REPORT ON SUMMER INTERNSHIP PROJECT

“Opportunities Mapping in Builders Segment”

Done at

HDFC BANK

Submitted in partial fulfilment of the requirements for awarding

Degree in

Master of Business Administration (MBA)

By

SANDEEP P.
(Reg. No. : 37118091)

Under the guidance of

Prof. (Dr.) JAGATHY RAJ V. P.

Professor

SCHOOL OF MANAGEMENT STUDIES,

COCHIN UNIVERSITY OF SCIENCE AND TECHNOLOGY
KOCHI - 682022.
JUNE 2019
 DECLARATION

I do hereby declare that this report is a bona fide record of the original project study entitled
“Opportunities Mapping in Builder Segment”, done by me under the guidance and supervision
of Dr. Jagathy Raj, Professor, School of Management Studies, CUSAT and Mr. Vikas M.S.,
Branch Manager, HDFC – Kakkanad, during the academic year 2018-19, submitted in partial
fulfilment for the award of degree of Master of Business Administration from Cochin
University of Science and Technology, Kochi, Kerala.

This work has not been under taken or submitted elsewhere in connection with any
other academic course.

Place: Kochi

Date: SANDEEP P.

ii
 ACKOWLEDGEMENT

It is really a matter of pleasure for me to get an opportunity to thank all the persons who
contributed directly or indirectly to the successful completion of this summer internship
project.

First of all I thank the God Almighty for the blessings and fortune received throughout my
work.

I owe a special thanks of gratitude to Mr. Vikas M.S., Branch Manager, HDFC - Kakkanad for
taking the role of my mentor and spending his invaluable time and effort in helping me
complete this project.

I am extremely thankful to Dr. Jagathy Raj, Professor, School of Management Studies,

CUSAT, for his support and guidance at every stage of the project.

I am grateful to Dr. D. Mavoothu, Professor (Director), School of Management Studies,

CUSAT for his encouragement and freedom provided to complete this project successfully.

I also express my gratitude to Mr. Anoop King, Cluster Head, HDFC, Kochi, for his valuable
insights on the study. I extend my sincere thanks to all the staff of HDFC Bank, Kakkanad
branch.

I express my deep gratitude to all my faculty members and friends for their co-operation and
helping hands, who were always supportive in times of need.

Sandeep P.

iii
 i) EXECUTIVE SUMMARY

The Housing Development Finance Corporation Ltd. (HDFC) was

among the first to receive an ‘in principle’ approval to set up bank in the private sector as part
of the liberalisation policy of the banking industry in India in 1994. HDFC Bank Ltd. was
incorporated in August 1994 with its registered office in Mumbai, Maharashtra, India, and it
started operations as a scheduled commercial bank in January, 1995.

The report is based on a summer-internship project conducted during

the 2 months period of May-June 2019 at HDFC Bank Ltd. (Kakkanad-branch, Kochi, Kerala,
India). The report gives detailed information on the project conducted to enhance the market
share for HDFC Bank. It delivers insights on the existing, but yet to be discovered
opportunities among the builders-customer segment for the bank. Apart from the marketing
based project study, the report includes the organizational study, industry analysis and
competitor study of the bank as well as a financial statement analysis. The key competitors of
the bank, with respect to the real-estate customers segment, are identified and the prime factors
in the market competition are determined. The internship helped in gaining an insight into the
functioning of various departments of the bank as well. An analysis of the bank’s financial
statement is also performed for the year 2018-19, which helped to identify the financial
position of the bank during that financial year.

iv
 ii) LIST OF TABLES

SERIAL PARTICULARS PAGE

NO. NO.

Table 4.1 Consolidated Profit & Loss Account of HDFC Bank ………............ 38

Table 4.2 Consolidated Balance Sheet for FY 18-19 …………………............. 40

Table 5.1 Age of firms surveyed ………………………………………............ 55

Table 5.2 Number of employees in the company …………………................... 56

Table 5.3 Current banker(s) of surveyed firms.………………………............... 56

Table 5.4 Factors for choosing the current banker.............................................. 59

Table 5.5 Banking services opted for by the firms.............................................. 60

Table 5.6 Firms importing construction equipment............................................. 62

v
 iii) LIST OF FIGURES

SERIAL PARTICULARS PAGE

NO.

Figure 1.1 Classification of Banks in India............................................................... 4

Figure 1.2 Advantages for Real Estate in India......................................................... 6

Figure 1.3 Real Estate Market Scenario in India....................................................... 7

Figure 2.1 Organizational Hierarchy of HDFC Bank................................................ 15

Figure 2.2 Overview of Indian Banking sector.......................................................... 27

Figure 2.3 PESTEL Analysis of Indian Banking Industry........................................ 28

Figure 4.1 Profit After Tax for the FY 18-19............................................................ 37

Figure 4.2 EPS & DPS for the FY 18-19................................................................... 37

Figure 4.3 Total assets and Assets Turnover Ratio................................................... 43

Figure 4.4 Analysis of Capital Adequacy Ratio........................................................ 44

Figure 4.5 Analysis of Deposits and Advances......................................................... 45

Figure 4.6 Profit After Tax and Before Tax.............................................................. 46

Figure 4.7 Analysis of Net Worth.............................................................................. 47

Figure 5.1 Age of builder firms surveyed.................................................................. 55

Figure 5.2 Number of employees in the company..................................................... 56

Figure 5.3 Current banker(s) of surveyed firms........................................................ 57

Figure 5.4 Satisfaction level of builder firms............................................................ 58

Figure 5.5 Factors for choosing the current banker................................................... 59

Figure 5.6 Banking services opted for by the firms................................................... 60

vi
Figure 5.7 Mode of fund transfer preferred by customer firms................................. 61

Figure 5.8 Type of bank accounts availed by builder firms...................................... 61

Figure 5.9 Equipment purchase undertaken by firms................................................ 62

Figure 5.10 Firms importing construction equipment................................................. 63

Figure 5.11 Firms suggesting services of financial institutions to their customers..... 63

Figure 5.12 Key factors considered in choosing the banker........................................ 64

Figure 5.13 Type of financial institutions preferred by the builder firms................... 65

vii
 TABLE OF CONTENTS

S.NO. PARTICULARS PAGE NO.

i) EXECUTIVE SUMMARY............................................................................ iv

ii) LIST OF TABLES......................................................................................... v

iii) LIST OF FIGURES........................................................................................ vi

I. INTRODUCTION.......................................................................................... 1

1.1 THE INDIAN BANKING AND FINANCIAL SYSTEM................... 3

1.2 REAL ESTATE CUSTOMER SEGMENT FOR BANKS.................. 5

1.3 POLICIES AND GOVERNMENT INTERVENTIONS..................... 7

II. COMPANY PROFILE................................................................................... 10

2.1 ABOUT HDFC BANK......................................................................... 11

2.2 ORGANIZATIONAL STUDY............................................................. 13

2.3 INDUSTRY ANALYSIS AND COMPETITORS STUDY................. 25

III. SWOT ANALYSIS......................................................................................... 33

IV. ANALYSIS OF FINANCIAL STATEMENT................................................ 36

V. PROJECT STUDY.......................................................................................... 48

5.1 INTRODUCTION................................................................................. 49

5.2 NEED FOR THE STUDY..................................................................... 50

5.3 SCOPE OF THE STUDY...................................................................... 51

5.4 MAIN OBJECTIVE............................................................................... 51

5.5 METHODOLOGY................................................................................. 51

5.6 LITERATURE REVIEW....................................................................... 52

viii
 5.7 DATA COLLECTION........................................................................... 53

5.8 ANALYSIS AND INTERPRETATION................................................ 55

5.9 FINDINGS AND RECOMMENDATIONS........................................... 52

5.10 LIMITATIONS OF THE STUDY.......................................................... 53

5.11 FUTURE SCOPE OF THE STUDY....................................................... 53

5.12 CONCLUSION....................................................................................... 54

5.13 BIBLIOGRAPHY................................................................................... 68

VI. APPENDIX....................................................................................................... 76

ix
 I
INTRODUCTION

1
1. INTRODUCTION

With the onset of liberalisation, privatisation and globalization from the

1990s, the Indian economy has witnessed tremendous growth. The private sector participation
in the banking industry has led to the emergence of many new banks and these banks bring
out the industry best practices, thereby benefiting the customers. Since then, competition
among them has been rising every year. This highlights the need for the development of
various marketing and operational strategies that would help the key players sustain their
business in the environment. The banks in India differ majorly based on their set up and type.
In other words, it is important to understand the impact of difference between a bank being a
private bank and a public sector bank, or a new generation bank and old generation private
bank, on various aspects of the banking business. The products and services offered by these
different banks also differ based on the regulations and guidelines provided by the Reserve
Bank of India.
The Real-estate developers and builders is one key customer segment of the
financial institutions in India. The segment has seen various changes and growth with respect
to the demographic dividend or the young growing population of our country. Change is
witnessed with variation in interest and availability of resources, and the country’s financial
supporters are in a competitive tussle to meet the requirements of builders and thereby develop
a win-win situation. With the advent of new legislations of the Government of India such as
the implementation of Real Estate Regulatory Authority (RERA), the real-estate sector is
required to be studied well by their bankers.
In order to formulate effective policies and take vital decisions, the banks
often invest in research and development to mine the data regarding their performance,
understand their sustainability among the competitors, recognize the emerging trends in the
market and also map the potential opportunities for growth in various aspects. Thus, a study
of a key market player, HDFC Bank, becomes significant to open up various hidden potential
for growth and development. This internship aims to study one such market leader
organization in the banking industry and also conduct a mini project study in order to gain
insight into the bank’s performance and map opportunities for growth in a particular customer
segment of the bank.
This internship project study tends to bring out the key factors affecting the
builders’ customer-perception regarding their main banker(s) in the state of Kerala,
predominantly focussing the city of Kochi. Hence, the project would also help HDFC Bank
to grow its market share, formulate suitable policies and design competitive products and
services relevant to the Builders-segment.

2
1.1 THE INDIAN BANKING AND FINANCIAL SYSTEM
A financial institution is a business whose primary activity is buying, selling
or holding financial assets. Financial institutions provide various types of financial services.
Financial intermediaries are a special group of financial institutions that obtain funds by
issuing claims to market participants and use these funds to purchase financial assets
India has an extensive banking network, in both urban and rural areas. The
banking system has four tiers:

 Scheduled Commercial Banks

 Regional rural banks (operate in rural areas, not covered by the scheduled banks)
 Cooperative banks and special purpose rural banks
 Small Finance banks and Payment banks

Timely availability of adequate credit is of utmost importance for the

development of the Indian rural economy and agriculture. At present regional rural banks,
commercial banks and credit cooperatives, encouraged mainly by the Government of India
(GOI), undertake this function. Financial inclusion remains the top most priority of the
Government of India (GOI) and the creation of small finance banks and payment banks are
aimed at furthering the financial inclusion in the economy.

The Indian banking system consists of 27 public sector banks, 21 private

sector banks, 49 foreign banks, 56 regional rural banks, 1,562 urban cooperative banks and
94,384 rural cooperative banks, in addition to cooperative credit institutions. Large Indian
banks and most Indian financial institutions are in the public sector. Though public-sector
banks currently dominate the banking industry, numerous private and foreign banks exist.
Several public-sector banks are being restructured, and in some cases the government either
has already reduced or is in the process of reducing its ownership. In terms of the market
share, the state-owned banks account for more than 72%, private banks handle 16%, foreign
banks account for more than 7%, and old-generation private lenders control 5% of the market.

3
 Figure 1.1 Classification of Banks in India

As of Q1 FY19, total credit extended by commercial banks surged to Rs

86,976.2 billion (US$ 1,297.4 billion) and deposits grew to Rs 115,070.3 billion (US$ 1,716.4
billion). Indian banks are increasingly focusing on adopting integrated approach to risk
management. Banks have already embraced the international banking supervision accord of
Basel II, and majority of the banks already meet capital requirements of Basel III, which has
a deadline of 31 March 2019.

The Reserve Bank of India (RBI) is the central banking institution. It is the
sole authority for issuing bank notes and the supervisory body for banking operations in India.
It supervises and administers exchange control and banking regulations and administers the
government's monetary policy. It is also responsible for granting licenses for new bank
branches. The Deposit Insurance and Credit Guarantee Corporation, an organization promoted
and fully funded by the RBI, offers deposit insurance facilities. The RBI directs banks to meet
Bureau of Indian Standards guidelines. Indian banks must also adhere to the prudential norms
laid down by the Basel Group. Currently, the Basel III norms are being implemented by the
Indian banking sector.

4
1.1.1 Recent Developments in the banking industry:

 Reserve Bank of India (RBI) has decided to set up Public Credit Registry (PCR) an
extensive database of credit information which is accessible to all stakeholders.
 The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been
passed and is expected to strengthen the banking sector.
 During FY07-18, credit off-take grew at a CAGR of 11%. As of Q1 FY19, total
credit extended surged to Rs.86, 976 billion (US$ 1,297.4 billion).
 Demand has grown for both corporate & retail loans; particularly the services, real
estate, consumer durables & agriculture allied sectors have led the growth in credit.
 Total banking sector assets (including public and private sector banks) have
increased at a CAGR of 6% to US$ 2.2 trillion during FY13–18. FY13-18 saw
growth in assets of banks across sectors.

1.2 THE REAL ESTATE CUSTOMER SEGMENT FOR BANKS

Real estate sector in India is expected to reach US$ 1 trillion by 2030. By

2025, it will contribute 13 percent of the country’s GDP. Real Estate stock in India is expected
to reach 3.7 million square feet. In 2019, with addition of 200 million square feet during the
year. Rapid urbanisation bodes well for the sector. The number of Indians living in urban areas
is expected to reach 543 million by 2025. More than 70 percent of India’s GDP will be
contributed by the urban areas by 2020. Construction is the fourth largest sector in terms of
FDI inflows. FDI in the sector stood at US $38.92 billion from April 2000 to December 2018.
Government of India’s Housing for All initiative is expected to bring US $1.3 trillion
investments in the housing sector by 2025.

5
 Figure 1.2 Advantages for Real Estate in India
(Source: KPMG, Report on Real Estate Sector in India –Corporate Catalyst India Pvt Ltd, USGBC, JLL India,
Cushman & Wakefield, Knight Frank Active Capital, EY)

The urban housing shortage in India is estimate data round 10 million units
which is being addressed through Pradhan Mantri Awas Yojana (PMAY), Urban, under which
more than 6.85 million houses have been sanctioned up to December 2018. Significant increase in
real estate activity in cities like Indore, Raipur, Ahmedabad, Jaipur and other 2 – tier cities; this
has opened new avenues of growth for the sector. Relaxation in the FDI norms for real estate sector
has been done to boost the real estate sector. Government’s plan to build 100 smart cities would
reduce the migration of people to metro and other developed cities.
Increasing share of real estate in the GDP would be supported by increasing
industrial activity, improving income level and urbanisation. Mumbai and Bengaluru have been
rated as the top real investment destinations in Asia.

6
 Figure 1.3 Real Estate Market Scenario in India
(Source: KPMG, Report on Real Estate Sector in India –Corporate Catalyst India Pvt Ltd, USGBC, JLL India,
Cushman & Wakefield, Knight Frank Active Capital, EY)

1.3 POLICIES AND GOVERNMENT INTERVENTIONS

The government also launched key policies for real estate sector, namely:
 Real Estate Regulatory Act
 Benami Transactions Act
 Boost to affordable housing construction
 Interest subsidy to home buyers
 Change in arbitration norms
 Dividend Distribution Tax (DDT) exemption
 Goods and Services Tax (GST)
 PR for foreign investors

7
 Ease in housing finances:

In order to boost affordable real estate, housing loans upto Rs 3.5 million
(US$54,306) in metro cities were included in priority sector lending by the RBI in
June 2018. Loans under priority sector lending are relatively cheaper. Home loans in
India increased 17.1 percent year-on-year in Oct – Dec 2018 quarter.

 Housing for economically weaker sections

The total number of houses built under the Pradhan Mantri Awas Yojana
(PMAY) reached 15.3 million in the period 2014-2018. In Union Budget 2019-20, the
Government of India has extended benefits under Section 80-I BA of the Income Tax
Act till March 31, 2020 to promote affordable housing in India. In February 2018, the
National Urban Housing Fund (NUHF) was approved with an outlay of Rs.60,000
crore (US $9.27 billion).

 FDI
 The government has allowed 100 percent FDI for townships and settlements
development projects.
 Provision for reduction in minimum capitalisation for FDI investment from US
$10 million to US $5 million which would help in boosting urbanisation.
 In January 2018, Government of India allowed 100 percent FDI in single-brand
retail trading and construction development without any government
approvals.

 REITs

Real Estate Investment Trusts (REITs) in non-residential segment and

Infrastructure Investment Trusts. REIT will open channels for both commercial and
infrastructure sector. In March 2019, Embassy Office Parks India’s first REIT, went
public.

 Land Acquisition Bill

In December 2014, the government passed an ordinance amending the Land

Acquisition Bill. This ordinance would help speeding up the process for industrial
corridors, social infra, rural infra, housing for the poor and defence capabilities.

8
 Private Equity Investments

 RBI proposed to allow banks to invest in real estate investment trusts and
infrastructure investment trusts, attracting more institutional investors to such
assets. Indian Banks, which are allowed to invest about 20 percent of their net-
owned funds inequity-linked mutual funds, venture capital funds and stocks,
could invest in these trusts within this limit.

 In the period from 2009 to 2018, Indian real estate sector attracted institutional
investments worth US $30 billion.

 Private Equity and Venture Capital investments in the sector reached US$ 4.47
billion in 2018.

 In 2018, Indospace raised US$ 1.2 billion to build logistics parks, the largest
investment during the year.

9
 II
COMPANY
PROFILE

10
2. COMPANY PROFILE

General Information

 Corporate Identity Number (CIN) of the Company- L65920MH1994PLC080618

 Name of the Company- HDFC Bank Limited

 Registered Address- HDFC Bank House, Senapati Bapat Marg, Lower Parel,

Mumbai – 400013.

 Website- www.hdfcbank.com

 Total Number of Employees- 98,061

2.1 ABOUT HDFC BANK

HDFC Bank Limited (Housing Development Finance Corporation) is

an Indian banking and financial services company headquartered in Mumbai, Maharashtra.
The bank 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 RBI's liberalisation of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC
Bank Limited'. HDFC Bank commenced operations as a Scheduled Commercial Bank in
January 1995.

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, strong market reputation, large shareholder base
and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian
environment.

Distribution Network:

As of March 31, 2019, the Bank's distribution network was at 5,103

branches across 2,748 cities. All branches are linked online on a real-time basis. Customers
across India are also serviced through multiple delivery channels such as Phone Banking, Net
Banking, Mobile Banking, and SMS based banking. The Bank's expansion plans take into
11
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 centres where the NSE / BSE have a strong and active
member base. The Bank also has a network of 13,160 ATMs across India. 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.

Business Focus:

HDFC Bank's 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 five core values: Operational
Excellence, Customer Focus, Product Leadership, People and Sustainability.

Capital Structure:

As on 30 June 2018 the authorized share capital of the Bank is Rs.650 crore.
The paid-up share capital of the Bank as on the said date is Rs.520,83,15,734 /- which is
comprising of 260,41,57,867 equity shares of the face value of Rs.2/- each. The HDFC Group
holds 20.86 % of the Bank's equity and about 18.16 % of the equity is held by the ADS / GDR
Depositories (in respect of the bank's American Depository Shares (ADS) and Global
Depository Receipts (GDR) Issues). 33.44 % of the equity is held by Foreign Institutional
Investors (FIIs) and the Bank has 5, 48, 942 shareholders.

Management:

HDFC Bank's Board of Directors comprises eminent individuals with a

wealth of experience in public policy, administration, industry and commercial banking.
Senior executives representing HDFC Ltd. are also on the board. Various businesses and
functions in the Bank are headed by senior executives with work experience in India and
abroad. They report to the Managing Director. The Bank is focussed on recruiting and
retaining the best talent in the industry as it believes that its people are a competitive strength.

12
2.2 ORGANIZATIONAL STUDY

As existing in any private commercial new generation banks, HDFC Bank also
undertakes the following activities:

a. Retail banking - dealing directly with individuals and small businesses.

b. Business banking - providing services to mid-market business.

c. Corporate banking - directed at large business entities.

d. Private banking - providing wealth management services to high-net-worth

individuals and families.

e. Investment banking - relating to activities on the financial markets.

2.2.1 Vision Statement of HDFC Bank:

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

2.2.2 Mission Statements of HDFC Bank:

 World Class Indian Bank.
 Benchmarking against international standards.
 To build sound customer franchises across distinct businesses
 Best practices in terms of product offerings, technology, service
 levels, risk management and audit & compliance

2.2.3 Business Strategy:

 Increasing market share in India’s expanding banking.
 Delivering high-quality customer service.

13
  Develop innovative products and services that attract targeted customers and
address inefficiencies in the Indian financial sector.
 Maintaining current high standards for assets quality through disciplined credit
risk management.

2.2.4 Products offered by HDFC Bank:

 Retail Banking products such as:
 Accounts & Deposit services - Saving accounts; Current accounts; Fixed
deposits; DEMAT account; Safe deposits lockers
 Loan Services – Personal loans, Home loans, Vehicle loans, Gold loans,
etc.
 Card services – Debit card, Credit card, Prepaid cards, Forex Card,
Reward programs, Loans on credit card, EMI options
 Payment/App services – Chillr App; Payzapp; SmartBuy.
 Imperia or Preferred or Classic Banking such as:
Customers are categorized based on different classifications. These customers are
allotted a Personal Banker (PB) and a Relationship Manager (RM) based on their
profile. The classifications are as follows:
 IMPERIA: Most privileged customers, who maintain Rs 10 to 15 lakhs
as their minimum average quarterly balance in the savings/ current
account respectively.
 PREFERRED: Higher to Classic Customers, who maintain a quarterly
average balance of Rs 2 to 5 lakhs in the savings or current account
respectively.
 CLASSIC: Maintain Average Monthly Balance of Rs1 lakh in their
Savings account
 Investments and Insurance products – Mutual Funds; General & Health insurance;
Bonds; Financial Planning; Equities & Derivatives, etc.
 Forex & Trade services
 NRI Banking services – Non Resident External (NRE) accounts, Non Resident
Ordinary (NRO) accounts, and Foreign Currency Non Resident (FCNR) accounts.
 Wholesale Banking services such as:
 Corporate Banking - offer blue chip companies in India, a full range of
client-focused corporate banking services, including working capital
finance, trade and transactional services, foreign exchange and cash
management.
14
  Financial Institutions and Trusts - HDFC Bank provides correspondent
bank services to Co-operative Banks, Private Banks, Foreign Banks &
RRB's. Banks can leverage HDFC banks branch network, technology and
product capability.
 Government Sector - HDFC Bank acts as an active medium between the
government and the customers by means of various services like Tax
collection, e-ticketing, Opening of L/Cs, Collection of levies and taxes,
disbursement of pension, Electronic Collection of fees, etc.
 Investment Banking - provide comprehensive strategic advisory services
and capital raising solutions.

The figure given below depicts the organizational hierarchy of the HDFC Bank.

MD & CEO

Executive
Director

Chief Chief
Chief Risk Country Chief Human
Information Financial
Officer Heads Resources
Officer Officer
Officer

Group
Heads

Cluster
Heads

Branch
Managers

Assistant Current
PB Personal Relationship
Branch Teller Accounts
Authoriser Banker Managers
Manager Manager

Figure 2.1 Organizational Hierarchy of HDFC Bank

15
2.2.5 Functional Departments of HDFC Bank
The functional departments of HDFC Bank include the following:
A. Human Resource Department
B. Marketing Department
C. Financial Department
D. Operations Department
E. Corporate Governance Committees & CSR

A. THE HUMAN RESOURCE DEPARTMENT

The HR department of HDFC Bank characterised by the following

 Collaborative relationships;
 Approachable and open communications;
 Courteous ,efficient and effective services;
 Flexibility and fairness

The Bank emphasises an environment where the principles of open communication

will be upheld. For the purpose of this policy, open communication encapsulates the idea of:

 Mutual recognition an respect at all levels;

 Freedom to express one’s views and a commitment to resolving any interpersonal
conflict;
 Promotion and development of two way communication incorporating
constructive feedback;
 Appropriate dissemination of dissemination of information

Roles and Responsibilities:

HR Department is responsible for the:

 Regular review and development of human resource management practices;

 Periodic review of the work priorities to determine skill requirements needed to
meet the Bank’s strategic plan;
 Determination of an organizational structure that will facilitate and improve
teamwork;
 Appointment and promotion of staff on merit and to ensure that treatment of all
employees is fair and equitable.

The Bank’s HR Department delegates the responsibilities of personnel management

to other roles as follows:
16
 Board of Directors - The Board will endeavour to provide:
 Direction and support to management and staff to attract, retain, motivate and
develop quality staff in order to achieve the Bank’s goals;
 Assistance to management and staff to focus on the performance and productivity of
individuals, teams and workgroups whilst meeting the Bank’s objectives;
 Remuneration under the current contract of employment and other employment
conditions consistent with legislative requirements.

 Managers - Managers are responsible for:

 Providing development opportunities for staff that relate to performance in order to
achieve organizational and individual needs;
 Agreed performance standards for staff and assistance with the achievement of
identified goals;
 Regular review and improve where necessary, human resource structures and
processes in line with Board directions. This will facilitate best practice, work
flexibility and the ability to adapt quickly to changing needs;
 Constructive feedback with an aim to improve work practices and relationships;
 Establishment and encouragement of team development.

 Corporate Management - Corporate Management is responsible for:

 Counselling for career path development to the respective employees.
 Provide necessary guidelines and directions to review and improve the skills of the
employees to the respective Managers.
 Providing coaching to the Managers to enable them to understand the hidden talents
of the employees.

 Employees - Employees are responsible for:

 Incorporation of the principles of this HR policy into their work practices and to make
themselves personally accountable for implementing the human resource values
framework;
 Use of initiative in relation to their own personal development;
 Utilization of their individual strengths in improvement of work practices;
 Achievement of organizational goals through participation in the development plans,
policies and procedures;

17
  Adherence to all policies, procedures, agreed code of conduct and standards;
 Assistance in the prevention of discrimination and the promotion of equal
opportunities when interacting with other employees.

Daily Responsibilities of the Department:

 The HR Department (HRD) records daily attendance through a software based

system, which can be accessed from the computer network systems in the branch.
 The leave system is under the control of the branch-manager, who approves/rejects
the leave requests by employees under him.
 The HR personnel may also make a surprise visit to the branches to ensure proper
functioning of the branch. Sometimes the Cluster-heads visit the branches under
them to keep track of the branch’s progress and its employees.

HUMAN RESOURCE – PLANNING

At the beginning of every year, planning of human resource required is
undertaken. At the end of the year, the HRD receives the required number of
employees for every branch, based on which the recruiting manager conducts the
recruitment and the training manager trains the employees, which is later approved
by the head of the HRD.

RECRUITMENT
Every year, HDFC Bank undertakes recruitment process for inducting new employees
to the bank. Recruitment is carried out in multiple ways.

 The bank selects candidates for recruitment process from those applications
received through their official career/job – portal. It is the responsibility of the
HRD to shortlist suitable candidates for the interview.
 In order to capture the greatest potential from fresher candidates, the HRD
conducts campus recruitments from various colleges. In this case, the HRD
functioning in a particular zone selects candidates to fill vacancies in branches
of that area.
 Apart from the above methods, recruitment for senior positions is also
conducted via third-party vendors such as Career websites, job-consultants,
Social media websites, etc.
 The Bank also has referral programs for recruitment of new employees.

18
TRAINING & DEVELOPMENT

The newly selected candidates undergo a 10 to 12 days training program

conducted by the HR team. It is only then that these employees are posted to the various
branches. During this training program, the employees are taught and trained about
various products and services offered by the bank, the general integrity and guidelines
to be followed, professional etiquettes, etc.

PERFROMANCE APPRAISAL

In order to appraise the performance of employees, the bank follows a credit

system based on the targets set for each employee. Every employee in the branch is
assigned a target to achieve by the end of the month, and the cumulative target is the
entire branch’s target. This is the overall sales target to be achieved by the branch
manager from that particular branch. Based on the achievement of this target, the
employees are rewarded with incentives and bonuses.

EMPLOYEES REMUNERATION & INCENTIVES

At HDFC, remuneration for employees comprises of the salary and

incentives. Apart from this, the employees can avail certain benefits from time to time.
Incentives are purely based on the targets achieved by the employee. This forms the
key motivation for the employee to perform well and achieve the required targets on
time.

DISPUTE RESOLUTION MECHANISMS

There is a well-established integral dispute resolution system in the bank, as

every employee is free to talk to the branch manager or authorities above him or her.
If the issue seems unresolved, the employee can further approach the HR manager.

19
B. MARKETING DEPARTMENT

Segmentation, Targeting & Positioning in marketing strategy:

HDFC has segmented the customers on the basis of income groups like formulating
the structure of ‘Classic’, ‘Preferred’ and ‘Imperial’ and also using customer financial needs
to segment the market like those of in need of general banking services (Retail & Wholesale
banking) and those customers who are of high net worth and in need of investment advisory
services. There are large number of products and services of HDFC Bank that are targeted at
the salaried class, Entrepreneurs and High Net-worth Individuals (HNIs). The Bank has
positioned itself as a preferred provider of financial services by incorporating technological
advancement in its core businesses.

Marketing Mix & the 4 P’s of Marketing for HDFC Bank:

The marketing mix is very much responsible for the growth of the company
and this marketing mix has made it one of the most coveted banks in India.

Product:
The Unique Selling Point (USP) of HDFC is that it designs competitive
products which guarantees great response from the market and an almost unlimited longevity
for business life. In terms of a banking, its product are its services, like Net banking and
ATM, and being a major bank, HDFC has planned its products in proportion with the ever
increasing customer’s needs, demands and expectations. Apart from offering accounts, it has
carried forward its namesake of being a housing finance corporation. Being into the services
business, the major support for the product lies in its distribution. Thus, after the product, the
place and distribution of HDFC bank services is the most important for the success of HDFC.

Place:
The Banks has a wide distribution with 5,103 branches across 2,748 cities
across the world. The bank’s services are delivered not only through ATMs or branches, but
also through an excellent Net banking service, phone banking, mobile banking and SMS
banking.

Price:
HDFC bank has premium competitive pricing. When compared with
national and PSU bank, the pricing is premium, because the minimum amount required to
open an account is high. But at the same time, there are many rules, like home load interest,
which are as per RBI guidelines and are competitive in nature. Thus, prices for these products
20
are in control by the market and not by the corporation. It provides reasonable loans at
maximum repayment tenure and at par interest rates to both old and new customers. Apart
from regular charges, it does not charge anything for miscellaneous and associated functions
such as cheque replacement, advance loan repayment, take over etc. that justifies a lot. Thus,
in some places HDFC is premium priced, whereas in others it is evenly priced as per
competition.

Promotion:
From the very beginning, HDFC has planned and executed its promotional
activities in a manner that has suited its service catalogue, and has maintained a 360 degree approach
in planning its commercials, campaigns and marketing activities in general. These promotional
activities include variety of subtle television commercials with a message, a recent and innovative
method of promotion by placing signboards and milestones in the rural portions of country in
local/native language, and placing “No Parking” boards outside residential and commercial buildings,
that has promoted its connection with the masses and making prospective client base associated with
the name i.e. HDFC. HDFC uses undifferentiated marketing techniques, it mainly focuses on
introducing its financial products to everyone. Because banking in general, is a mass market product.
However, for the HNI customers, well trained relationship managers, wealth managers are used to
retain the HNI clients with HDFC. Thus, this service too is a promotional product for HDFC. At the
end, the promotions are focused on one thing only – to spread the name of HDFC far and wide.

Marketing Department of HDFC Bank:

Mr. Parag Rao is the Country Head for the Payments Business and
Marketing at HDFC Bank Ltd. The Payments Business includes Debit Cards, Credit Cards,
Prepaid & Commercial Cards, Merchant Acquiring Services, Digital Payments Infrastructure,
and Consumer Finance Business. In his current role, he also spearheads Marketing which
includes Brand Communication and Analytics functions.

Brand Communication & Analytics:

Sonic Branding:

In November 2015, HDFC Bank launched its sonic branding to be used

across multiple touch points like ATMs, phone banking, mobile banking app and the website.
‘Sonic Branding’ refers to the Music Logo that stands unique to the bank. The objective is to
create a distinct brand imagery using music, where the musical logo or MOGO helps form a
powerful emotional connect with consumers and recall among stakeholders across platforms.
The musical logo creates a sonic imagery of a brand that's in tune with the evolution taking

21
place today and changing accordingly, while remaining true to the brand's core values of
operational excellence, customer focus, product leadership, people and sustainability.

Social Media Marketing:

HDFC Bank is doing a commendable job both online and offline. It has
established its presence on the 3 largest social media platforms: Facebook, Twitter and
YouTube. In all these 3 channels, it is making all the efforts it can to not only address customer
issues and market itself, but also as a platform to promote its CSR activities.

Technology & Analytics:

HDFC Bank operates in a highly automated environment in terms of

information technology and communication systems. The Bank has prioritised its engagement
in technology and the internet as one of its key goals and has already made significant progress
in web-enabling its core businesses. In each of its businesses, the Bank has succeeded in
leveraging its market position, expertise and technology to create a competitive advantage and
build market share.

C. FINANCE DEPARTMENT

The activities expected from a finance department cover a wide range from
basic bookkeeping to providing information to assisting managers in making strategic
decisions. The Department is responsible for the balance sheet related issues, publishing
balance sheet, managing bank's capital and related jobs. Treasury & Investment department
is responsible for management of banks fund, sale and purchase of government and other
securities, investments in other companies, etc.

Treasury:

The Treasury is the custodian of the Bank’s cash / liquid assets and handles its
investments in securities, foreign exchange and cash instruments. It manages the liquidity and
interest rate risks on the balance sheet and is also responsible for meeting reserve
requirements. The vertical also helps manage the treasury needs of customers and earns a
substantial part of its revenues through fee income generated from transactions customers
undertake with the Bank while managing their foreign exchange and interest rate risks.

Revenue accrues from spreads on customer transactions based on trade and

remittance flows and demonstrated hedging needs. The Bank recorded revenue of ` 1,720.4
crore from foreign exchange and derivative transactions in the year under review. While plain
vanilla forex products were in demand across all customer segments, the demand for
derivative products came mostly from large and emerging corporates. As a part of prudent
22
risk management, the Bank enters into foreign exchange and derivative deals with
counterparties after it has set up appropriate credit limits based on its evaluation of the ability
of the counterparty to meet its obligations. Where the Bank enters into foreign currency
derivative contracts not involving the Indian Rupee with its customers, it typically lays them
off in the inter-bank market on a matched basis. For such foreign currency derivatives, the
Bank primarily carries the counterparty credit risk (where the customer has crystallised
payables or mark-to-market losses) and may carry only residual market risk if any. The Bank
also deals in derivatives on its own account, including for the purpose of its own balance sheet
risk management. The Bank maintains a portfolio of Government Securities, in line with
regulatory norms governing the Statutory Liquidity Ratio (SLR). A significant portion of these
SLR securities are held in the ‘Held-to-Maturity’ (HTM) category, while some are held in the
‘Available for Sale’ (AFS) category. The Bank is also a Primary Dealer for Government
Securities. As a part of this business, as well as otherwise, the Bank holds fixed income
securities in the ‘Held for Trading’ (HFT) category.

D. OPERATIONS or ‘BACK OFFICE’ DEPARTMENT

Banking operations involves the practices and procedures that a bank uses
to ensure that customers’ transactions are completed accurately and appropriately. For
example, if a customer wishes to purchase stock shares, the bank ensures that the money and
the stock are ready to be traded. The bank will oversee the actual transfer of the stock and
funds, and it will ensure that any reporting requirements regarding the transaction are
recorded. Throughout the process, the bank focuses on protecting its clientele and looking for
any potential threats to the client’s finances.

The Banking sector has been the scene of huge change in recent years and
operations departments have been at the forefront of these changes. The thrust of current
strategies in Banking Operations departments is focused on substantially reducing the unit
costs of the key drivers (e.g. cost per current account). These reductions are being achieved
through a combination of automation, outsourcing, digitalization, etc. The operations teams
or ‘Back office’ teams, as it is generally referred to in banks, of HDFC Bank ensure that the
processes and transactions are executed correctly, which minimizes risk and maximizes
quality of service.

Operations functions performed in the bank:

 Processing of bank instruments.

 Payments of all receipts on demand.

23
  Credit of lodgements of proceeds on customers account.
 Proper recording of documents from the various transactions of the bank.
 Account opening and follow up of details provided by the bank customer.
 Acceptance of valuables of customers.
 Processing of credit facilities requested by the bank customer and ensure credit
worthiness.
 Risk Management teams control and monitor the various operational risks due to
inadequate or failed internal processes.

E. CORPORATE GOVERNANCE & CSR

The bank is committed to maintaining highest levels of ethical standards of

integrity, corporate governance and regulatory governance policy. The Board of directors are
responsible for setting the course for, and evaluating the bank’s performance with regard to
corporate governance. The parameters of evaluation include compliance, internal control, risk
management, information and cyber security, customer service, social & environmental
responsibility.

Code of Conduct: Transparency and Vigilance

HDFC Bank encourages an open, equitable and transparent system of

functioning and interacting with all its internal and external stakeholders. Their robust and
well-defined Code of Conduct alongside stringent, zero-tolerance policy against sexual
harassment serve as strong regulatory guidelines and govern the day-to-day functioning.

Their “Whistle Blower Policy” encourages employees and other

stakeholders to bring to attention any compromise or violation of HDFC Bank’s code of
conduct, or legal and regulatory norms. The Bank’s Chief of Internal Vigilance receives and
addresses these concerns by initiating a thorough enquiry conducted by the appropriate
authoritative body within the bank.

Committees for corporate governance

The Board has constituted various Committees of Directors to take informed
decisions in the best interests of the Bank. These Committees monitor the activities falling
within their respective terms of reference

 Audit Committee of the Board

 Nomination and Remuneration Committee
 Stakeholders' Relationship Committee
24
  Corporate Social Responsibility Committee
 Risk Policy and Monitoring Committee
 Fraud Monitoring Committee
 Customer Service Committee
 Credit Approval Committee
 Review Committee for Wilful Defaulter's Identification
 Review Committee for Non-Cooperative Borrowers
 Digital Transactions Monitoring Committee
 IT Strategy Committee

Corporate Social Responsibility

HDFC Bank believes that for any business to prosper, it must consider the
social, environmental and ethical impact of its decisions. The bank’s prime CSR activity is
termed as ‘Parivartan’, with the philosophy that success would be hollow if the resources are
not given back to the society. The CSR programmes of the bank focus on five distinct areas
of intervention:

 Rural Development
 Promotion of Education
 Skill Development and Livelihood Enhancement
 Healthcare and Hygiene
 Financial Literacy and Inclusion

2.3 INDUSTRIAL ANALYSIS & COMPETITORS

2.3.1 The Banking sector in India:

Indian banks are increasingly focusing on adopting integrated approach to

risk management. Banks have already embraced the international banking supervision accord
of Basel II, and majority of the banks already meet capital requirements of Basel III, which
had a deadline of March 31, 2019. Rising incomes are expected to enhance the need for
banking services in rural areas and therefore drive the growth of the sector. As of September
2018, Department of Financial Services (DFS), Ministry of Finance and National Informatics
Centre (NIC) launched ‘Jan Dhan Darshak’ as a part of financial inclusion initiative. It is a
mobile app to help people locate financial services in India. The digital payments revolution
will trigger massive changes in the way credit is disbursed in India. Debit cards have radically

25
replaced credit cards as the preferred payment mode in India, after demonetisation. Debit
cards garnered a share of 87.14 per cent of the total card spending as of April, 2019.

2.3.2 Prospects:

 Favourable demographics and rising income levels are a boon. India ranks among the
top six economies with a GDP of US$ 2,597 in 2017 and economy is forecasted to
grow at 7.3% in 2018. The sector will benefit from structural economic stability and
continued credibility of Monetary Policy.
 Increase in working population & growing disposable incomes will raise demand
for banking & related services. Housing & personal finance are expected to remain
key demand drivers. Rural banking is expected to witness growth in the future.
 Rising fee incomes improving the revenue mix of banks. High net interest margins,
along with low NPA levels, ensure healthy business fundamentals.
 Wide policy support in the form of private sector participation & liquidity infusion.
Healthy regulatory oversight & credible Monetary Policy by the Reserve Bank of
India (RBI) have lent strength & stability to the country’s banking sector.
 As of August 2018, total number of ATMs in India increased to 213,004 and is
further expected to increase to 407,000 ATMs in 2021.
 With entry of foreign banks, competition in the Indian banking sector has
intensified. Banks are increasingly looking at consolidation to derive greater
benefits such as enhanced synergy, cost take-outs from economies of scale,
organizational efficiency & diversification of risks.

26
 Figure 2.2 Overview of Indian Banking sector
(Source: https://www.ibef.org/industry/banking-india)

2.3.3 PESTEL ANALYSIS OF INDIAN BANKING INDUSTRY:

A comprehensive analysis of the Indian banking industry in terms of
Political, Economic, Socio-cultural, Technological, Environmental and Legal aspects reveals
reliable information about the current banking sector.

27
 POLITICAL

LEGAL ECONOMIC

ENVIRONMENTAL SOCIO-
CULTURAL

TECHNOLOGICAL

Figure 2.3 PESTEL Analysis of Indian Banking Industry

Political Aspects:
Government laws affect the state of the banking sector. The government can
intervene in the matters of banking whenever, leaving the industry susceptible to political
influence. This includes corruption amongst political parties, or specific legislative laws such
as labour laws, trade restrictions, tariffs, and political stability.

The Indian government’s key initiative such as the Insolvency and

Bankruptcy Code (IBC) is a good step in resolving insolvents and helping banks (lenders or
creditors) to reduce their NPAs, which has been a problem existent for quite some time in the
Indian economy.

Economic Aspects:
The banking industry and the economy are tied. How income flows, whether
the economy is prospering or barely surviving during times of recession, affects how much
capital banks can access. Spending habits, and the reasons behind them, affect when
customers borrow or spend funds at banks.

The role of RBI is very important in controlling inflation by modifying the

repo or key interest rates and thereby maintaining financial stability as well. The recent
monetary policy committee’s decision to reduce the repo rate by 25 bps must be seen as a
measure to increase credit growth and investments.

28
Socio-cultural Aspects:
Cultural influences, such as buying behaviours and necessities, affect how people
see and use banking options. People turn to banks for advice and assistance for loans related to
business, home, and academics. Consumers seek knowledge from bank tellers regarding saving
accounts, bank related credit cards, investments, and more.

Consumers desire a seamless banking experience. The modern fast-paced life

demands quick services at the door step. Moreover, when it comes to Indian customers, the value of
money plays its role.

Technological Aspects:

Once, it was expected to visit the local bank to make changes to financial
accounts. But not anymore. Technology is changing how consumers handle their funds. Banks
offer mobile apps to witness accounts, transfer funds, and pay bills on smartphones.

Smartphones can scan cheques, and the bank can process it from their end,
at their location. This change helps to save paper and the need to drive directly to the branch
to handle these affairs. Chips have been implemented in debit cards, requiring users to insert
their card into debit machines rather than swiping them. Recently, there are ‘tap’ options that
enable payment services without requiring PIN.

With the boom in the usage of Artificial Intelligence (AI), the banking
industry has seen drastic developments in user experience. HDFC Bank’s ‘Eva’ Chat Bot is a
very relevant example for AI application. EVA (Electronic Virtual Assistant) is India's first
and largest Artificial Intelligence powered banking chat-bot. Eva uses the latest in AI and
Natural Language Processing to understand the user query and fetch the relevant information
from thousands of possible sources, all in a matter of milliseconds. Customers can get the
information they are seeking instantaneously by conversing with Eva in human language
instead of searching, browsing, clicking buttons or waiting on a call.

Environmental Aspects:

With the use of technology — particularly with mobile banking apps — the
use for paper is being reduced. Additionally, the need to drive directly to a branch to handle
affairs is minimized as well. Many issues are taken care of through mobile apps and online
banking services. Consumers can apply for credit cards online, buy cheques online, and have
many of their banking questions answered online or by phone. Thus, reducing individual
environmental footprints.

29
Legal Aspects:

The banking industry follows strict laws regarding privacy, consumer laws,
and trade structures to confirm frameworks within the industry. Such structures are required
for customers in the allocated country and for international users.

The RBI is the sole authority that handles the banking norms for the banks
in India. The corporate governance policies under the Companies Act, 2013 are important for
the legal functioning of the banks.

2.3.4 COMPETITOR ANALYSIS - PORTER’S 5 - FORCE MODEL

ANALYSIS
Michael Porter provided a framework that models an industry as being
influenced by five forces. The strategic business manager seeking to develop an edge over
rival firms can use this model to better understand the industry context in which the firm
operates.

Threat of New Entrants:

The rules and regulations of RBI being very stringent regarding licenses to
begin new banks in India. Even the branch banking policy has been liberalized only recently.
Due to this it is not so easy to manage to enter the industry easily by any new player. Though
there are many private players eying the industry in the near future. If that happens
the competitiveness in the industry is only going to increase. But the entry to the
industry will always be very strict for a controlled economy like India.

Different factors affecting the threat of new entry barriers:

 Government Licensing and RBI regulations

 Skills manpower
 High Initial investment
 Protected intellectual property
 The entry of foreign banks

Bargaining Power of Suppliers:

Capital is the primary resource on any bank and there are four major
suppliers (various other suppliers [like fees] contribute to a lesser degree) of capital in the
industry.

30
  Customer deposits
 Mortgages loans
 Mortgage securities
 Loans from other financial institutions

By utilizing these four major suppliers, the bank can be sure that they have the necessary
resources required to service their customers' borrowing needs while maintaining enough
capital to meet withdrawal expectations. The power of the suppliers is largely based on the
market, their power is often considered to fluctuate between medium to high.

Also, different factors affect the bargaining power such as:

 Rise in investment avenues

 Providers of funds
 Interest rates
 Valuations
 The economic out look
 Role of RBI
 Offshore operation

The suppliers of capital might not pose a big threat, but the threat of suppliers luring away
human capital does. If a talented individual is working in a smaller regional bank, there is the
chance that person will be enticed away by bigger banks, investment firms, etc.

Bargaining Power of Customers/Buyers:

The individual doesn't pose much of a threat to the banking industry, but
one major factor affecting the power of buyers is relatively high switching costs. If a person
has one bank that services their banking needs, mortgage, savings, checking, etc., it can be a
huge hassle for that person to switch to another bank.

Factors having a major say in buyer’s bargaining power are:

 The individual Customers

 High switching costs
 The customers Loyalty
 The Technology
 RBI Rules and Regulations

The internet has greatly increased the power of the consumer in the banking
industry. It has increased the ease and reduced the cost for consumers to compare the prices
31
of opening or holding accounts as well as the rates offered at various banks. Moreover, certain
banking regulations regarding maintenance of minimum balance, etc. are always a deciding
factor in the perspective of the customer.

Availability of Substitutes:
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. Some
of the banking industry's largest threats of substitution are not from rival banks but from non-
financial competitors. The industry does not suffer any real threat of substitutes as far as
deposits or withdrawals; however insurances, mutual funds, and fixed income securities are
some of the many banking services that are also offered by non-banking companies. There is
also the threat of payment method substitutes and loans are relatively high for the
industry. For example, big name electronics, jewellers, car dealers, and more tend to offer
preferred financing on "big ticket" items. Often times these non-banking companies offer a
lower interest rates on payments then the consumer would otherwise get from a traditional
bank loan.

Different Factors affecting threats of substitutes:

 Close customer relationships

 Conservative Customers
 Risk taking customers attitude
 Switching costs

Competitive Rivalry:

The banking industry is considered highly competitive. The financial

services industry has been around for hundreds of years and just about everyone who needs
banking services already has them. Because of this, banks must attempt to lure clients away
from competitor banks. They do this by offering lower financing, higher rates, investment
services, and greater conveniences than their rivals. The banking competition is often a race
to determine which bank can offer both the best and fastest services, but has caused banks to
experience a lower ROA (Return on Assets). Given the nature of the industry it is more likely
to see further consolidation in the banking industry. Major Banks tend to prefer to acquire or
merge with other banks than to spend money marketing and advertising.

32
 III
SWOT
ANALYSIS

33
3. SWOT ANALYSIS OF HDFC BANK

STRENGTH
 HDFC Bank is India’s largest private sector scheduled commercial bank with 5,103
branches and 13,160 ATMs across 2,748 cities (as on March 31, 2019).
 HDFC has become one of the 3 companies in India to cross the $6 trillion market
capitalization threshold, the others being Reliance Industries and TCS.
 HDFC is one of the 3 Domestic Systematically Important Banks in India named by the
RBI, which means that any adverse conditions to the bank could affect the entire
economy of the nation.
 Numerous prestigious awards and recognitions in the national as well as global level
portrays the bank’s achievements in business.
 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.
 High degree of satisfaction among the new generation private sector banks in India.
 The employee turnover rate in HDFC Bank is low and it is one of the best places to
work in private banking sector
 Good network of Relationship Managers and advisors, who carry forward business
through guiding customers in investment decisions.
 Less NPAs (Non-performing Assets) when compared to multiple other banks shows
the strong policy adherence and integrity in banking by HDFC.

WEAKNESS
 The bank’s products and services are mainly focussed on high net-worth customers,
where the bank loses out to other competitors who capture the market share of the
middle income population.
 HDFC’s weak presence in rural areas of the country is disadvantageous to its business,
where Non-banking Financial Companies (NBFC) and other rural public sector banks
(PSBs) hold their firm.
 Sometimes the aggressive marketing strategy followed by the bank in acquiring and
maintaining customers are disliked by the customers, forcing them to terminate the
business.

34
OPPORTUNITIES

 HDFC bank can focus more on betterment of asset quality parameters over
government banks, which would increase the profit growth.
 The MSME sector industries are growing at a very fast pace. HDFC’s good reputation
in corporate salary accounts can be extended to the growing MSME sector.
 The Bank can target opportunities abroad and enhance its business to a global scale.
Currently the bank has its services only in Dubai and Singapore with limited services.
 The Economic Survey 2018-19 mentions the scope for improving the bad-debts and
thereby reducing the NPAs. The bank can avail support from the Government of India
and the RBI on this term
 There lies greater scope for acquisitions and strategic alliances due to strong financial
position held by the bank.

THREATS

 Though the bank has its NPAs in control, the proportion of Net NPAs to the Net
Advances which is 0.39% needs to be properly assessed and managed.
 Tough competition from similar banks and NBFCs is increasing in the country, which
requires the bank to implement sustainable policies. Foreign banks can also pose a
more serious threat in near future.
 The advancement in technology is highly rapid in the 21st century, highlighting the
bank to be adept with the latest technologies like AI and Machine Learning.
 Public Sector Banks are on the track of modernising their processes. Another PSB
coming up similar to State Bank of India (SBI) or mergers of PSBs might render a
painful blow to HDFC.

35
 IV
ANALYSIS OF

FINANCIAL

STATEMENTS

36
4. ANALYSIS OF FINANCIAL STATEMENTS

Financial Details of the Company (As of 30th April 2019):

1. Paid up Capital (INR) - ₹ 5,45,00,88,276

2. Total Turnover (INR) - ₹ 116,597.9 crore
3. Total profit after taxes (INR) - ₹ 21,078.1 crore
4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%)
-₹ 444 Crore (2% of Avg. Net Profit after tax)

Figure 4.1 Profit After Tax for the FY 18-19

(Source: HDFC Bank Ltd. - Annual Report 2018-19)
From the Figure 2.4, it can be seen that the Profit After Tax (PAT) of the bank is on the
rising curve for every financial year. The financial year 2018-19 has recorded Rs.21078
crores as the PAT as compared to Rs.17487 crores for the previous year.

Figure 4.2 EPS & DPS for the FY 18-19

(Source: HDFC Bank Ltd. - Annual Report 2018-19)
The figure given above shows the graphical curve of the increase in earnings per share and
Dividend per share of the bank.

37
 4.1 CONSOLIDATED PROFIT & LOSS ACCOUNT (As at March 31, 2019)
The following table shows the Profit and Loss Account for the financial year 2018-19,
obtained from the bank’s annual report as on March 31st, 2019.
Table 4.1 Consolidated Profit & Loss Account of HDFC Bank

Consolidated Profit &

------------------- in Rs. Cr. -------------------
Loss account
Mar 19 Mar-18 Mar-17 Mar-16 Mar-15
12 months 12 months 12 months 12 months 12 months

INCOME
Interest / Discount on
83,736.16 67,658.90 55,986.18 47,736.19 39,334.66
Advances / Bills
Income from Investments 19,924.75 16,229.79 15,951.56 14,125.50 10,709.85
Interest on Balance with RBI
660.62 540.62 544.86 375.16 542.94
and Other Inter-Bank funds
Others 839.21 858.53 788.76 924.72 79.04

Total Interest Earned 1,05,160.74 85,287.84 73,271.35 63,161.56 50,666.49

Other Income 18,947.05 16,056.60 12,877.63 11,211.65 9,545.68

Total Income 1,24,107.79 1,01,344.45 86,148.99 74,373.22 60,212.18

EXPENDITURE

Interest Expended 53,712.69 42,381.48 38,041.58 34,069.57 27,288.46

Payments to and Provisions
10,451.15 9,193.90 8,504.70 6,306.14 5,162.68
for Employees
Depreciation 1,220.67 966.78 886.19 738.03 680.45
Operating Expenses
(excludes Employee Cost & 16,022.94 13,766.54 11,360.18 10,787.71 8,734.40
Depreciation)
Total Operating Expenses 27,694.76 23,927.22 20,751.07 17,831.88 14,577.52
Provision Towards Income
12,961.15 10,848.11 8,424.16 6,889.36 5,492.37
Tax
Provision Towards Deferred
-1,088.60 -945.03 -346.04 -195.7 112.97
Tax
Provision Towards Other
0 0 0 0 0.77
Taxes
Other Provisions and
8,382.18 6,571.82 3,990.81 2,960.77 2,040.04
Contingencies
Total Provisions and
20,254.73 16,474.90 12,068.93 9,654.43 7,646.15
Contingencies
Total Expenditure 1,01,662.18 82,783.61 70,861.58 61,555.89 49,512.13

38
Net Profit / Loss for The
22,445.61 18,560.84 15,287.40 12,817.33 10,700.05
Year
Net Profit / Loss After EI &
22,445.61 18,560.84 15,287.40 12,817.33 10,700.05
Prior Year Items
Minority Interest -113.18 -51.34 -36.72 -19.72 -14.41
Share Of Profit/Loss Of
0 0.52 2.34 3.73 3.25
Associates
Consolidated Profit/Loss
22,332.43 18,510.02 15,253.03 12,801.33 10,688.89
After MI And Associates
Profit / Loss Brought
43,098.98 34,532.33 24,825.59 19,550.86 15,207.47
Forward
Transferred on
0 0 27.45 0 0
Amalgamation
Total Profit / Loss available
65,431.41 53,042.35 40,106.06 32,352.20 25,896.36
for Appropriations
APPROPRIATIONS
Transfer To / From Statutory
5,499.76 4,562.03 3,777.16 3,180.93 2,623.87
Reserve
Transfer To / From Capital
105.34 235.52 313.41 222.15 224.92
Reserve
Transfer To / From General
2,107.82 1,748.67 1,454.96 1,229.62 1,038.59
Reserve
Transfer To / From
773 -44.2 4.29 -8.52 27.54
Investment Reserve
Dividend and Dividend Tax
0 3,390.58 -1.69 -11.71 0.84
for The Previous Year
Equity Share Dividend 4,052.59 50.77 0 2,401.78 2,005.20

Tax On Dividend 43.31 0 25.6 512.35 424.54

Balance Carried Over To
52,849.61 43,098.98 34,532.33 24,825.59 19,550.86
Balance Sheet
Total Appropriations 65,431.41 53,042.35 40,106.06 32,352.20 25,896.36

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 83 72 60 51 44

Diluted EPS (Rs.) 83 71 59 50 44

39
 4.2 CONSOLIDATED BALANCE SHEET (As at March 31, 2019)
The following table shows the Balance sheet for the financial year 2018-19, obtained from
the bank’s annual report as on March 31st, 2019.
Table 4.2 Consolidated Balance Sheet for FY 18-19

Consolidated ------------------- in Rs. Cr. -------------------

Balance Sheet
Mar 19 Mar-18 Mar-17 Mar-16

12 months 12 months 12 months 12 months

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 544.66 519.02 512.51 505.64

Total Share Capital 544.66 519.02 512.51 505.64

Reserves and Surplus 1,53,128.00 1,09,080.11 91,281.44 73,798.49

Total Reserves and
1,53,128.00 1,09,080.11 91,281.44 73,798.49
Surplus
Total Share Holders
1,53,672.66 1,09,599.12 91,793.95 74,304.12
Funds
Minority Interest 501.79 356.33 291.44 180.62

Deposits 9,22,502.68 7,88,375.14 6,43,134.25 5,45,873.29

Borrowings 1,57,732.78 1,56,442.08 98,415.64 71,763.45

Other Liabilities and
58,395.80 48,413.49 58,708.88 38,140.33
Provisions
Total Capital and
12,92,805.71 11,03,186.17 8,92,344.16 7,30,261.82
Liabilities
ASSETS
Cash and Balances with
46,804.59 1,04,688.21 37,910.55 30,076.58
Reserve Bank of India
Balances with Banks
Money at Call and Short 35,013.05 18,373.35 11,400.57 8,992.30
Notice
Investments 2,86,917.68 2,38,460.92 2,10,777.11 1,61,683.34

Advances 8,69,222.66 7,00,033.84 5,85,480.99 4,87,290.42

Fixed Assets 4,219.84 3,810.56 3,814.70 3,479.70

Other Assets 50,627.89 37,819.29 42,960.24 38,739.48

Total Assets 12,92,805.71 11,03,186.17 8,92,344.16 7,30,261.82

40
 CONTINGENT LIABILITIES,
COMMITMENTS
Bills for Collection 49,952.80 82,299.09 30,848.04 55,242.58

Contingent Liabilities 10,25,125.31 8,36,231.70 8,18,284.29 8,21,774.81

4.3 RATIO ANALYSIS OF THE FINANCIAL STATEMENTS

Financial analysis is a scientific tool. It has assumed important role as a tool

for appraising the real worth of an enterprise, its performance during a period of time and its
pit falls. Financial analysis is a vital apparatus for the interpretation of financial statements. It
also helps to find out any cross-sectional and time series linkages between various ratios.
Unlike in the past when security was considered to be sufficient consideration for banks and
financial institutions to grant loans and advances, nowadays the entire lending is need-based
and the emphasis is on the financial viability of a proposal and not only on security alone.
Further all business decision contains an element of risk. The risk is more in the case of
decisions relating to credits. Ratio analysis and other quantitative techniques facilitate
assessment of this risk.
Ratio-analysis means the process of computing, determining and presenting
the relationship of related items and groups of items of the financial statements. They provide
in a summarized and concise form of fairly good idea about the financial position of a unit.
They are important tools for financial analysis.
Here, some of the key ratios are determined and analyzed in order to
comment on the financial strength and performance of HDFC Bank.

A. CURRENT RATIO:
Current ratio gives the relationship between the current assets and current liabilities.
Current Ratio = Current Assets / Current Liabilities
The ideal current ratio for banks is 1.33:1.
Current ratio for FY-2019:
Current ratio = 1288585.87 / 1139133.05 = 1.13:1

Interpretation & Ways to Improve:

The ratio indicates the liquidity measure of the bank or its ability to pay off the
short term liabilities. It tells investors and analysts how a company can maximize
the current assets on its balance sheet to satisfy its current debt and other payables. It is
also called as the working capital ratio. With respect to banks, the ideal value for current
ratio is 1.33:1.

41
 We see that HDFC bank’s ratio value of 1.13 is near the ideal condition. This
ratio is also a measure of the bank’s solvency in the short term. The higher the ratio, the
better is the bank’s financial position since it means that the bank would have better
working capital to manage its current liabilities. It can improve the solvency by lending
more advances, maintaining better ratio of cash balances and such other means that
improve liquidity.

B. QUICK RATIO:
It is the ratio between Quick Current Assets and Current Liabilities. This
ratio should be at least equal to 1.

Quick Current Assets:

Cash/Bank Balances + Receivables up to 6 months + quickly realizable securities

such as Govt. Securities or quickly marketable/quoted shares and Bank Fixed
Deposits

Acid Test or Quick Ratio = Quick Current Assets/Current Liabilities

The ideal value for Quick ratio is 1:1 for a bank.

Quick ratio for FY-2019:

Quick ratio = 1288585.87 / 1139133.05 = 1.13:1
Interpretation & Ways to Improve:
This ratio indicates the bank’s liquidity and thereby its ability to pay its
current liabilities when they come due with quick assets. Quick assets are current
assets that can be converted to cash within 90 days or in the short-term. The ideal value
for the ratio should be at least equal to 1:1.
Here, it is evident that HDFC Bank has a good value of quick assets against
its current assets. The bank must aim to sustain this ratio.

C. ASSETS TURNOVER RATIO:

It is the relationship between the Net sales (or) Income and the Total Assets of the
company.
Assets Ratio = Net Sales (or) Income / Total Assets

Assets Turnover Ratio for FY-2019:

Assets Ratio = 124107.79 Cr. / 1292805.71Cr. = 0.095

Assets Turnover Ratio for FY-2018:

Assets Ratio = 101344.45 / 1103186.17 = 0.092

42
Interpretation & Ways to Improve:
This ratio is a measure of efficiency with which the bank uses its assets to
generate income. The more the ratio, the better the efficiency of the bank. The following
figure shows the variation in total assets and turnover ratio of HDFC from the year 2015
to 2019.

Figure 4.3 Total assets and Assets Turnover Ratio

(Source: www.moneycontrol.com)

D. NET PROFIT RATIO:

This value gives the overall profitability of the bank.
Net Profit Ratio = (Net Profit / Net Income) x 100

Net Profit Ratio for FY-2019:

Net Profit Ratio = (22445.61 / 124107.79) x 100 = 18.08%
Net Profit Ratio for FY-2018:
Net Profit Ratio = (18560.84 / 101344.45) x 100 = 18.31%
Interpretation & Ways to Improve:
From the derived calculations, it can be seen that HDFC Bank has a profit
margin of 18.08% compared to the previous year’s 18.3%. This means that the bank’s
profit margin has reduced during this financial year.
43
E. CAPITAL ADEQUACY RATIO (CAR):
Expressed as a formula, the CAR equals the sum of the bank’s tier one
capital plus tier two capital, divided by its risk-weighted assets. CAR is also known
as CRAR (capital to risk assets ratio). A bank’s tier one capital is the ordinary capital
of the bank. This capital can absorb bank losses without the bank having to suspend
trading. Tier two capital is the bank’s subordinated debt. This is the capital that can
absorb losses if the bank has to shut down. Risk weighted assets are calculated by
looking at the bank's loans and evaluating their riskiness. Each loan is assigned a
percentage number. The higher the percentage, the riskier the loan.

Capital Adequacy Ratio for FY 2019 = 17.11

Capital Adequacy Ratio for FY 2018 = 14.82

Figure 4.4 Analysis of Capital Adequacy Ratio

(Source: www.moneycontrol.com)

Interpretation & Ways to Improve:

Capital Adequacy Ratio (CAR) is the measure of a bank's capital and expressed
in percentage term. In simple terms, this capital is set aside by banks to protect depositors.
A lower CAR means a bank is prone to the risk of going burst in case of any crisis.
However, a very high CAR means, the bank is not doing enough business.

44
 The Basel III norms stipulated a capital to risk weighted assets of 8%.
However, as per RBI norms, Indian scheduled commercial banks are required to maintain
a CAR of 9% while Indian public sector banks are emphasized to maintain a CAR of
12%. Thus, we see that HDFC has been able to maintain a good CAR percentage of
17.11%, increased from 15% of the previous year.

F. LOAN TO DEPOSITS RATIO:

The loan-to-deposit ratio (LDR) is used to assess a bank's liquidity by
comparing a bank's total loans to its total deposits for the same period. The LDR is
expressed as a percentage. If the ratio is too high, it means that the bank may not have
enough liquidity to cover any unforeseen fund requirements. Conversely, if the ratio is
too low, the bank may not be earning as much as it could be.
An ideal LDR is 80% to 90%. A loan-to-deposit ratio of 100% means a bank
loaned one dollar to customers for every dollar received in deposits. It also means a bank
will not have significant reserves available for expected or unexpected contingencies.
Loans to Deposits Ratio for FY 2019:
(869222.66 / 922502.68) x 100 = 94%
Loans to Deposits Ratio for FY 2018:
(700033.84 / 788375.14) x 100 = 88.8%

Figure 4.5 Analysis of Deposits and Advances

(Source: www.moneycontrol.com)

45
Interpretation & Ways to Improve:
Deposits are liability to banks, which need money to lend. It is the amount that any
citizen (resident or no-resident) keep with the bank subject to some regulatory compliance. In
turn, banks pay interest on deposits. It is considered the safest form of investment. Deposits
are of two types current and savings deposits (CASA) as well as term deposits.
Advance is the amount that banks lend to individuals and companies. They charge
interest on loans. Interest rates vary depending on the terms and conditions of such credit.
Banks raise money to lend through different sources like deposits, money market and so on.
The difference between credit and deposits, is expressed as Credit- Deposits (CD)
ratio in banking parlance. Neither an extreme lower nor higher CD ratio is good for banks.
Generally, a high CD ratio means credit growth is higher than deposit growth. Alternatively,
it also suggests, banks may be hiring more from debt market than deposits. A lower CD ratio
means, deposit growth is higher than credit expansion.

G. ANALYSIS OF PROFIT BEFORE AND AFTER TAX:

Figure 4.6 Profit After Tax and Before Tax

(Source: www.moneycontrol.com)

The above graph visually depicts the impact of tax on the net profit of the
bank. We can see that the profits are drastically reduced due to the tax deducted. The value
of Profit Before Tax during the Financial year 2018-19 is Rs.32000 Crores and the Profit

46
 After Tax for the same year is Rs.21076 Crores. This is higher in comparison with the
previous financial year and is a good sign for the bank.

H. NET WORTH OF THE BANK:

Net worth is the difference between a company's total assets and its total
liabilities. It is also known as shareholder`s equity.

Figure 4.7 Analysis of Net Worth

(Source: www.moneycontrol.com)

Interpretation & Ways to Improve:

Simply stated, net worth is the difference between assets and liabilities. Positive
net worth means that assets exceed liabilities while negative net worth describes the opposite
scenario. Net worth (assets minus liabilities) gauges financial health.
In the case of HDFC Bank, positive and increasing net worth indicates good
financial health. For the financial year 2018-19, the Total Shareholders’ funds value is
Rs.1,53,673 Crores whereas for the FY 2017-18, it was Rs.1,09,080 Crores.

47
 V
PROJECT
STUDY-
“Opportunities
mapping in
builders segment”

48
5. PROJECT STUDY

Project Title: Opportunities mapping in builder segment

5.1 Introduction
With the advent of the liberalisation, privatisation and globalization of 1991
in India, the Indian banking sector has seen drastic developmental changes. It was this period
that saw the emergence of the New-Generation Private (tech-savvy) banks. When the RBI
issued guidelines, it received 113 applications, many of which were from large industrial
houses. Then the RBI asked the first chairman of IDBI, Sharad Marathe, to review the
applications, and then finally picked 10 applications including four that were backed by
institutions. Of the 10 which started in 1994, four didn’t survive. Three banks (Times Bank,
Centurion Bank which had taken over Bank of Punjab) merged with HDFC Bank while
another new bank, Global Trust Bank was forced to merge with the public sector Oriental
Bank of Commerce. Other banks that emerged included UTI Bank (since renamed Axis
Bank), ICICI Bank, HDFC Bank and IndusInd Bank. This move, along with the rapid growth
in the economy of India, revitalised the banking sector in India, which has seen rapid growth
with strong contribution from all the three sectors of banks, namely, government banks,
private banks and foreign banks. As per the Reserve Bank of India (RBI), India’s banking
sector is sufficiently capitalised and well-regulated. The financial and economic conditions in
the country are far superior to any other country in the world. Credit, market and liquidity risk
studies suggest that Indian banks are generally resilient and have withstood the global
downturn well. Indian banking industry has recently witnessed the roll out of innovative
banking models like payments and small finance banks. RBI’s new measures may go a long
way in helping the restructuring of the domestic banking industry.

There has been a long term strong relationship between the banking sector
and the real-estate industry, with a number of facilities and banking products being availed by
the builders and land developers. The recent developments have depicted a transition in the
sector with the implementation of RERA, under the Real Estate (Regulation and
Development) Act, 2016. Also, after Reserve Bank India's February 12, 2018, circular on
restructuring of stressed loans, which is more stringent, things have become tight. The loans
to commercial real estate sector from banks have grown by just 4.1 per cent in 12 months in
December 2018. The liquidity crunch faced by the NBFC and HFC segment towards the mid
of FY2019 has impacted fund availability to the real estate sector. According to the rating
agency ICRA, if the current scenario persists in FY2020, it may cause credit stress to

49
developers who are reliant on refinancing to support balance sheets on land assets or slow-
moving inventory.

Taking all the above into consideration, this project study focuses on
analysing and studying the key factors that determine customer satisfaction for the builders or
construction firms regarding banking services, understanding the new market trends in the
near future, and thereby provide insights to a prominent banking company in the country to
enhance their market share and grow with a competitive edge.

5.2 Need for the study

The real estate sector is one of the most globally recognized sectors. Real
estate sector comprises four sub sectors - housing, retail, hospitality, and commercial. The
growth of this sector is well complemented by the growth of the corporate environment and
the demand for office space as well as urban and semi-urban accommodations. Real estate
sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120
billion in 2017 and contribute 13 per cent of the country’s GDP by 2025. Retail, hospitality
and commercial real estate are also growing significantly, providing the much-needed
infrastructure for India's growing needs. This opens doors for the banking sector to provide
services and products that meet their requirements. As per the Confederation of Real Estate
Developers Association of India - Kochi (CREDAI), the market is ripe with demand for
‘Apartment’- type projects, pertaining to the constraints on land-availability and modern
nuclear Indian families.

The findings of the study can carry significant managerial implications for
bank marketers and understanding of the salient criteria used by customers in choosing a bank.
It should help bankers to develop more precise, targeted marketing strategies for bank in order
to attract a larger number of customers and to better cater to the needs of both current and
potential customers. Hence this explains the need for the banks to assess their performance,
evaluate their marketing strategy and thereby develop new policies, products and services that
would enable them to sustain in the competitive business environment.

50
5.3 Scope of the study

This project study focuses on analysing the vital determinants in choosing a

bank by the builders-customer segment, understanding their banking requirements in the
modern business scenario, and studying the effect of implementation of the Real Estate
(Regulation and Development) Act, 2016 in the state of Kerala on the builder-firms. The
project has been conducted for HDFC Bank on a sample list of builder firms in the city of
Kochi, Kerala, India.

5.4 Main Objective

The main objective of the study is to enhance the market share and customer
base in the real-estate customers segment for HDFC Bank by determining the factors and key
potential areas of growth.

5.4.1 Specific Objectives

 To understand the main factors that influence the Real Estate firms or builders in
choosing their banker(s).
 To know the satisfaction level of the builder-firms with their current banker.
 To study their perception of various banking services and determine their requirements
and expectations from a banker.
 To determine and map opportunities for HDFC Bank based on the implementation of
the Real Estate Regulatory Authority (RERA) under the Real Estate (Development
and Regulation) Act, 2016.

5.5 Methodology
1) Literature Review: Previous researches and studies that have been conducted are
reviewed. The possible factors and variables to be measured are identified based
on the earlier research.
2) Data collection: Both primary as well as secondary data have been used for the
research study.
3) Analysis and Interpretation: The data collected are analysed using the MS-Excel
application and thereby the findings and conclusions are derived.

51
5.6 LITERATURE REVIEW

The study (E. Kaynak, 1991), conducted in Turkey, revealed that branch
locations being close to customers, that is, proximity was important in banking selection.
Moreover, there are factors such as ease of availability of credit and financial services
counselling that are important as well. According to (Mokhlis, 2009) service provision
came second in terms of relative importance considered by female customers than a male
customer when selecting their banks. The importance of service provision is further evidenced
by the study conducted on how undergraduate students choose the bank to (Mokhlis, 2009)
patronize in Singapore. Based on the study of (Kaufman, 1967), he found that the most
influential factors in customer’s selection of a bank were convenient location to home or place
of business, length of bank customers relationships and quality of services offered by the bank.
According to (Mason & Mayer, 1974), they suggested that among other important selection
criterions used by the customer, convenient location came on the top the priority, followed by
other important factors like friendly personnel, favourable loan experience, and advice of
friends and influence of relatives’ opinion. Findings of various studies reveal that consumer
choice of bank depends on a multiple set of criterions including bank location, availability of
loans and the default salary account of a particular bank based on study of (Martenson, 1985).

Based on the study (Elliot & Shatto, 1996) investigated bank customers in the
USA and found that price, speed, and access are particularly important. According to their
research findings, most customers place a higher value on lower prices and higher transaction
speeds than they do on personalized service, and they are willing to accept lower service levels
in exchange for price breaks (Elliot & Shatto, 1996). On the other hand, according to (Reeves
& Bednar, 1996) they suggested that customer service may be more important than price and
that customers may use additional criteria beyond price, speed and access when choosing
between banks, according to where they live (large cities or countryside) and other market
conditions. A selection criterion is one of the factors that influence of selecting the financial
institution among the customers.

According to (Mokhlis, 2009) the fast and efficient service, friendly and
helpful staff and reputation of the bank are important factors in the selection of a bank. Some
customer were found to be sensitive to the core services offered, some were conscious of every
aspect of their banks and some others would shop around for the best deal. Also was found that
friendliness of staff plays the major role in the bank decision process, followed by hours of
operations, size of waiting lines, convenience of location and efficiency of personnel.

52
 According to the report by India Brand Equity Foundation (Indian Real Estate
Industry Analysis, April, 2019), real estate sector in India is expected to reach US$ 1 trillion by
2030. By 2025, it will contribute 13 per cent of the country’s GDP. Real Estate stock in India
is expected to reach 3.7 million square feet in 2019, with addition of 200 million square feet
during the year. Emergence of nuclear families, rapid urbanisation and rising household income
are likely to remain the key drivers for growth in all spheres of real estate, including residential,
commercial and retail. Rapid urbanisation in the country is pushing the growth of real estate.
More than 70 per cent of India’s GDP will be contributed by the urban areas by 2020.

5.7 DATA COLLECTION

5.7.1 Research Design

The research design used to study the determinants that affect customers’
preferences in banking services among several banks was created considering the factors and
variables from the previous studies. The quantitative and qualitative data has been used to
assess those factors. Taking the previous studies into account, and interaction with the experts
in the field of study, the questionnaire was prepared for data collection. After the required
data points are collected, the data is tabulated and the required analysis is performed using
MS-Excel.

5.7.2 Sources of Data

The sources of data included both primary as well as secondary sources.

Primary Source:

The primary source of data was the information collected directly from the
decision-making authority of the Builder or Real Estate firms through the mode of structured
schedule, whereby a questionnaire containing relevant questions were filled by the researcher
himself on interviewing and interaction with the concerned respondents.

Secondary Source:

The secondary source included the data collected from the information from
the official websites of the Ministries of the Government of India, various associations such
as the Confederation of Real Estate Developers Association of India (CREDAI), Builders
Association of India (BAI), etc. and information collected from studies conducted by the
various research institutes relevant to the project.

53
5.7.3 Population and Sample

Universe / Population:

The population for the project includes the entire set of builder firms in the
state of Kerala. Focussing on the list of builder firms in the state of Kerala, there are 170
builder firms registered with CREDAI - Kerala, while there are 66 builder firms registered
with CREDAI - Kochi. Apart from these, there are a number of other builders and real estate
developers who are not registered with CREDAI.

Sample:

In order to deliver credible data for bank-marketers, a sample size of 40

builders is selected and data is collected from them. This sample includes builders who are
registered with CREDAI-Kochi, as well as those unregistered.

5.7.4 Data Collection Tool

A structured questionnaire with relevant questions to capture the required

data was used as the tool for primary data collection.

5.7.5 Data Collection Method

The collection of primary data was performed by the method of ‘Structured

Interview Schedule’ or ‘Researcher-Administered Schedule’. By this mode of data
collection, data is collected from the top-management personnel in the builder firms by
interacting with them and thereby recording the responses to the already defined questions in
the questionnaire.

54
5.8 ANALYSIS AND INTERPRETATION

The primary data that was collected have been tabulated and analysed based on the predicted
variables and factors. The data is tabulated and interpreted as follows.

1. Age of firms surveyed

The following table gives details about how old the firms that were surveyed are. It can
be seen that majority of the firms surveyed were ten to twenty years old.

Table 5.1: Age of firms surveyed

PERCENTAGE OF
AGE NUMBER OF FIRMS
FIRMS SURVEYED (%)

Less than 5 years 2 5

5 – 10 years 11 27.5

10 – 20 years 17 42.5

More than 20 years 10 25

The figure given below is a pictorial representation of the above table with a Pie-chart
indicating the age of the firms.

Figure 5.1: Age of builder firms surveyed

Interpretation:
 The builder firms surveyed for the project consisted of 17 firms that were
established or incorporated around 10 to 20 years before.
 27.5% of the firms, that is, 11 firms were 5 to 10 years old and 25% of the firms
(10 firms) were more than 20 years old. Only 2 firms surveyed were less than
5 years old.

55
2. Number of employees in the company

The table given below gives details about the number of employees that the firms
surveyed had employed.
Table 5.2: Number of employees in the company
NUMBER OF NUMBER OF PERCENTAGE OF
EMPLOYEES BUILDER FIRMS FIRMS (%)

Less than 10 10 25

10 – 50 employees 16 40

More than 50 14 35
employees

The figure given below is a pictorial representation of Table 4.2. From the figure, it is
evident that about 40% of the firms had employees more than 10, but less than 50. 35%
of the firms surveyed had more than 50 employees in them, and only 25% of the firms
consisted of less than 10 employees.

Figure 5.2: Number of employees in the company

3. Current banker(s) providing services for the builder segment

The table given below is a classification of the number of firms according to their current
banker.
Table 5.3: Current banker(s) of surveyed firms

SOUTH
NAME OF
HDFC SBI FEDERAL AXIS INDIAN ICICI OTHERS
THE BANK
BANK

NUMBER
16 20 11 6 4 6 11
OF FIRMS

56
The following figure indicates that majority of firms had SBI as their banker for many
banking services. The next main banker was HDFC, followed by Federal Bank.
25

20

15

10

0
HDFC BANK SBI FEDERAL AXIS BANK SOUTH ICICI BANK OTHERS
BANK INDIAN BANK

Figure 5.3: Current banker(s) of surveyed firms

Interpretation:
 The data regarding the main banker(s) currently rendering service to the
builder firms reveals that 20 banks, which makes 50% of those surveyed, are
customers of State Bank of India (SBI), 16 firms have services offered by
HDFC Bank and the third highest services are offered by Federal Bank.
 From the perspective of the surveyed authorities, the reason for preferring SBI
has been found to be that the bank being nationalised, is perceived to provide
better security to the firms. Other reasons stated by the firms is that SBI being
the largest bank in the country becomes beneficial for the firms regarding the
banking charges being low compared to other banks.
 HDFC Bank has been found to be preferred by firms because of mainly 3
reasons,
1. Good long term relationship with the bank
2. After-sales service offered, which include the employee behaviour.
3. Some because of the proximity to the office.
 Other private banks that are immediate competitors to HDFC Bank are Federal
Bank and Axis Bank in the builders segment.

57
4. Multiple Bank accounts and purpose

Most of the firms (38 out of 40) firms seem to have multiple bank accounts for
various purposes such as current accounts, salary accounts for their employees, over-draft
facilities (OD), loans, etc.

5. Satisfaction level with services provided by main banker

The figure given below is a pictorial chart representing the satisfaction level rated by the
customers for their current banking services on a scale of 5, where ‘1’ represented the
‘Worst Experience’ and ‘5’ depicted the ‘Best Experince’.

Figure 5.4: Satisfaction level of builder firms

Interpretation:
 The firms were asked to rate their main banker(s) on a scale of 5 for their level
of satisfaction with the banking services provided.
 It is found that 90% of the firms have rated 4 to 5 for their current banks.
 This data gives an insight on the scope of acquiring the firms as customers for
HDFC Bank.

58
6. Main reasons for choosing their current banker
The table shown below represents the tabulation of the firms based on the various factors
that were considered in deciding their main banker.
Table 5.4: Factors for choosing the current banker

NUMBER OF PERCENTAGE OF
FACTORS
FIRMS FIRMS (%)

Proximity to Office 8 20

After sales service 19 47.5

Employee behaviour 5 12.5

Relationship with the bank 5 12.5

Reputation of the bank 3 7.5

The figure given below is a pictorial representation that is in the form of a pie chart,
showing the various proportion of firms deciding their banks based on various factors.

Figure 5.5: Factors for choosing the current banker

Interpretation:
 Among the many factors considered as reasons for choosing their current banker,
‘After-Sales service’ has been found to be the key reason with 47.5% of firms
having chosen their bank for this reason.
 The next prime reason for choosing their banks is because of the ‘Proximity to
office’, i.e., proximity of the bank to the customer office.
 Apart from the above 2 key reasons, ‘Employee Behaviour’ and ‘Long term
relationship with the bank’ have also found to be main decision criteria.
59
7. Banking services that are predominantly demanded by customer firms

The following table shows the number of firms that avail the various services offered
by their banks and the corresponding proportion to the total number of firms surveyed.

Table 5.5: Banking services opted for by the firms

SERVICES NUMBER OF PERCENTAGE OF
FIRMS FIRMS (%)

Loans 25 62.5

Insurance 10 25

Forex 10 25

Corporate Credit Card 7 17.5

Net Banking Facilities 36 90

Over Draft Facilities 20 50

From the Figure 4.6 given below, it has been found that with the advent of digitalization,
90% of the firms, i.e., 36 firms use net-banking facilities. Other main banking services
include loans, Overdraft (OD) facilities, etc.

Figure 5.6: Banking services opted for by the firms

An important point to note here is that there lies a good opportunity in terms of
Corporate Credit Card, which is availed pretty less by the firms though Net-banking has
been used sufficiently.

60
8. Mode of fund transfer generally preferred

From the figure given below, it has been found that about 62.5% of the builder firms
prefer corporate banking services and 37.5% perform Net Banking services.

Figure 5.7: Mode of fund transfer preferred by customer firms

9. Type of bank accounts availed

The following figure gives the pictorial representation of the different types of accounts
that are demanded by the firms from their bankers.

The primary service availed by all firms is the ‘Current Account’ for the established
companies. The builder firms are also found to have salary accounts for their employees.

Figure 5.8: Type of bank accounts availed by builder firms

61
10. Companies undertaking construction equipment purchase
(with/without loan) & Rate of interest if availed

Through the survey, one of the intent was to determine what percentage of builders in
the sample carried out equipment purchase and how many of them actually leased out
their construction and other allied activities on contract to other firms. The figure given
below indicates this proportion.

Figure 5.9: Equipment purchase undertaken by firms

Interpretation:
 It is observed that about 21 companies, which made 52.5% of
those surveyed undertake equipment purchase.
 A majority of the companies undertake the purchase at 9% to
10% rate of interest.

11. Number of firms importing construction equipment

Through the schedule, the number of firms that imported their construction equipment
was identified and the data was tabulated as follows.
Table 5.6: Firms importing construction equipment
IMPORTING NUMBER OF FIRMS PERCENTAGE OF FIRMS (%)
YES 6 15

NO 34 85

 From the tabulation, we findthat 85% of the builders are not importing the
construction equipment for the purpose of construction. Most of the firms are found
to lease their construction works through other third party vendors or sub-contractors.

62
  This fact exposes the opportunity for HDFC bank to gain the market share of the sub-
contractors by offering them relevant banking products which could be beneficial for
their business as well. The figure given below gives the pictorial representation of
the tabulated data.

Figure 5.10: Firms importing construction equipment

12. Number of firms suggesting home loan options to consumers

 62.5% firms have stated that they suggest home-loan options for the customers who
approach them.
 Most of the firms who provide recommendations are found to have a bond with
their banker for delivering such suggestions to the customers. This again proves
vital for the bank to establish a relation with the firm.

The following figure indicates the proportion of the firms suggesting financial
institutions to the buyer-customers who consult them.

Figure 5.11: Firms suggesting services of financial institutions to their customers

63
13. Key factors that the firms consider while choosing their banker

A builder firm considers certain factors as a basis for choosing their banker(s). Some of
the main factors were identified and surveyed upon the firms. The following figure shows
the tabulated results.

Figure 5.12: Key factors considered in choosing the banker

Interpretation:
 75% of firms are of the opinion that ‘customer benefits’ provided by the bank is
considered while choosing a bank for them. This points out mainly to the monetary
benefits offered by the bank such as low charges for services, offers, etc.
 About 40% of builders have reported that it is the relationship with the bank that
they focus upon when choosing a bank.
 Next comes ‘Employee behaviour’, which includes the importance of the role of
the ‘Relationship Manager’ of the bank to the builder firm, with 30% of firms also
considering the customer satisfaction from employee-interaction.

14. Type of financial institution generally preferred by the firms

The Figure 4.13 shows the variation in preference of the different types of financial
institutions by the builder firms for availing banking services.
Interpretation:
 It has been found that 23 firms prefer private commercial banks and the prime
reason mentioned was the nature of service provided by the banks. It could be
deducted that private sector banks, though profit motivated, provided better
services which includes better relationship and employee behaviour compared to
public sector banks.

64
 Figure 5.13: Type of financial institutions preferred by the builder firms

 16 firms (40%) stated that they preferred availing service from public sector
banks. The main reason stated was the security and trust they had in the
nationalised banks and also the comparatively lower charges for banking services.
 Only 2.5% of firms preferred to bank with Non-Banking Financial Institutions
(NBFCs). The primary reason was flexibility in services and negotiable banking
rates.

15. Real Estate (Regulation and Development) Act, 2016 &

implementation of RERA – Real Estate Regulatory Authority

The Real Estate (Regulation & Development) Act, 2016 is an act for
regulation and promotion of the real estate sector to ensure the sale of apartment, plot
or building in an efficient and transparent manner. The Act aims to protect the interest
of consumers. It was enacted by the Parliament in May 2016 and the Act has come
into force with all its 92 sections from 1st May, 2017 across India. So far, 14 states
and union territories such as Uttar Pradesh, Gujarat, Bihar, Madhya Pradesh, Odisha,
Andhra Pradesh and Maharashtra have notified their rules with RERA and the others
are expected to follow suit.
The implementation of RERA is expected to bring relief to the
homebuyers as builders will be accountable for the timely delivery of the projects and
to protect buyers from fraud sellers. The developers would also gain from the increased
confidence of the consumers in a regulated environment.
It is mandatory for the developers to get all approvals from various
government agencies before launching a project and disclose all the information on
the website that the respective state RERA regulatory authority will set up. Real estate

65
 agents will be provided a registration number by the regulator which they have to
mention in every property sale. This will help in eliminating the possibility of
misleading the purchaser. The authority has wide ranging powers to impose penalties
and imprisonment of agents in case of violation of law.

Key Provisions of RERA

 RERA will be followed in every state of India and this regulation applies to both
residential and commercial properties.
 The sale of property will be based on carpet area and not on super built-up area.
 Builders are required to deposit 70% of the funds collected from buyers in a separate
bank account for the construction of the project
 Developers have to disclose the project details (financial statements, legal title deed
and others) on the website and update it on quarterly basis related to the construction
progress
 Projects with plot size of minimum 500 sq. mt or 8 apartments need to be registered
with the RERA Authority
 Builders require to submit the original approved plans for their project and the
alterations made to RERA
 Developers and buyers both have to pay the same interest rate of 2% above SBI’s
MCLR in case of any delay
 Imprisonment of up to 3 years for the developers and up to 1 year for agents and
buyers for violation of law
 Any structural or workmanship defects in the building during the period of 5 years
must be rectified within 30 days by the promoter without any further charges. If he
fails to do so, the buyer is entitled to receive the compensation under RERA
 Developers cannot demand for more than 10% of the property cost as an advanced
payment booking amount before signing a registered sale agreement
 Developers are not allowed to advertise, sell, offer, market or book any plot or
apartment without registering to the authority
 The buyer can contact the developer in writing within 1 year of taking possession to
demand for the shortcomings in the project.

Benefits of RERA for homebuyers

 Builders have to disclose every detail of the project on the website of authority and
update these on a regular basis.
 The buyer will have to pay only on the basis of carpet area (area within walls). The
builder cannot charge them for the super built-up area (lift, balcony, stairs and lobby).
66
  Timely completion of projects as 70% of the money collected from the customer has
to be transferred in a separate bank account and can be used only for the purpose of
completing the construction of the project.
 Any delay in completion of the project will require the developer to pay an interest
rate of 2% above SBI’s Marginal cost of leading rate to the buyer for delayed period.
 Any defect in the building will be the responsibility of builder for a period of 5 years.
 Any disputes with the buyers need to be resolved within 120 days.

Perception of builders about RERA in Kerala

RERA is yet to be established in the state of Kerala (as of June, 2019). The
State Government of Kerala had notified the rules in the month of April, 2019 and also
stated that the authority would be established soon after the Parliamentary elections
conclude.

As far as the builder firms are concerned, implementation of RERA will be

more beneficial for the customers as it builds up more accountability to the real estate
developers and builders. Moreover, the cases where projects get stalled or inability to
deliver the project by the agreed date to customers can be dealt with by the quasi-judicial
body. Not only this, but in the case where the customer fails to pay the amount as per sale
agreement by due date, the RERA provides various remedies for the protection of builders.
Hence, the implementation of RERA is considered as good move by the Government.

Impact of implementation of RERA on banking sector

Considering the banking industry, there seems to open a good opportunity for
business with the real estate developers. This is because of the provision that a separate
bank account must be held for the purpose of each project being constructed by the
developer. As per the rules, 70% of the cost of project that the builder receives from the
customer must be deposited with the bank in the particular account, the details of which
will also be shared with RERA. This increases accountability for the builder regarding the
money to be used for construction. In the banker’s perspective, this money is beneficial in
business for the stipulated period.

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5.9 FINDINGS AND RECOMMENDATIONS

1. One of the main reasons for the tough competition from SBI and Federal bank to HDFC
Bank is because of the popularity and relevant banking products offered to the builders
at lesser rates. One factor by which HDFC Bank can improve its customer base is by
considering better range of products with lower charges for the services provided.

2. HDFC Bank’s success factor includes its excellent relationship with the existing as well
as newly acquired customers. Taking this into consideration, the employee behaviour and
importance of the role of ‘Relationship Manager’ has to be given great attention in each
department of the bank.

3. There lies wider scope for enhancing the market share among builders segment because
the builders opt for a variety of banking products and services from multiple banks. This
in turn helps them reduce their dependence and reliability on a particular bank and gives
them options to choose their banks accordingly.

4. Since it has been derived that a major reason for the real-estate developers in choosing
their bank lies in the after-sale services provided by the bank, there lies good opportunity
if the bank focusses on formulating new policies and programs that improves customer
satisfaction.

5. Other main factors such as proximity to head-office is important in deciding the location
of new branches. For examples, areas such as Panampilly Nagar in Kochi, Kerala has a
large number of premium builders’ head offices. But there is only one branch that handles
most of the builders in the locality. Such sites can be better considered for establishing
more points of contact.

6. Though a majority of banking services are availed through corporate banking, Net-
banking has also started finding its importance among the customers. Hence, enhancing
and maintaining a secure online-system for transactions is to be ensured always.

7. All builder firms surveyed have salary accounts for their employees linked with a
particular bank. This opens opportunity for HDFC Bank to establish new relations with
the customers, and offering them benefits for salary accounts would attract more firms to
transfer their accounts to the bank.

8. More than half of the firms surveyed undertake equipment purchase for their business.
This indicates the opportunity for the bank to produce new banking products with
additional and attractive benefits to the builders segment. The remaining firms declared
that they take up equipment or the entire construction works on lease with other sub-

68
 contractors and vendors. This can be utilised efficiently by HDFC Bank to gain the market
share of the vendors as well.

9. A vital point to note is that the real-estate developers themselves act as promoters for the
bank they are in agreement with, by suggesting and leading the home-buyers to the
respective banks for financial services. Once again, it highlights the importance of the
bank to establish good relation with the builders and also structure certain products with
benefits for such services.

10. On interaction with certain customers, it was evident that they always preferred ease of
doing business through banking. For example, in cases of availing loan facilities, the
customers mentioned that they opted for banks that made documentation procedure easier
for them if they had an existing account in the branch. This highlights the scope for
enhancing ease of providing services to customers.

11. The implementation of the Real Estate (Regulation and Development) Act will definitely
enhance opportunities for the banking industry. As mentioned earlier, when the State
Government of Kerala sets up RERA (Real Estate Regulatory Authority), there is a need
for an account for each new project that is approved. Moreover, the flow of funds to these
accounts will also benefit the financial sector. Hence, ability to capture this opportunity
determines the bank’s success in enlarging the business.

69
5.10 LIMITATIONS OF THE STUDY

 The study was able to bring out key insights into the business environment for the
bank in a period of two months, thus paving way for obtaining better perspectives if
carried out for longer period in future.
 The sample size involved in the study included the builder firms with head office in
the district of Ernakulam, Kerala. Moreover, the majority of the firms were those
registered with CREDAI-Kochi.
 Since the data collection was through a schedule, the prevalence of biased data from
the respondents cannot be completely neglected.
 The study was designed in a manner more suitable for the benefit of HDFC Bank and
served the purpose of the internship.

5.11 FUTURE SCOPE OF THE STUDY

 The study provides further opportunities in future for understanding and analysing
the market environment for the entire banking industry and include all major
competitors taking longer period of observation.
 The sample size can be expanded to include not only the builder firms in
Ernakulam, but other major districts like Kozhikode, Thiruvananthapuram, etc.
where the banking industry have equal opportunities in the builder customer
segment.
 Other forms of data collection such as long period interviews with the key
stakeholders can be used for more reliable data.
 Similar study can be designed in future to the benefit of multiple banks and can
provide insights into the comparison of performance of each bank in the same
customer segment on a national scale.

70
5.12 CONCLUSION

With the growth in technology and business, the role of banking has also
seen its growth in the recent past. Right from the period of liberalization, there has been a rise
in the financial growth in India, the prime reason for which, is the development of banking
sector. There has been a steady increase in competition between the various new generation
banks in India, and thus the importance for the existing banks to indulge in research and
development activities in order to sustain in the competitive environment. The results of this
project, undertaken as part of the summer-internship program for a short duration, helped the
bank (HDFC Bank) to understand their market environment better.

The real-estate segment is still in the growing phase, with demand

increasing with the increase in population and per-capita income. India being a developing
country, is yet to explore its vast potential in infrastructure development. The study conducted
as part of this internship was able to highlight the huge opportunities for growth of the banking
sector in the builders and real estate developers segment. One of the main findings derived
from the study is the fact that after-sales services is one of the most important factors that
becomes important when it comes to customer engagement for the builders. Certain policy
initiatives by the government like the Real Estate Act, 2016 is yet to roll out its impact in the
real-estate segment and seems to have optimistic potential for the bank. Through this study,
sufficient insights have been delivered to HDFC Bank to sustain and lead itself into better
position by enlarging its market share in the near future.

Through this internship project, I was able to gain insight into the market
scenario of private banking sector with special focus on India’s leading private sector bank,
HDFC. The project has revealed several factors and determinants of builders’ satisfaction with
banking, and has highlighted the key areas where the bank has higher potential of market share
in Kerala, but is yet to be utilised. With the adequate and valid data collected through the
project, I have been able to gather reliable information as required by the bank, which can
form the basis for formulating key marketing and operational strategies by HDFC Bank Ltd.

71
5.13. BIBLIOGRAPHY

JOURNAL ARTICLES
1) E. Kaynak, O. K. (1991). Commercial Bank Selection in Turkey. International Journal
of Bank.
2) Elliot, M., & Shatto, D. (1996). Three Customer Values Are key to Marketing Success.
Journal of Retail Banking Services, Vol.18 No. 1, pp. 1 - 7.
3) (April, 2019). Indian Real Estate Industry Analysis. India Brand Equity Foundation
(www.ibef.org).
4) Kaufman, G. (1967). A Survey of Business Firms and Households View of a Commercial
Bank, Appleton, University of Wisconsin, Madison, WI. Chicago: Report to the Federal
Reserve Bank of Chicago.
5) Martenson, R. (1985). Consumer Choice Criteria in Retail Bank Selection. International
Journal of Bank Marketing, 64 - 75.
6) Mason, J., & Mayer, M. (1974, June). Differences between high-and-low-income savings
and checking account customers. The Magazine of Bank Administration, pp. Vol. 65, 48-
52.
7) Mokhlis, s. (2009). Determinants of Choice Criteria in Malaysia Retail Banking: An
Analysis of Gender Based Choice Decisions.
8) Reeves, C., & Bednar, D. (1996). Keys to market success – a response and another view.
Journal of Retail Banking Services, Vol.18 No.4, pp.33-40.

BOOKS
1) Kotler, P., “Marketing Management”, Pearson Education, 11th Edition.
2) Chandra, Prasanna “Financial Management – Theory and Practice”, McGraw Hill,
6th Edition.

ONLINE SOURCES
1) https://www.hdfcbank.com/aboutus/general/default.htm
2) https://www.hdfcbank.com/htdocs/common/pdf/corporate/Annual_Report_2018-19.pdf
3) https://www.ibef.org/industry/banking-india.aspx
4) https://www.moneycontrol.com/financials/hdfcbank/ratiosVI/HDF01
5) https://home.kpmg/content/dam/kpmg/in/pdf/2017/02/Building-Construction-and-Real-
Estate.pdf.

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 VI. APPENDIX

a) QUESTIONNAIRE

SUMMER INTERNSHIP QUESTIONNAIRE

Questionnaire for a study on opportunities mapping in builder segment
*Required

1. Name of the company *

______________________________________________________________

2. Contacted Person (with designation) *

______________________________________________________________

3. How old is your firm? *

o Less than 5 years

o 5-10 years
o 10-20 years
o More than 20 years

4. Who is/are your current banker(s)? *

___________________________________________________________________

5. Do you have multiple bank accounts? If yes, please mention the purpose. *

___________________________________________________________________

6. Please rate your main banker for satisfaction of services provided on a scale
of 1 to 5 *

73
7. Key factors for choosing your current banker *

o Proximity to office
o Employee Behaviour
o Reputation of the bank
o After-Sales service
o Long term/Strong Relationship with the
bank

8. What are the facilities provided by your bank, used by you? *

(Select all that apply)

o Loans
o Insurance
o Forex
o Corporate Credit Card
o Net Banking facilities
o Overdraft Facilities - If yes, please mention bank

9. Which mode of Fund transfer do you generally prefer? *

o Net Banking - NEFT/RTGS/UPI

o Corporate Banking service

10. Type of bank accounts used for your business *

(Select all that apply)
o Salary Account for employees
o Savings Account
o Current Account

11. How many employees does your company have? *

_______________________________________________________

12. Do you make equipment purchases for construction?

o YES
o NO

74
13. If yes, at what rate of interest do you generally finance your equipment
purchase?*

_________________________________________________

14. Do you import your construction equipment? *

o YES
o NO

15. Your Sub-Contractors / Equipment Lessor:

____________________________________________________

16. Are your up-coming projects registered under RERA?

o YES
o NO

17. If no, what is the reason?

__________________________________________________

18. Do you suggest Home-Loan options for your customers who seek financial
support?*

o YES
o NO

19. If yes, which financial institution do you suggest, and why?

___________________________________________________

20. In case you wish to change your banker, who will be your next option, and why? *

____________________________________________________

21. Which type of financial institutions do you generally prefer? And why?*
o Public sector banks
o Private Banks
o NBFCs

Reason:

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22. Any specific facility/service/product that you would like your bank to provide
(currently not provided by your banker)?*

________________________________________________________

23. What key factors do you consider first while choosing a bank?*
(Select all that apply)

o Advanced banking technologies including e-banking & security features

o Customer benefits
o Employee behaviour
o Relationship with the bank
o Varies depending upon the requirement

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 b. SAMPLE – LIST OF BUILDER FIRMS SURVEYED

S.NO. NAME OF THE COMPANY

1. TRINITY BUILDERS
2. ANVITA BUILDERS PVT. LTD.
3. JAIN HOUSING PVT. LTD.
4. ASSET HOMES
5. GREEN VISTAS DEVELOPERS
6. OLIVE HOUSE
7. OXONIA BUILDERS & DEVELOPERS

8. NUCLEUS PREMIUM PROPERTIES

9. RELCON PROPERTIES FOUNDATIONS PVT. LTD.
10. MANJOORAN HOUSING
11. KENT CONSTRUCTIONS
12. PLATINUM BUILDERS
13. MATHER BUILDERS
14. LIVIT HOMES
15. NANMA PROPERTIES
16. DREAM FLOWER HOUSING PROPERTIES
17. NATIONAL GROUP OF COMPANIES
18. ABC GROUP OF COMPANIES
19. DLF NEW TOWN KOCHI
20. INKEL LIMITED
21. NOEL CONSTRUCTIONS

22. MEGHA HABITATS L.L.P

23. TULSI DEVELOPERS

24. VEEGALAND DEVELOPERS PVT. LTD.

25. HOMELAND BUILDERS AND DEVELOPERS

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26. GALAXY INTERIORS & BUILDERS

27. BAVA REALTORS

28. VM BUILDERS & DEVELOPERS
29. CASADEL DEVELOPERS
30. SFS HOMES
31. JOY ALUKKAS GOLD TOWER
32. CLASSIC CONSTRUCTIONS

33. JAIRAJ PROJECTS PVT. LTD.

34. SMS BUILDERS

35. YESKAY BUILDERS

36. ASTEN REALTORS

37. KUNNEL IMPERIAL HOMES

38. YASORAM BUILDERS PVT. LTD.

39. SKYLINE BUILDERS

40. HEERA HOMES

78