PROJECT REPORT

ON

Comparative analysis on Effectiveness of retail banking of HDFC BANK In comparison with Jammu and Kashmir Bank IN PARTIAL FULFILLMENT OF MASTERS OF BUSINESS ADMINISTRATION (MBA) SESSION- 2009-2011 SUBMITTED TO THE UNIVERSITY OF PUNE

Project guide SHERYL XAVIER AIMS

Submitted By ZAROO YASIR MBA-Sem-III Roll No-60

ALLANA INSTITUTE OF MANAGEMENT SCIENCES, PUNE 411001

Content

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Topic

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Acknowledgement Executive Summary Objective Limitation Summary of Retail Banking Future of Retail Banking Company Profile of HDFC Bank Ratings of HDFC Products Scope of HDFC Bank Service at glance of HDFC Bank Milestone in the history of HDFC Bank Preferred banking by HDFC Bank Objectives strength philosophy of HDFC SWOT analysis Management of HDFC Company profile of J/K Bank J/K Bank product and services Corporate social responsibilities of J/K Bank Market research and analysis Sample size Comparative analysis of HDFC bank with J/K bank Observation Recommendation References and Bibliography Questionnaires

3 4-5 6 7 8-15 16-18 19-22 23-24 25 26-33 34-42 43-49 50 51-52 53 54-55 56-60 61 62 63-64 65-75 76-77 78 79 80-81

Acknowledgement

I am very thankful to my project guide Sheryl Xavier for encouraging me to take up a project on Comparative analysis on Effectiveness of retail banking of HDFC Bank in comparison with Jammu and Kashmir Bank. In the completion of this project report I would like to add a few heartfelt words for the people who were part of this project in numerous ways. I am grateful to the management of HDFC bank and the staff for their help and cooperation throughout the training period. Mr Suhail Trambu (relationship manager) and Mohd Salim Wani (Branch manager). Last but not the least , I would like to express my sincere gratitude to all the faculty members who have taught me in my entire MBA curriculum and to our head Dr Roshan Kazi who has always been a source of guidance, inspiration and motivation.

Executive Summary

The issue of retail banking is extremely important and topical. Across the globe, retail lending has been a spectacular innovation in the commercial banking sector in recent years. The growth of retail lending especially in emerging economies, is attributable to the rapid advances in information technology, the evolving macroeconomic environment, financial market reform, and several micro-level demand and supply side factors. India too experienced a surge in retail banking. There are various pointers towards this. Retail loan is estimated to have accounted for nearly one-fifth of all bank credit. Housing sector is experiencing a boom in its credit. The retail loan market has decisively got transformed from a sellers market to a buyers market. Gone are the days where getting a retail loan was somewhat cumbersome. All these emphasise the momentum that retail banking is experiencing in the Indian economy in recent years. HDFC Bank offers a bunch of products and services to meet the every need of the people. The company cares for both, individuals as well as corporate and small and medium enterprises. For individuals, the company has a range accounts, investment, and pension scheme, different types of loans and cards that assist the customers. The customers can choose the suitable one from a range of products which will suit their life-stage and needs. For organizations the company has a host of customized solutions that range from funded services, Non-funded services, Value addition services, Mutual fund etc. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company. HDFC bank is not in a better position as compared to its competitors as far as loan procuring is concerned. At present HDFC bank is not offering the services of home loans which in present scenario is in great demand in the Kashmir region. Not providing home loans in Kashmir valley is in a way benefiting the competitors working against the HDFC banks desire to increase the customer base in the valley. In any relationship, small gestures can speak volumes. This is one such service, one small gesture that is sure to make you feel special. There are many advantages of relationship programme. 5

HDFC securities trading account: enjoy the convenience of e-broking through HDFC securities trading account. Credit cards: HDFC believes in constantly improving offerings, so that customers can enjoy the best banking facilities. To this end, HDFC brings the titanium card- quite simply the most exclusive credit card one could ask for. And for our most exclusive customers this card unparalleled benefits are completely free!

OBJECTIVE OF THE PROJECT The main objective of the project is to gain an in depth an in depth practical exposure in the field of retail banking of HDFC BANK. The issue of 6

retail banking is extremely important and topical. Across the globe, retail lending has been a spectacular innovation in the commercial banking sector in recent years. The growth of retail lending, especially, in emerging economies, is attributable to the rapid advances in information technology, the evolving macroeconomic environment, financial market reform, and several micro-level demand and supply side factors. The Overall objective of the project is to experience the ways in which the HDFC BANK can perform better than its main competitor JAMMU AND KASHMIR BANK. 1- To get an in depth view of procedure of opening an account takes place in HDFC BANK. 2- To understand how various principles that we have learned during our academic year are applied in a real business world. 3-To see what steps can be taken to increase its customer base in Kashmir. 4-To understand what are the customers perception about the bank employees. 5To understand what are the customers opinion about the loan facility 6-To provide an effective solutions to remove the drawbacks and improve the brand image of HDFC BANK.

LIMITATIONS OF THE STUDY

The study was formulated and conducted under the following limitations The data for several aspects like expenses made on promotion etc were not available and hence it was not possible to calculate the exact impact of promotion on retail banking performance. The information collected from customers is subjective in nature and may not give an exact picture of the banks. The banks studied were across sectors, with SBI, J&K being fully or partially government owned and HDFC bank being a private bank. The differences in the functioning across sectors are difficult to take in to account.

SUMMARY OF RETAIL BANKING

The issue of retail banking is extremely important. Across the globe, retail lending has been a spectacular innovation in the commercial banking sector in recent years. The growth of retail lending, especially, in emerging economies, is attributable to the rapid advances in information technology, the evolving macroeconomic environment, financial market reform, and several micro-level demand and supply side factors. India too experienced a surge in retail banking. There are various pointers towards this. Retail loan is estimated to have accounted for nearly one-fifth of all bank credit. Housing sector is experiencing a boom in its credit. The retail loan market has decisively got transformed from a sellers market to a buyers market. Gone are the days where getting a retail loan was somewhat cumbersome. All these emphasise the momentum that retail banking is experiencing in the Indian economy in recent years.

What is retail banking?

Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. Todays retail banking sector is characterized by three basic characteristics: Multiple products (deposits, credit cards, insurance, investments and securities); Multiple channels of distribution (call centre, branch, Internet and Kiosk); and Multiple customer groups (consumer, small business, and Corporate).

What is the nature of retail banking?

In a recent book, retail banking has been described as hotter than vindaloo. Considering the fact that vindaloo, the Indian-English innovative curry available in umpteen numbers of restaurants of London, is indeed very hot and spicy, it seems that retail banking is perceived to be the in-thing in todays world of banking.

Retail banking in India Retail banking in India is not a new phenomenon. It has always been prevalent in India in various forms. For the last few years it has become synonymous with mainstream banking for many banks. The typical products offered in the Indian retail banking segment are housing loans, consumption loans for purchase of durables, auto loans, credit cards and educational loans. The loans are marketed under attractive brand names to differentiate the products offered by different banks. As the Report on Trend and Progress of India, 2008-2009 has shown that the loan values of these retail lending typically range between Rs.20,000 to Rs.100 lakh. The loans are generally for duration of five to seven years with housing loans granted for a longer duration of 15 years. Credit card is another rapidly growing sub-segment of this product group. In recent past retail lending has turned out to be a key profit driver for banks with retail portfolio constituting 21.5 per cent of total outstanding advances as on March 2008. The overall impairment of the retail loan portfolio worked out much less then the Gross NPA ratio for the entire loan portfolio. Within the retail segment, the housing loans had the least gross asset impairment. In fact, retailing make ample business sense in the banking sector. While new generation private sector banks have been able to create a niche in this regard, the public sector banks have not lagged behind. Leveraging their vast branch network and outreach, public sector banks have aggressively

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forayed to garner a larger slice of the retail pie. By international standards, however, there is still much scope for retail banking in India. After all, retail loans constitute less than seven per cent of GDP in India vis--vis about 35 per cent for other Asian economies - South Korea (55 per cent), Taiwan (52 per cent), Malaysia (33 per cent) and Thailand (18 per cent). As retail banking in India is still growing from modest base, there is a likelihood that the growth numbers seem to get somewhat exaggerated. One, thus, has to exercise caution is interpreting the growth of retail banking in India.

Drivers of retail business in India What has contributed to this retail growth? First, economic prosperity and the consequent increase in purchasing power has given a fillip to a consumer boom. Note that during the 10 years after 1992, India's economy grew at an average rate of 6.8 percent and continues to grow at the almost the same rate not many countries in the world match this performance. Second, changing consumer demographics indicate vast potential for growth in consumption both qualitatively and quantitatively. India is one of the countries having highest proportion (70%) of the population below 35 years of age (young population). The BRIC report of the Goldman-Sachs, which predicted a bright future for Brazil, Russia, India and China, mentioned Indian demographic advantage as an important positive factor for India. Third, technological factors played a major role. Convenience banking in the form of debit cards, internet and phone-banking, anywhere and anytime banking has attracted many new customers into the banking field. Technological innovations relating to increasing use of credit / debit cards, ATMs, direct debits and phone banking has contributed to the growth of retail banking in India. Fourth, the Treasury income of the banks, which had strengthened the bottom lines of banks for the past few years, has been on the decline during the last

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two years. In such a scenario, retail business provides a good vehicle of profit maximisation. Considering the fact that retails share in impaired assets is far lower than the overall bank loans and advances, retail loans have put comparatively less provisioning burden on banks apart from diversifying their income streams. Fifth, decline in interest rates have also contributed to the growth of retail credit by generating the demand for such credit. In this backdrop let me now come two specific domains of retail lending in India, viz., (a) credit cards and (b) housing. Credit cards in India

While usage of cards by customers of banks in India has been in vogue since the mid-1980s, it is only since the early 1990s that the market had witnessed a quantum jump. The total number of cards issued by 42 banks and outstanding, increased from 2.69 crore as on end December 2003 to 4.33 crore as on end December 2004. The actual usage too has registered increases both in terms of volume and value. Almost all the categories of banks issue credit cards. Credit cards have found greater acceptance in terms of usage in the major cities of the country, with the four major metropolitan cities accounting for the bulk of the transactions. In view of this ever increasing role of credit cards a Working Group was set up for regulatory mechanism for cards. The terms of reference of the Working Group were fairly broad and the Group was to look into the type of regulatory measures that are to be introduced for plastic cards (credit, debit and smart cards) for encouraging their growth in a safe, secure and efficient manner, as also to take care of the best customer practices and grievances redressal mechanism for the card users. The Reserve Bank has been receiving a number of complaints regarding various undesirable practices by credit card issuing institutions and their agents. Some of them are: Unsolicited calls to members of the public by card issuing banks/ direct selling agents pressurising them to apply for credit card. 12

Communicating misleading / wrong information regarding credit cards regarding conditions for issue, amount of service charges/ waiver of fees, gifts/prizes.

Sending credit cards to persons who have not applied for them / activating unsolicited cards without the approval of the recipient.

Charging very high interest rates /service charges. Lack of transparency in disclosing fees/charges/penalties. Non-disclosure of detailed billing procedure. The Working Group deliberated a number of major issues relating to: a) to customer grievances and rights: a) Transparency and Disclosure, b) Customer Rights Protection, and c) Code of Conduct. The Group recommended that the Most Important Terms and Conditions should be highlighted and advertised and sent separately to the prospective customer. These terms and conditions include various issues relating to: a) fees and charges, (b) drawal limits, (c) billing, (d) default, (e) termination / revocation of card membership, (f) loss / theft / misuse of card, and (g) disclosure. These recommendations are being processed within the RBI and a set of guidelines would be issued which are going to pave the path of a healthy growth in the development of plastic money in India. The RBI is also considering bringing credit card disputes within the ambit of the Banking Ombudsman scheme. While builregulatory oversight in this regard we need to ensure that neither does it reduce the efficiency of the system nor does it hamper the credit card usage.

Housing credit in India

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In view of its backward and forward linkages with other sectors of the economy, housing finance in developing countries is seen as a social good. In India, growth of housing finance segment has accelerated in recent years. Several supporting policy measures (like tax benefits) and the supervisory incentives instituted had played a major role in this market. Housing credit has increased substantially over last few years, but from a very low base. During the period 1993-2004, outstanding housing loans by scheduled commercial banks and housing finance companies grew at a trend rate of 23 per cent. The share of housing loans in total non-food credit of scheduled commercial banks has increased from about 3 per cent in 1992-93 to about 7 per cent in 2003-04. Recent data reveal that non-priority sector housing loans outstanding as on February 18, 2005 were around Rs. 74 thousand crore, which is, however, only 8.0 per cent of the gross bank credit. As already pointed out, direct housing loans up to Rs. 15 lakh irrespective of the location now qualify as priority sector lending; housing loans are understood to form a large component of such lending. In addition, housing credit is also being provided by housing finance companies, which in turn are also receiving some bank finance. Thus, from miniscule amounts, the exposure of the banking sector to housing loans has gone up. Unlike many other countries, asset impairment on account of housing finance constitutes a very small portion. However, with growing competition in the housing finance market, there has been a growing concern over its likely impact on the asset quality. While no immediate financial stability concerns exist, there is a need to put in place appropriate risk management systems, strengthen internal control procedures and also improve regulatory oversight in this area. Banks also need to monitor their exposure and the credit quality. In a fiercely competitive market, there may be some temptation to slacken the loan scrutiny procedures and this need to be severely checked. Having delineated the broad contours of retail banking in India let me now come to its opportunities and challenges.

Opportunities and challenges of retail banking in India

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Retail banking has immense opportunities in a growing economy like India. As the growth story gets unfolded in India, retail banking is going to emerge a major driver. How does the world view us? I have already referred to the BRIC Report talking India as an economic superpower. A. T. Kearney, a global management consulting firm, recently identified India as the "second most attractive retail destination" of 30 emergent markets. The rise of the Indian middle class is an important contributory factor in this regard. The percentage of middle to high income Indian households is expected to continue rising. The younger population not only wields increasing purchasing power, but as far as acquiring personal debt is concerned, they are perhaps more comfortable than previous generations. Improving consumer purchasing power, coupled with more liberal attitudes toward personal debt, is contributing to India's retail banking segment. The combination of the above factors promises substantial growth in the retail sector, which at present is in the nascent stage. Due to bundling of services and delivery channels, the areas of potential conflicts of interest tend to increase in universal banks and financial conglomerates. Some of the key policy issues relevant to the retail banking sector are: financial inclusion, responsible lending, access to finance, long-term savings, financial capability, consumer protection, regulation and financial crime prevention. What are the challenges for the industry and its stakeholders? First, retention of customers is going to be a major challenge. According to a research by Reichheld and Sasser in the Harvard Business Review, 5 per cent increase in customer retention can increase profitability by 35 per cent in banking business, 50 per cent in insurance and brokerage, and 125 per cent in the consumer credit card market. Thus, banks need to emphasise retaining customers and increasing market share. Second, rising indebtedness could turn out to be a cause for concern in the future. India's position, of course, is not comparable to that of the developed world where household debt as a proportion of disposable income is much

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higher. Such a scenario creates high uncertainty. Expressing concerns about the high growth witnessed in the consumer credit segments the Reserve Bank has, as a temporary measure, put in place risk containment measures and increased the risk weight from 100 per cent to 125 per cent in the case of consumer credit including personal loans and credit cards (Mid-term Review of Annual Policy, 2004-05). Third, information technology poses both opportunities and challenges. Even with ATM machines and Internet Banking, many consumers still prefer the personal touch of their neighbourhood branch bank. Technology has made it possible to deliver services throughout the branch bank network, providing instant updates to checking accounts and rapid movement of money for stock transfers. However, this dependency on the network has brought IT departments additional responsibilities and challenges in managing, maintaining and optimizing the performance of retail banking networks. Illustratively, ensuring that all bank products and services are available, at all times, and across the entire organization is essential for todays retails banks to generate revenues and remain competitive. Besides, there are network management challenges, whereby keeping these complex, distributed networks and applications operating properly in support of business objectives becomes essential. Specific challenges include ensuring that account transaction applications run efficiently between the branch offices and data centres. Fourth, KYC Issues and money laundering risks in retail banking is yet another important issue. Retail lending is often regarded as a low risk area for money laundering because of the perception of the sums involved. However, competition for clients may also lead to KYC procedures being waived in the bid for new business.

FUTURE OF RETAIL BANKING 16

First, customer service should be the be-all and end-all of retail banking. A document released by the British Bankers Association, entitled UK Retail Banking Manifesto: addressing the challenges that lie ahead for the industry and its stakeholders on September 29, 2004. This document analysed the key policy issues relevant to the retail banking sector and highlighted the role of financial inclusion, responsible lending, access to finance, and consumer protection. It is in this context that that one is reminded of the needs to develop the standards and codes for banking. The contribution of the Committee on Procedure & Performance Audit on Public Services (CPPAPS) (Chairman: Shri S.S. Tarapore) has been invaluable and has provided great insight. Based on the recommendation of the CPPAPS, the Annual Policy Statement for 2005-06 announced the decision to set up an independent Banking Codes & Standards Board of India on the model of the mechanism in the UK in order to ensure that comprehensive code of conduct for fair treatment of customers is evolved and adhered to. The codes and standards, together with the institutional mechanism to monitor them, are expected to enhance the quality of customer service, to the individual customer in particular. The codes will bring about greater transparency in the system and also tackle the issue of information asymmetry. The Board would function as an industry-wide watchdog of the banking code and ensure that the banks comply with the banking codes. The codes would establish the banking industrys key commitments and obligations to customers on standards of practice, disclosure and principles of conduct for their banking services. The Board will monitor compliance with the Codes by the affiliated banks. Second, sharing of information about the credit history of households is extremely important as far retail banking is concerned. Perhaps due the confidential nature of banker-customer, banks have a traditional resistance to share credit information on the client, not only with one another, but also across sectors.

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Globally, Credit Information Bureaus have, therefore, been set up to function as a repository of credit information - both current and historical data on existing and potential borrowers. The database maintained by these institutions can be accessed by the lending institutions. Credit Bureaus have been established not only in countries with developed financial systems but also in countries with relatively less developed financial markets, such as, Sri Lanka, Mexico, Bangladesh and the Philippines. In Indian case, the Credit Information Bureau (India) Limited (CIBIL), incorporated in 2000, aims at fulfilling the need of credit granting institutions for comprehensive credit information by collecting, collating and disseminating credit information pertaining to both commercial and

consumer borrowers. At the same time banks must exercise due diligence before declaring a borrower as defaulter. Third, outsourcing has become an important issue in the recent past. With the increasing market orientation of the financial system and to cope with the competition as also to benefit from the technological innovations such as, ebanking, the banks are making increasing use of "outsourcing" as a means of both reducing costs and achieving better efficiency. While outsourcing does have various cost advantages, it has the potential to transfer risk, management and compliance to third parties who may not be regulated. A recent BIS Report on Outsourcing in Financial Services developed some high-level principles. A basic requirement in this context is that a regulated entity seeking to outsource activities should have in place a comprehensive policy on outsourcing including a comprehensive outsourcing risk management programme to address the outsourced activities and the relationship with the service provider. Application of these principles in the Indian context is under consideration. Finally, retail banking does not refer to lending only. In the whole story of retailing one should not forget the role played by retail depositors. The homemaker, the retail shop keeper, the pensioners, self-employed and those

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employed in unorganised sector - all need to get a place in the banks. It is in this backdrop that the Annual Policy for 2005-06 pointed out issues relating to financial exclusion and had announced that the RBI would implement policies to encourage banks which provide extensive services while Dis incentivising those which are not responsive to the banking needs of the community, including the underprivileged. Furthermore, the nature, scope and cost of services need to be monitored to assess whether there is any denial, implicit or explicit, of basic banking services to the common person and banks have been urged to review their existing practices to align them with the objective of financial inclusion

Companys profile Formation of the company:

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The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. Promoter : HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

Business focus:

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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 four core values Operational Excellence, Customer Focus, Product Leadership and People.

Distribution network:

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HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1480 branches spread over 444 cities across India. All branches are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial 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 network of about over 2890 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic Plus/Cirrus and and international American Visa/MasterCard, Express Visa Electron/Maestro, cardholders. Credit/Charge

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Technology

HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches have online 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 for a world class bank. The Bank's business is supported by scalable and robust systems which ensure that our clients always get the finest services we offer. The Bank has prioritized 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.

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Rating I. credit rating The Bank has its deposit programs rated by two rating agencies - Credit Analysis & Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents instruments considered to be "of the best quality, carrying negligible investment risk". CARE has also rated the bank's Certificate of Deposit (CD) programme "PR 1+" which represents "superior capacity for repayment of short term promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "tAAA ( ind )" rating to the Bank's deposit programme, with the outlook on the rating as "stable". This rating indicates "highest credit quality" where "protection factors are very high". The Bank also has its long term unsecured, subordinated (Tier II) Bonds rated by CARE and Fitch Ratings India Private Limited and its Tier I perpetual Bonds and Upper Tier II Bonds rated by CARE and CRISIL Ltd. CARE has assigned the rating of "CARE AAA" for the subordinated Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)" with the outlook on the rating as "stable". CARE has also assigned "CARE AAA [Triple A]" for the Banks Perpetual bond and Upper Tier II bond issues. CRISIL has assigned the rating "AAA / Stable" for the Bank's Perpetual Debt programme and Upper Tier II Bond issue. In each of the cases referred to above, the ratings awarded were the highest assigned by the rating agency for those instruments.

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II. Corporate Governance Rating : The bank was one of the first four companies, which subjected itself to a Corporate Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services of India Limited (CRISIL). The rating provides an independent assessment of an entity's current performance and an expectation on its "balanced value creation and corporate governance practices" in future. The bank has been assigned a 'CRISIL GVC Level 1' rating which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest.

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PRODUCT SCOPE: HDFC Bank offers a bunch of products and services to meet the every need of the people. The company cares for both, individuals as well as corporate and small and medium enterprises. For individuals, the company has a range accounts, investment, and pension scheme, different types of loans and cards that assist the customers. The customers can choose the suitable one from a range of products which will suit their life-stage and needs. For organizations the company has a host of customized solutions that range from funded services, Non-funded services, Value addition services, Mutual fund etc. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company. The products of the company are categorized into various sections which are as follows:

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SERVICES AT A GLANCE: 1. PERSONAL BANKING A. Accounts & Deposits Regular Savings Account Savings Accounts and deposits. Loans. Investments and Insurance.

Forex and payment services. Cards. Customer center.

PRODUCTS Plus Account Savings Max Account Senior Citizens Account No Frills Account Institutional Savings Account Payroll Salary Account Classic Salary Account Regular Salary Account Premium Salary Account

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Defence Salary Account Kid's Advantage Account Pension Saving Bank Account Family Savings Account Kisan No Frills Savings Account Kisan Club Savings Account Plus Current Account Trade Current Account Premium Current Account Regular Current Account Apex Current Account Max Current Account Reimbursement Current Account RFC - Domestic Account Regular Fixed Deposit Super Saver Account Sweep-in Account

HDFC Bank Preferred

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Private Banking Demat account

B. Loans Personal Loans Home Loans Two Wheeler Loans New Car Loans Used Car Loans Overdraft against Car Express Loans Loan against Securities Loan against Property Commercial Vehicle Finance Working Capital Finance Construction Equipment Finance

Offers & Deals Customer Center

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C. Investments & Insurance Mutual Funds Insurance Bonds Financial Planning Knowledge Centre Equities & Derivatives Mudra Gold Bar

D. Forex Services Trade Finance Travelers Cheques Foreign Currency Cash Foreign Currency Drafts Foreign Currency Cheque Deposits

Foreign Currency Remittances Cash To Master

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ForexPlus Card

E. Payment Services Net Safe Prepaid Refill Bill Pay Direct Pay Visa Money Transfer E-Monies Electronic Funds Transfer Excise & Service Tax Payment

F. Access Your Bank One View Insta Alerts Mobile Banking ATM

Phone Banking Branch Network

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G. Cards Silver Credit Card Gold Credit Card Woman's Gold Credit Card Platinum plus Credit Card Titanium Credit Card Value plus Credit Card Health plus Credit Card HDFC Bank Idea Silver Card HDFC Bank Idea Gold Card Compare Cards Transfer & Safe Track your Credit Card

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H. Get More from Your Card Offers & Savings My Rewards Insta Wonderz Add-On Cards Credit Card Usage Guide Easy EMI Net safe Smart Pay Secure Plus My City Benefit Card Debit Cards Easy Shop International Debit Easy Shop Gold Debit Card

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Easy Shop International Business Easy Shop Woman's Advantage

Prepaid Cards Forex Plus Card Kisan Card

I. Customer Centre Offers & Deals Winners of Contests & Promotions

2. Wholesale Banking A. Corporate Funded Services Non Funded Services Value Added Services Internet Banking

B. Small & Medium Enterprises Funded Services Non-Funded Services Specialized Services

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Internet Banking

C. Financial Institutions & Trusts Banks Financial Institutions Mutual Funds Stock Brokers

MILESTONES IN THE HISTORY

HDFC Bank began its operations in 1995 with a simple mission: to be a "World-class Indian Bank". They realized that only a single-minded focus on product quality and service excellence would help us get there. Today, they are proud to say that they are well on our way towards that goal. It is extremely gratifying that their efforts towards providing customer convenience have been appreciated both nationally and internationally.

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2008 CNBC - TV 18 - CRISIL Mutual Fund of the Year Awards 2008 - HDFC Prudence Fund was the only scheme that won the CNBC - TV 18 CRISIL Mutual Fund of the Year Award 2008 in the Most Consistent Balanced Fund under CRISIL. Companies" 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 - Fab 50 companies in Asia Pacific Asian Banker Excellence in Retail Financial Services - Best Retail Bank 2008

Asiamoney - Best local Cash Management Bank Award voted by Corporates Microsoft & Indian Express Group - Security Strategist Award 2008 World Trade Center Award of honour - For outstanding contribution to international trade services.

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Business Today-Monitor Group survey - One of India's "Most Innovative 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

2007 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 20072008-Award- First Runner-up. Best Bank Award. Business Today - Best Bank Award. Dun & Bradstreet American Express Corporate Best Bank Award 2007 Corporate Best Bank-Award. The Bombay Stock Exchange and Nasscom Foundation's Business for Social responsibility Award 2007 - Best Corporate Social Responsibility practice award. Outlook Money & NDTV Profit - Best Bank Award in the Private sector category.

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The Asian Banker Excellence in Retail Financial Services Awards - Best Retail Bank in India. Asian Banker - Managing Director Aditya Puri won the Leadership achievement Award for India Business Today - Best Bank in India. Forbes Magazine - One of Asia Pacific's Best 50 companies. Business world - Best listed Bank of India. The Asset Magazine's Triple A Country Awards - Best Domestic Bank.

2005 Asiamoney Awards - Best Domestic Commercial Bank. Asiamoney Awards - Best Cash Management Bank - India. The Asian Banker Excellence - Retail Banking Risk Management Award in India. Hong Kong-based Finance Asia magazine - Best Bank in India. Economic Times Awards - "Company of the Year" Award for Corporate Excellence. Asset Triple A Country Awards - Best Domestic Bank in India Region 2005 The Business Today-KPMG Survey - Best Local Cash Management Bank in India US$11-100m 2005 The Business Today-KPMG Survey - "Best Bank in India" for the third consecutive year in 2005.

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The Economic Times - Avaya Global Connect Customer Responsiveness award"Most Customer Responsive Company Banking and Financial Services 2005

2004 Asiamoney Awards - Best Local Cash Management Bank in India US$11-100m Asiamoney Awards - Best Local Cash Management Bank in India >US$501m Asiamoney Awards - Best Local Cash Management Bank in India 1989-2004 (poll of polls) Asiamoney Awards - Best Overall Domestic Trade Finance Services in India 2004 Asiamoney Awards - Most Improved company for Best Management Practices in India - 2004 Business World - One of India's Most Respected Companies 2004 Forbes Global - Best Under a Billion, 100 Best Smaller Size Enterprises in Asia/Pacific and Europe 2004 Asian Banker Awards - Operational Excellence in Retail Financial Services 2004 39

The Asset Triple A Country Awards - Best Domestic Bank in India 2004

2003 Forbes Global - Best Under a Billion, 200 Best Small Companies 2003

The Asset Triple A Country Awards - Best Domestic Bank in India -2003 BusinessWorld - The Business World Most Respected Company Awards -One of India's Most Respected Companies The Asset magazine - Best Cash Management Bank The Asset magazine - Best Trade Finance Bank FE-Ernst & Young Best Banks Survey - Best New Private Sector Bank 2003 Outlook Money - Best Bank in the Private Sector 2003 Business Today - Best Bank in India -2003 NASSCOM & economictimes.com - IT Users Awards - Best IT User in Banking -2003

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2002 Hong Kong-based Finance Asia magazine - Best Local Bank India Hong Kong-based Finance Asia magazine - "Best Local Bank - India" Euromoney magazine - "Best Bank in India Asiamoney magazine - Commercial Bank in India 2002

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2001 Hong Kong-based Finance Asia magazine - Best Domestic Commercial Bank India Hong Kong-based Finance Asia magazine - Best Domestic Commercial Bank India Euromoney magazine - "Best Bank in India Forbes Global - Named in The 300 Best Small Companies one of the "20 for 2001" best FE-E&Y Best Banks small companies The Economic Times - Awards for Corporate Excellence as the Emerging Company of the Year

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2000 Hong Kong-based Finance Asia magazine - Best Domestic Commercial Bank India Euromoney magazine - Best Domestic Bank " Business India - India 's Best Bank" Forbes Global - Named in The 300 Best Small Companies one of the "20 for 2001" best FE-E&Y Best Banks small companies

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Preferred banking by HDFC

In order to boost their retail offering and increase its effectiveness in the market, HDFC bank is using the preferred banking option to gain a competitive advantage in market place. At HDFC bank, the opportunity to serve customers is one of the pleasures they cherish the most. Everything they do is a reflection of the belief that customers truly deserve undivided attention and exclusive privileges.

Personalised attention: At HDFC bank it is an endeavour to nurture a truly personal relationship with the banking customers. So the customers are assigned their own relationship managers, who are always on call. Relationship manager is an experienced and professionally trained individual, whose primary concern is to ensure that all the banking and financial requirements are taken care of smoothly. So what ever the job, relationship manager is there to get the job done.

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Comprehensive wealth management -it is believed that time is true : wealth. And people at HDFC believe that nothing should cut in to your personal time, not even managing wealth. Protecting customer wealth means world to HDFC. To this end HDFC have designed convenient end-to-end wealth management solution that range from tax saving investments avenues, buying and selling shares to convenient tax payment options, all under the same roof! Multiple investment options Comprehensive wealth management programme Seamless trading Convenient tax payment options

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Relationship pricing: In any relationship, small gestures can speak volumes. This is one such service, one small gesture that is sure to make you feel special. There are many advantages of relationship programme. HDFC securities trading account: enjoy the convenience of e-broking through HDFC securities trading account. Credit cards: HDFC believes in constantly improving offerings, so that customers can enjoy the best banking facilities. To this end, HDFC brings the titanium card- quite simply the most exclusive credit card one could ask for. And for our most exclusive customers this card unparalleled benefits are completely free! Loans at preferential rates: HDFC bank preferred customers are entitled to enjoy reduced pricing on select loan products.

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Exclusive privileges: we do not stop when it comes to looking for things that can make a big difference to you. Every little thing is an opportunity for us to make you feel specialised. It is the little thing that make the big difference Zero balance accounts Combined monthly statements Free payable at par cheque book Enhanced limits on preferred easy shop gold debit card 50% discount on locker charges Preferential forex rates Free standing instruction Cheque pick-up facility Free transactions on non-HDFC bank ATMs

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Business solutions: HDFC strives to take care of all your financial needs, whether it is for your personal finances or your business requirements. There is no need to worry, just call your relationship manager and relax.

Annual service charges waiver: Gratitude nurtures long term relationships. A valued preferred customer deserves our special services a waiver of up to RS. 2000 per annum on a host of service charges.

Convenience:

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one of the most treasured feelings is that of a friend by your side. As our preferred customer, HDFC banks services are always at your beck and call. Being a preferred customer definitely has its perks. HDFC offers an enviable network of over 540 branches spread over 226 cities across the country and still growing.

Free e-age banking: banking hours are pass now. We at HDFC understand that your requirements can go beyond banking hours. As preferred customer you can avail 24 hour banking service through mobile banking, net banking, phone banking, and a wide network of ATMs, none of which you have to pay for.

Free mobile banking Free net banking Free 24 hour phone banking ATMs Bill pay Insta alerts

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Eligibility criteria for preferred banking customer: A customer is eligible for preferred programme if the following criteria are met Holds at least one saving or current account, sole or joint account, with HDFC bank. Maintains a minimum average monthly balance of 15 lakhs across all accounts. Or maintains an average quarterly balance of RS. 2 lakhs in saving account. Or maintains an average quarterly balance of RS. 5 lakhs in current account. The requisite balance can be maintained over your accounts and over those of you immediate family membersMission To be a world class Indian bank

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OBJECTIVE, STRENGTH, AND PHYLOSOPHY Objective To build customer franchises across distinct businesses To achieve healthy growth in profitability To be the preferred provider of banking services for target retail and wholesale customer segments Strengths 1. Highest level of ethical standards 2. Professional integrity 3. Corporate governance 4. Regulatory compliance Business Philosophy The four values are the banks business philosophy, Operational Excellence Customer Focus Product Leadership

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People

SWOT ANALYSIS STRENGTH 1-It has an extensive distribution network comprising of 319 branchs in 166 cities and one international office in DUBAI that provides a competitive edge over the compititions. 2- The bank has a strong retail depository base and has more than million customers. 3- Bank boasts of a strong brand equity. 4- The bank has a near competitive edge in area of operation. 5- The bank has a market leader in cash settlement servises for the major stock exchanges in its country. 6- HDFC Bank is one of the largest private sector bank working in india. 7- It has a highly automated environment in terms of information technology and communication services.

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8-

Infrastructure is best.

9- It has many innovative products like-Advantage scheme, NRI Services.

WEAKNESSES 1-Account opening and delivery of cheque book takes comparatively more time. 2- Lack of availability of different credit products like CC-limit, Bills discounting facilities.

OPPORTUNITIES 1- Branch expansion. 2- Door step services. 3- Greater liberalization in foreign Ownership. 4- CC /OF facilities. Infrastructure improvement and better systems for trading and settlements in the Government securities and foreign exchange market THREATS 1-The bank has started facing competition from players like SBI, PNB, in the finance market it self . This reduces the profit margin in the future. 2- some private banks have seven days working

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MANAGEMENT OF HDFC BANK The Composition of the Board of Directors of the Bank is governed by the Companies Act, 1956, the Banking Regulation Act, 1949 and the listing requirements of the Indian Stock Exchanges where the securities issued by the Bank are listed. The Board has a strength of eleven (11) Directors as on March 31, 2010. All Directors other than Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-executive directors. The Bank has five independent directors and six non-independent directors. The Board consists of eminent persons with considerable professional expertise and experience in banking, finance, agriculture, small scale industries and other related fields. None of the Directors on the Board is a member of more than ten (10) Committees and Chairman of more than five (5) Committees across all the companies in which he/she is a Director. All the Directors have made necessary disclosures regarding Committee positions occupied by them in other companies

Mr. Jagdish Capoor, Mr. Keki Mistry, Mrs. Renu Karnad, Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh Sukthankar are non-independent Directors on the Board.

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Mr. Arvind Pande, Mr. Ashim Samanta, Mr. Gautam Divan, Mr. C. M. Vasudev and Dr. Pandit Palande are independent directors on the Board. Mr. Keki Mistry and Mrs. Renu Karnad represent HDFC Limited on the Board of the Bank. The Bank has not entered into any materially significant transactions during the year, which could have a potential conflict of interest between the Bank and its promoters, directors, management and/or their relatives, etc. other than the transactions entered into in the normal course of business. The Senior Management have made disclosures to the Board confirming that there are no material, financial and/or commercial transactions between them and the Bank which could have potential conflict of interest with the Bank at large. None of the directors are related to each other.

Industry Founded Headquarters Number of locations Area served Revenue Employees

Financial, Commercial banks 1938[1] Srinagar, India > 577 branches/offices Mostly J & K 20,595,000,000 (2007) 7267

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The Jammu & Kashmir Bank was founded on October 1 1938 under letters patent issued by the Maharaja of Kashmir, Hari Singh. The Maharaja invited eminent Kashmiri investors to become founding directors and shareholders of the bank, the most notable of which were Abdul Aziz Mantoo, Pesten Gee and the Bhaghat Family, all of whom acquired major shareholdings.

The Bank commenced business on July 4, 1939 and was considered the first of its nature and composition as a State owned bank in the country. The Bank was established as a semi-State Bank with participation in capital by State and the public under the control of State Government. The bank had to face serious problems at the time of independence when out of its total of ten branches two branches of Muzaffarabad, Rawalakot and Mirpur fell to the other side of the line of control (now Azad Kashmir) along with cash and other assets. Following the extension of Central laws to the state of Jammu & Kashmir, the bank was defined as a government company as per the provisions of Indian companies act 1956.

J&K Bank Corporate Headquarters, SrinagarBehind Chinar Trees

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Quick Facts About J&K Bank Ltd. Established in 1938 as a limited company Have around 500 branches across India Having approx. 7627 employees Private Sector Scheduled Bank Member of BSE and NSE Supervised by RBI and SEBI Government holding 53% of equity Tie-ups with MetLife and Western Union Financial Services Inc

THE JAMMU AND KASHMIR BANK RANGE OF PRODUCTS AND SERVICES The products of the company are categorised in to various sections which are as follows; Savings and deposits Loans Investment and insurance Cards Non resident banking Services

A. savings and deposits: 1. Saving bank deposit scheme:

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Account can be opened with a minimum initial deposit of Rs.100/- to Rs.500/Suitable for irregular income group .No time bar on depositing or withdrawing money.

2. Saving bank ujala no frill account: A variant of Saving Bank account to ensure financial inclusion and to strive for making banking services easily accessible to all segments of society. Minimum initial deposit is Rs.50/-

3. Term bank deposits: Millennium Deposits Scheme Flexi Deposits Scheme Fixed Deposits Scheme Child Care Scheme Cash Certificates Super Earner Deposits Scheme Recurring Deposits Scheme Recurring Plus Account Smart Saver Scheme Depositors Pension Scheme

4. Value added schemes: 58

 tax saver term deposit schemes mehndi deposit schemes

5. Current accounts: The following current account services are Platinum Account Gold Account Premium Plus Account Premium Account Basic Account

available

B. Loans: The Jammu and Kashmir bank limited offers the following loans to its customers. 5. Housing loans 6. Educational finance Educational loan scheme Term loan for b.ed and m.ed courses Budshah primary educational finance

types of

7. Automobile finance car loan scheme

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 car loan for used cars commercial vehicle finance commercial vehicle finance for used vehicles two wheeler finance 8. Other finance: consumer loans consumption loans personal loan to pensioners loan against mortgage of immovable property fair price shop scheme

9. Specialised finances: help tourism for Kashmir valley all purpose agri term loans fruit advance scheme apple zafran finance scheme roshni finance scheme craft development finance dastkar finance

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 giri finance scheme khatamband craftsmen finance commercial premise finance laptop/pc finance schemes

C. investments and insurance: 1. J&K Bank has entered into tie-ups with reputed Asset Management Companies for distribution of Mutual Fund products. The AMCs with which the Bank has entered into an arrangement are: UTI, Kotak and Reliance Mutual Fund. The Bank shall undertake distribution of their current schemes as well as NFO (New Fund Offer) as and when the AMC comes up with the same. 2. Insurance MetLife India insurance BAJAJ ALLIANZ general insurance D. cards: Global access cards Empowerment credit card Merchant acquiring E. Non resident banking: NRE savings account NRE fixed deposits

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 NRE rupee deposit

F. services: 1. Support services: Anywhere banking Internet banking SMS banking ATM services Debit cards Credit cards Merchant acquiring 2. Depository services

3. Third party services

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Corporate social responsibility

The Corporate Social Responsibility (CSR) of the J&K Bank seeks to recognize obligations towards society and aims to integrate the CSR ideals into its mission for optimizing both business and social performance. It stresses on promoting work life balance, give attention to social and environmental concerns and host of factors that facilitate business pursuits and accomplishment of economic goals. The CSR is not just recognized as promulgating the Bank's own values and principles of philanthropy but also the values and principles of all those who have a stake in it or are affected by its operations. By supporting social cause aligned to the mission the CSR strategy differentiates the Bank's brand and enhances its reputation. The Bank manages social issues in the same manner as any other strategic business issues.

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MARKET RESEARCH AND ANALYSIS This is an exploratory research carried on by me. The research was municipal limits. The branches covered included: HDFC bank residency road. HDFC bank hari singh high street. carried on

in the SOPORE AND SRINAGAR valley within SOPORE AND SRINAGAR

HDFC bank karan nagar.

J&K bank residency road.

J&K bank hazratbal.

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J&K bank air cargo branch

SAMPLE SIZE:A sample of three hundred (300) people including one hundred fifty (150) HDFC customers and (150) J&K BANK CUSTOMERS

METHOD OF COLLECTING DATA:Data was collected both from the primary and the secondary sources. For primary data collection, information was gathered through the schedule of questions. Secondary data was collected from financial and annual reports, internet, newspaper and so forth.

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Methods adopted by me to collect the sample size for market analysis was through major close end questions and few open end questions.

A Limitations:questionnaire was prepared for the customers and questions regarding product using, turn around time for complaints, overall hygiene etc were framed. The data for several aspects like expenses made on promotion etc were not available and hence it was not possible to calculate the exact impact of promotion on retail banking performance. The information collected from customers is subjective in nature and may not give an exact picture of the banks.

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The banks studied were across sectors, with SBI, J&K being fully or partially government owned and HDFC bank being a private bank. The differences in the functioning across sectors are difficult to take in to account.

The marketing efforts of all the banks are based at head-office level and it was beyond the scope of my project to acquire data related to these aspects.

Comparative analysis

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Of Retail banking Of HDFC bank With J&K bank

Satisfaction with the range of products provided by the bank SAMPLE 150 HDFC-BANK J&K-BANK HDFC-BANK% J&K-BANK% SATISFIED 147 136 91% 99% NOT-SATISFIED 3 14 9% 1%

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100 90 80 70 60 50 40 30 20 10 0 SATISFIED NOT SATISFIED

HDFC bank J&K BANK AND SBI

Inference:The above graph shows that the satisfaction with regard to range of products is higher for non HDFC customers as compared to HDFC customers. Dissatisfaction reason for HDFC customers being the non- availability of home loans in the Kashmir province. By providing the above service, HDFC bank has the potential to improve its graph of customer satisfaction and may leave behind J&K bank and HDFC in the graphic ratings. Customer satisfaction with respect to customisation in branches SAMPLE(150) HDFC-BANK(150) J&K-BANK(150) HDFC-BANK% J&K-BANK% SATISFIED 120 40 81% 27% NOT-SATISFIED 30 110 19% 73%

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90 80 70 60 50 40 30 20 10 0 satisfied not satisfied

HDFC BANK J&K BANK

Inference:-

The above graph reveals that customer satisfaction with respect to extent of customisation that is prevalent in different banks, HDFC bank outweighs J&K & SBI. The above average customer satisfaction with regards to customisation in HDFC bank can be used to increase the customer base of high net worth customers and with the result customer base in Kashmir region would increase. Satisfaction with respect to turn around time for Complaints/queries SAMPLE (150) HDFCBANK(150) J&K-BANK (150) HDFC-BANK % J&K-BANK % FAST 120 42 80% 42% AVERAGE 25 25 17% 19% SLOW 5 83 3% 39%

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80 70 60 50 40 30 20 10 0 fast average slow

HDFC bank J&K BANK

Inference:From the above graph it is quite evident that the HDFC bank is comparatively in a much better position than JKB & HDFC with respect to time taken to respond to complaints and queries. The above results clearly reflect that HDFC bank has been much effective in transference and maintenance of bank overall culture and climate. Customer satisfaction with respect to number of branches SAMPLE HDFC-BANK J/K BANK SATISFIED 18 135 NOT-SATISFIED 132 15

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100 90 80 70 60 50 40 30 20 10 0 satisfied not satisfied

HDFC BANK J&K BANK

Inference:Majority of customers are not satisfied with the number of branches offered by the bank. In this case majority JKB & SBI customers are satisfied with the number of branches. The less number of branches is one of the major reasons which are responsible for low customer base and hence less market share. HDFC bank is in desperate need to increase the number of branches for growth and smooth functioning of their operations Customers opinion about account opening procedures SAMPLE-150 HDFC-BANK J/K BANK EASY 117 123 DIFFICULT 12 20 CAN NOT SAY 21 7

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90 80 70 60 50 40 30 20 10 0 easy difficult can`t say

HDFC BANK J&K BANK

Inference:The graph reveals that the process involved in opening of an account is not at all difficult in all the three banks. There is still a need to find out some innovative procedures of simplifying the process in order to change the views of those who consider the process difficult as well as those who are indecisive about the process. The bank should have customer helping teams within the branch premises to facilitate the process who find it a difficult process. Customer opinion about the loan facility SAMPLE-150 HDFC-BANK J/K BANK EASY 68 50 DIFFICULT 78 93 CAN NOT SAY 4 7

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70

HDFC BANK J&K BANK

60

50

40

30

20

10

0 easy difficult can`t say

Inference:From the above graph it is clear that HDFC bank is not in a better position as compared to its competitors as far as loan procuring is concerned. At present HDFC bank is not offering the services of home loans which in present scenarios is in great demand in the Kashmir region. Not providing home loans in Kashmir valley is in a way benefiting the competitorsworking against the HDFC banks desire to increase the customer base in the valley. Customer opinion about deposits SAMPLE HDFC-BANK EASY 123 DIFFICULT 7 CAN NOT SAY 20

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J/K BANK

120

27

90 80 70 60 50 40 30 20 10 0 easy difficult can`t say

HDFC BANK J&K BANK

Inference:The process involved in deposits is not at all difficult in all the three banks. The bank must try to find out some innovative procedures to further simplify the process in order to change the views of those who consider the process to be difficult as well those who are indecisive about the process. The bank must train its staff well so that they further simplify the process.

Customer perception about bank interiors

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SAMPLE-150 HDFC BANK J/K BANK

GOOD 82 42

AVERAGE 63 72

POOR 5 26

60

HDFC BANK J&K BANK

50

40

30

20

10

0 GOOD AVERAGE POOR

Inference:More than half of the customers of HDFC bank regard its interior pleasant and delightful as compared to JKB whose interiors are mostly considered below average. Since the HDFC bank branches are new with latest and customer /employee friendly layouts which not only look pleasing to the eye but help simplifying the whole process and have been one of the sources of customer satisfaction. The HDFC bank should maintain its supremacy in physical evidence and service scape that matches the customer expectation. Customers perception about staff appearance 76

SAMPLE-150

GOOD

AVERAGE

POOR

HDFC-BANK J/K BANK

120 57

25 73

5 20

90 80 70 60 50 40 30 20 10 0 good average poor

HDFC BANK J&K BANK

Inference:HDFC bank has an edge over others in terms of staff appearance as is evident from the graph. Majority of the HDFC customers think that the staff appearance is neat and pleasing, while the same does not hold true for the other three banks. The appearance plays an important role in service organisation; hence this goes in favour of HDFC bank which will in turn help the organisation to increase their customer base. Customers perception about bank employees

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SAMPLE-150 HDFC-BANK J/K BANK

FRIENDLY 135 87

MILD 7 40

UNFRIENDLY 8 23

100 90 80 70 60 50 40 30 20 10 0 friendly mild unfriendly

HDFC BANk J&K BANK

Inference:Majority of HDFC customers are of the opinion that the bank employees are very friendly and are well behaved, and problem solvers. The HDFC bank should try to maintain this as it will help them further to improve their relationship with the customers and in turn help them in customer retention. These customers may also help the bank in attracting new customers by positive word of mouth communication and thereby enhance market share.

Observations

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From my analysis and study I found various observations and information from the market regarding the effectiveness of retail banking of HDFC bank vis--vis other competitors. My observations and study are as follows: Customers are satisfied with range of products and quality of service offered by the HDFC bank. Most of the customers want HDFC bank to provide cash credit facility and home loans in the Kashmir region. Price charged by HDFC bank is viewed as most expensive by the customers. Setting price for different products and services should be done carefully with due consideration to the competitors because it can work in the competitors favour. Less branches and ATMs of HDFC bank is also one of the hindrances for the bank to get popularity among the customers. But with RBI guidelines that using ATM of any bank is now free and customer would not be charged for ATM usage, the frequency of customers banking with HDFC will surely increase in the Kashmir region. Though HDFC bank has a brand image in India but the bank has not been able to build this image in Kashmir region. Loyalty towards J&K bank is a major hindrance for HDFC bank to increase its customer base in this region. In order to increase its customer base in Srinagar the bank need to shift from class banking to mass banking. Customers which are presently being served by HDFC bank in this region are satisfied with the knowledge, appearance, and their attitude towards customeremployee relationship. There is a great need to aware the customer regarding the charges which are charged by the HDFC bank for its various services so that after receiving 79

services they do not complain of hidden charges. A good number of HDFC customers are complaining about the so called hidden charges. HDFC bank being a private bank. The sense of insecurity associated with the private bank is a hindrance towards increasing the customer base.

Recommendations

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HDFC bank is a young and dynamic bank, with youthful and enthusiastic team determined to accomplish the vision of becoming a world class Indian bank but there are certain areas where improvement is needed. Even though customers are satisfied with the range of products as well as the quality of services, the bank should conduct a research in order to know the reason for low market share. The bank needs to increase its number of branches so that it is easily accessible; thus making a chance to increase the customer base as well as retain the existing ones. Since marketing is all about communication and the effectiveness of communication determines the market share and the future market potential, efforts should be made to make the communication as clear and effective as possible. Customers should be provided full information regarding the provision of services and the charges they would have to pay. The bank should rethink over its promotion strategy and should go for heavy promotion of their brand and services in order to increase awareness of the target group. Tremendous competition in the market place call for innovation. The bank must continue to develop innovative products and services that give them competitive advantage in the market.

At the earliest the bank should start sanctioning home loans in the Kashmir region. There is a great need felt in the region towards provision of this service.

At last, banking with any bank should be by choice and not by compulsion

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References & Bibliography

WWW.HDFCBANK.COM

WWW.J&KBANK.COM

WWW.GOOGLE.COM

WWW.WIKIPEDIA.COM

SERVICE MARKETING BY ZEITHMAL AND BRITNER

SERVICE MARKETING BY LOVELOCK

MARKETING RESEARCH BY NARESH MALHOTRA MARKETING MANAGEMENT BY PHILIP KOTLER

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QUESTIONNAIRE Q1. Which bank do you prefer for your banking needs and transactions? (a) HDFC bank (b) J&K bank (c) SBI (d) Others Q2. Are you satisfied with the range of products / services offered by the bank? (a) Satisfied (b) Not satisfied Q3. How would you rate the prices charged by bank for its various services? (a) Economical (b) Moderate (c) Expensive Q4. Are you satisfied with the customisation that is prevalent in the bank? (a) Satisfied (b) Not satisfied Q5. What is the turn around time for your complaints and queries? (a) Fast (b) Average (c) Slow Q6. Are you satisfied with the number of branches of your bank? (a) Satisfied (b) Not satisfied Q7. How would you rate the account opening procedure in your bank? (a) Easy (b) Difficult (c) Cant say Q8. How would you rate the procedure involved in availing loan services? (a) Easy (b) Difficult (c) Cant say Q9. How would you rate the deposit services offered by your bank? (a) Easy (b) Difficult (c) cant say Q10. What do you feel about the interiors of your bank? (a) Good (b) Average (c) Poor Q11. What do you feel about appearance of your bank employees? (a) Good (b) Average (c) Poor Q12. How much courteous / friendly is the staff of your bank? (a) Friendly (b) Mild (c) Unfriendly Q13. Do you have dedicated resources in the form of personal bankers relationship managers? (a) Yes (b) No and

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Q14. Which type of new services would you like your bank should add to its portfolio? _______________________________________________________ _______________________________________________________ Q15. Any suggestions that would help the bank to increase the value perceived by you? ________________________________________________________________ ________________________________________________________________

THANKS FOR YOUR PRECIOUS TIME!

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