the confirmation of receipt is not received within a reasonable period, the
postal authorities should be immediately approached for confirmation.
Sometimes, for our own convenience, we may choose not to transfer the
securities immediately. This may facilitate easy and quick selling of the
securities. In that case care should be taken to see that the transfer deed
remains valid. However, in order to avail the corporate benefits like the
dividends, bonus or rights from the company, it is essential to get the securities
transferred in our name.
On receipt of our request for transfer, the company proceeds to transfer the
securities as per provisions of the law. In case they cannot affect the transfer,
the company returns back the securities giving details of the grounds under
which the transfer could not be affected. This is known as Company
Objection.
In case we are unable to get the errors rectified or get them replaced, we may
have to recourse to the seller and his broker through the stock exchange to get
back our money. Sometimes securities in physical form may be lost or
misplaced then we must immediately request the company to record a stop
transfer of the securities and simultaneously apply for issue of duplicate
securities.
For transactions in Demat mode we are requested to refer to the
trading/settlement in depositories section. Whom to approach for Grievance
Redressal? There will be occasions when there are grievances against the
company in which we are stake-holders.
Given below are types of grievances for which we could approach SEBI:
Issue related i.e. non-receipt of refund order/allotment advice, cancelled
stock invests.
Non-receipt of dividend.
Shares related i.e. non-receipt of share certificates.
Debenture related i.e. non-receipt of deb. certificates, non-receipt of
interest warrant.

 Non-receipt of letter of offer for rights and interest on delayed payment of

refund orders.
Complaints related to collective investment schemes.
Complaints related to Mutual Funds Mutual Funds Dept., SEBI
Complaints related to Dematerialisation or DPs, Depositories and
Custodian Cell.
Apart from taking up grievances against companies of the types
mentioned above through SEBI the following types of grievances
could be taken up with other authorities/agencies as given below:
With the Stock Exchange: At the investor Information Centre of all the
recognised Stock Exchanges:

Complaints related to securities traded/listed with the exchanges.

Regarding the trades effected in the exchange against the companies.

Complaints regarding the trades effected in the exchange against the

members of the exchange.

With the Department Of Company Affairs/ concerned Registrar of

Companies (ROC)

Complaints against unlisted companies.

Complaints regarding non-receipt of annual report, AGM Notice.

Fixed deposit in manufacturing companies.

With the Reserve Bank of India:

Fixed deposits in banks and NBFCs.
With the concerned company/ROC:
Forfeiture of shares.
Moreover two other avenues always available to the investors to seek redressal
of their complaints. They areas follows:
Complaints with Consumers Disputes Redressal
Suit in the court of Law.

EVOLUTION OF ON-LINE TRADING

The history of e-trading began in 1983, when a doctor in Michigan placed the
first online trade using E TRADE technology. What began with a single click
over 16 years ago has now taken the world by storm. The concept was
visualized by one Bill Porter, a physicist and inventor with more than a dozen
patents to his credit, who provided online quotes and trading services to
Fidelity, Charles Schwab, and Quick & Reilly.
This led Bill to wonder why, as an individual investor, he had to pay a broker
hundreds of dollars for stock transactions. With incredible foresight, he saw
the solution at hand: Someday, everyone would own computers and invest
through them with unprecedented efficiency and control.
And today his dream has become a reality. e trading has become a way of
investing in the developed world and is soon catching on in developing
countries too.
There are three basic things needed for e-trading, a bank account, a Demat
account and a brokerage account. The steps in e-trading replicate the real life
situation and are fairly simple to follow. Once these three accounts are opened,
the money and shares are transferred to your bank and Demat account
automatically, electronically and without any paper work.
The first step is of course to open an account. One can open multiple accounts
with himself or herself as the first name in the account. Then it is necessary to
determine the type of account that you want and how you want to pay for the
trades you make. Accounts can be Individual, Joint, Sole Proprietorship,
Corporate, or Partnership etc.
The form filling requires simple personal details like full legal name,
Citizenship status, Residency status, employer's name and address, your
passport\PAN number, Date of birth, etc.

One can download the forms or request for them by post or even request for a
representative of the firm to come over to help you with the form. Postsubmitting, you are allotted a USER ID and PASSWORD while giving details
for registration.
Then an Account Reference Number is generated and displayed to you. These
three things are unique to an individual and ensure security of transactions.
The acceptance of the application is communicated by email.
The Online Trading is a discount trading service appropriate for individuals
who require fast execution, lowest commissions and have the expertise to
make their own trading decisions without the direction of a full service broker.
It gives you an opportunity to leverage your independence to execute, receive
automatic fills, monitor, and manage your account on your time. With online
order-entry system the investor can transmit his/her orders via the Internet
(electronically), directly to the Pit or to the Exchange floor in real time (in as
little as 2.5 seconds).
In order to start trading online it is important that you deposit money in your
bank account before placing a buy order. In order to place a sell order you
must have shares in your DEMAT Account. In order to place a buy order you
need to fund your account.
You can do this by depositing money in your bank account or else you can sell
some shares existing in your Demat account and use the proceeds of sale to
fund your purchase transaction. The amount of money required before placing
a buy order would depend on the value of order and the type of e-invest
account you have enrolled for - whether cash or margin.
In a Margin account one can use a line of credit to buy marginable securities
or for overdraft protection. Such an account is opened after taking into
consideration Annual income, Net worth, description of your investment
objectives, as it involves lending a line of credit. In a cash account, the amount
of securities bought has to be backed by the cash in the account.
Then comes placing the order. For this you enter your Trading password and
go to trade. From the Trading tab, select Enter Order under the Stocks
heading. Select a transaction type: Buy, Sell. At 'Number of Shares', type the

number of shares that you want to buy. At 'Stock Symbol or Name(s)', type the
stock symbol.
If you don't know the symbol, click 'Find Symbol', type the company name,
click 'Search' and click the symbol that you want from the list. For a market
order, select 'Market'. Otherwise, select 'Limit', 'Stop' or 'Stop Limit' and enter
the price.
'Market Order': you just ask the broker to buy or sell your stocks at the best
price available. 'Limit Order': you tell the broker to trade only when the stock
hits a certain price or better. 'Stop Order': you tell the broker to sell your shares
if the stock drops below a certain price.
Select either 'Good for Day' or 'Good Until Canceled'. If you want to place an
'All-or-None' order, click 'All or None'. Type your trading password and click
'Preview Order'. If you want to change your order, click 'Cancel' and make
your changes.
To see if your order has been executed and filled as you expect, check your
account balance. The 'Account Balances' page shows your account equity (the
value of your account) and your buying power.
If an order to buy or sell stock hasn't been executed yet, you might be able to
change or cancel the order. Orders that you have placed but for which you
haven't yet received execution reports appear when you click 'View Open
Orders' under the 'Stocks' heading of the 'Trading' tab.
To change a stock order from the 'Trading' tab, select 'View Open Orders',
make sure you're currently in the correct account, the click 'Change' beside the
order you want to change.
Enter your change or changes - you can change the quantity, price, and term.
For a new price, select the appropriate option button and then enter the price
(unless you're changing it to a market order).

You cannot change the stock symbol or the transaction type (Buy, Sell, Sell
Short, or Buy to Cover). Enter your trading password and click 'Preview
Change Order'. Or, if you want to cancel your changes, click 'Do Not Change'.
The account opening charge, commission rates and the minimum limit of
transaction vary from site to site. Other charges can include Annual Services
Charges, Custody charges, D-Mat account charges etc.
So sitting at home one can take an investment decision at ease after having
researched and read up fully about the stock. With the advent of online
trading, it would seem that the markets are just a click away.
However, do remember that currently in India the handful of online trading
offers are mere order routing systems. But it will not be long enough before
the entire system goes online.
REASONS FOR ONLINE TRADING IN INDIA:
Each investor has one or other reasons to go for online trading instead of
offline trading. They are as follows:
They are independent. They fell they have control over their account,
can make their own decisions and dont have to give reasons for their
actions.
They have a reason to participate in the stock market and learn about it.
They find it interesting, cheap, easy, fast and convenience.
A lot of information is online so they can keep up-to-date with what is
happening in the trading world.
They are sure and overconfident.
They have access to numerous tools to invest and can create their own
portfolio.
They feel that trading through net can hide from others.
REASONS FOR THE EMERGENCE OF ONLINE TRADING IN
INDIA:

The reasons for providing online trading facility to investors by the Indian
companies are various. They are as follows:
Online trading has a very good future in India as it is not exploited
properly so far.
Consistent increase in the number of users of interest.
Consistent increase in the number of personal computer users.
Part of diversification.
Less investment in technology and other areas compared to the returns.
More awareness in investors about the stock market.

RECENT DEVELOPMENTS:
The bumpy Bull Run in the stock markets has triggered a slowdown in the
opening of new account by the depository participants (DPs). Faced with the
sudden dip in the number of new account being opened the DPs are devising
ways to attracts customers.
On offer is Interactive Voice Response (IVR) for the latest update on Demat
accounts and services through the Internet.
Analysts said there was booms in Demat account opening as retail customers
were riding high on the loans extended to pick up initial public offers. Most of
these Demat accounts are now dormant.
Several DPs are planning to launch Interactive Voice Response (IVR) units
and Demat services on the Net, Through these IVR units , investor will be able
to know the current value of their portfolio, current holdings, transaction list,
etc.

Some DPs are providing Demat services on the Net to enable customer to
access their account and get the holding and transaction statement on a daily
basis. For eg: HDFC Bank.
With Online trading an investor can:
Enter orders through internet.
Review your account balances and transaction activity.
Obtain stock quotes in real time.
Access company profiles and research.
Receive the most competitive and current commission schedule.
Direct Floor Access-Submit trades directly to the pit in real time.
Institutional Quality Order Entry.
Market-to-Market Dynamic Account Updates.
Reduced Commissions - Up to 80% discounted commission rates.
Physical Trading
Indian investor community has undergone sea changes in the past few years.
India now has a very large investor population and ever increasing volumes of
trades. However, this continuous growth in activities has also increased
problems associated with stock trading.
Most of these problems arise due to the intrinsic nature of paper based trading
and settlement, like theft or loss of share certificates. This system requires
handling of huge volumes of paper leading to increased costs and inefficiencies.
Risk exposure of the investor also increases due to this trading in paper.
The risks involved are a follows:

Delay in transfer of shares.

Possibility of forgery on various documents leading to bad

deliveries, legal disputes etc.

Possibility of theft of share certificates.

Prevalence of fake certificates in the market.

Mutilation or loss of share certificates in transit.

The physical form of holding and trading in securities also acts as a bottleneck
for broking community in capital market operations.
The introduction of NSE and BOLT has increased the reach of capital market
manifolds. The increase in number of investors participating in the capital
market has increased the possibility of being hit by a bad delivery. The cost and
time spent by the brokers for rectification of these bad deliveries tends to be
higher with the geographical spread of the clients. The increase in trade volumes
lead to exponential rise in the back office operations thus limiting the growth
potential of the broking members.
The inconvenience faced by investors (in areas that are far flung and away from
the main metros) in settlement of trade also limits the opportunity for such
investors, especially in participating in auction trading. This has made the
investors as well as broker wary of Indian capital market. In this scenario
Dematerialised trading is certainly a welcome move.
Trading can be at minimum number in capital market. Split of shares made
more investors to join the investment scenario.
Dematerialised Trading
Dematerialisation or "Demat" is a process whereby the investors securities like
shares, debentures etc, are converted into electronic data and stored in
computers by a Depository. Securities registered in the investors name are
surrendered to depository participant (DP) and these are sent to the respective
companies who will cancel them after "Dematerialisation" and credit investors
depository account with the DP.

The securities on Dematerialisation appear as balances in investors depository

account. These balances are transferable like physical shares. If at a later date,
the investor wishes to have these Demat" securities converted back into paper
certificates, the Depository helps them to do this.

Depository functions like a securities bank, where the Dematerialised

physical securities are traded and held in custody. This facilitates faster, risk
free and low cost settlement. Depository is much like a bank and performs
many activities that are similar to a bank. Following table compares the two:

Depository
Bank
Holds funds in accounts

Holds securities in account

Transfers funds between accounts

Transfers securities between accounts

Transfers without handling money

Transfers without handling securities

Safekeeping of money

Safekeeping of securities

National Securities Depository Limited (NSDL)

At present there are two depositories in India, National Securities Depository
Limited (NSDL) and Central Depository Services (CDS).
NSDL is the first Indian depository; it was inaugurated in November 1996.
NSDL was set up with an initial capital of US$28mn, promoted by Industrial

Development Bank of India (IDBI), Unit Trust of India (UTI) and National
Stock Exchange of India Ltd. (NSEIL). Later, State Bank of India (SBI) also
became a shareholder.
NSDL has since its inception built a network of its business partners and 10
stock exchanges are now trading in securities in the Demat form.

Chart 1: Showing NSDL and its Interface

INVESTOR

Depository
Participant

R&T

Clearing House
NSDL

NSDL carries out its activities through various functionaries called business
partners who include Depository Participants (DPs), Issuing corporates and their
Registrars and Transfer Agents, Clearing corporations/ Clearing Houses etc.
NSDL is electronically linked to each of these business partners via a satellite
link through Very Small Aperture Terminals (VSATs). The investor interacts

with the depository through a depository participant of NSDL. A DP can be a

bank, financial institution, a custodian or a broker.

Benefits Of Demat
Transacting the depository way has several advantages over the
traditional system of transacting using share certificates. Some of the benefits
are:

Trading in Demat segment completely eliminates the risk of bad

deliveries, which in turn eliminates all cost and wastage of time

Associated with follow up for rectification. This reduction in risk

associated with bad delivery has lead to reduction in brokerage to the extent of
0.5% by quite a few brokerage firms. In case of transfer of electronic shares,
you save 0.5% in stamp duty.

The investor can also avoid the cost of courier/ notarization/ the need for

further follow-up with your broker for shares returned for company objection

In case the certificates are lost in transit or when the share certificates

become mutilated or misplaced, to obtain duplicate certificates, the investor

may have to spend at least Rs 500 for indemnity bond, newspaper
advertisement etc, which can be completely eliminated in the Demat form

The investor can also receive his/her bonuses and rights into their

depository account as a direct credit, thus eliminating risk of loss in transit.

The investor can also expect a lower interest charge for loans taken

against Demat shares as compared to the interest for loan against physical

shares. This could result in a saving of about 0.25% to 1.5%. Some banks have
already announced this.

The exclusive demat segments follow rolling settlement cycle of

T+3 i.e. the settlement of trades will be on the 3 rd working day from the trade
day. This will enable faster turnover of stock and more liquidity with the
investor.

Reduction in handling of huge volumes of paper

Periodic status reports to investors on their holdings and

transactions, leading to better controls.

RBI has increased the limit of loans against Dematerialised securities as

collateral to Rs 2mn per borrower as against Rs1mn per borrower in case of

loans against physical securities.

RBI has also reduced the minimum margin to 25% for loans against

Dematerialized securities as against 50% for loans against physical securities.

Demat functions not only in capital market, it also does in money

market.

COMPANY PROFILE:
BACKGROUND AND INCEPTION OF COMPANY
Housing Development Financial Corporation Limited (HDFC) was
incorporated in 1977 with the primary objective of meeting a social need that of
promoting home ownership by providing long-term finance to households for
their housing needs. HDFC was promoted with an initial share capital of Rs.
100 million.
HDFC was amongst the first to receive an 'in-principle' approval from the
Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the
RBI's liberalization of the Indian Banking Industry in 1994. The bank was
incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995
On 18thFeb 1995, the union finance minister flew down to Mumbai to
inaugurate the 1st branch of a new bank being promoted by Indias premier

housing finance institution. It was the 1 st Private sector bank to have received a
license from the Reserve bank of India after the sector was thrown open to new
players. HDFC Bank kick started its operation in 1995 with a focus on corporate
banking, targeting the top end of the market.
Ten years ago, HDFC Bank began the operations with the mission of becoming
a world class Indian bank, focused in fulfilling all the financial requirements of
our customers under one proof, in a convenient, reliable and cost effective
manner.
HDFC Bank has put in place stage of the art technology to provide quality
service to all the customers. This system has cross branch functionalities which
enable on line transfer of funds across all HDFC Bank locations. The wide
network of HDFC branches, spread over 217 cities with new locations being
added regularly, is an advantage. HDFC Bank has also entered into various
correspondent banking services, which offer the facility of speedy collection of
cheques for movement of funds across locations.
HDFC Bank is one Indian bank keeping pace with the global banking and
staying in tune with the changing needs of customers. HDFC bank has a strong
and an enviable network of over 484 branches and 1000 ATMs spread across the
length and breadth of the country and more than 3 million retail customers.
HDFC bank is committed to providing world class services to it's customers at
highly affordable prices.
PROMOTERS
HDFC is India's premier housing finance company and enjoys an impeccable
track record in India as well as in international markets. Since its inception in
1977, the Corporation has maintained a consistent and healthy growth in its
operations to remain the market leader in mortgages. Its outstanding loan

portfolio covers well over a million dwelling units. HDFC has developed
significant expertise in retail mortgage loans to different market segments and
also has a large corporate client base for its housing related credit facilities.
With its experience in the financial markets, a strong market reputation, large
shareholder base and unique consumer franchise, HDFC was ideally positioned
to promote a bank in the Indian environment.
BUSINESS FOCUS
HDFCs mission is to be a world class Indian Bank. The 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 bank's risk
appetite. The bank is committed to maintain the highest level of ethical
standards, professional integrity, corporate governance and regulatory
compliance. HDFC Bank's business philosophy is based on four core values Operational Excellence, Customer Focus, Product Leadership and People.
CAPITAL STRUCTURE
The authorized capital of HDFC Bank is Rs. 450 Crores (Rs. 4.5 bn). The paidup capital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of
the bank's equity and about 19.4% of the equity is held by the ADS Depository
(in respect of the bank's American Depository Shares (ADS) Issue). Roughly
31.3% of the equity is held by Foreign Institutional Investors (FIIs) and the
bank has about 190,000 shareholders. The shares are listed on the Stock
Exchange, Mumbai and the National Stock Exchange. The bank's American
Depository Shares are listed on the New York Stock Exchange (NYSE) under
the symbol "HDB".
TIMES BANK AMALGAMATION

In a milestone transaction in the Indian banking industry, Times Bank Limited

(another new private sector bank promoted by Bennett, Coleman & Co./Times
Group) was merged with HDFC Bank Ltd., effective February 26, 2000. As per
the scheme of amalgamation approved by the shareholders of both banks and
the Reserve Bank of India, shareholders of Times Bank received 1 share of
HDFC Bank for every 5.75 shares of Times Bank. The acquisition added
significant value to HDFC Bank in terms of increased branch network,
expanded geographic reach, enhanced customer base, skilled manpower and the
opportunity to cross-sell and leverage alternative delivery channels.

MANAGEMENT
Mr. Jagdish Kapoor took over as the bank's Chairman in July 2001. Prior to this,
Mr. Capoor was a Deputy Governor of the Reserve Bank of India.
The Managing Director, Mr. Aditya Puri, has been a professional banker for
over 25 years, and before joining HDFC Bank in 1994 was heading Citibank's
operations in Malaysia. The Bank's Board of Directors is composed of eminent
individuals with a wealth of experience in public policy, administration,
industry and commercial banking.

Senior banking professionals with substantial experience in India and abroad

head various businesses and functions and report to the Managing Director.
Given the professional expertise of the management team and the overall focus
on recruiting and retaining the best talent in the industry, the bank believes that
its people are a significant competitive strength.
DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable

network of over 684 branches spread over 316 cities across India. All branches
are linked on an online real-time basis. Customers in over 120 locations are also
serviced through Telephone Banking. The Bank's expansion plans take into
account the need to have a presence in all major industrial and commercial
centres where its corporate customers are located as well as the need to build a
strong retail customer base for both deposits and loan products. Being a
clearing/settlement bank to various leading stock exchanges, the Bank has
branches in the centres where the NSE/BSE have a strong and active member
base. The Bank also has a network of about over 1695 networked ATMs across
these cities. Moreover, HDFC Bank's ATM network can be accessed by all
domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus
and American Express Credit/Charge cardholders.

PRODUCTS AND SERVICES:

Accounts & Deposits Loans
Savings Account
1. Personal Loans
1.Regular
Savings 2. Home Loans

Investments & Insurance

1. Mutual Funds
2. Insurance

Account
2. Savings Plus Account 3. Two Wheeler Loans

3. General & Health

Insurance
3. Savings Max Account 4. Car loans
4. Bonds
4. No Frills Account
5. Gold Loan
5. Financial Planning
5. Retail Trust Account 6. Educational Loan
6. Equities & Derivatives
Salary Account
7.Loan Against Securities 7. Mudra Gold Bar
1. payroll
8. Loan Against Property Forex Services
2. Classic
Cards
1. Trade Finance
3. Regular
1. Silver Credit Card
2. Travellers' Cheques
4. Premium
2. Gold Credit Card
3. Foreign Currency Cash
Defence Salary Account 3. Woman's Gold Credit 4.
Foreign
Currency
Card
Kids Advantage Account 4. Corporate Credit Card

Cheque Deposits
5.Foreign
Currency

Pension

Saving

Bank 5. Business Credit Card

Remittances
6. ForexPlus Card

Account
Current Account
6. Health Plus Credit Card Payment Services
1. Plus Current Account Debit Cards
1. NetSafe
2.
Trade
Current 1. EasyShop International 2. Prepaid Refill
Account
3. Premium

Debit Card
Current 2. EasyShop

Account
4.
Regular

Advantage Debit Card

Current 3. EasyShop International 4. Visa Money Transfer

Woman's 3. BillPay

Account
Business Debit Card
5.
Reimbursement

5. Excise & Service Tax

Current Account
Fixed Deposits

Payment
6. Online

Payment

of

Direct Tax
1. Regular Fixed Deposit
2. Super Saver Account
Demat Account
Safe Deposit Lockers

DEMAT ACCOUNT:
Demat of course remains the ideal option to avoid the hassles of fake certificate,
lost certificate, damages, theft and conduct hassle - free transactions on the
respective shares of the customers. The customers can also access the Demat
Account on the Internet.

DEMATERIALISATION OF SHARES:
Trading in the shares of the Company is compulsory in dematerialized form for
all investors. The Company has, therefore, enlisted its shares with both the
depositories, viz, NSDL and CDSL. This means that you have now had the
option to hold and trade in the shares of the Company in electronic form.
While most of you may be familiar with how a Depository functions, given
below is a brief outline, in question and answer format, which we hope will be
useful to you.
Dematerialisation (Demat in short form) signifies conversion of a share
certificate from its physical form to electronic form for the same number of
holding which is credited to your Demat account which you open with a
Depository Participant (DP).
Dematerialisation is a process by which the physical share certificates of an
investor are taken back by the Company and an equivalent number of securities
are credited in electronic form at the request of the investor. An investor will
have to first open an account with a Depository Participant and then request for
the dematerialisation of his share certificates through the Depository Participant
so that the dematerialised holdings can be credited into that account. This is
very similar to opening a Bank Account. Dematerialisation of shares is optional
and an investor can still hold shares in physical form. However, he / she have to
Demat the shares if he / she wish to sell the same through the Stock Exchanges.
Similarly, if an investor purchases shares, he / she will get delivery of the shares
in Demat form.
BENEFITS:

Easy and speedy execution of transactions viz. sale, purchase, transfer,

transmission etc.

No worry about securities, certificates being lost, stolen or mutilated.

Genuineness of the securities held - no risk of holding fake certificates.

Less paper work and the resultant cost saving, for you, your Corporation
and the country as a whole.

Less cost for transfer - No stamp duty.

No risk of bad delivery.

Immediate allotment / credit in case of Bonus / Right Issues.

Types of Accounts:
The D-mat accounts are classified in to different types according to the clients
as per NSDL terminology. They are as follows,

Ordinary resident ( Resident Individual Account)

NRI - repatriable

NRI - non-repatriable

HUF- Hindu Undivided Family

Others like corporate

DATA ANALYSIS AND INTERPRETATION:

1. Are you Aware of the Demat account?
Table No: 1 Awareness of Demat account No of responses

Particulars No of Responses
YES
90
NO
10

ANALYSIS:
Out of the 100 respondents that were interviewed, most respondents, i.e., 90%
of them said that they were aware of the Demat account and only 10% of the
respondents were unaware of Demat account.

Graph No: 1

INTERPRETATION:

From the analysis it can inferred that the awareness of Demat account
among the respondents is high. This clearly indicates that the most of the
respondents are quite informed about the Demat account and very insignificant
proportions of people are unaware of it.

2. What were the sources from which you obtained the information about
demat account services?
o

Friends & Colleagues

Advertisement

Business magazines

Others

Table No: 2 Sources of Information

Sources
Friends and Colleagues
Advertisement
Business Magazine
Others

No of Responses
42
10
30
8

ANALYSIS:
From the above table, we can observe that most of respondents i.e., 42 of
them got the information through their Friends & Colleagues and 30 of the
respondents got information about Demat account through various Business
Magazines, 10 of the respondents got information through Advertisements and
only 8 of the respondents got the in formation through Other sources such as
internet, bank etc..

Graph No: 2

INTERPRETATION:
By the analysis we can infer that major sources of information are
friends, colleagues and business magazines. Where Advertisements and Other
sources such as Internet, banks are being insignificant sources of information.

3. .Which Depository Participant/ Broking House comes to your mind first,

when you hear about Demat account services.

Table No: 3 Top of the Mind Awareness

Depository participants/ Broking Houses
HDFC
ICICI
SHARE KHAN
RELIANCE MONEY

No of responses
35
25
25
5

ANALYSIS:
From the above chart it is seen that (38%) of the respondents recall
HDFC when they hear about the Demat account followed by ICICI & Share
Khan both being (28%) with Reliance Money (6%) having the least priority.
Graph No: 3

INTERPRETATION:
By the analysis it can infer that HDFC holds the top of the mind space of
majority the respondents followed by ICICI & Share Khan. Where Reliance

Money holds a very few respondents mind space.

4. 1Do you have a Demat account?

Table No: 4.1 Respondents having Demat account
Particulars

No of Responses

YES
NO

54
36

ANALYSIS:
The above table shows that (60%) of the respondents surveyed are having a
Demat account and (40%) of the respondents still doesnt have the Demat
account.

Graph No: 4.1

INTERPRETATION:
From the above analysis we can infer that the majority of the customers
i.e., 60% of them are having Demat account but there is still some potential
market left as seen with 40% of the respondents still not having a Demat
account.

4.2If Yes, Then which depository participant/ Broking house demat account
do you have
Table No: 4.2 Respondents having Demat account with different broking
house/DP
Broking House/ Depository participant
SHARE KHAN
HDFC
ICICI
RELIANCE MONEY
ANALYSIS:

No of Responses
23
14
12
5

By the above table it can be seen that out of (60%) of Demat account
holders (43 % ) have Demat account with Share Khan, (26%)have a Demat
account with HDFC, (22%) have Demat account with ICICI, (10%) have with
Reliance Money.
Graph No: 4.2

INTERPRETATION:
From the analysis we can infer that Share Khan is having a majority
number of customers i.e.,23 followed by HDFC and ICICI with 14 and 12
customers respectively, where in Reliance Money having the least number of
customers.
As (40%) of respondents dont have a Demat account, the reason for not having
a Demat account among the respondents is because of the following reasons
- Respondents are not interested in trading shares
- Respondents feel that there is no requirement of trading in shares

- Respondents feel its too risky trading in shares.

- Respondents feel trading in shares requires more knowledge about it.

5. Do you think the documentation process in opening demat account is

tedious?
Table No: 5 Tediousness of Documentation Process

YES
NO
DON'T KNOW

No of Responses
45
33
12

ANALYSIS:
From the above table we can see that (50%) of the respondents feels the
documentation process in opening a Demat account is tedious while (37%) of

the respondents said it is not a tedious process. (13%) were unsure of the nature
of the documentation process required for opening a Demat account.

Graph No: 5

INTERPRETATION:
From the analysis it can be inferred that majority of the respondents feel
that the documentation process while opening a Demat account is very tedious,
where in some of the respondents feel that the documentation process is not so
tedious.

6. What parameters would you consider while selecting a depository

participant/ Broking House?
Table No: 6 Respondents considering the parameter while selecting DP
Parameters
REPUTATION
SERVICE
BROKING CHARGES

No of Respondents
15
50
25

ANALYSIS:
From the above table it can be inferred that Service (55%) holds the top
priority while selecting a depository participant / Broking House. In addition to
that Broking charges (28%) & Reputation (17%) are second and third
respectively on the priority list of the respondents.

Graph No: 6

INTERPRETATION:
The analysis infers that Service is the parameter which has the top most
priority while selecting a Depository Participant / Broking House. While
broking charges are considered to be the next priority after the service. And
Reputation is considered to be not of much importance while selecting a DP/
Broking House. So the bank should try to provide good service in order to gain
a competitive edge in the market.

7. Which of these depository participant/ Broking House are you aware of?
Table No: 7 Awareness of responses towards individual DPs/Broking House
DP/ Broking House
HDFC
INDIA INFOLINE
ICICI
KOTAK MAHINDRA
SHARE KHAN
CITI BANK
INDIA BULLS
OTHERS

ANALYSIS:

No. of Responses
83
75
90
34
86
18
49
33

Out of the total responses for the awareness of depository participant /

broking House , ICICI being the first with 90 responses followed by Share Khan
86 responses, HDFC with 83responses, India Infoline 75 responses, India Bulls
49, Kotak Mahindra 34 and least is Citi Bank with only 18 responses .

Graph No: 7

INTERPRETATION:
From the analysis we can infer that ICICI carries a very good brand name
in market as we see that each and every respondent is aware of the bank.
Followed by Share Khan, HDFC, India Infoline, where these also carry a good
brand name as most of the respondents are also aware of these DP/ Broking

Houses. Very few respondents are aware of Kotak Mahindra and Citi Bank as a
DP/ Broking House.

8. According to you which depository participant / Broking House provides

you the minimum brokerage charge?
Table No: 8 Minimum Brokerage Charge
DP/ Broking House

No. Of Respondents

HDFC
INDIA INFOLINE
ICICI
KOTAK MAHINDRA
SHARE KHAN
CITI BANK
INDIA BULLS
OTHERS

18
0
38
0
28
0
0
6

ANALYSIS:
From the table it can be observed that majority of the number respondents
i.e., 38 feel that ICICI charges the minimum brokerage charges, where 28 of
respondents feel that Share Khan charges the minimum brokerage charges and

18 of them feel HDFC charges the minimum brokerage charge. 6 of the

respondents feel that other depository participant brokerage charges are less
than these above.
Graph No: 8

INTERPRETATION:
According to the above table ICICI holds the distinction for providing the
minimum brokerage charge among the given Depository Participant/ Broking
House. Other Depository Participants in order of minimum brokerage charge are
listed below
- Share Khan
- HDFC
-Reliance Money

9. Do you trade online?

Table No: 9 Respondents Trading Online

No. Of Responses
63
27

YES
NO

ANALYSIS:
From the above table it is observed that majority of the respondents i.e.
70% of them trade online, where as 30% of the respondents do not trade online.

Graph No: 9

INTERPRETATION:
From the above analysis it is evident that a significant number of
respondents are tech savvy and use internet for trading. As we can see that there
has been a paradigm shift in trading practices.

10.How safe do you feel online trading is?

Table No: 10 Safety Trading Online
Particulars
Totally safe
Safety Trading Online
Niether safe nor unsafe
Unsafe
Totally unsafe

No. Of Responses
32
43
22
3
0

ANALYSIS:
Responses on the safety of online trading show the above trend.32
respondents felt that online trading is totally safe, 43 respondents felt that
trading online is safe,22 respondents felt its neither safe nor unsafe, 3
respondents felt its unsafe to trade online.

Graph No: 10

INTERPRETATION:
By above table it can be inferred that most of the respondents feel trading
online is safe. This would signify that respondents are well aware of the benefits
of trading online. Respondents feel that it is safe trading online rather than
trading in physical form.

11.How many of these Demat accounts are you aware of?

Table NO11; Awareness of types of Demat account of respondents
Types Of Account
Resident Individual Account
Hindu Undivided Family (HUF) Account
Non Resident Indian Account

No. of Responses
64
23
28

ANALYSIS:
By the above chart we can observe that 64 respondents are well aware of
Resident Individual Account followed by Non Resident Indian(NRI) Account
and Hindu Undivided Family (HUF) Account.

Graph no. 11;

AWARENESS OF TYPES OF DEMAT ACCOUNT

INTERPRETATION:
From the above analysis it can be inferred that the awareness about the
Resident Individual Account is more compared to other accounts.

12.Do you know that investing in shares helps in tax reduction?

Table No: 12 Investing in Shares
Particulars
Yes
No
Dont Know

No. Of Responses
46
18
26

ANALYSIS:
From the above table it can be observed that (51%) respondents believe
that investing in shares helps in tax reduction while (20%) feel that investing in
shares doesnt help in tax reduction. (29%) respondents are unaware of it.

Graph no - 12

INTERPRETATION:
From the analysis we can infer that majority of the respondents are aware
that, investing in shares helps in tax reduction. Where considerably most of the
respondents dont know that investing in shares helps in tax reduction.

13.Rank the following Depository Participants / Broking houses in

accordance with their reputation.
Table no 13;Rank of DPs/ Broking houses
Depository Participants
HDFC
INDIA INFOLINE
ICICI
KOTAK MAHINDRA
SHARE KHAN
CITI BANK
INDIA BULLS
OTHERS

Ranking
2
4
3
7
1
6
5
8

ANALYSIS:
From the table we see that Share Khan is ranked No.1 depository
Participant followed by HDFC No. 2, ICICI No.3, India Infoline No.4, India
Bulls No.5, Citi Bank No.6 and Kotak Mahindra being ranked as No.7.
Graph no.13

GRAPH NO 13;
RANK OF DPs/BROKING HOUSES

INTERPRETATION:
From the analysis it can be inferred that amongst the seven depository
participant, Share Khan is the most preferred Depository Participant followed
by HDFC, ICICI, India Infoline, India Bulls, Citi Bank where Kotak Mahindra
being the least preferred one.

14.Should the investor dematerialise there securities for the following

reasons
o

It is safe & convenient way to hold securities

SEBI has made it mandatory for trading

Instantaneous transfer of securities

It eliminates delays thefts and misuse of certificates.

Table No: 14 Investor Dematerializing Securities

Particulars
Strongly Agree
Agree
Neither Agree Nor Disagree
Disagree
Strongly Disagree

No. of Responses
24
52
10
4
0

ANALYSIS:
From the above table it can be observed that (26%) of the respondents
strongly agree to statements mentioned, (57%) agree to it, (11%) of them neither
agree nor disagree and only (4%) of the respondents disagree.
Graph No: 14

INTERPRETATION:
It is seen that majority of the respondents agree to statements which
means that they all have a clear knowledge about Dematerialization and its
benefits. Where very less number of respondents disagree to it because of the
lack of knowledge about Demat account.

15.Are you aware of the current bidding mechanism of IPOs(that is book

building)
YES

NO

Table no. 15; Awareness of IPO bidding of responses

Opinion
Yes
No

No. of Responses
90
00

ANALYSIS;
From the table clearly shown 100% are aware with current ,0%are not aware
with current bidding.

Graph no - 15

INTERPRETATION:
It clearly shown that who have demat account almost aware with IPO bidding

16 If YES, from where did you come to know about IPO bidding
Advertisement
Friends

Brokers
DPs
Table no. 16;Respondents source of knowing about IPO bidding
Awareness
Advertisement
Friends
Brokers
DPs

No. of Responses
55
08
17
10

ANALYSIS:
Above table shown that awareness regarding IPO bidding from advertisement is
55 no, from friends is 08 no, from brokers is 17, from DPs 10 no

Graph.no.16

INTERPRETATION;
From analysis we interpetate that majority of people come to know about
IPO bidding from the advertisement, then next to brokers and DPs

17. Have you invested in IPOs

YES

NO

Table no.17; Investing in IPOs

Opinion
Yes
No
ANALYSIS;

No of Responses
62
28

From the above table among 90 Demat account holders,62 Demat account
holders are invest in IPOs,28 Demat account holders are not invest in IPOs

GRAPH NO 17;INVESTING IN IPOs

INTERPRETATION;
It is seen that majority of demat account holders interested in investing in IPOs
bidding

18.What are the bases you consider while bidding in IPOs and investing in it
Industry outlook
Company background and earnings
Project profile
P.E ratios of the similar company
Advice from the broker/friends/DPs
All of the above
Table no 18;Respondents considering the factor while bidding in IPO
Considerations
Industry outlook
Company background& earnings
Project profile
P E ratios
Advice from broker
All of the above
ANALYSIS

No of Responses
15
16
12
08
09
30

According to survey,among 90 respondent before investing IPOs bidding

15investors are consider industrial outlook,16 respondents are consider
company

background&

earnings,12

respondents

are

consider

project

profile,8respondents are consider PE ratios,9respondents are invest by taking

advice from the broker and 30 respondents are consider all factors which
mentioned above
Graph no 18;
RESPODENTS CONSIDERING THE FACTORS WHILE IPOs BIDDING

INTERPRETATION;
From the analysis we can interfere that majority of the respondents are
before investing IPO bidding they consider all factors which provide safety for
them investment .

19.Do you invest in IPO even though it is aggressively priced.

YES

NO

Table no 19;No.of respondents investing in IPO in aggressive price

Opinion
Yes
No

No of responses
15
75

ANALYSIS;
According to survey,15respondents are ready to invest with aggressive
price of IPO and 75 respondents are not ready

GRAPH NO 19;
NO .OF RESPONDENTS INVESTING IN IPO IN AGGRESSIVE PRICE

INTERPRETATION;
From analysis we can interfere that, more no of respondents are not
investing with aggressive price of IPO.

SUMMARY OF FINDINGS:
Out of the 100 respondents that were interviewed, most respondents,
i.e. 90% of them said that they were aware of the Demat account and only 10%
of the respondents were unaware of Demat account.
Out of 90 respondents i.e., 42 of them got the information through their
Friends & Colleagues and 30 of the respondents got information about Demat
account through various Business Magazines, 10 of the respondents got
information through Advertisements and only 8 of the respondents got the in
formation through Other sources such as internet, bank etc.
The study clearly highlights that HDFC holds the top of the mind space
of majority the respondents followed by ICICI & Share Khan. Where Reliance
Money holds a very few respondents mind space.
According to the survey it is clear that (60%) of the respondents surveyed
are having a Demat account and (40%) of the respondents still doesnt have the
Demat account.
Out of the 54 respondents, Share Khan is having a majority number of
customers i.e.,23 followed by HDFC and ICICI with 14 and 12 customers
respectively, where in Reliance Money having the least number of customers.
The survey showed that 40% of the respondents surveyed dint had there
Demat account and the reason for not having a Demat account was because
some respondents were not interested in trading, some thought it is a risky job
trading shares, some felt that it was not so necessary .
From the survey it was found that (i.e., 50%) of the respondents felt that
the documentation process while opening a Demat account is very tedious,

where in some of the respondents (i.e.,37%) felt that it was not a tedious
process.
According to the survey it is found that service is the parameter which
has the top most priority while selecting a Depository Participant / Broking
House. While broking charges are considered to be the next priority after the
service. And Reputation is considered to be not of much importance while
selecting a DP/ Broking House.
From the study it is evident that a significant number of respondents are
tech savvy and use internet for trading.
It is found that most of the respondents feel trading online is safe. This
would signify that respondents are well aware of the benefits of trading online.
Respondents feel that it is safe trading online rather than trading in physical
form
According to the survey it was also found that majority of the
respondents are well aware of the benefits of Demat account, which means that
the understanding level of the respondents is hi

SUGGESTIONS:

The first and most important suggestion is that the Bank has to put
in more efforts to inform customers about the Demat account

Bank should concentrate more on providing a quality service. As

providing a good service would help the bank in achieving there
results

The documentation process for opening a Demat account should be

made simpler and non tedious

The Bank can have kiosks at each of its branches through which it
can provide information regarding features, functions and benefits
of the Demat account.

To sustain a competitive advantage in the market the Bank has to

come up with various promotional strategies such as posters
inside the bank.

Bank can come up with quarterly programs which would contain

different offers, schemes like free account opening charge

CONCLUSION:
HDFC Bank has put in place stage of the art technology to provide quality
service to all the customers. With the service provided by HDFC Demat having

more than 8 lakh accounts through out India has made company acquire great
proportion of market. Moving towards the customer, the bank offers today, a
vast range of services, designed to suit, the needs of the customers.
Among the customers as the level of awareness as well as level of
understanding is high which makes the bank to emphasise more on the
promotional strategies and providing a good service.
As the banks have started providing Demat services, all the banks are facing
stiff competition between them. Overall the bank performance depends upon the
service provided by the bank to its customers. To sustain the No.1 position in
the market, HDFC bank must excel in the service to its customers and attract
them with significant broking charges and also with unique products and
services. The most important and challenging task for the HDFC Bank is to
ensure overall customer satisfaction and deliver the best to its customers all the
time.

BIBLIOGRAPHY
1. Text books

Business Research Methods by Donald R Cooper & Pamela S

Schindler - TMH, 3/e, 2007

2. Company Website:
o

http://www.hdfcdemat.com/

http://www.demataccount.com/

3. Other Websites:
o

www.wikipedia.com

www.google.com

ANNEXURE:
Questionnaire on Awareness of Demat Account

1. Are you aware of Demat Account

Yes [ ]

No [ ]

2. What were the sources from which you obtained information about demat
account services?
o

Friends & colleagues [ ]

Advertisement

Business magazines [ ]

Other, specify.

[ ]

3. Which depository participant / Broking house comes to your mind first,

when you hear about Demat account services.

4. Do you have a Demat Account?

Yes [ ] No [ ]
If Yes, Then which depository participant / Broking house demat
account

do

you

have
If

No,

What

is

the

reason

5. Do you think the documentation process in opening a demat account is

tedious?
Yes

[ ] No

[ ] Dont know

[ ]

6. What parameters you consider while selecting a depository participant /

Broking house?
o

Reputation [ ]

Services [ ]

Charges [ ]

7. Which of these depository participant / Broking house are you aware of?
India Infoline [ ] Share Khan [ ]
HDFC [ ] Citi Bank [ ]
ICICI [ ] India Bulls [ ]
Kotak Mahindra [ ] Other, specify.
8. According to you which depository participant / Broking house provides
you the minimum brokerage charges?
India Infoline [ ] Share Khan [ ]
HDFC [ ] Citi Bank [ ]
ICICI [

] India

Bulls [

Other,specify.

9.Do you trade online?

Yes

[ ] No

[ ]

10.How safe do you feel online trading is?

Totally safe [ ]

Kotak

Mahindra [

Safety trading online [ ]

Neither safe nor unsafe [ ]
Unsafe [ ]
Totally unsafe [ ]
11.How many of these Demat accounts are you aware of?
o

Resident Individual Account [ ]

Hindu Undivided Family (HUF) Account [ ]

Non Resident Indian (NRI) Account [ ]

12.Do you know that investing in shares helps in tax reduction?

Yes

[ ] No

[ ] Dont know

[ ]

13.Rank the following stock broking houses in accordance with their

reputation.(1 being highest, 7 being lowest)
India Infoline [
ICICI [ ]

] Share Khan [
India Bulls [ ]

] HDFC [ ]

Citi Bank [

Kotak Mahindra [ ]

14.Should the investor dematerialize his/her securities, because,

o

It is safe & convenient way to hold securities

SEBI has made it mandatory for trading

Instantaneous transfer of securities

It eliminates delays, thefts, and misuse of certificate.

Strongly
agree

Agree

NeitherAgree Disagree
Nor Disagree
3

Strongly
Disagree
1

15.Are you aware of the current bidding mechanism of IPOs(that is book

building)
YES

NO

16. IF YES, from where did you come to know about IPO bidding
Advertisement
Friends

Brokers
DPs

17. Have you invested in IPOs

YES

NO

18.What are the bases you consider while bidding in IPOs and investing in it
Industry outlook
Company background and earnings
Project profile
P.E ratios of the similar company
Advice from the broker/friends/DPs
All of the above
19.Do you invest in IPO even though it is aggressively priced.
YES

NO

Name:

Age: ...............................
Contact Number: ...
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