GAUHATI UNIVERSITY

A Training Report submitted in partial fulfillemt of the requirements for the award of

the Degree of the Bachelor of Business Administration ( Industry Integrated ) ,

Gauhati University on

Comparitive Analysis Between Kotak Mahindra Bank and HDFC Bank

FOR KOTAK MAHINDRA BANK ,

NEW FRIENDS COLONY BRANCH ,

NEW DELHI

Under Organization Guidance Of : Under Institutional Guidance Of :

Mr. Deepesh Sharma Dr. M.P.Gupta

Branch Sales Manager ( Retail Liabilities ) Director General

Kotak Mahindra Bank , New Friends Colony G.S.M.S. , Delhi

Prepared and Submitted By :

Ashna Kalra

G.U. Registration No. 003864 of 2009-2010

1
 STUDENTS DECLARATION

I hereby declare that the Training Report conducted at

KOTAK MAHINDRA BANK ,

NEW FRIENDS COLONY , NEW DELHI .

Under the guidance of

Dr. M.P.Gutpa

Submitted in Partial fulfillment of the requirements for the Degree of

MASTER OF BUSINESS ADMINISTRATION

( Industry Integrated )

TO

GAUHATI UNIVERSITY , GUWAHATI

Is my original work and the same has not been submitted for the award of any other

Degree / Diploma fellowship or other similar titles or prizes .

Place : New Delhi Ashna Kalra

Date : 18-07-10 Reg. No. - 003864

2
 CERTIFICATE

This is to certify that Ashna Kalra , a student of the Gauhati University has

prepared her Training Report entitled Comparitive Analysis Between Kotak

Mahindra Bank and HDFC Bank under my guidance . She has fulfilled all

requirements under the regulations of the MBA (IIP) , Gauhati University , leading to

the MBA (IIP) degree . This work is the result of her own investigation and the project

; neither as a whole nor any part of it was submitted to any other University or

Educational Institutionfor any research or diploma .

I wish her all all success in life .

Dr. M. P. Gupta

Director General

Global School Of Management Science

3
 CERTIFICATE OF THE ORGANISATION

To ,

The Director,

NIAM,

New Delhi.

This is to certify that Ms. Ashna Kalra of MBA ( Industry Integrated ) course of

Gauhati University at Global School Of Management Science has undergone

management training at our organization from 15th April 2010 to 15th June 2010 .

Her performance during the training period was extremely satisfactory .

Authorized signatory

Mr. Deepesh Sharma ,

Branch Sales Manager ( Retail Liabilities ) ,

Kotak Mahindra Bank , New Friends Colony .

4
 ACKNOWLEDGEMENT

No duty is more urgent than that of returning thanks

I would like to take this opportunity to express my deep sense of gratitude to all those

who have contributed significantly in the successful completion of this project .

Firstly , i would like to thank Kotak Mahindra Bank , New Friends Colony

Branch , New Delhi , for having given me an opportunity to undergo summer training

in their company .

My deep-rooted respect and sincere gratitude to Mr. Deepesh Sharma (Branch Sales

Manager , Kotak Mahindra Bank ) who in spite of his busy schedule listened to my

problems and suggested prompt solutions . I am grateful to him for providing me with

all the necessary insights and inputs and helping me all throughout my summer

training programme . He has always been a source of guidance, inspiration and

motivation to me .

I would also like to express my sincere gratitude to Dr. M.P. Gupta ( Director

General , Global School of Management Science ) , NIAM , all the faculty

members , colleagues and friends for their encouragement , support , guidance and

assistance provided for undergoing my management training and preparing this

project report . All of them helped me immensely during the course of my training .

5
Last but not the least , my heartfelt thanks to my dear family members whose

blessings, inspiration and encouragement have resulted in the successful completion

of this project . Im thankful to them for their kind cooperation, advice and

encouragement during the long and arduous task of preparing this project report.

I hope that I have been successful in my endeavour. . However, I accept the sole

responsibility for any possible errors of omission and would be extremely grateful to

the readers of this project report if they bring such mistakes to my notice. .

Discrepancies , mistakes , if any , are solely mine.

THANK YOU ALL

6
 CHAPTER 1 : INTRODUCTION

( 1.1 ) GENERAL INTRODUCTION ABOUT THE SECTOR

A bank is an institution that deals in money and its substitutes and provides

other financial services. Banks accept deposits and make loans or make an

investment to derive a profit from the difference in the interest rates paid and charged,

respectively .

India has a well developed banking system. Infact , without a sound and effective

banking system , India cannot have a healthy economy. The banking system of India

should not only be hassle free but it should be able to meet new challenges posed by

the technology and any other external and internal factors. For the past three decades

India's banking system has several outstanding achievements to its credit. The most

striking is its extensive reach. It is no longer confined to only metropolitans or

cosmopolitans in India. In fact, Indian banking system has reached even to the

remote corners of the country. This is one of the main reasons of India's growth

process

Most of the banks in India were founded by Indian entrepreneurs and visionaries in

the pre-independence era to provide financial assistance to traders, agriculturists and

budding Indian industrialists. The origin of banking in India can be traced back to

the last decades of the 18th century. The General Bank of India and the Bank of

Hindustan, which started in 1786 were the first banks in India. Both the banks are now

defunct. The oldest bank in existence in India at the moment is the State Bank of

7
India. The State Bank of India came into existence in 1806. At that time it was known

as the Bank of Calcutta. SBI is presently the largest commercial bank in the country.

The banking industry in India is sufficiently capitalized and regulated. The

economic and financial conditions here are better than in any other country. Liquidity,

credit, and market studies have proven Indian banks to be resilient. They have

negotiated the downturn in the global economy well.

The role of central banking in India is looked by the Reserve Bank of India,

which in 1935 formally took over these responsibilities from the then Imperial Bank

of India. Reserve Bank was nationalized in 1947 and was given broader powers. In

1969, 14 largest commercial banks were nationalized followed by six next largest in

1980. But with adoption of economic liberalization in 1991, private banking was

again allowed.

The central bank is the apex financial institution in the banking and financial system

of a country. It is regarded as the highest monetary authority in the country. It acts as

the leader of the money market. It supervises, control and regulates the activities of

the commercial banks. It is a service oriented financial institution. The Reserve Bank

of India (RBI) is the topmost body monitoring the Banking Industry. Any

shortcomings or discrepancies are dealt with by the RBI

The banking industry in India is divided into scheduled and non-scheduled banks ie.

the commercial banking structure in India consists of : Scheduled Commercial Banks

and Unscheduled Banks . Scheduled commercial Banks constitute those banks, which

have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934.

8
RBI includes only those banks in this schedule, which satisfy the criteria laid down

vide section 42 (6) (a) of the Act.

67,000 scheduled bank branches are located in India. They consist of cooperative

banks and commercial banks. The Public Sector Banks form the base of this sector

in India. These are those banks in which the Government of India holds a stake . They

account for 78% of the assets in the banking sector. The Private Sector banking is

also making headway. They are leading in mobile banking, phone banking, ATMs,

and Internet Banking sectors. The government doe not have any stake in these banks.

Now a days even foreign banks are increasingly establishing their base in India. JP

Morgan, Standard Chartered, Bank of America, and many other international banks

have established centers in India to tap its potential.

The government constantly encourages foreign investment in this sector, as the entry

of foreign players will help the sector to flourish . FDI in Indian banking can lead to

improved efficiency, better capitalization, and improved adaptability. So the

government is attracting FDI, FII, and NRIs in this field.

Even with the global recession, the investment in the banking industry is still

prevalent though the volume may have been reduced. FDI in India grew by 145%

between 2006 and 2007 and by 46.6% during 20072008. The FDI in 2009 was

down to 18.6%. However, with the recession abating the investments are sure to rise.

Overall, the Indian banking industry has immense potential for further growth

and expansion.

9
 ( 1.2 ) INDUSTRY PROFILE

(a) ORIGIN AND DEVELOPMENT OF THE BANKING INDUSTRY

Banking system in India has its roots in since ancient times. The first banks were the

religious temples of the ancient world, and were established in the third millennium

B.C. Temples were chosen as they were sacred and thus possibilities of a theft taking

place was minimal. The temple priest or the merchants were left with the work of

account keeping. Later on in the evolution of the banking system came the money

lenders (SAHUKARS) who are prominent even today in the villages of India. Despite

these early informal modes of banking, the first conventional bank in India, though

conservative, was established only in 1786.

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan

and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank

of Bombay (1840) and Bank of Madras (1843) as independent units and called it

Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of

India was established which started as private shareholders banks with mostly

Europeans shareholders.

In 1865 Allahabad Bank was established and was fir the first time set up exclusively

by Indians. Punjab National Bank Ltd. was set up in 1894 with its headquarters at

Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of

Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of

India came in 1935.

10
From 1786 till today, the journey of Indian Banking System can be segregated into

three distinct phases. They are as mentioned below:

Table 1.1: Banks established during 1786-1969

YEAR BANK
1786 General Bank of India
1807 Bank of Hindustan
1809 Bank of Bengal
1840 Bank of Bombay
1843 Bank of Madras
1865 1st bank established exclusively by Indians -Allahabad Bank
1894 Punjab Bank of India
Bank of India, Central Bank of India, Bank of Baroda,

1906 Canara Bank, Indian Bank

1913 Bank of Mysore
1920 Imperial Bank
1935 RBI
1991 Liberalisation of Banking practices

1st PHASE

1. During the first phase the growth was very slow and banks also

experienced periodic failures.

2. There were approximately 1100 banks, mostly small. To streamline the

functioning and activities of commercial banks, the Government of India

came up with The Banking Companies Act, 1949 which was later changed

to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23

of 1965).

3. Reserve Bank of India was vested with extensive powers for the

supervision of banking in India as the Central Banking Authority. It tightly

11
 controlled the banking environments and was conservative in its approach

especially towards the fixation of interest rates.

4. Public had lesser confidence in the banking system and relied more on the

depositing their money with the Postal services of India. As an aftermath

deposit mobilization was slow. Also as the economic condition of the

country was not very strong during those times people did not have enough

money to experiment with and mostly choose to give it to traders who

would give better rate of return.

2nd PHASE

1. It was in the year 1955 that the Government took major steps towards the

Indian Banking Sector Reform. In 1955, it nationalized Imperial Bank of

India with extensive banking facilities on a large scale especially in rural

and semi-urban areas. It formed State Bank of India to act as the principal

agent of RBI and to handle banking transactions of the Union and State

Governments all over the country.

2. In the year 1969 a major drive to nationalize banks was carried out for

example seven banks forming subsidiary of State Bank of India were

nationalised and 14 major banks in the country were nationalized.

3. The nationalisation of these and the other banks 80% of the banking

segment in India under Government ownership thus strengthening the

fundamental base of these banks. Also these helped in gaining the faith and

confidence of the people in the banking system and these institutions. This

12
 step helped the institutions in raising the levels of deposits and advances

from 800% to 11000%.

4. The following are the steps taken by the Government of India to Regulate

Banking Institutions in the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalisation of State Bank of India.

1959: Nationalisation of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalisation of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalisation of seven banks with deposits over 200 crore

3RD PHASE

This phase has introduced many more products and facilities in the banking

sector in its reforms measure. In 1991, under the chairmanship of M

Narasimham, a committee was set up by his name which worked for the

liberalisation of banking practices. The major reforms of the banking system

which has shaped the success story of Indian banking system were done in this

phase. Some of the reforms are-

To create an environment for banks to flourish by deregulating interest rates,

reducing reserve requirements and allocating credit to certain sectors.

(Y V Reddy: Banking sector reforms in India - an overview)

13
It is result of these reforms that the people have options to choose which banker to

bank with. They are flooded with variety of options from which they can choose and

decide how they wish to invest their money. The country is flooded with foreign

banks and their ATM stations. Banks are putting sincere Efforts to give a satisfactory

service to customers. The entire system became more convenient and swift and

customers ease is the priority.

The financial system of India has shown a great deal of resilience. It is sheltered from

any crisis triggered by any external macroeconomics shock as other East Asian

Countries suffered. This is all due to a flexible exchange rate regime, the foreign

reserves are high, the capital account is not yet fully convertible, and banks and their

customers have limited foreign exchange exposure.

(b) GROWTH AND PRESENT STATUS OF THE BANKING INDUSTRY

A Sound and healthy banking system forms the backbone of any economy. The Indian

banking industry is going through competitive times. With the lowering of entry

14
barriers and liberalization of banking practices the competition has become intense

and scope of differentiation on the basis of products sold has significantly reduced.

Banks are now focusing more on services and maintaining customer relationships in

order to enhance their hold in the market. Net banking, phone banking, home banking

and ATM banking services are the new focus areas.

The competition is not just from the multinational and foreign banks but is also

emanating from within the banking system, financial sector reforms and domestic

players. All public sector banks, private sector and foreign banks along with non

banking finance companies are competing for the same segment. The fact that India

was only marginally affected by the financial turmoil in the western countries because

of its strong policies and sound regulations has only led to add to the already intense

competition in the industry. The news has reassured the public at large that the Indian

financial and banking systems have a strong base and thus it has helped more people

to invest in banks and also attract foreign bankers to India. This has lead to increasing

the level of competition.

Indias banking sector is growing at a fast pace. India has become one of the most

preferred banking destinations in the world. The reasons are numerous: the economy

is growing at a rate of more than 8%, Bank credit is growing at 30% per annum and

there is an ever-expanding middle class of about 250 to 300 million people (larger

than the population of the US) in need of financial services. The rural market segment

is yet to be exploited. The disposable income with the public is growing, also there is

a change in mindset and people are no more against taking credits and loans. This has

significantly increased the potential Market for bankers. All this enables double-digit

15
returns on most asset classes which is not so in a majority of other countries. Foreign

banks in India achieving a return on assets (ROA) of 3%, their keen interest in

expanding their businesses is understandable. Indian markets provide growth

opportunities, which are unlikely to be matched by the mature banking markets

around the world.

The interplay between policy and regulatory interventions and management strategies

will determine the performance of Indian banking over the next few years. Legislative

actions will shape the regulatory stance through six key elements: industry structure

and sector consolidation; freedom to deploy capital; regulatory coverage; corporate

governance; labor reforms and human capital development; and support for creating

industry utilities and service bureaus. Management success will be determined on

three fronts: fundamentally upgrading organizational capability to stay in tune with

the changing market; adopting value-creating M&A as an avenue for growth; and

continually innovating to develop new business models to access untapped

opportunities. Through these scenarios, we can paint a picture of the events and

outcomes that will be the consequence of the actions of policy makers and bank

managements.

( c ) FUTURE OF THE BANKING INDUSTRY

A healthy banking system is essential for any economy striving to achieve good

growth and yet remain stable in an increasingly global business environment.

16
The Indian banking system has witnessed a series of reforms in the past, like

deregulation of interest rates, dilution of government stake in PSBs, and increased

participation of private sector banks. It has also undergone rapid changes, reflecting a

number of underlying developments. This trend has created new competitive threats

as well as new opportunities.

The strong banking regulatory system has helped India to weather the storms of global

credit crunch. India's central bank RBI has already made cuts in Cash Reserve Ratio,

or CRR, and Statutory Liquidity Ratio, or SLR, to pump more liquidity into the

economy. The interest rates are also at record lows.

The future of banking will undoubtedly rest on risk management dynamics. Only

those banks that have efficient risk management system will survive in the market in

the long run. The effective management of credit risk is a critical component of

comprehensive risk management essential for long-term success of a banking

institution.

Consolidation :

Consolidation, which has been on the counter over the last year or so, is likely to

gather momentum in the coming years. Post April 2009, when the restrictions on

17
operations of foreign banks will go, the banking landscape is expected to change

dramatically. Foreign banks, which currently account for 5% of total deposits and 8%

of total advances, are devising new business models to capture the Indian market.

Their full-fledged entry is expected to transform the business of banking in many

ways, which would be reflected in terms of greater breadth of products, depth in

delivery channels and efficiency in operations.

Despite the stiff resistance from certain segments, consolidation holds the key to

future growth. This view is underpinned by the following:

Owing to greater scale and size, consolidation can help save costs and improve

operational efficiency.

Banks will also have to explore different avenues for raising capital to meet norms

under Basel-II

Owing to the diversified operations and credit profiles of merging banks,

consolidation is likely to serve as a risk-mitigation exercise as much as a growth

engine.

Though there is no confirmation yet, speculative signals arising from the market point

to the prospect of consolidation involving banks such as Union Bank of India, Bank of

India, Bank of Baroda, Dena Bank, State Bank of Patiala, and Punjab and Sind Bank.

Further, the case for merger between stronger banks has also gained ground a clear

deviation from the past when only weak banks were thrust on stronger banks. There is

a case being made for mergers between banks with a distinct geographical presence

coming together to leverage their respective strengths.

18
Globalization :

Growing integration of economies and the markets around the world is making global

banking a reality. The surge in globalization of finance has already begun to gain

momentum with the technological advancements which have effectively overcome the

national borders in the financial services business. Widespread use of internet banking

will widen frontiers of global banking, and make marketing of financial products and

services on a global basis possible. In the coming years globalization will spread

further on account of the likely opening up of financial services under WTO. India is

one of the 104 signatories of Financial Services Agreement (FSA) of 1997. This gives

Indias financial sector including banks an opportunity to expand their business on a

quid pro quo basis.

As per Indian Banks' Association report Banking Industry Vision 2010, there would

be greater presence of international players in Indian financial system and some of the

Indian banks would become global players in the coming years. So, the new mantra

for Indian banks is to go global in search of new markets, customers and profits.

Technology :

There is an imperative need for not mere technology upgradation but also its

integration with the general way of functioning of banks to give them an edge in

19
respect of services provided to their constituents, better housekeeping, optimizing the

use of funds and building up of MIS for decision making, better management of assets

& liabilities and the risks assumed which in turn have a direct impact on the balance

sheets of banks as a whole. Technology has demonstrated potential to change methods

of marketing, advertising, designing, pricing and distributing financial products and

services and cost savings in the form of an electronic, self-service product delivery

channel. These challenges call for a new, more dynamic, aggressive and challenging

work culture to meet the demands of customer relationships, product differentiation,

brand values, reputation, corporate governance and regulatory prescriptions.

Technology holds the key to the future success of Indian Banks.

Internet, wireless technology and global straight-through processing have created a

paradigm shift in the banking industry. The explosive growth of both the Internet and

mobile and wireless technology is revolutionizing the way the financial industry

conducts business. The overall wireless technology market is expected to grow

profoundly in the coming years.

Regulations :

The RBI's approval for banks to raise funds abroad through innovative capital

instruments holds great significance. Such fund-raising, which includes preference

shares, will, however, not just substitute equity; it could have unintended

consequences on the strategies of banks and their profitability. While the cost of

raising monies through such instruments is likely to be higher (close to 10 per cent),

the consequent higher leverage on equity funds is likely to result in expansion of

20
return on net worth. This is because the same amount of capital supports a higher

volume of business, generating higher profits.

Skilled Manpower :

There will be a sea change for employees too. Secure jobs will be replaced by

contractual appointments, for a specified period of time. The unions will merge into

the shadows and bank managements will turn effective. As a result there will be

swifter turn over of personnel in banks. But at the same time, skilled personnel from

other disciplines will enter banks in increasing numbers.

Factors like skills, attitudes and knowledge of the human capital play a crucial role in

determining the competitiveness of the financial sector. The quality of human

resources indicates the ability of banks to deliver value to customers. Capital and

technology are replicable but not the human capital which needs to be valued as a

highly valuable resource for achieving that competitive edge.

Business model, which comprises a comprehensive range of business solutions

delivered through a unique balance of portfolio and relationship management must be

incorporated.

Future Challenges :

Competition

Customer Retention

21
Globalization

Shrinking Margin

Some Suggestions :

Strong In-house research & market Intelligence

Focused marketing- Focus on region-specific campaigns rather than national media

campaigns

CONCLUSION:

What will the future of Indian banking look like? Will the reform in banking sectors

face the same fate as in power and telecom? It is increasingly evident that the

economy offers opportunities but no security! Therefore, the future will belong to

those who develop good internal controls, checks and balances and a sound market

strategy. Business Growth, Cost Efficiency and Evolution are therefore regarded as

key drivers which will have to be addressed.

CHAPTER 2 : PROFILE OF THE ORGANISATION

( 1.1 ) ORIGIN OF THE ORGANISATION

22
Kotak Mahindra is one of India's leading financial institutions, offering complete

financial solutions that encompass every sphere of life. From commercial banking, to

stock broking, to mutual funds, to life insurance, to investment banking, the group

caters to the financial needs of individuals and corporates. The group has a net worth

of over Rs. 2,900 crore, employs around 8,800 people in its various businesses and

has a distribution network of branches, franchisees, representative offices and satellite

offices across 282 cities and towns in India and offices in New York, London, Dubai

and Mauritius. The Group services around 2 million customer accounts.

The Kotak Mahindra group is a financial organization established in 1985 in India. It

was previously known as the Kotak Mahindra Finance Limited, a non-banking

financial company. In February 2003, Kotak Mahindra Finance Ltd, the group's

flagship company was given the license to carry on banking business by the Reserve

Bank of India (RBI). Kotak Mahindra Finance Ltd. is the first company in the Indian

banking history to be converted from a private financial institution to a bank.

The bank is headed by K.M. Gherda as Chairman and Uday Kotak as Executive Vice

Chairman & Managing Director. Shankar Acharya is the chairman of board of

Directors in the company. A stake in the group was taken in by industrialists Harish

Mahindra and Anand Mahindra and this is the time when the company changed its

name to Kotak Mahindra Finance Limited.

The following diagram shows a picture of kotaks success through the years.

Figure 1: Kotaks progress chart

23
 1.2 GROWTH AND DEVELOPMENT OF THE ORGANISATION

Within a small span of 6 years, the bank has spread it wings in several sphere of

finances. Presently, spread in 82 cities in India, the bank caters to the needs of its 5.9

24
million customers spread throughout the length and breadth of country and even

abroad. By the end of FY 2007-2008, the Kotak Mahindra Bank had about 178

branches spread all over the country and it plans to add some more branches by the

end of FY 2010.

The bank is one of the most admired financial services providers in India because of

its state-of-the-art financial solutions for countless needs of individual and corporate

clients. In addition to Internet banking and phone banking, the bank provides suitable

banking facilities through SMS services, Mobile banking, Home banking, Netc@rd

and BillPay facility to name a few.

The entire Kotak Mahindra group has a net worth of over Rs. 6,327 crore and at the

end of FYP 2007-2008,it was reported that the consolidated profit of Kotak Mahindra

Bank individually was Rs 991.2 crore which was 84% higher than the consolidated

profit of Rs 538.2 crore in FY07. Kotak Mahindra Bank has 75 ATMs at 41 locations

in the country which are 24x7 accessible. Before the free transactions facility of RBI

was made mandatory to all the ATM operating banks in India from April 1, 2009,

Kotak Mahindra Bank had underwent under a treaty with the HDFC Bank to provide

free network free of cost to most of its customers through its 1335 ATMs spread in the

country to ensure comfort to its customers.

Year Milestone
1986 Mahindra Finance Limited starts the activity of Bill Discounting
1987 Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
The Investment Banking Division is started. Takes over FICOM, one of India's
1991
largest financial retail marketing networks

25
1992 Enters the Funds Syndication sector
Brokerage and Distribution businesses incorporated into a separate company -

1995 Securities. Investment Banking division incorporated into a separate company -

Mahindra Capital Company

The Auto Finance Business is hived off into a separate company - Mahindra

Prime Limited (formerly known as Mahindra Primus Limited). Mahindra takes a

1996 significant stake in Ford Credit Mahindra Limited, for financing Ford vehicles.

The launch of Matrix Information Services Limited marks the Group's entry into

information distribution.
Enters the mutual fund market with the launch of Mahindra Asset Management
1998
Company.
2000 Mahindra ties up with Old Mutual plc. for the Life Insurance business.
Securities launches its on-line broking site (now www.securities.com).

2000 Commencement of private equity activity through setting up of Mahindra

Venture Capital Fund.

2001 Matrix sold to Friday Corporation
2001 Launches Insurance Services
Mahindra Finance Ltd. converts to a commercial bank - the first Indian company
2003
to do so.
2004 Launches India Growth Fund, a private equity fund.
Group realigns joint venture in Ford Credit; Buys Mahindra Prime (formerly
2005
known as Mahindra Primus Limited) and sells Ford credit Mahindra.
2005 Launches a real estate fund
Bought the 25% stake held by Goldman Sachs in Mahindra Capital Company
2006
and Securities

26
 (2.3) PRESENT STATUS OF THE ORGANISATION

Kotak Mahindra Bank Ltd. is presently one of the finest banking services providers in

India. The specialized products by Kotak Mahindra Bank India that drive mass

interest among the customers are Kotak Mahindra Life Insurance and other insurance

products, Kotak Mahindra Mutual Fund, and Kotak Mahindra Securities, Kotak

Mahindra Bank Credit Cards, Kotak Mahindra Bank Home Loan products, Kotak

Mahindra Bank personal loan, Kotak Mahindra Bank Visa C@rd and many more

products.

The Group's principal activity is to provide banking and related services. The Group

operates in four business segments: Treasury and Balance Sheet Management Unit

(BMU), which includes dealing in money market, forex market, derivatives,

investments and primary dealership of government securities; Retail Banking, which

27
includes lending, commercial vehicle finance, personal loans, agriculture finance,

other loans and home loans, Branch banking, which includes retail borrowings

covering savings, current, term deposit accounts and branch banking network/services

including distribution of financial products, and credit cards; Corporate Banking,

which comprises wholesale borrowings and lendings and other related services to the

corporate sector; As of 31-Mar-2010, it had a network of 249 branches.

The various banking products by Kotak Mahindra Bank include:

Banking & Savings

Banking Accounts

Demat

Deposits

NRI Services

Convenience Banking

Investments & Insurance

Life Insurance

Mutual Funds

Share Trading

Structured Products

Gold Estate Planning

Loans & Borrowings

Car Finance

28
 Home Loans

Loans Against Property

Personal Loans

Corporate & Institutional

Corporate Finance

Investment Banking

Institutional Equities

Treasury

( 2.4 ) FUNCTIONAL DEPARTMENTS OF THE ORGANISATION

Marketing

Marketing at Kotak Mahindra Bank categorises in to four departments - Marketing

Communications, PR & Corporate Communications, Marketing Activation &

Marketing Operations. These departments act as an advisory and support channel

towards marketing strategies and PR planning to ensure effective brand building

through brand awareness and visibility. The objective is to implement effective

campaigns and promotions which would help in meeting the business targets and

getting media coverage for the same.

We provide support at two broad levels - Branch Marketing and Central Marketing.

Human Resource

29
The HR professional contributes to the organization by constantly assessing the

effectiveness of the HR function. He also sponsors change in other departments and in

work practices. To promote the overall success of his organization, he champions the

identification of the organizational mission, vision, values, goals and action plans.

Finally, he helps determine the measures that will tell his organization how well it is

succeeding in all of this.

Wholesale Bank

We offer corporate clients & institutions a complete range of highly focused banking

services & solutions. Our service offerings are specially structured, taking into

account client's specific needs and keeping in perspective their risk profile. Kotak

Bank will offer all services, products & solutions in keeping with the credit & risk

management philosophy & policies of the Bank as well as in keeping with the relevant

RBI circulars & guidelines issued from time to time.

Retail Liabilities Operations (RL Ops)

The image of a typical operations unit has changed over the years from a processing

centre to a more customer focused service delivery unit. RL-Ops facilitates the

customer to establish a relationship with the bank. The Retail Liabilities Central

Processing Centre (RL-CPC Mumbai) functions as a hub for processing the account

opening forms sourced from Western India, over and above the centralised activities

30
such as Direct Banking/Salary Uploads/Account Closures for PAN India. Regional

Processing Centre (RPC) Ahmedabad caters to branches in Gujarat, RPC Delhi caters

to the branches in North and Eastern part of India while RPC Chennai caters to

branches in the South.

Technology

Technology has opened up new markets, new products, new services and efficient

delivery channels for the banking industry. Online electronics banking, mobile

banking and internet banking are just a few examples.

Information Technology has also provided banking industry with the wherewithal to

deal with the challenges the new economy poses. Information technology has been the

cornerstone of recent financial sector reforms aimed at increasing the speed and

reliability of financial operations and of initiatives to strengthen the banking sector.

The IT revolution has set the stage for unprecedented increase in financial activity

across the globe. The progress of technology and the development of world wide

networks have significantly reduced the cost of global funds transfer.

It is information technology which enables banks in meeting such high expectations of

the customers who are more demanding and are also more techno-savvy compared to

their counterparts of the yester years. They demand instant, anytime and anywhere

banking facilities.

IT has been providing solutions to banks to take care of their accounting and back

office requirements. This has, however, now given way to large scale usage in

services aimed at the customer of the banks. IT also facilitates the introduction of new

31
 delivery channels--in the form of Automated Teller Machines, Net Banking, Mobile

Banking and the like. Further, IT deployment has assumed such high levels that it is

no longer possible for banks to manage their IT implementations on a stand alone

basis with IT revolution, banks are increasingly interconnecting their computer

systems not only across branches in a city but also to other geographic locations with

high-speed network infrastructure, and setting up local area and wide area networks

and connecting them to the Internet. As a result, information systems and networks are

now exposed to a growing number.

( 2.5 ) ORGANIZATION STRUCTURE

The Kotak group comprises of Kotak Mahindra Capital Company, Kotak Securities,

Kotak Mahindra Investments, Kotak Mahindra Prime, Kotak Mahindra Asset

Management Company, Kotak Mahindra Trustee Company, Kotak Investment

Group Structure.
Advisors Limited, Global Investments Opportunities Fund, Kotak Mahindra

(International), Kotak Mahindra (UK), Kotak Mahindra

Corporate BankingInc., Kotak Mahindra
Treasury
Retail Branch Banking
Trusteeship Services, Kotak Forex Brokerage and Wealth
KotakManagement
Mahindra Old Mutual Life
Retail Lending
Insurance. In the above companies Kotak Mahindra Old Mutual Life Insurance is a
*100% *100% 100% *100% 100% 100% *74%
74% subsidiary, however allKotak
Kotak Mahindra
the other companies
Kotak
are 100%
Kotak Mahindra subsidiaries of Kotak.
Kotak Mahindra Kotak Mahindra
Kotak Asset Old Mutual Life
Capital Mahindra Mahindra Management Trustee
Securities Insurance
Company Investments P rime Company Company

26% held by
IP Os Stock broking Investment Car Finance Mutual fund Trustee Company
Old Mutual
Private equity & other
eBroking Lending
Project advisory lending Life insurance
M&A Distribution

*100% *100% *100% *100% *100% 100% 100%

Kotak Global
Investment Kotak Kotak Mahindra Kotak Mahindra
Investments Kotak Mahindra Kotak Forex
Advisors Opportunities Mahindra Inc. Trusteeship
(UK) Brokerage
Limited Fund (International) Services

Trustee Company Interbankforex

Private E quity fund Advisory Services Asset Management Broker/Dealer broking
Realty fund Investment Broking
Management
Investment
Management

Servicing around 5.6 mn customer accounts.

32

*Includes direct and indirect holdings 1

 ( 2.6 ) PRODUCT AND MARKET PROFILE OF THE ORGANIZATION

COMPETITORS ie. HDFC BANK

History

HDFC Bank was incorporated in the year of 1994 by Housing Development Finance

Corporation Limited (HDFC), India's premier housing finance company. It was

among the first companies to receive an 'in principle' approval from the Reserve Bank

of India (RBI) to set up a bank in the private sector.The Bank commenced its

operations as a Scheduled Commercial Bank in January 1995 with the help of RBI's

liberalization policies. HDFC Bank was the first bank in India to launch an

International Debit Card in association with VISA (VISA Electron) and issues

the Mastercard Maestro debit card as well.

33
In a milestone transaction in the Indian banking industry, Times Bank Limited

(promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank

Ltd., in 2000. This was the first merger of two private banks in India. As per the

scheme of amalgamation approved by the shareholders of both banks and the Reserve

Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for

every 5.75 shares of Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total

branches to more than 1,000. The amalgamated bank emerged with a strong deposit

base of around Rs. 1,22,000 crore and net advances of around Rs. 89,000 crore. The

amalgamation added significant value to HDFC Bank in terms of increased branch

network, geographic reach, and customer base, and a bigger pool of skilled

manpower.

1.1.

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.

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

34
the housing sector by integrating the housing finance sector with the overall domestic

financial markets.

Organisational Goals

HDFC's main goals are to a) develop close relationships with individual households,

b) maintain its position as the premier housing finance institution in the country, c)

transform ideas into viable and creative solutions, d) provide consistently high returns

to shareholders, and e) to grow through diversification by leveraging off the existing

client base.

Geographical Presence

Bank at present has an enviable network of 1,725 branches spread in 779 cities across

India.All branches are linked on an online real-time basis. Customers in over 500

locations are also serviced through Telephone Banking. The Bank also

has 4,232networked ATMs across these cities. The bank is looking at countries such

as Canada and Singapore to expand its branch networks abroad.The bank has already

applied for licenses in Bahrain and Hong Kong and currently having a representative

office in Dubai.

Customer Profile base

The Bank's target market ranges from large, blue-chip manufacturing companies in

the Indian corp to small & mid-sized corporates and agri-based businesses Under

Retail Banking Services HDFC has adopted mass banking strategy.

35
HDFC Bank Mission and Objective

Mission - to be "a World Class Indian Bank", benchmarking ourselves against

international standards and best practices in terms of product offerings, technology,

service levels, risk management and audit & compliance.

Objective - to build sound customer franchises across distinct businesses so as to

be a preferred provider of banking services for target retail and wholesale customer

segments, and to achieve a healthy growth in profitability, consistent with the Bank's

risk appetite.

SAVING ACCOUNT PRODUCT OFFERING:

Regular Savings Account

Premium Savings Account

REGULAR SAVINGS ACCOUNT

Kotak Mahindra Bank's Ace Savings Account has been designed as a gateway to a

world of financial benefits and privileged banking transactions. The account carries

benefits ranging from personal investment advisory services to free banking

transactions. You will find that this package of services and privileges is unmatched

by any other savings account in the market.

Features & Benefits :

36
 Wide network of branches and over thousand ATMs to meet all your banking

needs no matter where you are located.

Bank conveniently with facilities like NetBanking and MobileBanking- check

your account balance, pay utility bills or stop cheque payment, through SMS.

Never overspend- Shop using your International Debit Card that reflects the

actual balance in your savings account.

Personalised cheques with your name printed on each cheque leaf for

enhanced security.

Take advantage of BillPay, an instant solution to all your frequent utility bill

payments. Instruct for payment over the phone or through the Internet.

Avail of facilities like Safe Deposit Locker, Sweep-In and Super Saverfacility

on your account.

Free cash withdrawals on any other Bank's ATM*

Free Payable-at-Par chequebook, without any usage charges upto a limit of

Rs.50,000/- per month.

Free InstaAlerts for all account holders for lifetime of the account.

Free Passbook facility available at home branch for account holders

(individuals)

37
 Description of
Regular Savings Account
Charges

Minimum Balance Rs. 10,000 (Urban), Rs.

Option 1
(Average 5000 (Semi-urban)
NIL with a Fixed deposit of
Quarterly Option 2
Rs. 50,000
Balance)

Rs. 750 per qtr (Urban &

Option 1
Semi-urban)
Charges on non In case of non maintenance

maintenance of Rs. 50,000 Fixed Deposit

Option 2
thereof - Rs. 750 per qtr (Urban &

Semi-urban)

PREMIUM SAVINGS ACCOUNT

By maintaining an average quarterly balance of just Rs. 25,000/- one get a host of

premium services from HDFC Bank absolutely free.

Features

Free unlimited transactions: Cash withdrawal and balance enquiry, at all

HDFC Bank ATMs & at all non HDFC Bank domestic ATMs using your

HDFC Bank Debit Card

Free Gold Debit Card for primary account holder for lifetime of the account.

Gold Debit Card for other account holders at Rs 250/- p.a.

38
 Free Woman's Advantage/International Debit Card for all account holders for

lifetime of the account.

Free Payable-at-Par (PAP) chequebook, without any usage charges upto a limit

of Rs. 2 lac per month. Above Rs. 2 lac, charge of Rs.3.50/- per Rs. 1,000/- on

the full amount.

Free Demand Drafts on HDFC Bank locations, upto a limit of

Rs. 1 lac per day.

Free Demand Drafts on HDFC Bank locations, upto a limit of

Rs. 1 lac per day.

Self/Third Party Cash Deposit/Withdrawal at non-home branches, upto Rs

50,000/- per day free. Above Rs 50,000 a charge of Rs 2.90 per thousand on

the full amount would be applicable.

Optional MoneyMaximizer (sweep- out) facility for conversion of your

surplus money into high earning fixed deposits, at the threshold of

Rs.1,25,000/- . In the event of the balance in SavingsMax account exceeding /

reaching Rs.1,25,000/-, the amount in excess of Rs.1,00,000/- will be swept

out in to a Fixed Deposit with a minimum value of Rs.25,000/- for a 1year

1day period

Free BillPay & InstaAlerts for all account holders for lifetime of the account.

Free NetBanking, PhoneBanking & MobileBanking.

SPECIAL PREVILEGES

Insurance Benefits One can enjoy an Accidental Hospitalization cover of Rs. 1lac

per annum on Savings Max account. One can also claim daily cash allowance at

Rs.1,000/- per day for a maximum of 15 days per year, for each day of hospitalization

39
due to an accident. This is a re-imbursement cover, extended only to the first holder of

the Savings Max account. It would be applicable after the completion of the 1st

calendar quarter, post the quarter of a/c opening. Eg. If the Savings Max a/c is opened

in August 2009, the insurance benefit will apply only from January 2010. For the

claim to be accepted & processed, the first holder of the Savings Max account should

have fulfilled the below 2 conditions - Maintained an Average Quarterly Balance of

Rs. 25,000/- (irrespective of enjoying the benefit of a zero balance account with a

Fixed Deposit of minimum Rs. 1,00,000/-) in the calendar quarter previous to the

quarter of the date of accident. One should have done at least 1 purchase - point of

sale (POS) transaction at a merchant establishment using the Debit Card in the

previous 3 months before the date of accident.

CURRENT ACCOUNT OFFERED

Plus Current Account, Trade A/c, Premium A/c, Regular A/c, Flexi A/c, Apex

A/c, Max A/c.

FEATURES

Free Account to account funds transfer between HDFC Bank accounts

Free payment and collection through RTGS.

Free payment and collection using NEFT (through Netbanking)

Free up to 50 Demand Drafts per month and can be issued from any HDFC

Bank Branch

40
 Free up to 50 Pay Orders (PO) per month and can be issued from any HDFC

Bank Branch.

Free anywhere collection & payment transactions (clearing) within HDFC

Bank branch network (except Dahej), up to Rs.100 lacs per month.

HDFC Bank offers you Doorstep Banking, a channel, which is convenient,

secure and hassle-free. Now, you can enjoy the benefits of banking right at

your doorstep. The Bank will arrange to render the services like Cash &

Cheque Pickup and Cash Delivery, through a reputed agency.

300 "At Par" cheque leaves free per month.

( 2.7 ) MARKET PROFILE OF THE ORGANISATION

Kotak Mahindra is one of India's leading financial institutions, offering complete

financial solutions that encompass every sphere of life. From commercial banking, to

stock broking, to mutual funds, to life insurance, to investment banking, the group

caters to the financial needs of individuals and corporates.

The group has a net worth of over Rs. 2,900 crore, employs around 8,800 people in its

various businesses and has a distribution network of branches, franchisees,

representative offices and satellite offices across 282 cities and towns in India and

offices in New York, London, Dubai and Mauritius. The Group services around 2

million customer accounts.

41
SAVING ACCOUNT PRODUCT OFFERING:

o Ace Savings Account

o Pro Savings Account

o Edge Savings Account

ACE SAVINGS ACCOUNT (AQB 50000)

Kotak Mahindra Bank's Ace Savings Account has been designed as a gateway to a

world of financial benefits and privileged banking transactions. The account carries

benefits ranging from personal investment advisory services to free banking

transactions.

Features & Benefits:

Free access at all domestic and international VISA ATMs: One no longer have to

worry about locating your Bank or Partner Bank ATM - Use the first VISA ATM that

you spot, for free cash withdrawal or balance enquiry transactions.

Multiple access channels: Access your account anytime through your land line,

mobile phone or internet to get information on your account balance or track your

transactions. One can even transfer funds through Phone Banking or Net Banking.

Financial payments facilitated through the savings account: Use the free Kotak

Payment Gateway to make online payments for your utility bills, credit cards, online

trading of shares or even online shopping.

42
Quick and easy funds transfer: Transfer funds easily and with speed, to a beneficiary

account at another bank. One can avail of this facility by walking into any of our

branches or by simple logging on to Net Banking. Account holder also gets a free

multi-city cheque book so that money from his account is transferred to the

beneficiary's account at any of kotak branch locations, in the fastest possible time.

Free banking transactions: One can issue demand drafts or send cheques for collection

anywhere in the country for no extra charge.

Active Money: Helps earn better returns in savings account, with the ActivMoney

facility that automatically sweeps out idle funds, above a threshold, from the account

into Term Deposits. These Term Deposits are sweep back into the account to meet

fund requirements when one withdrawals exceed the balance available in the account,

thereby providing maximum liquidity.

Free investment account: Use the Net Banking facility to purchase/redeem mutual

funds online while directly debiting / crediting ones bank account. Further, a free

investment account for tracking your investments with the Bank is provided. This

account provides a consolidated view of all your mutual fund investments across

schemes with updated returns status, latest NAV information and research reports.

Dedicated relationship manager: Account holder gets a one point contact for all

banking related queries and transactions. The relationship manager is qualified to help

with financial planning and sound investment decisions in order to meet financial

goals.

43
Family Savings Account: The Kotak Ace Savings package allows customers to extend

the Kotak banking experience to three of his family members. Under this scheme one

is eligible to open 3 Edge Savings Account with NMC waiver on all 3 accounts, so

long as the AQB of your ACE account is maintained.

Online trading account : Link the savings account to your online trading with Kotak

Securities to enable transfer of funds from your bank account to your account with

Kotak Securities and vice versa.

PRO SAVINGS ACCOUNT (AQB Rs 20000)

Kotak Mahindra Banks Pro Savings Account is an account packed with powerful

features to provide a superior banking experience at a very comfortable balance

requirement. It is one of the best products being offered in the entire industry.

Features & Benefits

Unlimited Access to your bank account at over 35,000 VISA and Cash net

ATMs in India and over 388,000 Merchant Establishments which accepts

VISA credit/debit cards in India.

Multiple access channels

Free investment account

Financial payments facilitated through the savings account

44
 Quick and easy funds transfer Unlike the Ace account this facility is available

in only 15 locations through Net Banking.

ActivMoney

Dedicated relationship manager

Free banking transactions

Family Savings Account Unlike Ace Under this scheme one is eligible to

open Only 1 Edge Savings Account with NMC waiver so long as the AQB of

your ACE account is maintained.

EDGE SAVINGS ACCOUNT (AQB Rs 10000)

Kotak Mahindra Banks Edge Savings Account is a complete financial

package customized to suit individual banking needs

Features & Benefits

Unlimited Access

Multiple Access Channels

Financial payments facilitated through the savings account

Quick and easy funds transfer Quick funds transfer to a third party account

with another Bank is available across 15 locations through Net Banking.

ActivMoney

45
 Family Savings Account Under this scheme one is eligible to open Only 1

NOVA Savings Account with reduced AQB of 5000 Rs.

CURRENT ACCOUNT FEATURES

1. Remittance/ Payment Solutions - Demand Drafts/ Bankers Cheques, Payable

At-par Cheques books, Funds Transfer, NEFT and RTGS.

2. Receipts/ Collections Solutions - Local & Payable At- par Cheque

Clearing,Out station Cheque Collection,

3. Cash Transactions Free Cash Deposits at Home Branch Location

4. Home Banking

5. ActivMoney - Interest is paid on these as per the no. of days for which these

actually remain as TD! For earning any interest, a swept out TD < 15 lakhs

should remain for a min of 15 days & for a swept out TD > or = 15 lakhs, it

should remain in for a min of 7 days, as per RBI.

6. Charges Reversal Offer (Only for NEO Current Account)- For accounts that

maintain an average bal of Rs. 25,000 or more, over the term of the account, in

a financial year, 50% of all charges levied for the services & transactions

availed during the year, shall be reversed centrally at the end of each financial

year. Reversals capped at a max. limit of Rs. 1000 p.a. NMC charges

excluded. Account should be open at the end of the financial year & should not

be in TOD/ Dormancy.

7. Credit Access - Unsecured overdraft facility upto 3.5 times of AQB

maintained (max. Rs 10 Lakhs) offered to firms >3 yrs old; subject to

approvals.

46
 8. KValue - Unsecured OD offered to firms >3 yrs old. No hypothecation of

stocks etc. involved but financials like balance sheet, P&L statement, bank

account statement needed. Credit is given upon successful account

performance over the first 6 months of account opening, subject to approvals.

Credit limits upto a max. limit of Rs 50 Lakhs.

9. OD against TD

10. Phone Banking and Net Banking

11. Web Pay - A highly secured Internet based Banking system to transfer the

funds from customers account to the Beneficiary accounts maintained with

Kotak Mahindra Bank from anywhere and anytime. Customer can make

periodic payments like salaries, reimbursements, vendor payments, service

charges etc. automatically through multiple account fund transfers through file

upload facility.

12. Visa Money Transfer for Credit Card Payments & Funds Transfer

13. E Tax Online Payment of Direct Taxes

14. Trade & Forex Services

CURRENT ACCOUNTS OFFERED

1. Neo Current Account.

2. Edge Current Account.

3. Pro Current Account.

4. Elite Current Account.

5. Ace Current Account.

47
 CHAPTER 3 : DISCUSSIONS ON TRAINING

( 3.1 ) SUDENTS WORK PROFILE , TOOLS AND TECHINIQUES USED .

Taking LMS

48
My summer training of 2 months has been a complete learning experience , When I

joined this esteemed organization , my organization guide told me to take the inhouse

examinations which all employees of Kotak Mahindra Bank have to compulsorily

undergo within the first 9 months of joining the organization . These are conducted on

the computer system and we can take them at any time convenient to us . These exams

are known as LMS which means LEARNING MANAGEMENT SYSTEM .

LMS consists of about 100 papers which covers all aspects of banking . For every

exam paper , study material is available in the form of powerpoint presentations and

and word dpcuments . These are available of the intranet of the company . We just

need to log in with our specific employee id and password , refer to the material ,

study and appear for the exam .

Making Service Calls

It is a common practice in banks to sell products and services and never look back

thereafter . Since all salesmen are always chasing their monthly targets , taking out

time to talk to their existing clients and understanding any current need or any other

problems with respect to the products and services of the bank , is often rare . I

capitalized on this opportunity . I took the data of 500 clients or more from my fellow

colleagues and made service calls to all the clients .

In these calls , I thanked the customer for being a member of the Kotak family and

then resolved any issues and complaints that they were facing . This not only widened

49
my horizon in terms of understanding products and services better but also gave me a

lot of satisfaction each time I could help someone .

Marketing and Selling of CASA and other products

Since no organization can survive without making profits and profit is only made after

doing sales , I had to perform the same role . I made tele- calls to customers ie. Both

existing and non-existing and persuaded and convinced them to buy the companys

products . Although 80 % prospects dont even bother to hear you , I had to struggle

with the other 20 % .

I was happy to sell 3 savings account , one demat / trading account and one term

deposit . I received much appreciation for the same .

Other Operational Activities

At times my boss would give me some routine operational tasks to perform such as

entering data , tallying it etc ,

( 3.2 ) KEY LEARNINGS

From these 2 months training , I learnt the following :

1. I read extensively about many topics since I had to appear for LMS . This

increased my knowledge base manifolds.

50
2. Since I made service calls to clients , I became aware of the different kinds of

problems faced by clients and also understood the method of getting it

resolved .

3. While marketing and pitching company products , I got aware of the various

offerings by the bank and also learnt the effective ways of converting a

prospect into a lead .

4. The daily operational activities taught me how to use the different softwares

and applications in a computer .

5. Observation about my co-colleagues and their working style also made me

aware of a lot of things . As they say ACTIONS SPEAK LOUDER THAN

WORDS .

CHAPTER 4 : STUDY OF SELECTED RESEARCH PROBLEMS

( 4.1 ) STATEMENT OF RESEARCH PROBLEM

To make a comparative analysis of the various current accounts and savings

accounts of Kotak Mahindra Bank and HDFC Bank .

51
 ( 4.2 ) STATEMENT OF RESEARCH OBJECTIVES

To understand the differences in customer preferences while choosing savings

account and current account between Kotak Mahindra Bank and HDFC Bank.

To suggest changes that could be adopted by both the banks.

( 4.3 ) RESEARCH DESIGN AND METHODOLOGY

Research Design

Area of study

The study has been carried out for the customers of Kotak Mahindra and HDFC banks

in New Delhi, India

Sources of data

Primary data has been collected by handing out questionnaires to customers of Kotak

Mahindra and HDFC banks. The study has also used secondary data obtained from

RBI annual reports.

Sampling technique

Simple random sampling technique has been used to generate a sample of customers

of Kotak Mahindra and HDFC banks.

Sample size

52
100 questionnaires were handed out randomly to respondents of which 88 held

accounts in either Kotak Mahindra or HDFC banks. The remaining 12 respondents

held accounts in other banks and therefore their preferences became irrelevant to the

study. Hence the sample size for the study is 88.

Tools for the study

To study the differences in the performance of Kotak Mahindra and HDFC banks, the

questionnaire was used as a tool to analyse the customer preferences of both the

accounts .

CHAPTER 5 : ANALYSIS

( 5.1 ) ANALYSIS OF DATA

SWOT analysis of Kotak Mahindra Bank

53
STRENGTHS:

Capital markets franchise

Professional management

Strong technology

Strong capital structure

Construction equipment financing business

Comprehensive cash management system

Capturing supply chain businesses

NPA is at 1.30%, Total Deposits Rs15, 645 crore, Net Advances Rs16, 625 crore,

Capital Adequacy Ratio 16%.

WEAKNESS:

Wholesale Funding Costs

Late comer in the industry

Less Promotional Activities

OPPORTUNITIES:

Low loan and retail penetration

Stressed Asset Business

54
Mass Banking

THREATS:

Capital Market slow-down

Competition

Rising Rates

Other better saving, investment option available (like Insurance, Mutual fund, Real-

estate, Gold)

Brand value of competitors is stronger.

SWOT analysis of HDFC Bank

STRENGTHS

55
Right strategy for the right products.

Superior customer service vs. competitors.

Great Brand Image.

Products have required accreditation.

High degree of customer satisfaction.

Good place to work

Lower response time with efficient and effective service.

Dedicated workforce aiming at making a long-term career in the field.

WEAKNESSES

Some gaps in range for certain sectors.

Customer service staff needs training.

Processes and systems are weak.

Management cover is insufficient.

Sect oral growth is constrained by low unemployment levels and competitive staff.

OPPORTUNITIES

Profit margins trends are positive in next five years.

Bank could extend to overseas aggressively.

Introduction of new engineered products and better service applications by the bank.

Could seek better customer deals.

Fast-track career development opportunities for employees on an industry-wide basis.

56
An applied research center to create opportunities for developing techniques to

provide added-value services.

THREATS

Legislation could impact.

Great risk involved

Very high competition prevailing in the industry.

Vulnerable to reactive attack by major competitors.

Lack of infrastructure in rural areas could constrain investment.

High volume/low cost market is intensely competitive.

( 5.2 ) SUMMARY OF FINDINGS

57
 1. Distribution of different types of accounts held by the customers of Kotak

Mahindra and HDFC Banks.

The results of the data collected show that there is no difference in the types of

accounts that are held in the two banks. Out of 44 respondents of Kotak Mahindra

Bank 33 respondents have a savings account which is similar to the data of HDFC

Bank.

2. Distribution of different types of savings accounts held by the customers of

Kotak Mahindra and HDFC Banks.

In both the banks customer preference is more towards availing a lower AQB account.

In case of Kotak Bank 30 out of 44 respondents availed Edge account (the lowest

level account offered). This again highlights that Kotak Mahindra Bank can capitalize

on the opportunity to convert these account holders into Ace or Pro account holders

by educating them of the additional benefits available with these accounts.

3. Distribution of different types of current accounts held by the customers of

Kotak Mahindra and HDFC Banks.

The graph highlights that in HDFC Bank there is more number of customers using

higher end current account product than Kotak Mahindra Bank customers. In Kotak

Mahindra Bank there are more users of Edge Current Account than Ace or Pro

account. Thus there lies an opportunity for Kotak Bank to lure the customers to adopt

Ace or Pro current accounts.

58
 4. Distribution of income (per month) earned by the customers of Kotak

Mahindra Bank and HDFC Bank.

The income reported by the respondents of the two banks is similar. The difference in

the type of customers of the two banks lies in the fact that Kotak Mahindra Bank has

customers whose income per month is greater than Rs. 1 lac. However out of 44

respondents of HDFC Bank no one had an income level greater than Rs. 1 lac.

5. Distribution of waiting time experienced by the respondents of Kotak

Mahindra Bank and HDFC Bank in respective bank branches.

The data shows that 75% of the customers of Kotak Mahindra Bank have to wait less

than ten minutes for their transaction to process. Only 25% of respondents have to

wait for more than ten minutes. However in case of HDFC Bank 75% of the

respondents have to wait for more than ten minutes for their transaction to process.

This highlights the efficiency of Kotak Mahindra Bank in providing quicker

services to its customers.

6. Accessibility of bank branches

Out of 44 respondents of HDFC Bank 38 respondents feel that the branches of HDFC

bank are easily accessible to them. Only 13% customers of HDFC Bank feel that the

bank branches are not easily accessible. However in case of Kotak Mahindra Bank

31% of the respondents feel that branches of the bank are not easily accessible. This

59
implies that there is a need to increase the number of branches for Kotak

Mahindra Bank.

7. Accessibility of ATMs

Out of 44 respondents of HDFC Bank 9% customers of HDFC Bank feel that the bank

ATM is not easily accessible. However in case of Kotak Mahindra Bank 31% of the

respondents feel that ATM of the bank is not easily accessible. Chi Square test was

conducted for the sample data of 88 respondents to see whether there is a significant

difference in the accessibility of ATMs by the customers of Kotak Mahindra Bank and

HDFC bank.

8. Distribution of preferred modes of banking by customers of Kotak Mahindra

Bank and HDFC Bank.

The respondents of HDFC bank view both net banking and branch banking modes of

banking as equal. However more respondents of Kotak Mahindra Bank prefer

branch banking than net banking. Kotak Mahindra Bank could take measures to

improve and promote net banking and educate its customers about net banking to

improve its performance. This is also important because respondents feel that the

branches of Kotak bank are not easily accessible. Thus to expand its customer base

Kotak can focus to help customer adopt net banking mode.

9. Distribution of preference of customers for change in bank working hours of

Kotak Mahindra Bank and HDFC Bank.

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Of the total 44 respondents of Kotak Mahindra Bank 68% of the respondents feel that

the bank should increase its working hours. Only 32% of the respondents feel that

there is no need of increasing the working hours of the bank. Chi Square test was

conducted for the sample data of 88 respondents to see whether there is a significant

difference felt in the need to increase the working hours by the customers of Kotak

Mahindra Bank and HDFC bank.

10. Distribution of waiting time experienced by the respondents of Kotak

Mahindra Bank and HDFC Bank in respective ATMs.

The data shows that approximately 75% of the customers of Kotak Mahindra Bank

have to wait less than five minutes for their transaction to process. Only 27% of

respondents have to wait for more than five minutes. However in case of HDFC Bank

61% of the respondents have to wait for more than five minutes for their transaction o

process.

11. Receiving timely information regarding account

70% respondents of Kotak Mahindra Bank feel that they receive information

regarding their accounts by the bank within proper time. Only 15% of the respondents

of the bank feel that they do not receive timely information from the bank. However

the data collected from HDFC bank shows that 52% respondents feel they receive

timely information whereas 47% respondents felt that they do not receive updates of

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information timely. This suggests that Kotak Bank provides better services than

HDFC Bank.

12. Distribution of average monthly balance maintained by the customers of

Kotak Mahindra Bank and HDFC Bank

In both the banks maximum number of respondents keep an average monthly balance

of less than Rs. 25000 in their account.

13. Distribution of level of satisfaction experiences by the customers of the Kotak

Mahindra Bank and HDFC Bank.

More than half of the respondents of HDFC Bank feel that they are not satisfied

with the bank. On the other hand only 34% of the customers of Kotak bank feel

that they are not satisfied with the bank. This clearly highlights the efficiency of

Kotak Mahindra Bank in keeping its customers satisfied.

14. Distribution of level of satisfaction experienced by the customers of the Kotak

Mahindra Bank and HDFC Bank with respect to the knowledge of bank

employees.

The data reveals that 93% of the customers of Kotak Mahindra Bank feel that the bank

employees are have knowledge to satisfy their queries.

CHAPTER 6 : SUMMARY AND CONCLUSIONS

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 ( 6.1 ) SUMMARY OF LEARNING EXPERIENCE

From these 2 months training , I learnt the following :

I read extensively about many topics since I had to appear for LMS . This

increased my knowledge base manifolds.

Since I made service calls to clients , I became aware of the different kinds of

problems faced by clients and also understood the method of getting it

resolved .

While marketing and pitching company products , I got aware of the various

offerings by the bank and also learnt the effective ways of converting a

prospect into a lead .

The daily operational activities taught me how to use the different softwares

and applications in a computer .

Observation about my co-colleagues and their working style also made me

aware of a lot of things . As they say ACTIONS SPEAK LOUDER THAN

WORDS .

( 6.2 ) CONCLUSIONS AND RECOMMENDATIONS

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Suggestion for the HDFC BANK

HDFC must focus on the quality of service they are providing thus resulting

into reduction in service gaps.

Should work on improvement of the Banking Process and Systems for the

Growth.

HDFC must look forward toward hiring of competent staff to provide quality

services.

Must gives Sufficient time for the effective Services.

Must use Strong Capital Structure for the Capital Growth.

Suggestion for the KOTAK MAHINDRA BANK.

Arrangement of more & more motivational Activities for the Staff to achieve

the Target.

Must appoint the active employees in the Bank for the Fast Working Process.

Use the Customer reference to make the many Bank Customer.

Using the right Strategy for increase the Sales for the Product.

Must provide the high degree of Customer Satisfaction According to the

Demand.

Open more Kotak ATM outlets for the Customers.

Improving the Loan Policies/Plans of the Growth of the Bank.

APPENDIX

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 QUESTIONNAIRE

Dear Respondent, I am Ashna Kalra , student of Global school of Business, New Dehli. I request you to
please fill this questionnaire. I assure you that information shared will be kept confidential.
Name _________________________ E -mail Address __________________________
Location _________________________ Contact No. __________________________

1. With which bank do you hold an account?

Kotak Mahindra Bank HDFC Bank Others ________________

2. Which type of account do you operate in your bank?

Current Account Savings Account Both

Please indicate your Income per month
<25 K 25 50 K 50 1 L 1L 2L >2L

If you bank with Kotak Mahindra, proceed to question 3, else proceed to question 6.
3. Which Current Account do you hold with Kotak Mahindra Bank?
Ace Elite Pro Edge Neo

4. Which Savings Account do you hold with Kotak Mahindra Bank?

Ace Pro Edge

5. Rate (on a scale of 10) the following bank services offered by Kotak Mahindra Bank that you
find most useful.(Please do not give same ratings to any of the two services)

Active Money facility in savings account

Zero balance family account offer for Pro savings account holders
Wealth statements offered
Net card facility
Cheques pick up and drop facility
NEFT and RTGS facilities provided
Advance payment offer for Demat account holders
Proceed to question 9.
6. Which Current Account do you hold with HDFC Bank?
Apex Max Plus Flexi Trade

7. Which Savings Account do you hold with HDFC Bank?

Premium Regular
8. Rate (on a scale of 10) the following bank services offered by HDFC Bank that you find most
useful.(Please do not give same ratings to any of the two services)

Opening Account even with NIL initial payment

Fastest NEFT and RTGS facilities provided
ATM availability after every 500 meters
Credit card offered with savings account ( limit Rs 75000)
9. Please rank (on a scale of 1 to 10; 1 being the lowest) the factors that you consider before
opening an account in a bank.

Accessibility to bank
Minimum Balance required to be maintained
DD/ pay order services
Free Cheques facility
Cheques pick up and drop facility (home banking)
Net banking and Mobile Banking facilities available
NEFT and RTGS facilities provided
No. of ATM of the bank
Customer relationship services
10. Are your bank branches easily accessible to you?

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 Yes No
11. Are your bank ATM easily accessible to you?

Yes No
12. Which modes of banking do you prefer more?

Net banking Branch Banking

13. Do you feel employees of your bank have proper knowledge to satisfy your queries?

Very good Good Average Poor Very poor

14. Do you feel your bank should increase its working hours till late evenings.

Yes No
15. How long do you have to wait in your banks branch for your transaction to process?

< 10 min 10 to 30 min >30 min

16. How long do you have to wait in your banks ATM (Queue time)?

< 5 min 5 to 15 min >15 min

17. Are you provided with all the timely information you require from your bank?

Yes No Sometimes
18. What is the average monthly balance you maintain in your account?

< 25000 25-50000 50-100000 1-150000 1.5- 200000 >250000

19. Are you satisfied with the banking services provided to you?

Satisfied Average Needs Improvement

20. Which additional banking service do you feel your bank should provide?

_____________________________________________________________

BIBLIOGRAPHY

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Philip kotler Marketing Management

C.B. Gupta Business Organization and

Management

Internet www.google.co.in

www.kotak.com

www.bis.org

www.hdfcbank.com

www.moneycontrol.com

http://papers.ssrn.com

www.scribd.com

www.rbi.org.in

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