PROJECT REPORT ON HDFC BANK

EXECUTIVE SUMMARY

The role of financial institution is ever expanding and is becoming inseparable part of the growth of the country. There are many financial products coming everyday to the Indian market. Some are old and some are new from Indian context. However, there are some products have presence in the country since lon g, like Saving A/c, Current A/c, Fixed Deposit, various types of loans(personal loan, vehicle loan, h ome loan) etc. But in the era of Globalizations and with free entry of lot of private players this product need some modification. So, in the current situation lots of different and attractive products regarding loan, Saving A/c, Current A/c, and Fixed Dep osits are available with this Financial Institutions. Now to avail such kind of Products detailed knowledge Bhavnagar University, Bhavnagar arranged six week summer project in any business organization for sharpen our skills & to bridge to gap of the th eory & practice. I completed my project at HDFC Bank, Bhavnagar.

This is a specialized training project report prepared at HDFC Bank, which consist of detailed analysis on the topic of Analysis of customer behavior towards
personal loan market & comparis on among top 3 banks In first part of this

project I highlighted brief introduction of Industry and information HDFC bank. This include Brief introduction about the Bank. Founder and director of the bank, structure of the bank etc. So this section include s brief history about HDFC Bank. In second part of the project, I get detailed knowledge about the different products and services of the HDFC Bank. In this section I highlight different loans of HDFC Bank Ltd. Plus I highlight different products of the HDFC Bank. In addition to this I presented different aspects of personal loan.. In last and most important part is a Research Analysis made by me on the topic
Analysis of customer behavior towards personal loan market & comparison among top 3 banks with the help of 200 sample size.

INDEX

CHAPTER NO. CHAPTER 1

1.1 1.2 1.3

NAME OF CHAPTERS INDUSTRY PROFILE

PAGE NO.
7 8 10 17 20 21 22 24 26 27 27 28 29 31 32 35 38 39 40 58 59 61 66 68

What is banking? Structure of Indian banking industry Current scenario

PROFILE OF HDFC BANK

CHAPTER 2
2.1 2.2 2.3 2.4

2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14
CHAPTER 3

About HDFC Group List of Enterprise About HDFC Bank History of the Banks Mission Goal and Objectives Organizational culture and values Board of directors Awards & Achievement Products of the Bank Org. chart of HDFC at Bhavnagar branch ATM in Bhavnagar Map of the Bhavnagar-HDFC Bank Branch Various loans provided by HDFC Bank
INTRODUCTION OF PERSONAL LOANS

3.1
3.2 3.3 3.4 3.5 3.6

Introduction Types of personal Loans Types Of Interest Rates Personal Loans Interest Comparison Chart Personal Loan Process Factors that influence loan rate
PROFILE OF BANKS SELECTED FOR COMPARISON

70 71

CHAPTER 4

73 74 79

4.1 4.2

ICICI Bank SBI Bank

CHAPTER 5 CHAPTER 6 CHAPTER 7 CHAPTER 8 CHAPTER 9 CHAPTER 10 CHAPTER 11

RESEARCH METHODOLOGY FINDINGS ANALYSIS SUGGESTIONS CONCLUSION ANNEXURE BIBLIOGRAPHY

82 86 115 117 119 121 125

Chapter 1

1.1 WHAT IS BANKING?

Bank is a business that provides financial services usually for profit.

Traditional banking Services include receiving deposits of money, lending money and processing transactions. A commercial bank accepts deposits from customers and in turn makes loans based on those deposits. Some banks (called Banks of issue) issue banknotes as legal tender. Many banks offer ancillary financia l services to make additional profit; for example: selling insurance products.

Banking is the business of providing financial services to consumers and businesses. The basic services a bank provides are checking accounts, which can be used like money to make payments and purchase goods and services; savings accounts and time deposits that can be used to save money for future use; loans that consumers and businesses can use to purchase goods and services; and basic cash management services such as check cashing and foreign currency exchange. Four types of banks specialize in offering these basic banking services: commercial banks, savings and loan associations, savings banks, and credit unions. A broader definition of a bank is any financial institution that receives, collects, transfers, pays, exchanges, lends, invests, or safeguards money for its customers.

This broader definition includes many other financial institutions that are not usually thought of as banks but which nevertheless provide one or more of these broadly defined banking services. These institutions include finance companies, investment companies, investment banks, insurance companies, pension funds, security brokers and dealers, mortgage companies and real estate investment trusts. This a rticle, however, focuses on the narrower definition of a bank and the services provided by banks in Canada and the United States. (For information on other financial institutions, see Insurance; Investment Banking; and Trust Companies.) Banking services are extremely important in a free market economy such as that found in Canada and the United States. Banking services serve two primary purposes. First, by supplying customers with the basic mediums-of-exchange (cash, checking

accounts, and credit cards), ba nks play a key role in the way goods and services are purchased.

Second, by accepting money deposits from savers and then lending the money to borrowers, banks encourage the flow of money to productive use and investments. This in turn allows the economy to grow. Without this flow, savings would sit idle in someones safe or pocket, money would not be available to borrow, people would not be able to purchase cars or houses, and businesses would not be able to build the new factories the economy needs to produce more goods and grow. Enabling the flow of money from savers to investors is called financial intermediation, and it is extremely important to a free market economy.

1. S

Organized banking was active in India since the establishment of the General Bank of India in 1786. After independence, the Reserve Bank of India (RBI) was established as the central bank and in 1955, the Imperial Bank of India, the biggest bank at the time, was taken over by the government to form state -owned State Bank of India (SBI). RBI had undertaken an exercise to merge weak banks to strong banks and the total number of banks thus reduced from 566 in 1951 to 85 in 1969. With the objective of reaching out to masses and meeting the credit needs of all sections of people, the government nationalized 14 large banks in 1969 followed by another 6 banks in 1980. This period saw enormous growth in the number of branches and the banks branch network be came wide enough to reach the weakest sections of the society in a vast country like India. Sibs network of 9033 domestic branches and 48 overseas offices is considered to be one of the largest for any bank in the world.

The economic reforms unleashed by the government in early nineties included banking sector too, to a significant extent. Entry of new private sector banks was permitted under specific guidelines issued by RBI. A number of liberalization and de regulation measures aimed at consolidation, e fficiency, productivity, asset quality, capital adequacy and profitability have been introduced by the RBI to bring Indian banks in line with International best practices. With a view to giving the state -owned banks operational flexibility and functional a utonomy, partial privatization has been authorized as a first step, enabling them to dilute the stake of the government to 51 per cent. The government further proposed, in the Union Budget for the financial year 2000-01, to reduce its holding in nationaliz ed banks to a minimum of 33 per cent on a case by case basis. The banking system can be broadly classified as organized and unorganized banking system. The unorganized banking system comprises of moneylenders, indigenous bankers, lending pawnbrokers, landl ords, traders, etc. Whereas the organized banking system comprises of Scheduled Banks and Non -Scheduled Banks that are permitted by RBI to undertake banking busines s.

The Indian Banking Industry can be broadly classified into: A. Public Sector Banks B. Old and New Private Sector Banks C. Foreign Banks D. Co-operative Banks

A. Public Sector Banks

Public sector banks are banks where in the government has a holding of 100%.This been a situation prior to liberalization. The stake has fallen because of a public issue in the post liberalization period. Some of the other leading banks in this segment have also proposed to come out with an equity issue to raise further capital. The government is proposing to bring out a bill wherein its share in all these banks would stand reduced to 33% from the current levels

The public sector banks largely dominate the Indian Banking industry. These banks till the early 90s were involved in the traditional banking business of deposits and credit lending. The public sector banks have a strong distribution network all over the country. But the strength of the earlier periods has now become a concern for these banks. As compared to the tech-equipped distribution network of the new private sector banks and the foreign banks, these banks hav e found it difficult to upgrade them on the technology front. These banks are also facing the problem of surplus manpower. Most of these banks are now coming out with a VRS to bring down their number of employees and improve the efficiency ratios.

The public sector banks still control a major share in the banking operations of the country. Their inefficiencies have been exposed only when the market was thrown open for competition and new players started eating up their share. But given their size and the strong network, most of these banks can change their perception. The recent thrust on reduction of government stake; VRS, NPA settlement schemes etc have been some of the steps in this direction. Since the growth of the economy is largely dependent o n the performance of these banks, even with the growth of new private and foreign players, these banks will have an important role to play.Some of

10

the players here are State Bank of India and its associates, Bank of Baroda, Corporation Bank, Punjab National Bank, Union Bank of India, etc.

B. Old and New Private Sector Banks

 Private Sector Banks-Old
These banks existed prior to the promulgation of Banking Nationalization Act but were not nationalized due to their smaller size and regional focus. Most of t hese banks continue to have a regional focus and are relatively smaller in size. A large number of these banks are basically from the south. Being small in size, these banks focus on service and technology and thus face competition from new private and foreign banks. Most of these banks are trying to increase their presence nationwide and are planning to enter other business areas like insurance.

The old private sector banks have performed reasonably well during the FY2000. As these banks were facing stiff competition from the new private banks and the foreign players who were making inroads in their markets, these banks have been able to increase their net profits by over 50%. As a result of the increasing competition in the sector, these banks have been trying to improve upon their margins and asset quality. Most of these banks have a high CAR and as such they do not face any capital constraint in their growth plans. Even their return on net worth has been at par in most of the cases with the other new pl ayers in the market. But the coming years would be more challenging for these banks as the public sector are also trying to adapt to the new environment and the new banks have already equipped themselves to have a major share in any opportunity that would accrue.

Some of the private sector-old players are Bank of Madura Ltd., Tamilnad Mercantile Bank Ltd., The Jammu & Kashmir Bank Ltd., The Vysya Bank Ltd., etc.

11

 Private Sector Banks- New

The Banking Regulation Act was amended in 1993 permitting the ent ry of new private sector banks. The act also specified certain criteria for establishing new private sector banks. The criteria are as follows:

1. The banks should have a minimum net worth of Rs1bn. 2. The promoters holding should be minimum 25% of the paid up capital. 3. The banks should offer shares to the public within three years of their operations.

The first new private sector bank started operations in 1995. The minimum net worth requirement of Rs1bn and difficulty in getting the banking license has kept the option open for very few players. The financial institutions have promoted many of these banks. With emphasis on service and technology, it is for the first time that Indian banks are challenging the foreign banks. These banks are making heavy use of te chnology to give good service on par with foreign banks but to a much wider audience e.g. branch size has been reduced considerably by using technology and having less manpower. This saves the cost of the branch. In addition the ATM etc helps drawing large customers to one branch.

The new private banks have been consistently gaining market share from the public sector banks. The major beneficiary of this has been corporate clients who are most sought after now.

The new private sector banks have performed very well in the FY2000.Most of this banks have registered an increase in net profits of over 50%.They have been able to make significant inroads in the retail market of the public sector and the old private sector banks. During the year, the two leading b anks in this sector had set a new trend in the Indian banking sector. HDFC Bank, as a part of its expansion

12

plans had taken over Times Bank. ICICI Bank became the first bank in the country to list its shares on NYSE.

Some of the private sector-new players include, Centurion Bank Ltd., Global Trust Bank Ltd., HDFC Bank., ICICI Banking Corporation Ltd., IDBI Bank Ltd., etc.

C. Foreign Banks
Foreign banks have been doing the normal banking business in the country. During the period of nationalization, the entry of new foreign banks and expansion by existing foreign banks were prohibited. Even, when the norms were relaxed later on, RBI was very slow in granting any further approvals to these banks. But most of these banks have concentrated on the metropolita n cities of the country and have been able to do reasonably well. These banks have used the latest technology to compensate for the limited number of branches they have. In the post liberalization period, there has been a sharp increase in the total business done by the foreign banks. A number of new players have entered and the existing players have consolidated their position in the market. In the last couple of years, some of the foreign banks have entered the retail segment and introduced a number of new products in the market. This has intensified the competition in the banking sector and has made most of the old players rethink their strategy.

Some of the foreign banks operating in India are ABN -AMRO Bank N.V., ANZ Grind lays Bank Ltd, Citibank N.A. , Deutsche Bank AG, Standard Chartered Bank, etc.

13

D. Co-Operative Banks
Co-operative banks are a part of the vast and powerful superstructure of co operative institutions, which are engaged in the tasks of production, processing, marketing, and distribution, servicing, and banking in India. The co -operative banks were conceived in order to substitute unorganized money market agencies like moneylenders, to provide adequate short -term and long-term institutional credit at reasonable rates of intere st, and to bring about integration of the unorganized and organized segments of the money market.

The main aim of the co-operative banks is to provide cheaper credit to their members, and not to maximize their profits. There has been an impressive growth in deposits, credit and working capital of these banks. The annual rates of growth of co-operative banks have been quite high, and are comparable with those of commercial banks. The government and the RBI have taken a number of steps to improve the health and strength of co-operative banks in India. In keeping with other financial sectors reforms, certain co -operative banking reforms also have been carried out after 1991.

14

1.3 CURRENT SCENARIO

A. PUBLIC SECTOR BANKS
SBI Group: State Bank of India with its seven associates banks command the largest banking resource in India. SBI and its associates banks are:

1 State Bank of India 2 State Bank of Bikaner & Jaipur 3 State Bank of Hyderabad 4 State Bank of Indore 5 State Bank of Mysore 6 State Bank of Patiala 7 State Bank of Saurashtra 8 State Bank of Travancore

After the amalgamation of new bank of India with Punjab national bank, currently there are 18 nationalized banks in India: > Allahabad bank > Andhra bank > Bank of Baroda > Bank of Maharashtra > Canara bank > Central bank of India > Corporation bank > Dena bank > Indian bank > Syndicate Bank > Union Bank of India > United Bank of India > UCO Bank > Vijaya Bank > Indian Overseas Bank > Oriental Bank Of Commerce > Punjab and Sind Bank > Punjab National bank

15

B. PRIVATE SECTOR BANKS

 Bank of Rajasthan  Indian Overseas Bank  Catholic Syrian Bank  Centurion Bank of Punjab  Dhanalaxmi Bank  Federal Bank  HDFC Bank  ICICI Bank  IDBI Bank > ING Vysya Bank > Jammu & Kashmir Bank > Karnataka Bank > Karur Vysya Bank > Kotak Mahindra Bank > South Indian Bank > Tamilnad Indian Bank > Axis Bank > Indusind Bank

C. FOREIGN BANKS
 ABN AMRO Bank  Abu Dhabi Commercial Bank L td  Bank of Ceylon  BNP Paribas Bank  Citi Bank  China Trust Commercial Bank > Deutshce Bank > HSBC > JPMorgan Chase Bank > Standard Chartered Bank > Scotia Bank > Taib Bank

Currently (2009), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clea n, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility-without any stated exchange rate -and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time especially in its services sector, the demand for banking services-especially retail banking, mortgages and investment services are expected to be strong. M&As,
16

takeovers, asset sales and much more action (as it is unraveling in China) will happen on this front in India.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase i ts stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private sector banks (these do not have government stake; they may be publicly l isted and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs.

17

Chapter 2

18

2.1 ABOUT HDFC GROUP

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and Chairman-Emeritus, of HDFC Group who left this earthly abode on November 18, 1994. Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his financial career at Harkisandass Lukhmidass a leading stock broking firm. The firm closed down in the late seventies, but, long before that, he went on to become a towering figure on the Indian financial scene .

In 1956 he began his lifelong financial affair with the economic world, as General Manager of the newly-formed Industrial Credit and Investment Corporation of India (ICICI). He rose to become Chairman and continued so till his retirement in 1972. At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more illustrious than his first. His vision for mortgage finance for housing gave birth to the Housing Development Finance Corporation it was a trend-setter for housing finance in the whole Asian continent.

He was also a writer in his own right. There are over 200 published articles by him. In 1992, the Government of India honored him with the Padma Bhushan Award. The London School of Economics & Political Science conferred on him an Honorary Fellowship. He was one of the Founder Members of the Centre for Advancement of Philanthropy, and its Chairman till 1993.

19

2.2 LIST OF ENTERPRISES

 Enterprises under common control of the promoter:
y y y y y y y y y y

HDFC Bank Ltd. HDFC Asset Management Company Ltd. HDFC Standard Life Insurance Company Ltd. HDFC Developers Ltd. HDFC Holdings Ltd. HDFC Investments Ltd. HDFC trustee Company Ltd. HDFC Finance Ltd. HDFC Chubb General Insurance Company Ltd. HDFC Venture Capital Ltd.

20

REGISTERED OFFICE:

CORPORATE OFFICE:

Address: HDFC Bank House Senapati Bapat Marg Lower Parel, Mumbai, Maharashtra, 400013. Phone: 91-022-56521000 Fax: 91-022-24960737

Address: Ramon House, 169, Back Bay, Reclamation, H T Parekh Marg, Church Gate, Mumbai 400 020.

BHAVNAGAR BRANCH

HDFC BANK LTD. Sterling Point, Waghawadi Road, Bhavnagar- 364002.

Websites

Www. hdfc.com Www. hdfcbank.com

21

2.3 ABOUT HDFC BANK

The Housing Development Finance Corporation (HDFC) was amongst the first to receive an 'in-principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of RBI's liberalization of the Indian Banking industry in 1994. The Bank was incorporated in August 1994 in the name of 'HDFC Bank Limited' with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995 HDFC Bank, the pioneer of the retail -banking movement in India, is one of the fastest growing and most profitable banks in India with a strong urban prese nce. The bank, with a market share of 2.5% has a wide reach across the country with a branch network of 425 branches and 950 ATMs. Strong understanding of the retail sphere (46% of total advances in 9mFY05) and technology initiatives has made the bank the second largest private sector bank in the country. The bank has largely outpaced the sector growth over the last few years, but of late the growth momentum has been subdued due to competitive reasons.

HDFC Bank is headquartered in Mumbai. The Bank at pres ent has an enviable network of over 250 branches spread over 135 cities across the country. All branches are linked to each other through an online real - time basis. Customers in 80 locations are also serviced through Phone Banking. The Bank's expansion pl ans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and active member base.

The Bank also has a chain of over 800 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express credit/charge cardholders.

22

HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. The entire bank's branches have connectivity which enables the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also provided to retail customers through the branch network and Automated Teller Machines (ATMs). The Bank has made substantial efforts and investments in acquiring the best technology available internationally to build the infrastructure required for a world class bank. In terms of software, the Corporate Banking business is supported by Flex cube, while the Retail Banking business by Fin ware, both from i -flex Solutions Ltd. The systems are open, scalable and web -enabled.

The Bank has prioritized its engagement in technology and the internet as one of its key goals and has already made significant pr ogress 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.

The Bank has received recognition both nat ionally and internationally for 'The Best Bank' on various parameters in publications like Euro money and Finance Asia.

The Bank's IT department has total staff strength of 120 (approx.), with a mix of functional and technical specialists. The project man agers for new IT initiatives are designated both from this group and from businesses. Almost all the project development and application maintenance activities are outsourced to IT vendors.

23

2.4 HISTORY OF THE BANK

HDFC was incorporated in 1977 with the primary objective of meeting a social need that of promoting home ownership by providing long -term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 100 million. Against the milieu of rapid ur banization and a changing socio -economic scenario, the demand for housing has grown explosively. The importance of the housing sector in the economy can be illustrated by a few key statistics. According to the National Building Organization (NBO), the tota l demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.4 million units, of which 12.76 million units is from rural areas and 6.64 million units from urban areas. The housing industry is the secon d largest employment generator in the country. It is estimated that the budgeted 2 million units would lead to the creation of an additional 10 million man -years of direct employment and another 15 million man -years of indirect employment.

 MILE STONES
 Acquired Times Bank in merger from Times Of India Group (5 6% present holding) in 2000.  HDFC owns only 24.4%, rest owned by public and private equity investors JP Morgan Chase (5 -6%).  Large Foreign Institutional Investors (in India) including Putnam, et c. (big vote in Indian equity markets) 10-11%  Warburg Pincus has a significant holding in HDFC (its promoter ) Having identified housing as a priority area in the Ninth Five Year Plan (1997 -2002), the National Housing Policy has envisaged an investment t arget of Rs. 1,500 billion for this sector. In order to achieve this investment target, the Government needs to make low cost funds easily available and enforce legal and regulatory reforms.

24

2.5 MISSION
HDFC Bank's mission is to be a world -class Indian Bank. The Bank's aim is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services in the segments that the bank operates in 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 and regulatory compliance. HDFC Bank's business philosophy is based on four core values: Operational Excellence, Customer Focus, Product Lead ership and People.

2.6 GOAL AND OBJECTIVES

 Business Objectives
The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets.

 Organizational Goals
 Develop close relationships with individual households,  Maintain its position as the premier housing finance institution in the country,  Transform ideas into viable and creative solutions,  Provide consistently high returns to shareholders, and  To grow through diversification by leveraging off the existing clie nt base.

25

2.7 ORGANIZATIONAL CULTURE & VALUES

HDFC Bank has an open and informal culture. HDFC Bank has value integrity, commitment and teamwork and excellence in customer service. HDFC adopts a policy of learning by doingwhich encourages decision making as well as learning from doing.

As HDFC Bank continue to grow rapidly in spite of the competitive market scenario, young professionals opting to make a career with HDFC Bank today will find more challenging and exciting opportu nities to contribute and grow with them.

If you are young, talented individual who enjoys challenges, has a passion to excel and can fit into our organizational culture & value system, you could be a part of learning and growing team of professionals at HDFC Bank.

HDFC Bank has always been market-oriented and dynamic with respect to resource mobilization as well as its lending programmed. This renders it more that capable to meet the new challenges that have emerged. Over the years, HDFC Bank has developed a vast client base of borrowers, depositors, shareholders and agents, and it hopes to capitalize on this loyal and satisfied client base for future growth. Internal systems have been developed to be robust and agile, to take into account changes in the volatile external environment.

HDFC Bank has developed a network of industries through partnerships with some of the best institutions in the world, for providing specialized financial services. Each institution fine tuned for a specific market, while off ering the entire HDFC customer base the highest standards of quality in product design, facilities and services.

26

2.8 BOARD OF DIRECTORS

 ORGANISATION AND MANAGEMENT
HDFC is a professionally managed organization with a board of directors consisting of eminent persons who represent various fields including finance, taxation, construction and urban policy & development. The board primarily focuses on strategy formulation, policy and control, designed to deliver increasing value to shareholders.

Board of Directors

BOARD OF DIRECTORS
Managing Director Director Director Director Director Executive Director Chairman Director Director Executive Director Director Director Mr.Aditya Puri Mr.Arvind Pande Mr.Ashim Samanta Mr.C M Vasudev Mr.Gautam Divan Mr.Harish Engineer Mr.Jagdish Capoor Mr.Keki M Mistry Mr.Pandit Palande Mr.Paresh Sukthankar, Mr.Renu Karnad Mr.Vineet Jain

27

 SHARE HOLDING PATTERN

Share Holding Pattern

Indian Promoters Foreign collaborators Indian inst/Mut Fund FIIs/GDR Free float Shareholders

24.20% 13.10% 2.10% 26.90% 33.70% 215,630

HDFC has a staff strength of 1029, which includes professionals from the fields of finance, law, accountancy, engineering and marketing.

28

2.9 AWARDS & ACHIEVEMENT

Euro money Awards 2009: 'Best Bank in India' Economic Times Brand Equity & Nielsen Research annual survey 2009: Most Trusted Brand - Runner Up Asia Money 2009 Awards: 'Best Domestic Bank in India' IBA Banking Technology Awards 2009: 'Best IT Governance Award Runner up' Global Finance Award: 'Best Trade Finance Bank in India for 2009 IDRBT Banking Technology Excellence Award 2008: 'Best IT Governance and Value Delivery' Asian Banker Excellence in Retail Financial Services: 'Asian Banker Best Retail Bank in India Award 2009 ' Finance Asia Country Awards for Achievement 2008: 'Best Bank and Best Cash Management Bank' CNN-IBN: 'Indian of the Year (Business)' Nasscom IT User Award 2008: 'Best IT Adoption in the Banking Sector Business India: 'Best Bank 2008' Forbes Asia: Feb. 50 companies in Asia Pacific Asian Banker Excellence in Retail Financial Servic es: Best Retail Bank 2008 Asia money: Best local Cash Management Bank Award voted by Corporate Microsoft & Indian Express Group: Security Strategist Award 2008 World Trade Center Award of honor: For outstanding contribution to international trade services Business Today-Monitor Group survey: One of India's "Most Innovative Companies" Financial Express-Ernst & Young Award: Best Bank Award in the Private Sector category Global HR Excellence Awards - Asia Pacific HRM Congress; 'Employer Brand of the Year 2007 -2008' Award - First Runner up, & many more Business Today: 'Best Bank' Award 29

2.10 PRODUCTS OF THE BANK

 SAVINGS ACCOUNTS
These accounts are primarily meant to inculcate a sense of saving for the future, accumulating funds over a period of time. Whatever your occupation, we are confident that you will find the perfect banking solution. Open an account in your name or register for one jointly with a family member today.

TYPES OF SAVINGS ACCOUNTS

(1) Regular (2) Savings Max (3) Institutional Savings (4) No frills (5) Senior citizens A/C. (6) Kids advantage (7) Corporate Salary

TYPES OF SALLARY ACCOUNTS

(1) Classic (2) Regular (3) Payroll (4) Premium

 CURRENT ACCOUNTS
Now, with an HDFC Bank Current Account, experience the freedom of multi -city banking! You can have the power of multi -location access to your account from any of our 684 branches in 316 cities. Not only that, you can do most of your banking transactions from the comfort of your office or home without stepping out.

30

TYPES OF CURRENT ACCOUNTS

(1) Regular (2) Current Plus (3) Current Trade (4) Current Premium (5) Bank Flexi (6) Bank Apex (7) Bank Max

 FIXED DEPOSITS
Long-term investments form the chunk of everybody's future plans. An alternative to simply applying for loans, fixed deposits allow you to borrow from your own funds for a limited period, thus fulfilling your needs as well as keeping your savings secure.

(1) Regular fixed deposits (2) Super saver fixed deposits (3) Sweep in fixed deposits (4) 5 year tax savings fixed deposits

 DEMAT ACCOUNT
HDFC BANK is one of the leading Depository Participant (DP) in the country with over 8 Lac Demat accounts. HDFC Bank Demat services offers you a secure and convenient way to keep track of your securities and investments, over a period of time, without the hassle of handling physical documents that get mutilated or lost in transit. HDFC BANK is Depository participant both with -National Securities Depositories Limited (NSDL) and Central Depository Services Limited (CDSL).

31

 NRI ACCOUNTS
(1) NRE savings account (2) NRO savings account

 CARDS
Our range of Cards helps you meet your financial objectives. So whether you are looking to add to your buying power, conducting cashless shopping or budgeting your expenditure, you will find a card that suits you.

CREDIT CARDS (1) Silver Card (2) Gold Card (3) Platinum Card (4) Titanium Card (5) Womens gold credit card

DEBIT CARDS

(1) Easy shop international debit card (2) Easy shop gold debit card

PREPAID CARDS

(1) Forex Plus card (2) Gift Plus card

 INVESTMENT AND INSURANCE

(1) Mutual Funds (2) Insurance
32

(3) Bonds (4) Mudra Gold Bar

2.11 ORG.

RT OF

FC

GAR

RANCH

Managing direct

Mr. Aditya puri

Country Head Retail Banking Mr. Navin Puri

Reagional Business Head

Mr. Ravi Narayan

Zonal Head
Mr. Pinal Shah

Cluster Head Saurashtra Reagion Mr.Pankaj Popat

Branch Manager (Bhavnagar Branch)

Mr. Chetan Trivedi

P.B. Authorisor

Relationship Manage

Assistant Branch Manager For Current a/c

Investment Relationship Manager

Teller Authorisor

P. . Authori or : IRM :

. it .K l

S Pi .K l

ABM or Current / : Teller Authori er i :

. i . Vij B l

i i

Rel tionshi Manager:

33

P A t

lB i

ll

A t

i E

S l ti

lB

ll

 Functions
Branch manager
   i i i l i t lf i it ti . B f t ti ti ti l t i t , S. i ti .

Personal Banker authori er

 Aft f  f t il i t l l f PB i l, ll t t it, t i it . i li ti . , , it ll t PB, E ti

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Personal Banker
 Maintain contacts with walk-in customers, existing customers and provide satisfactory service to them.  Handle all the complaint of the customers and resolve it.  Maintain daily stock reports and take approval from the PB authorizer.

Teller Authorizer
 He gives approval to all types cheques and DDs by checking all the details and validity of it.  At the end of the day all the cash on hand in the bank require signature of him.  Report of cash loading in ATM is to be submitted to him. He is responsible for it.

Teller
 Maintain daily transactions of cheque withdrawal, cheque deposits, cash withdrawal cash deposit, fund transfer and DD etc.  Check the validity of all the above transactions.

Clearinghouse
 All the cheques are being transferred to this department and it checks the sign, balance amount in his/ her a/c, date of issuing.  It also maintains the transaction with other branches and banks.  DRF forms are being handled by this department.

Sales Executive
 Generate new inquiries by cold calling and tele marketing.  Handle existing and new customers.  Maintain customer relationships.

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2.12 ATM IN BHAVNAGAR

Address

Dr. Kapasis Hospital, Opp City Bus Stand, Down Chowk Bhavnagar Bhavnagar 364001 Gujarat

Address Gopi Arcade

Opp Thakteshwar Post Office Waghawadi Bhavnagar - 364002 Gujarat

Address Shop No. 1 ,

Prithvi Complex Kalanala Bhavnagar Gujarat

Address Shop No. 6

Prithvi Plaza, Ground Floor Ghogha Circle Bhavnagar Gujarat

Address Shop No. H / 82

Akshardeep Complex Shastrinagar Bhavnagar Gujarat

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2.13 MAP OF THE BHAVNAGAR-HDFC BANK

BRANCH

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2.14 VARIOUS LOANS PROVIDED BY HDFC BANK 1. Personal Loan

 Features & Benefits
1) Borrow up to Rs 15, 00,000 for any purpose depending on your requirements. 2) Flexible Repayment options, ranging from 12 to 60 months. 3) Repay with easy EMIs. 4) One of the lowest interest rates. 5) Hassle free loans - No guarantor/security/collateral required. 6) Speedy loan approval. 7) Convenience of service at your doorstep. 8) Customer privileges
j If you are an HDFC Bank salary account holder , we have a

special offer for you

j If you are an existing Auto Loan customer with a clear repayment

of 12 months or more from any of our approved financiers or us, you can get a hassle free personal loan (without income
documentation). j If you are an existing HDFC Bank Personal Loan customer with a

clear repayment of 12 months or more, we can Top-Up your

personal loan.

9) Credit Shield

In case of death or total permanent disability of the loanee, the loanee/nominee can avail of the Payment Protection Insurance (Credit Shield) which insures the principle outstandings on the loan up to a maximum of the loan amount. Principle outstanding is defined as the amount of loan outstanding (not including any arrears in payment or interest thereon) at the
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Date of Loss, having accounted for payments made and interest accruing as determined in the Policy. Hence, the amount covered does not include any principal added because of non - payment of EMI and also will not include interest/ accrued charges.

10) Personal Accident Cover In order to ensure that your family is taken care of we also offer a Personal Accident cover of Rs.2, 00,000 at a nominal premium .

Salaried Individuals include Salaried Doctors, CAs, employees of select

Public and Private limited companies, Government Sector employees including public sector undertakings and central, state and local bodies:  Eligibility Criteria
1. Minimum age of Applicant: 21 years 2. Maximum age of Applicant at loan maturity: 60 years 3. Minimum employment: Minimum 2 years in employment and

minimum 1 year in the current organization

4. Minimum Net Monthly Income: Rs. 10,000 per month (Rs. 15,000 in

Mumbai, Delhi, Bangalore, Chennai and Hyd erabad & Rs. 12,000 in Calcutta, Ahmadabad and Cochin)

 Documents required
1. Proof of Identity (Passport Copy/ Voters ID card/ Driving Licence) 2. Address Proof (Ration card Tel/Elect. Bill/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate) 3. Bank Statements (latest 3 months bank statement / 6 months bank passbook) 4. Latest salary slip or current dated salary certificate with latest Form 16

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Self employed (Professionals) include self - employed Doctors, Chartered

Accountants, Engineers, MBA Consultants, Architects, and Company Secretaries.

 Eligibility Criteria
1. 2. 3. 4.

Minimum age of Applicant: 25 years Maximum age of Applicant at loan maturity: 65 years Years in business: 4 to 7 years depending on profession Minimum Annual Income: Rs. 100000 p.a.

 Documents required
1. Proof of Identity (Passport Copy/ Voters ID card/ Driving Licence). 2. Address Proof (Ration card Tel/elect. Bill/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate). 3. Bank Statements(latest 6 months bank statement /passbook) 4. Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA 5. Qualification proof of the highest professional degree

Self Employed (Individuals) include self-employed - Sole proprietors, Partners &

Directors in the Business of Manufacturing, Trading or Services.

 Eligibility Criteria
1. Minimum age of Applicant: 21 years 2. Maximum age of Applicant at loan maturity: 65 years 3. Years in business: 5 yrs continuous business experience 4. Minimum Annual Income: Rs. 1, 00,000 p.a. 5. Available in select cities

 Documents required
1. 2.

Proof of Identity (Passport Copy/ Voters ID card/ Driving Licence) Address Proof (Ration card Tel/elect. Bil l/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate)

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3. 4.

Bank Statements(latest 6 months bank statement /passbook) Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA

5.

Proof of continuation (Trade licence /Establishment /Sales Tax certificate)

6.

Other Mandatory Documents (Sole Prop. Decl. Or Cert. Copy of Partnership Deed, Cert. Copy of MOA, AOA & Board resolution.)

Self Employed (Pvt Cos and Partnership Firms)

include Private

Companies and Partnership firms in the Business of Manufacturing, Trading orServices. .

 Eligibility Criteria
1. Years in business: Minimum of 3 years in current business and 5 years total business experience 2. Business must be profit making for the last 2 years 3. Minimum Annual Income: Rs 100000 p.a. 4. Available in select cities

 Documents required
1. Address Proof (Ration card Tel/elect. Bill/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate) 2. Bank Statements(latest 6 months bank statement /passb ook) 3. Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA 4. Proof of continuation (Trade licence /Establishment /Sales Tax certificate)
5. Other Mandatory Documents (Sole Prop. Decl. Or Cert. Copy of

Partnership Deed, Certified true copy of Memorandum & Articles of Association (certified by Director) & Board resolution (Original)

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2. SmartDraft-Overdraft against salary

SmartDraft is an unsecured overdraft facility offered to HDFC Bank's corporate salary account holders. The facility operates in the form of additional funds in the account, for use during short -term exigencies. Our corporate salary account holders can avail of Over draft facility of up to 3 times the salary

 Features & Benefits

1. Overdraft limit up to 3 times the salary 2. Minimum documentation 3. No pre-closure charges 4. Easy-to-use and easy-to-pay facility 5. Freedom to use limit through Cheque book, ATM, online transfer, etc. 6. Interest payable on the amount utilized 7. Credits in the account set -off utilization and help save interest 8. Easy documentation 9. Limit will be set on the existing account 10. Non EMI based facility

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3.Home loans
 Home Loans Features & Benefits
1. Home Loan - Home loans for individuals to purchase (fresh / resale) o

construct houses. Application can be made individually or jointly. HDFC finance up to 85% maximum of the cost of the property (Agreement value + Stamp dut + Registration charges) based on the repayment capacity of the customer.

2. Home Improvement Loan - HIL facilitates internal and external repairs and

other structural improvements like painting, waterproofing, plumbing and electric works, tiling and flooring, grills and aluminum windows. HDFC finances up t 85% of the cost of renovation (100% for existing customers) subject to marke value of the property.

3. Home Extension Loan - HEL facilitates the extension of an existing dwellin

unit. All the terms are the same as applicable to Home Loan.

4. Land Purchase Loan - Be it land for a dream house, or just an investment fo

the future, HDFC Land Purchase Loan is a convenient loan facility to purchase land. HDFC finances up to 85% of the cost of the land. Repayment of the loan can be done over a maximum period of 15 ye ars.

5. Choose from Fixed Rate or Floating Rate with options to structure your loa

as Partly Fixed or Partly Floating.

6. Flexible repayment options to suit your individual needs.

7. Loan cover Term Assurance Plan - HDFC Standard Life Insurance Compan

Ltd. offers an insurance plan*, which is designed to ensure that life'

43

uncertainties do not affect your family's interests and your precious home. LCTAP provides a lump -sum payment on the unfortunate demise of the l ife assured.

8. Automated Repayment of Home loan EMI - You can give us standing

instructions to repay your Home Loan EMIs directly from your HDFC Bank Savings Account, thus, saving you the trouble of procuring, signing and tracking post-dated cheques.

9. HDFC also offers In-house scrutiny of Property documents for your

complete peace of mind.

10.Customer privileges - If you are an existing HDFC Home Loan customer ,

you can avail of other loans (such as Personal Loans, Car Loans, Two- wheeler Loans and Loan against securities) at lower interest rates.

4.Two Wheeler Loan

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 Features & Benefits

1. Flexible repayment options, ranging from 12 to 48 months available even

at the point of purchase.

2. Repay through post-dated cheques with easy EMIs. Calculate your EMI. 3. Hassle free loans - No guarantor required. 4. Speedy loan approval. 5. Available for almost all models at attractive interest rates. 6. Free gifts from time to time on approval of your Two Wheeler Loan.

(Watch this space for more details on the free gift promotion).

5.1 OBJECTIVE OF STUDY

To know the concept of personal loan very well and also to know the awareness about it in Bhavnagar. To analyze customers selection criteria for providers of personal loans. To find out customers decision making process for personal loans. . To obtain opinion of general public about the services and facilities provided by different banks. To acquire a practical work experience out of the project and take the opportunity to relate knowledge with the actual practices adopt by the organization. To know how they deal with their customers. To study the banking habits of people by the way of an alyzing the existing trends in the market.

5.2 NATURE OF STUDY

The nature of this research study is descriptive and convenience one. These kinds of research are very flexible, convenient and done by simple survey.

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5.3 TYPES OF DATA

There are main two types of data: (1) Primary data: which are collected for the first time and thus happen to be in original in character. (2) Secondary data: which have already been collected by someone in the past.

PRIMARY DATA
Primary data contains details in the direct conversation or contact with the concern person about the respective topic or section. Such people should be executive, staff member, customers, operating heads, businessmen, personal loan holder etc. conversation could take in the form of questionnaire, g eneral talk, etc. where the view is to immediately take data by way of writing or any other form.

SECONDARY DATA
Secondary research contains the collection of data through various indirect and readymade forms like books, magazines, brochures, annual repor ts, etc. here the information is collected from the data available on internet, annual reports, banking related books, brochures, and through indirect talk with the official person of bank.

5.4 RESEARCH INSTRUMENT

Questionnaire is used as a data collection instrument for collecting the primary data by taking personal opinion of the customer in the field. A questionnaire consists of a number of question printed or typed in definite order on a form or set of form. I used both open and close ended questionna ire.

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MERITS OF THIS METHOD :

There is low cost even when the universe is large and is widely spread geographically. It is free the bias of the interviewer; answers are in respondents own words. Respondents have adequate time to give well thought own answ er. It is used even respondents are illiterate.

LIMITATION
The control over questionnaire may be lost once it is sent. There is also the possibility of ambiguous replies or omission of replies altogether to certain questions: interpretation of omissions is difficult. This method is quite expensive. This method is time consuming. It is difficult to know representative. This method needs trained and also enthusiastic persons. whether willing respondents are truly

5.5 SAMPLING PLAN

SAMPLE SIZE:
The sample size is 200 personal loan holders.

UNIVERSE:
The sample universe is total number of customers of personal loans in Bhavnagar city.

SAMPLE UNIT:
The sample unit is single customer in Bhavnagar respectively.

SAMPLING METHOD:
The samples are selected by using convenience sampling method.
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5.6 LIMITATIONS OF RESEARCH

It is difficult to know whether willing respondents are truly responsive or not. This method of collection of data is quite slow and hence time consuming. The research cannot be accurate if the people can select more than one option given to them. Universe is only one city and in that particular selected area so it cannot give accurate results.

Chapter 6

48

6.1 FIN

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