Saving Account Market Potential Analysis in Delhi For HDFC Bank Final

INTRODUCTION
THE INDUSTRY
Industry Profile Banking: Banking industry has virtually been the embodiment of the
hedonistic mantra "bigger, faster, more"-- as in bigger corporations produced by mergers
and acquisitions, faster transactions via ATMs and the Internet, and more products, such
as insurance and securities. More... Financial Services: Was it just a few years ago our
individual portfolios were going to make us all millionaires? How far we have come in
such short time! The bursting of the dot-com bubble set the stage for second-guessing
about how stock analysts from Morgan Stanley, Goldman Sachs Group, Citi group
Global Markets Holdings, and other investment banks had valued shares.
Bank has moved a long way from the safe deposit houses that they were. They have now
taken the role of an agent, a Private sector investor etc . . . In simple words they have
increased their scope by a wide margin.
Until Private sector banks were introduced banking for Indians was an inevitable, time
consuming and a complicated activity. Private sector banks brought with them
personalized banking which has attracted major parts of the Indian population. Major
industrial houses and a large part of the business sector do bank with these Private sector
institutions. Due to the number and quality of services provided and the case with an
account can be operated; even the household sector has started banking with these
institutions.
These Private sector banks are providing new and innovative services like
 Tele banking
 Internet banking
 Tele Draft facility
 Credit cards
 Cash delivery at door step and
 ATM
1
PRIVATE SECTOR BANKS
The Banking Regulation Act was amended in 1993 permitting the entry of new private
sector banks. The act also specified certain criteria for establishing new private sector
banks. The criteria are as follows:
 The banks should have a minimum net-worth of Rs1bn.
 The promoters holding should be minimum 25% of the paid up capital.
 The banks should offer shares to the public within three years of their operations.
(This condition was relaxed in case of many banks due to poor state of capital markets).
 The first new private sector bank started operations in 1995. The minimum net-
worth requirement of Rs1bn and difficulty in getting the banking license has kept the
option open for very few players. The financial institutions have promoted many of these
banks. After the CRB fiasco (the group was granted a license for banking which was
revoked after the exposure of the group in a scam), RBI has not granted any further
licenses.
 With emphasis on service and technology, it is for the first time that Indian banks
are challenging the foreign banks. These banks are making heavy use of technology to
give good service on par with foreign banks but to a much wider audience e.g. branch
size has been reduced considerably by using technology and having less manpower. This
saves the cost of the branch. In addition the ATM etc helps drawing large customers to
one branch.
 The new private banks are on an expansion phase and are now moving into semi-
urban areas and satellite towns to fulfill their branch expansion norms. Their
technological edge and product innovation has seen them gaining market share from the
slower, less efficient older banks. These banks have targeted non-fund-based income as
major source of revenue, with their level of contingent liabilities being much higher then
their other counterparts viz. PSU and old private sector banks.
the new private banks have been consistently gaining market share from the public sector
banks. The major beneficiary of this has been corporate clients who are most sought after
now.
2
Banking Industry in India has always revolved around the traditional function of deposits
and credit. Their role had been defined as to assist the overall economic growth with
majority of share being controlled by the Government of India in most of the banks. But
with the process of liberalization, the banking industry has also undergone tremendous
change in the last 5 years. The market, which was largely controlled by the public sector
banks, has now been facing stiff competition not only from foreign players but also from
the new generation private sector banks. The rules of the game have been changing with
the RBI introducing new norms to make banks more accountable and to adopt the
practices followed worldwide.
Most of the banks have now been trying to function on the concept of a Universal Bank.
Apart from the traditional functions of a commercial bank, they are taking steps to build
themselves into a one stop financial center wherein all the financial products would be
available. Banks have started catering to the retail segment to improve their deposit
portfolio. In order to have a maximum share in this segment, most of the banks have been
introducing new products. The delivery channels have also been shifted from branches to
ATMs, phone banking, net banking etc.
Technology has become an important medium of not only attracting new customers but
also in retaining them. The new generation private sector banks have made a strong
presence in the most lucrative business areas in the country because of technology up
gradation. While, their operating expenses have been falling as compared to the PSU
banks, their efficiency ratios (employee’s productivity and profitability ratios) have also
improved significantly.
Mergers and Acquisitions have also started playing their role in the banking industry
where lots of players are trying to consolidate their position. The recent merger of Times
Bank with HDFC Bank was an important step in this direction. In recent times, most of
the new private sector banks have shown interest in inducting a foreign partner in their
operations.
The government is planning to bring down its stake in the public sector banks from 51%
to 33%. This move will enable these banks to raise further capital to adhere to the CAR
requirements and will also help in changing their perception in the market vis-à-vis the
private sector banks.
3
Most of the banks are also planning to enter the insurance business and are in the process
of identifying their strategic partners. Since most of the banks already have an extensive
distribution network, this new business should result in substantial revenues. But with
most of the top league players planning to enter this business, the more efficient and pro-
active players would be able to take a lead.
Industry Profile Banking: Banking industry has virtually been the embodiment of the
hedonistic mantra "bigger, faster, more"-- as in bigger corporations produced by mergers
and acquisitions, faster transactions via ATMs and the Internet, and more products, such
as insurance and securities. More... Financial Services: Was it just a few years ago our
individual portfolios were going to make us all millionaires? How far we have come in
such short time! The bursting of the dot-com bubble set the stage for second-guessing
about how stock analysts from Morgan Stanley, Goldman Sachs Group, Citi group
Global Markets Holdings, and other investment banks had valued shares.
account can be operated; even the household sector has started banking with these
institutions.
These Private sector banks are providing new and innovative services
like
1) Tele banking
2) Internet banking
3) Tele Draft facility
4) Credit cards
5) Cash delivery at door step and
6) ATM
4
7) Making them more and more user friendly.
account can be operated, even the household sector has started banking with these
institutions.
These Private sector banks are providing new and innovative services
like
1) Tele banking
2) Internet banking
3) Tele Draft facility
4) Credit cards
5) Cash delivery at door step and
6) ATM
7) Making them more and more user friendly.
5
BANKING INDUSTRY
INDIAN FINANCIAL SYSTEM
Commercial banks
Financial Financial institutions
institution
Non-banking financial
companies
Long term instruments

FINANCIAL Financial
SYSTEM instruments
Short term instruments
Capital market
Financial
markets
Money market
HISTORY OF BANKING INDUSTRY

Banks are the most prominent and very important part of the financial economy of India.
The performance of banks is completely linked to the growth of the economy while the
nature and quantum of growth is in turn linked to the availability of bank credit. Banks
have been used by successive governments to achieve their social, political and economic
goals. The structure of the Government Banking system has undergone numerous change
since independence. Two phases of nationalization, introduction of Regional Rural Banks
in 1975 (to focus on rural spread on banking) and permission to new private banks to set
up operations since 1993-94 are some of the major changes undergone.
Banking Industry in India has always revolved around the traditional function of deposits
and credit. Their role had been defined as to assist the overall economic growth with
majority of share being controlled by the Government of India in most of the banks. But
with the process of liberalization, and the technological revolution the banking industry
has also undergone tremendous change in the last 5 years. The market, which was largely
controlled by the public sector banks, has now been facing stiff competition not only
6
from foreign players but also from the new generation private sector banks. The rules of
the game have been changing with the RBI introducing new norms to make banks more
accountable and to adopt the practices followed worldwide.
Most of the banks have now been trying to function on the concept of a Universal Bank.
Apart from the traditional functions of a commercial bank, they are taking steps to build
themselves into a one stop financial centre wherein all the financial products would be
available. Banks have started catering to the retail segment to improve their deposit
portfolio. In order to have a maximum share in this segment, most of the banks have been
introducing new products. The delivery channels have also been shifted from branches to
ATMs, phone banking, net banking etc.
Technology has become an important medium of not only attracting new customers but
also in retaining them. The new generation private sector banks have made a strong
presence in the most lucrative business areas in the country because of technology
upgradation. While, their operating expenses have been falling as compared to the PSU
banks, their efficiency ratios (employee’s productivity and profitability ratios) have also
improved significantly.
Key Industry Statistics of Scheduled Commercial Banks
(Rs bn)
2006 2007 2008 2009
Total deposits 7140 8132 8729 9928
Demand 1174 1273 1266 1347
Time 5966 6859 7463 7498
Total bank credit 3688 4358 4667 4779
Food 168 256 320 373
non-food 3520 4102 4347 4399
Investments 2545 3088 3332 3347
govt. sec 2232 2784 3023 3038
other approved sec 313 304 309 314
Cash in hand 43 53 53 57
Balance with RBI 635 574 631 656
Cash-Deposit ratio 9.50% 7.70% 7.80% 7.80%
Investment-Deposit ratio 35.70% 38% 38.20% 38.20%
Credit-Deposit ratio 51.70% 53.60% 53.50% 53.50%
Banks traditionally involved in working capital financing have started offering consumer
loans and housing loans. Some of the banks have started offering travel loans as well.
7
Retail financing is the other area where the banks have started to concentrate. The loan
formalities too have been relaxed to a great extent and sanctioning time has been speeded
up.
Mergers and Acquisitions have also started playing their role in the banking industry
where lots of players are trying to consolidate their position. The recent merger of HDFC
Bank with Times Bank and ICICI Bank with Bank of Madura are important steps in this
direction. In recent times, most of the new private sector banks have shown interest in
inducting a foreign partner in their operations.
Most of the banks are also planning to enter the insurance business and are in the process
of identifying their strategic partners. Since most of the banks already have an extensive
distribution network, this new business should result in substantial revenues. But with
most of the top league players planning to enter this business, the more efficient and pro
active players would be able to take a lead.
Private Sector Banks
The Banking Regulation Act was amended in 1993 permitting the entry of new private
sector banks. The act also specified certain criteria for establishing new private sector
banks. The criteria are as follows:
The banks should have a minimum net-worth of Rs1bn.
1) The promoters holding should be minimum 25% of the paid up capital.
2) The banks should offer shares to the public within three years of their operations.
(This condition was relaxed in case of many banks due to poor state of capital
markets).
3) The first new private sector bank started operations in 1995. The minimum net-
worth requirement of Rs1bn and difficulty in getting the banking license has kept
the option open for very few players. The financial institutions have promoted
many of these banks. After the CRB fiasco (the group was granted a license for
banking which was revoked after the exposure of the group in a scam), RBI has
not granted any further licenses.
4) With emphasis on service and technology, it is for the first time that Indian banks
are challenging the foreign banks. These banks are making heavy use of
technology to give good service on par with foreign banks but to a much wider
8
audience e.g. branch size has been reduced considerably by using technology and
having less manpower. This saves the cost of the branch. In addition the ATM etc
helps drawing large customers to one branch.
5) The new private banks are on an expansion phase and are now moving into semi-
urban areas and satellite towns to fulfill their branch expansion norms. Their
technological edge and product innovation has seen them gaining market share
from the slower, less efficient older banks. These banks have targeted non-fund-
based income as major source of revenue, with their level of contingent liabilities
being much higher then their other counterparts viz. PSU and old private sector
banks.
6) The new private banks have been consistently gaining market share from the
public sector banks. The major beneficiary of this has been corporate clients who
are most sought after now.
Comparative position of private sector banks (Rs mn)
HDFC ICICI HDFC
Income 8052 10468 5743
Net Profit 1200 1053 509
Net Worth 7514 11495 2395
Deposits 84277 98660 57200
Advances 33622 36573 35066
Investments 57482 44166 20651
Spread (%) 3.6 1.4 1.4
NPAs / Net worth (%)4.9 4.8 68.9
RONW (%) 16.0 9.2 21.3
CAR (%) 12.2 19.6 11.3
Source: Indiainfoline.com
The new private sector banks have performed very well in the FY2005. Most of these
banks have registered an increase in net profits of over 50%. They have been able to
make significant inroads in the retail market of the public sector and the old private sector
banks. During the year, the two leading banks in this sector had set a new trend in the
9
Indian banking sector. HDFC Bank, as a part of its expansion plans had taken over Times
Bank. ICICI Bank became the first bank in the country to list its shares on NYSE.
The Reserve Bank of India had advised the promoters of these banks to bring their stake
to 40% over a time period. As a result, most of these banks had a foreign capital infusion
and some of the other banks have already initiated talks about a strategic alliance with a
foreign partner.
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COMPANY PROFILE
BACKGROUND
Incorporated in 1977 with a share capital of Rs.100 million, HDFC has since emerged as
the largest mortgage finance institution in the country. Promoted by the Industrial Credit
and Investment Corporation of India, and with initial investments from the International
Finance Corporation and the Aga Khan, the corporation has had a series of share issues
raising it’s capital to Rs1.19 billion. The net worth of the corporation as at March 31,
2001 is Rs.18, 000 crores.
Objectives
The primary objective of HDFC is to enhance residential housing stock and to promote
home ownership. One of HDFC’s major objectives is to increase the flow of resources for
housing through the integration of housing finance institutions with the domestic capital
market. During the past decade, HDFC has nurtured the development of a housing
finance industry by helping to promote housing finance institutions in partnership with
commercial banks and private sector institutions.
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 a market
leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling
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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
HDFC Bank's mission is to be a World-Class Indian Bank. The Bank's aim is to build
sound customer franchises across distinct businesses so as to be the preferred provider of
banking services in the segments that the bank operates in and to achieve healthy growth
in profitability, consistent with the bank's risk appetite. The bank is committed to
maintain the highest level of ethical standards, professional integrity and regulatory
compliance. HDFC Bank's business philosophy is based on four core values: Operational
Excellence, Customer Focus, Product Leadership and People.
Capital Structure
The authorized capital of HDFC Bank is Rs.450 crore (Rs.45 billion). The paid-up capital
is Rs.282 crore (Rs.28.2 billion). The HDFC Group holds 24.2% of the bank's equity
while about 13.1% of the equity is held by the depository in respect of the bank's issue of
American Depository Shares (ADS/ADR Issue). The Indian Private Equity Fund,
Mauritius (IPEF) and Indocean Financial Holdings Ltd., Mauritius (IFHL) (both funds
advised by J P Morgan Partners, formerly Chase Capital Partners) together hold about
5.5% of the bank's equity. Roughly 27.5% of the equity is held by FIIs, NRIs/OCBs
while the balance is widely held by about 214,000 shareholders. The shares are listed on
The Stock Exchange, Mumbai and the National Stock Exchange. The bank's American
Depository Shares are listed on the New York Stock Exchange (NYSE) under the symbol
"HDB".
Times Bank Amalgamation
In a milestone transaction in the Indian banking industry, Times Bank Limited (another
new private sector bank promoted by Bennett, Coleman & Co./Times Group) was merged
with HDFC Bank Ltd., effective February 26, 2000. As per the scheme of amalgamation
approved by the shareholders of both banks and the Reserve Bank of India, shareholders
of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. The
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amalgamation added significant value to HDFC Bank in terms of increased branch
network, expanded geographic reach, enhanced customer base, skilled manpower and the
opportunity to cross-sell and leverage alternative delivery channels.
Distribution Network
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network
of over 396 branches spread over 189 cities across the country. All branches are linked on
an online real-time basis. Customers in 90 locations are also serviced through Phone
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 have a strong and active member base.
The Bank also has a network of over 900-networked ATMs across these cities. Moreover,
all domestic and international Visa/MasterCard, Visa, can access HDFC BANK’s ATM
network
Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.
Management
Mr. Jagdish kapoor took over as the bank's Chairman in July 2001. Prior to this, Mr.
kapoor was a Deputy Governor of the Reserve Bank of India.
The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25
years, and before joining HDFC Bank in 1994 was heading Citibank's operations in
Malaysia.
The Bank's Board of Directors is composed of eminent individuals with a wealth of
experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board.
Senior banking professionals with substantial experience in India and abroad head
various businesses and functions and report to the Managing Director. Given the
professional expertise of the management team and the overall focus on recruiting and
retaining the best talent in the industry, the bank believes that its people are a significant
competitive strength.
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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 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. In terms of
software, the Corporate Banking business is supported by Flexcube, while the Retail
Banking business by Finware, both from i-flex Solutions Ltd. The systems are open,
scaleable and web-enabled.
The Bank has prioritized its engagement in technology and the internet as one of its key
goals and has already made significant 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.
Business Profile
HDFC Bank caters to a wide range of banking services covering both commercial and
investment banking on the wholesale side and transactional / branch banking on the retail
side. The bank has three key business areas: -
a) Wholesale Banking Services
The Bank's target market is primarily large, blue chip manufacturing companies in the
Indian corporate sector and to a lesser extent, emerging mid-sized corporate. For these
corporate, the Bank provides a wide range of commercial and transactional banking
services, including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions, which
combine cash management services with vendor and distributor finance for facilitating
superior supply chain management for its corporate customers. Based on its superior
product delivery / service levels and strong customer orientation, the Bank has made
significant inroads into the banking consortia of a number of leading Indian corporate
including multinationals, companies from the domestic business houses and prime Public
Sector companies. It is recognized as a leading provider of cash management and
14
transactional banking solutions to corporate customers, mutual funds, stock exchange
members and banks.
b) Retail Banking Services
The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and
delivered to the customers through the growing branch network, as well as through
alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile
Banking.
The HDFC Bank preferred program for high net worth individuals, the HDFC Bank Plus
and the Investment Advisory Services programs have been designed keeping in mind
needs of customers who seek distinct financial solutions, information and advice on
various investment avenues. The Bank also has a wide array of retail loan products
including Auto Loans, Loans against marketable securities, Personal Loans and Loans for
Two-wheelers. It is also a leading provider of Depository Services to retail customers,
offering customers the facility to hold their investments in electronic form.
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. The debit card allows the user to directly debit his account at the point of purchase
at a merchant establishment, in India and overseas. The Bank launched its credit card in
association with VISA in November 2001. The Bank is also one of the leading players in
the "merchant acquiring" business with over 25,000 Point-of-Sale (POS) terminals for
debit / credit cards acceptance at merchant establishments. The Bank is well positioned as
a leader in various net-based B2C opportunities including a wide range of Internet
banking services for Fixed Deposits, Loans, Bill Payments, etc.
c) Treasury Operations
Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on
various treasury products are provided through the bank's Treasury team. To comply with
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statutory reserve requirements, the bank is required to hold 25% of its deposits in
government securities. The Treasury business is responsible for managing the returns and
market risk on this investment portfolio.
Rating
HDFC Bank has its deposit programme rated by two rating agencies - Credit Analysis &
Research Limited (CARE) and Fitch Ratings India Pvt. Ltd. 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 "AAA (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". HDFC
Bank also has its long-term unsecured, subordinated (Tier-II) Bonds rated by CARE and
Fitch Ratings India Pvt. Ltd. CARE has assigned the rating of "CARE AAA" for the
Tier-II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)"
with the outlook on the rating as "stable". In each case referred to above, the ratings
awarded were the highest assigned by the rating agency for those instruments.
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.
Operations
HDFC commenced operations as a mortgage bank; it raised large wholesale resources
(domestic and international) and lent retail primarily to individual households. In mid-
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1991, it entered the retail deposit market by offering savings and investment
opportunities to households in competition with other instruments in the financial market.
Loans to Corporate Bodies: Deposit Facilities
Corporate loans Individual deposits
Lines of Credit - Cumulative option
Non-residential premises loans - Non-cumulative option
- Monthly income plan
Facilities to Developers
- Double money option
Short term construction finance
- Children’s gift fund
Financial guarantees
Trust deposits
Advance processing facility
Corporate deposits
HDFC provides finance on both sides of its balance sheet in order to provide services
that are the best suited to its customer base. Today, HDFC has a mix of individual and
corporate clients both on the funding and the lending side.
Individual Home Loans

• Purchase/Construction • Short-term bridging loans
• Home Improvement loans • Loans to Non-Resident Indians
• Home Extension loans • Flexi-Rate Individual loans
• Loans to professionals • Land Purchase loans
HDFC depicts a healthy portfolio of outstanding loans as at Mar31, 2001. This is
constituted by 73% individual loans, 26% corporate loans and 1% loans of others.
The number of offices of the corporation in India has increased sharply in the last three
years. From 49 in 1999 to 67 in 2000, the present locations number 87.
Development of Institutions
Housing will continue to be the core business of HDFC. While the main focus is to grow
the housing portfolio, organically and inorganically, in order to capitalize on HDFC’s
strong brand value and maximize returns for shareholders, HDFC has made investments
in various group companies. They have strong synergies with HDFC and such
diversification will enable it to offer a wide gamut of financial services and products to
customers. A few of these companies have been mentioned below: -
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Associate Companies
• GRUH Finance Ltd. • HDFC Bank Ltd.
• HDFC Securities Ltd. • CRISIL
Subsidiary Companies
• HDFC Standard Life Insurance Ltd. • HDFC Holdings Ltd.
• HDFC Asset Management Company Ltd. • HDFC Realty Ltd.
Financial Performance
(Rs. In crores)
Parameters 2006-2007 2007-2008 2008-2009
Gross Income 1752.73 2015.56 2382.35
Profit-after Tax 333.90 401.80 473.65
Dividend (%) 85 190* 125
Earnings per share 28 34 40
(Rs.)
* Includes one-time special millennium interim dividend of 100%
Other Services/Activities
Apart from providing a gamut of financial services to its customers, HDFC has made its
for a into various other activities too.
♦ Property related services
♦ Training
♦ International Union for Housing Finance
♦ Consultancy
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LITERATURE REVIEW
Savings, Fixed Deposits, Current and Demat Accounts
Savings Account: Apart from the usual facilities, you get a free ATM Card, Inter branch
banking, Net Banking, Bill Pay, Phone Banking, Debit Card and Mobile Banking, among
others.
HDFC Bank Preferred: A preferential Savings Account where you are assigned a
dedicated Relationship Manager, who is your one-point contact. You also get privileges
like fee waivers, enhanced ATM withdrawal limit, priority locker allotment, free Demat
Account and lower interest rates on loans, to name a few.
Sweep-In Account: A fixed deposit linked to your Savings Account. So, even if your
Savings Account runs a bit short, you can issue a cheque (or use your ATM Card). The
money is automatically swept in from your fixed deposit into your Savings Account.
Super Saver Account: Gives you an overdraft facility up to 75% of your Fixed Deposit.
In an emergency, you can access your funds while your Fixed Deposit continues to earn
high interest.
HDFC Bank Plus: Apart from Regular and Premium Current accounts we also have
HDFC Bank Plus, a Current Account and then some more. You can transfer up to Rs. 50
lakhs per month at no extra charge, between the four metros. You can also avail of
cheque clearing between the four metros, get cash delivery/pickup up to Rs. 25,000/-,
home delivery of Demand Drafts, at-par cheques, outstation cheque clearance facility,
etc.
Demat Account: Conduct hassle-free transactions on your shares. You can also access
your Demat Account on the Internet.
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Innovative services for your convenience...
Phone Banking: 24-hour automated banking services with 39 Phone Banking numbers
available.
ATM 24-hour banking: Apart from routine transactions, you can also pay your utility
bills and transfer funds, at any of our ATMs across the country all year round.
Inter-city/Inter-branch Banking: Access your account from any of our 396 branches in
189 cities.
Net Banking: Access your bank account from anywhere in the world, at anytime, at your
own convenience. You can also view your Demat Account through Net Banking.
International Debit Card: An ATM card you can shop with all over the country and in
over 140 countries with. You can spend in any currency, and pay in Rupees.
Mobile Banking: Access your account on your mobile phone screen at no airtime cost.
Use SMS technology to conduct your banking transactions from your cell phone.
Bill Pay: Pay your telephone, electricity and mobile phone bills through our ATMs,
Internet, phone or mobile phone. No more standing in long queues or writing cheques.
Loans for every need
Now, our loans come to you in easy-to-pay monthly installments, and are available with
easy documentation and quick delivery.
Personal Loans: Take a loan of up to Rs. 3 lakh for a wedding, education, purchase of a
computer or an exciting holiday.
New Car Loans and Used Car Loans: Finance up to 90% of the cost of a car, new or
used! And the loans come to you with easy documentation and speedy processing at
attractive interest rates.
20
Loans Against Shares: Get an overdraft up to Rs. 10 lakh at an attractive interest rate
against physical shares, up to 50% of the market value of your shares. In case of Demat
Shares, you can get a Loans Against Shares of up to 65% of the market value of your
shares, till Rs. 20 lakh.
Two Wheeler & Consumer Loans: To help you buy the best durables for your home.
Demat Account: Protect your shares from damage, loss and theft, by maintaining your
shares in electronic form. You can also access your demat account on the Internet.
Current Account: Get a personalized chequebook, monthly account statements, inter-
branch banking and much more.
Mutual Funds: Apart from a wide choice of mutual funds to suit your individual needs,
you benefit from expert advice on choosing the right funds based on in-depth market
analysis.
International Credit Card: Get an option of Silver, Gold, or Health Plus Credit card,
accepted worldwide from a world-class bank. If you have outstanding balance on your
other credit card, you can transfer that balance to this card at a lower interest rate.
NRI Services: A comprehensive range, backed by unmatched features and world-class
service, ensures NRIs all the banking support they need.
Forex Facilities: Avail of foreign currency, travelers cheques, foreign exchange demand
drafts, to meet your travel needs.
Insurance*: HDFC Bank now brings you Life Insurance and Pension Solutions like Risk
Cover Scheme, Savings Scheme, Children’s Plan and Personal Plan from HDFC
Standard Life Insurance Co. Ltd.
RULES AND REGULATIONS
21
Cluster Deposits:
Fixed deposits are held in units of Rs,. 1 each of which is treated as a separate deposit.
This allows customer to encash part of the deposit amounting multiples of Re 1 before
the maturity date while the re maturity units continue to earn him at the contract rate.
Therefore in an emergency the customer can withdraw the exact amount he needs to
minimize the interest loss. There is no limit on the number of units or the frequency at
which the customer can withdraw unit during the tenure of the deposit.
SWOT ANALYSIS (HDFC BANK)
To understand the position that IndusInd holds among its competitors and in the industry
segment as such, a SWOT analysis can be attempted. This exposes the bank's positives
and negatives in a better way, which helps one properly, evaluate and quantify the worth
of its equity also.
STRENGTHS
• Largest bank among the new private sector banks in terms of deposits advances and
profits. IndusInd had maintained its leadership position all through the years since it
was established.
• IndusInd handles one of the largest volumes of international banking business in
India. All the branches of the bank are SWIFT facilitated. A correspondence network
of 178 foreign banks overseas is pivotal in this success.
• Frugal cost management system adopted by the bank helped it to achieve a figure of
2.06 percent as the operating cost to average working funds ratio which is the lowest
operating cost in the whole banking sector. The bank is very strong on this front.
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• High profitability, reflected by the Return On Net Worth (RONW) of 88.64 percent.
This was substantiated by an EPS figure of 6.11 as on 31 March 2005. Extrapolating
the half-yearly results, this showed an increase, which meant that the profit earning
capacity of the bank was increasing.
WEAKNESSES
• The bank's interest spread to Average Working funds ratio had been showing a
decline since last two years. This reflects an inherent weakness in interest risk
management, more often referred to as Asset-Liability Management (ALM).
• A weak credit monitoring exercise had resulted in the bank's provisioning of nearly
22 crore which it had lent to the CRB group companies. Greater caution has to be
shown on this front.
• The investment banking division of the bank, though it had a category I merchant
banker status from SEBI, could not perform well. This was because the bank had its
competency in a different field like commercial banking, and not in the area of
investment banking.
OPPORTUNITIES
• The RBI reforms aimed at providing more functional autonomy to commercial banks
will help the new private sector banks in expanding their operations into new
customer segments and making use of their resources more productively.
• The phased introduction of rupee convertibility and other similar economic reforms,
aimed at linking the domestic economy with the foreign markets would help banks
like IndusInd to have a leading edge over other banks. The bank can increase its
23
global business due to the vast network of links with foreign banks, and rich
experience.
• Removal of the 5 percent limit of advances to be put in investments, and making it
relative to the incremental deposits is a welcome decision for the banking sector in
general, and private banks in particular. At a time of lower credit off take, the banks
can go in for aggressive investment strategies to maintain the profitability.
THREATS
• A slump in the industrial output has resulted in a low credit off take, which is
affecting the banking industry in a bad way. This has affected IndusInd also, which is
evident from a decreasing credit-deposit ratio.
• Competition is intense in the banking sector, with many public sector banks
restructuring their way of functioning, and coming to the profitability track. They are
investing more in technology, and customer approach has also changed considerably.
The private banks like IndusInd will have to fight these giants out, who have a long
market standing and rich deposit base.
• Changing regulatory environment is also a threat to the private banks like IndusInd.
With an unstable political set up, the rules of the game may change any time to the
disadvantage of these banks.
24
Development Initiatives (HDFC)
(i) Investment In Sri Lanka
In October 1999, HDFC Investment Limited, a wholly owned subsidiary of
HDFC, signed an agreement with National Development Bank (NDB), Sri Lanka to
become an equity partner in the proposed housing finance company to be promoted by
NDB.
(ii) Credit Information Bureau (CIB)
HDFC has signed a memorandum of understanding with State Bank of India
(SBI), Trans Union International Inc. (Trans Union) and Dun & Bradstreet Information
Services India Private Limited (D&B) to work towards setting up a CIB in India. HDFC
and SBI will hold 40% each and Trans Union and D&B will hold 10% each in proposed
share capital of the CIB.
(iii) Information Technology and Web Enable Services
Several opportunities have emerged in information technology and web enabled
services, which have linkages to HDFC’s operations. These include services in real estate
and construction, personal finance and other financial related products. HDFC has
invested in some of these opportunities and will continue to explore further possible
investments in this area.
Property Portal
During the year 2000, HDFC and the e-Mahindra division of the Mahindra and
Mahindra Group of Companies entered into a joint venture to set up a property portal,
propertymartindia.com to provide an entire range of real estate services through the
25
internet. The objective of the site is to simplify the tedious and opaque process of
acquiring/selling a property. The customer is provided a wide range of properties at one
stop and is also advised on various legal and technical aspects of real estate.
HDFC Website
HDFC’s website, www.hdfc.com offers a number of interactive features and e-mail based
services. In December 2000, HDFC became the first Indian housing loans. Strategic tie-
ups with leading portals have been initiated for passing on referrals, lead and giving links
from other sites to hdfc.com.
The website offers information on products and services of the corporation,
including interactive tools such as a monthly installment calculator and deposit
calculator. Other value based services for loan and deposit products include e-mail based
for income-tax certificates, statement of accounts, prepayment information and checklist
of legal documentation.
HDFC Offerings
Loan and Deposits
1. Resident Indians – (i) Loans (Home Loans, Adjustable Rate Home Loans, Home
improvement Loans, Home Extension Loan, Short Term Loans, Land Purchase
Loan, Non-Residential Premises Loans For Professionals). (ii) Deposits (Non-
Cumulative Deposits, Cumulative Deposits, Annual Income Plan, Monthly
Income Plan, Easy Way Savings, Individual Interest Rates, and Senior Citizens
Deposits.
2. Non-Resident Indians – (i) Loans (Home Loans, Adjustable Rate Home Loans,
Home Improvement Loans, Home Extension Loan, Land Purchase Loans). (ii)
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Deposits (Non-Cumulative Deposits, Cumulative Deposits, Annual Income Plan,
Monthly Income Plan, Individual Interest Rates, Senior Citizens Deposits).
3. Other – (i) Consumer Loans (ii) Education Loans (iii) Home Equity Loans.
4. Corporate – (i) Corporate Loan Facility (ii) Line of Credit Facility (iii)
Service Facilities.
5. Trusts – (i) Non-Cumulative Deposits (ii) Cumulative Deposits (iii) Annual
Income Plan (iv) Monthly Income Plan (iv) Interest Rates.
6. Deposit Agents.
7. Property Services - (i) Builders (ii) HDFC Reality
TERMS AND CONDITIONS: -
Either can apply for all loans individually or jointly. Proposed owners of the
property, in respect of which the loan is being sought, will have to be co-
applications. However, the co-applications need not be co-owners.
1. Home Loans: Loans can be available up to a maximum of 85% of the cost of the
property (including the cost of the land). HDFC lends up to a maximum of
Rs.1,00,00,000 on a Home Loan to an individual. The loan repay over a
maximum period of 15 years. HDFC’s main concern is to help individuals
comfortably repay the borrowed amount.
2. Adjustable Rate Home Loans: Loans can be available up to a maximum of 85%
of the cost of the property (including the cost of the land). The loan repay over a
maximum period of 20 years.
3. Home Improvement Loans: Loan can be available up to 70% of the
improvement costs. HDFC lends up to a maximum of Rs.10,00,000 on a home
27
improvement loan to an individual. The loan repay over a maximum period of 8
years.
4. Home Extension: Loans can be available up to a maximum of 85% of the cost of
the home extension. HDFC lends up to a maximum of Rs.1,00,00,000 on a home
extension loan to an individual. The loan repay over a maximum period of 15
years.
5. Short Term Bridging Loans: Loans can be availed up to a maximum of 85% of
the value of the existing home. HDFC lends up to a maximum of Rs.1, 00,00,000
on a STBL to an individual. The loan repay over a maximum period of 24
months.
6. Land Purchase Loan: Loans can be availed up to a maximum of 85% of the cost
of the land. HDFC lends up to a maximum of Rs.1,00,00,000 on a land purchase
loan to an individual. The loan repay over a maximum period of 15 years.
MERGER
The merger with Times Bank had catapulted HDFC Bank into a different league, giving
it greater muscle in terms of retail client base as well as mid-market corporate clientele.
The bank has nearly 8.5 lakh retail accounts currently. It has said that in its corporate
lending, it will continue to focus on top-end corporate clientele while retaining a part of
mid-market clientele that came as part of the Times Bank baggage.
This should ensure that the focus on asset quality, which stood the bank in good stead
during the two years of recession, is not diluted. Even so, the bank had added Rs. 47.71
crores of gross non-performing accounts on its own account and another Rs. 61.67 crores
of gross NPAs on account of the amalgamation in 1999-2000. The degree of impairment
28
of the asset portfolio seems to have reflected in the higher provisioning of Rs. 26 crores
during the first quarter.
Over the past few months, HDFC Bank has entered into a number of alliances with
software and dot com companies. It announced a joint venture with I-Flex Solutions to
offer solutions to other banks in India and abroad through an application services
provider model. The bank had taken a stake in Computer Age Management Services, a
leading registrar and share transfer agent, earlier this year. The bank has also tied-up with
a couple of portals and brokerages to provide payment gateway services for transactions
done on the web.
The bank has said that it will make selective strategic investments in technology-related
companies/important service-providers, which provide strong synergy with its existing
business plan. These investments may, however, take some time to show results. Until
then, the stock market may not read much value in these tie-ups. The bank's stock has
trebled in value since the merger with Times Bank eight months ago. The HDFC Bank
stock trades in the Rs. 270-280 region and is expected to stay firm at these levels in the
short term.
One concern for the stock market is whether the fast pace of growth of HDFC Bank
would prompt a further capital-raising exercise in the next one year. The bank's capital
adequacy ratio, as of March 2000, was 12.9 per cent. At the moment, it still has sufficient
headroom in the tier-II capital. Unless the bank goes in for a major acquisition, it may not
be required to tap equity funds in the immediate future. In any case, there appears to be a
lull after the merger mania, which gripped the new private bank group in early 2000. The
bank management as not feasible in the current regulatory environment has also
29
dismissed the possibility of a possible merger between HDFC BANK and the parent
HDFC.
Savings, Fixed Deposits, Current and Demand accounts
Savings Account: Apart from the usual facilities, you get a free ATM Card, Inter branch
banking, Net Banking, Bill Pay, Phone Banking, Debit Card and Mobile Banking, among
others.
HDFC Bank Preferred: A preferential Savings Account where you are assigned a
dedicated Relationship Manager, who is your one-point contact. You also get privileges
like fee waivers, enhanced ATM withdrawal limit, priority locker allotment, free Demat
Account and lower interest rates on loans, to name a few.
Sweep-In Account: A fixed deposit linked to your Savings Account. So, even if your
Savings Account runs a bit short, you can issue a cheque (or use your ATM Card). The
money is automatically swept in from your fixed deposit into your Savings Account.
Super Saver Account: Gives you an overdraft facility up to 75% of your Fixed Deposit.
In an emergency, you can access your funds while your Fixed Deposit continues to earn
high interest.
HDFC Bank Plus: Apart from Regular and Premium Current accounts we also have
HDFC Bank Plus, a Current Account and then some more. You can transfer up to Rs. 50
lakh per month at no extra charge, between the four metros. You can also avail of cheque
clearing between the four metros, get cash delivery/pickup up to Rs. 25,000/-, home
delivery of Demand Drafts, at-par cheques, outstation cheque clearance facility, etc.
Demand Account : Conduct hassle-free transactions on your shares. You can also access
your Demand Account on the Internet.
30
Innovative services for your convenience...
Phone Banking: 24-hour automated banking services with 39 Phone Banking numbers
available.
ATM 24-hour banking: Apart from routine transactions, you can also pay your utility
bills and transfer funds, at any of our ATMs across the country all year round.
Inter-city/Inter-branch Banking: Access your account from any of our 396 branches in
189 cities.
Net Banking: Access your bank account from anywhere in the world, at anytime, at your
own convenience. You can also view your Demat Account through Net Banking.
International Debit Card: An ATM card you can shop with all over the country and in
over 140 countries with. You can spend in any currency, and pay in Rupees.
Mobile Banking: Access your account on your mobile phone screen at no airtime cost.
Use SMS technology to conduct your banking transactions from your cell phone.
Bill Pay: Pay your telephone, electricity and mobile phone bills through our ATMs,
Internet, phone or mobile phone. No more standing in long queues or writing cheques.
Loans for every need
Now, our loans come to you in easy-to-pay monthly installments, and are available with
easy documentation and quick delivery.
Personal Loans: Take a loan of up to Rs. 3 lakh for a wedding, education, purchase of a
computer or an exciting holiday.
New Car Loans and Used Car Loans: Finance up to 90% of the cost of a car, new or
used! And the loans come to you with easy documentation and speedy processing at
attractive interest rates.
31
Loans Against Shares: Get an overdraft up to Rs. 10 lakh at an attractive interest rate
against physical shares, up to 50% of the market value of your shares. In case of Demat
Shares, you can get a Loans Against Shares of up to 65% of the market value of your
shares, till Rs. 20 lakh.
Two Wheeler & Consumer Loans: To help you buy the best durables for your home.
Demand Account : Protect your shares from damage, loss and theft, by maintaining your
shares in electronic form. You can also access your Demand account the Internet.
Current Account: Get a personalized chequebook, monthly account statements, inter-
branch banking and much more.
Mutual Funds: Apart from a wide choice of mutual funds to suit your individual needs,
you benefit from expert advice on choosing the right funds based on in-depth market
analysis.
International Credit Card: Get an option of Silver, Gold, or Health Plus Credit card,
accepted worldwide from a world-class bank. If you have outstanding balance on your
other credit card, you can transfer that balance to this card at a lower interest rate.
NRI Services: A comprehensive range, backed by unmatched features and world-class
service, ensures NRIs all the banking support they need.
Forex Facilities: Avail of foreign currency, travelers cheques, foreign exchange demand
drafts, to meet your travel needs.
Insurance*: HDFC Bank now brings you Life Insurance and Pension Solutions like Risk
Cover Scheme, Savings Scheme, Children’s Plan and Personal Plan from HDFC
Standard Life Insurance Co. Ltd.
32
SAVINGS ACCOUNT
Banking should be effortless. With HDFC Bank, the efforts are rewarding. No matter
what a customer's need and occupational status, we have a range of solutions that are
second to none.
Whether you're employed in a company and need a simple Savings account or run your
own business and require a robust banking partner, HDFC Bank not only has the perfect
solution for you, but also can recommend products that can augment your planning for
the future.
Savings Accounts
These accounts are primarily meant to inculcate a sense of saving for the future,
accumulating funds over a period of time. Whatever your occupation, we are confident
that you will find the perfect banking solution. Open an account in your name or register
for one jointly with a family member today.
Regular Salary
Savings Plus Classic
SavingsMax Payroll
No Frills Regular
Retail Trust Premium
Kids Advantage Defence
Pension Savings Reimbursement
Family Savings Kisan No Frills Savings
Kisan Club Savings
Current Accounts
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Now, with an HDFC Bank Current Account, experience the freedom of multi-city
banking! You can have the power of multi-location access to your account from any of
our 748 branches in 316 cities. Not only that, you can do most of your banking
transactions from the comfort of your office or home without stepping out.
We make it our business to help you with your business by offering you a Current
Account with all the benefits you need to stay ahead of your competition.
At HDFC Bank, we understand that running a business requires time and money, also
that your business needs are constantly evolving. That's where we come in. We provide
you with a choice of Current Account options to exclusively suit your business -
whatever the size or scope.
Open an HDFC Bank Current Account & control your business
operations centrally.
Plus Trade Premium
Regular RFC Domestic
Choose the product most suitable for you:
Fixed Deposits
Long-term investments form the chunk of everybody's future plans. An alternative to
simply applying for loans, fixed deposits allow you to borrow from your own funds for a
limited period, thus fulfilling your needs as well as keeping your savings secure.
Features and Benefits
Eligibility
Fees & Charges
Apply Now
34
An easy-to-operate savings account that allows you to issue cheques, draw Demand
Drafts and withdraw cash. Check up on your balances from the comfort of your home or
office through NetBanking, PhoneBanking and MobileBanking.
Need money urgently? Withdraw cash from any of the 1,740 ATM centres spread across
the country.
Features & Benefits
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 Saver facility on your
account.
3 Free transactions on SBI/Andhra Bank ATMs per month.
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).
Free Email Statement facility.
35
HDFC buys 9.9% more in fund arm
Khyati Lodaya | Tuesday, 09 October , 2007, 12:07
Housing Development and Finance Company (HDFC) has bought an additional 9.9 per
cent stake in HDFC Asset Management from its UK-based joint venture partner Standard
Life.
Standard Life sold the stake at Rs 181.81 crore, thus valuing HDFC Mutual Fund at Rs
1,836.47 crore. HDFC MF manages assets worth Rs 41,333.40 crore.
An additional Rs 11,434 crore is managed by the fourth-largest fund house in the country
under its portfolio management services.
However, Standard Life continues to be a co-sponsor of the mutual fund business of
HDFC.
HDFC will now hold a 60 per cent stake, while Standard Life will hold the remaining 40
per cent in the joint venture. Standard Life and HDFC are also partners for HDFC
Standard Life Insurance Company, where again HDFC holds a majority 81.9 per cent.
In May this year, HDFC's general insurance partner, Chubb Global Financial Services,
sold its entire 26 per cent stake in HDFC Chubb General Insurance.
The stake, equivalent to 32.5 crore equity shares, was bought by HDFC, while its price is
not yet known.
HDFC has spent a huge amount for its insurance business. The Deepak Parekh-headed
firm is now on the look-out for a new partner to replace Chubb Global, which shared an
almost five-year partnership with HDFC.
HDFC has a market capitalisation of over Rs 67,000 crore ($17 billion), with the foreign
equity holding being at 80 per cent.
36
HDFC Mutual Fund had earlier bought over Zurich Mutual Fund in 2003.
The mutual fund arena has been seeing some stake sales recently.
The latest deal took place on Friday when Italian Pioneer Investments bought a 51 per
cent stake in Bank of Baroda Asset Management Company to form Baroda Pioneer Asset
Management Company.
Another mutual fund, run by a public-sector bank, Canara Bank Mutual Fund, caught the
attention of Robeco of the Netherlands, which picked up a 49 per cent stake in the fund
house.
Robeco is the asset management arm of the Rabo Bank.
ICICI Bank, too, purchased a marginal 2 per cent stake of Prudential in the mutual fund
joint venture to become the majority stake holder. ICICI Bank now holds 51 per cent in
the AMC, with the balance held by Prudential Plc.
Vijaya Bank, too, sold its 5 per cent stake in Principal Pnb Mutual Fund recently.
Savings Plus Account
Features and Benefits
Eligibility
Fees & Charges
Apply Now
Introducing the best banking option for you with HDFC Bank Savings Plus Account.
Now you can get access to some of the finest banking facilities with HDFC Bank's
Savings Plus Account. All you have to do is maintain an Average Quarterly Balance of
Rs. 10,000/- and experience the benefits as mentioned below:
Features & Benefits
37
Wide network of branches and over thousand ATMs to meet all your banking needs no
matter where you are located.
2 Free transactions on SBI/Andhra Bank ATMs per month.
3 Free transactions on any other Bank's ATM per month.
Free International Debit Card for all account holders for life time of the account.
Free Payable at Par (PAP) chequebook without any usage charges upto a limit of 50,000
per month.*
Free Demand Drafts on HDFC Bank locations, upto a limit of 25,000/- per day.
Free BillPay & InstaAlerts for all account holders for lifetime of the account
Free Electronic Funds Transfer facility, NetBanking, PhoneBanking & MobileBanking
Special relationship discount on purchase of Gold Bars
25%-off on the Locker rental for the 1st year (only).
Intercity Banking / Multi-city Banking.
Free Email Statement facility .
Savings Max Account
Welcome to a world of convenience. Presenting SavingsMax account, loaded with
maximum benefits to make your banking experience a pleasure. By maintaining an
average quarterly balance of just Rs. 25,000/- you get a host of premium services from
HDFC Bank absolutely free*.
Features & Benefits
Free unlimited transactions: Cash withdrawal and balance enquiry, at all HDFC Bank
ATMs & on any other Bank's ATM using your HDFC Bank Debit Card.
38
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.
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 1 lac
per month.*
Free Demand Drafts on HDFC Bank locations, upto a limit of 50,000/- per day at home
branch.
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 sweep out facility to transfer extra savings to a Fixed Deposit, at the threshold
of Rs.50,000/-.In the event of the balance in SavingsMax account exceeding Rs 50,000/-,
the amount in excess of Rs 50,000/- will be swept out in to a Fixed Deposit with a
minimum value of Rs 25000/- for a 1year 1day period.
Free BillPay & InstaAlerts for all account holders for lifetime of the account.
Free Monthly Statement of Account.
50% off on the Locker rental for the 1st year only.
Folio maintenance charges on Demat account free for first year.
Free National Electronic Funds Transfer facility, NetBanking, PhoneBanking & Mobile
Banking.
Free Email Statement facility .
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'NO FRILLS' SAVINGS ACCOUNT
In an effort to make banking simpler and more accessible for our customers, we have
introduced the 'No Frills' Savings Account, which offers you all the basic banking
facilities. You can even avail of services like NetBanking, Mobilebanking free of cost.
All this with a Zero Initial Pay-in and a Zero Balance account !
Read more about the benefits you get on the 'No Frills' Savings Account.
Features & Benefits
Access a wide network of branches and over a thousand ATMs across the country to
meet all your banking needs.
Bank conveniently with facilities like Free NetBanking and MobileBanking.
Use the Free Electronic Funds Transfer (EFT) facility to transfer funds from your HDFC
Bank account to an account in another Bank at the locations as specified by RBI.
Enjoy Free IVR based PhoneBanking. (Agent assisted calls will be charged*)
Get Free Quarterly Account Statements.
Access your account through a Free ATM Card.
Enjoy free Cash Deposits at Branch/ATM.
9 Free Cash withdrawals per Quarter at Branch and HDFC Bank ATMs
This includes 1 Cash withdrawal per month at the Branch and 2 Cash withdrawals per
month at HDFC Bank ATMs
Additional ATM Cash withdrawals in the month will be charged Rs. 15/- per transaction.
Other transactions like cheque deposit, balance enquiry and mini-statement at the ATMs
will be free of charge and without any restrictions
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Additional Branch Cash withdrawals in the month will be charged @ Rs.50/- per
transaction. Cheque deposits at branches will be free of charge and without any
restrictions
International Debit Card available only on request at the branch @ Rs. 100/- p.a. for each
applicant.
First Cheque book consisting of 25 leaves free and subsequent Cheque books to be
charged at the rate of Rs 5/- per Cheque leaf.
Take advantage of Bill Pay, an instant solution to all your frequent utility bill payments.
Instruct for payment over the phone or through the Internet*.
Enjoy InstaAlerts via e-mails or SMS at nominal charges*.
Avail facilities like Safe Deposit Locker, Sweep-In and Super Saver on your account.
RETAIL TRUST ACCOUNT
The Retail Trust Account is beneficial for Trusts and Societies as it earns them a higher
interest as compared to a conventional Current Account that offers no interest.
HDFC Bank's Retail Trust now offers features and benefits previously offered only on
Current Accounts.
Features & Benefits
Enjoy free DD's payable on HDFC bank locations up to a limit of Rs. 50,000/- per DD,
per day.
Avail of Free Outstation Cheque Collection at HDFC Bank locations across the country.
Payable at Par Cheque facility: At a nominal cost, you can avail a PAP cheque book of
25 leaves (Regular non-PAP cheque book come free of cost).
41
Avail of Special discounts on Foreign exchange transactions and Forex rates at most
branches across the country.
Access your account from any of the branches in the HDFC banking network.
Avail of facilities like Safe Deposit Locker and Sweep-In facility on your account
Avail of facilities like Free 24-hour PhoneBanking and NetBanking and carry out
banking transactions from the comfort of your office or home.
Cash delivery & Cash pick-up facility*
Cheque pick-up facility*
Structured Investment Program: Avail of the facility for investing surplus funds lying in
your account into Mutual Funds, RBI Bonds and other financial instruments through any
of our branches across the country.
Payroll Account
The HDFC Bank payroll account comes with the following benefits and features.
Features & Benefits
Zero Balance Account
Nil Interest payout on account balance
Personal Accident Insurance cover of Rs. 2,00,000/-
Free Payroll Debit Card - (max cash withdrawal at ATMs- Rs 15,000/- and Rs 25,000 at
shopping avenues)
Branch transactions at Rs. 60/- per transaction.
Free Net Banking, Phone Banking, Mobile Banking.
BillPay facility at Rs 25/- (plus taxes) per qtr. per Customer ID.
InstaAlert facility at Rs 25/- (plus taxes) per qtr. per account.
42
Up to 6 free ATM cash withdrawal transactions; thereafter Rs. 30/- per transaction.
Six-monthly account statements.
Free Monthly email statements (optional)
Cheque book issuance @ charge of Rs.5 per leaf (only on request and this is not a
standard offering )
Free Passbook facility available at home branch for account holders (individuals)
CLASSIC SALARY ACCOUNT
The Classic Salary account is a Zero Balance Account which earns you interest on your
savings from salary at a competitive rate fixed by the bank from time to time. There is no
fee applicable for branch transactions and you receive banking statements once every six
months.
Features & Benefits
Zero Balance Account
Free personalized Cheque books
Free ATM Card with a withdrawal limit of up to Rs. 10,000/- per day.
Free facilities like Net Banking, Phone Banking and Mobile Banking.
Free inter-city and inter-branch banking
Half yearly statements.
Billpay facility
Indices off lows; L&T, HDFC support
9 Oct, 2007, 1217 hrs IST, INDIATIMES NEWS NETWORK
43
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MUMBAI: Equities recovered from early losses as buying emerged at lower levels.
Capital goods and auto stocks led advances. Stocks were beaten down Monday on fresh
political concerns.
But even as retail investors turned sellers foreign institutions remained bullish, with
purchases worth Rs 1459.51 core of equity on Monday (as per provisional data on NSE).
Analysts believe this is the correction the market was waiting for.
According to Emkay Share and Stock Broking, the trend will turn weak only if the Nifty
closes below 5000. “It has formed a ‘morning star’ pattern on the hourly chart thus we
may see a bounce back and it may come up to 5137. Above that, it may test 5163, these
are 50 per cent and 61.80 per cent retracement levels of the correction from 5249 to 5024.
It now has support placed at 5024 and below that at 5000,” the brokerage said in a note.
At 11:05 am, the National Stock Exchange’s 50-share index was 7 points or 0.14 per cent
higher at 5092.25, bouncing off the low of 5000.95.
The Bombay Stock Exchange’s Sensex was up 94 points or 0.54 per cent at 17,585.07.
The index recovered from the low of 17,287.19 with support from Maruti Udyog (2.3%),
HDFC (1.66%), Larsen & Toubro (1.51%), Infosys Technologies (1.23%), and Reliance
Communications (1.2%).
Cipla (down 2.08%), Ranbaxy Laboratories (2.04%), NTPC (2.03%), ITC (1.4%) and
Ambuja Cement (0.96%) remained laggards. Second rung stocks were weak with key
44
BSE and NSE mid and small-cap indices down almost a per cent. The market breadth
showed 1612 declines and 708 advances on BSE, while on NSE, 314 shares advanced
and 804 declined. Trade will be suspended between 11:25 am and 12:10 pm, due to sun
outage.
Upward pressure on Re to continue: HDFC Bank
2007-10-09 14:38:37 Source : Moneycontrol.com
Email Print Version Watch Video
Ravi Pai, Head-Forex and Derivatives, HDFC Bank, said we haven’t the rupee appreciate
because of political developments. He sees the upward pressure on the rupee continuing
going forward.
Excerpts from CNBC-TV18’s exclusive interview with Ravi Pai:
Q: What are you making of this slight strength that we are seeing in the dollar? Do you
think the Reserve Bank will stoutly defend that 39.5/4 level that they have given
themselves or do you think this is only a temporary support?
A: There has not been a very significant change in the levels of dollar because of political
developments that we are seeing. The rupee is slightly weaker than what we have seen in
the recent past but I don’t think we will see a significant upmove for the dollar just based
on those developments alone.
Q: What would you expect the dollar to do by December 31 or March 31?
A: It will be difficult to predict on a three-six months view. Given the fact that the growth
scenario is not likely to be significantly different, I would expect the rupee to continue to
45
under upward pressure. Overall, we might see intermittent bouts of correction but I would
not expect that correction to go beyond 1-2%.
REGULAR SALARY ACCOUNT
The HDFC Bank Regular Salary account is a Zero Balance account and comes with
below mentioned features and benefits.
Features & Benefits
No minimum balance required
Interest at the applicable savings account rate
Free International Debit card with ATM cash withdrawal limit of up to Rs. 15,000 and
Rs. 25,000 (non-cash) at shopping avenues.
Free issuance of Demand Drafts up to Rs. 25,000 per instrument, payable at branches
within the HDFC Banking network.
Free Net Banking, Phone Banking, Mobile Banking
Free Sweep-in facility
Free inter-city/branch banking.
Safe Deposit Lockers (subject to availability)
Quarterly statements
Free Payable at Par Chequebook
Preferential rates on loan products offered by the bank
Preferential rates on forex transactions
Billpay facility
Free InstaAlert facility
46
PREMIUM SALARY ACCOUNT
A power-packed account for successful salaried professionals, the Premium Salary
account comes with a free International Debit Card and add-on Debit card for life, with
the option of choosing between a Silver or Gold credit card at preferential rates.
Features & Benefits
Free International Debit Card and Add-on Debit card for life
Free Personal Insurance Accident cover up to Rs. 2,00,000/- on the Debit card
Free Debit card withdrawals - max cash withdrawal at ATMs- Rs 25,000/- and Rs
50,000 (non-cash) at shopping avenues
Preferential rates for Gold and Silver credit cards
Free Demand Drafts up to Rs. 25,000 per instrument, per instrument payable at branches
within the HDFC Banking network.
Free BillPay and Insta Alert facility
Free monthly account statements
Free ATM transactions on non-HDFC Bank Visa/Cirrus network ATM's
Defence Salary Account
Are you a defence personnel employed with the Indian Armed Forces or the Indian
Navy? Then this account is for you.
47
Rather than collecting your cheque/cash at the end of the month, you can instruct your
salary wing to start crediting your salary to your Defence Salary Account.
Features & Benefits
The Defence Salary Account is a Zero Balance account.
Free for life International Debit Card and one add-on Debit Card with no annual fees for
the first year.
Enjoy facilities like NetBanking, PhoneBanking, MobileBanking, BillPay, ATM facility,
inter-city and inter-branch banking.
Free Funds Transfer to any other HDFC Bank account in any city/branch and free
Demand Drafts up to Rs. 25,000/-.
Enjoy preferential rates on Loans Against Shares, New Car Loans and Used Car Loans,
Consumer Loans and Personal Loans.
Enjoy Free InstaAlert Facility
Free Monthly Accounts Statements - Free Monthly email statements (optional)
No Frills Salary Account
As a financial inclusion initiative, we have introduced the "No Frills Salary" product
specifically targeted at the "urban" poor and the low salaried class.
This is a Zero Balance Salary Account!
Features & Benefits
Access a wide network of branches and over a thousand ATMs across the country to
meet all your banking needs.
48
Bank conveniently with facilities like Free NetBanking and MobileBanking.
Use the Free Electronic Funds Transfer (EFT) facility to transfer funds from your HDFC
Bank account to an account in another Bank at the locations as specified by RBI.
Enjoy Free IVR based PhoneBanking. (Agent assisted calls will be charged*).
Get Free Quarterly Account Statements.
Free Monthly email statements (optional).
Access your account through a Free ATM Card.
Enjoy free Cash Deposits at Branch/ATM.
Free Cash withdrawals per Month at Branch and HDFC Bank ATMs
This includes 1 Cash withdrawal per month at the Branch and 2 Cash withdrawals per
month at HDFC Bank ATMs
Additional ATM Cash withdrawals in the month will be charged Rs. 15/- per transaction.
Other transactions like cheque deposit, balance enquiry and mini-statement at the ATMs
will be free of charge and without any restrictions
Additional Branch Cash withdrawals in the month will be charged @ Rs.50/- per
transaction. Cheque deposits at branches will be free of charge and without any
restrictions
Free ATM Card for life.
International Debit Card available only on request at the branch @ Rs. 100/- p.a. for each
applicant.
First Chequebook consisting of 25 leaves free and subsequent cheque books to be
charged at the rate of Rs 5/- per cheque leaf.
49
Take advantage of BillPay, an instant solution to all your frequent utility bill payments.
Instruct for payment over the phone or through the Internet*.
Enjoy InstaAlerts via e-mails or SMS at nominal charges*.
Avail facilities like Safe Deposit Locker, Sweep-In and Super Saver on your account.
Free Passbook facility available at home branch for account holders (individuals) .
Kids Advantage Account
Start saving for your child today and secure his/her future. Open a Savings Account and
transfer money every month into his/her Kids Advantage Account. Watch the savings
grow as your child grows. The accumulated savings in the Kids Advantage Account can
over the years help in meeting your child's needs.
Features & Benefits
Builds up savings for your child's future.
Automatically increases the balance in your Kids Advantage Account by transferring a
fixed sum from your Savings Account every month.
Amounts in excess of Rs. 5,000/- over and above a balance of Rs. 10,000/- gets
converted into Fixed Deposits for a specified period in your child's name.
Free International Debit Card for your child (above 7 years of age) with a maximum
drawing capability of Rs. 2,500/- per day.
Free Education Insurance cover of up to Rs. 1,00,000/- for your child with every Kids
Advantage Account.
Net Banking facility to monitor both, your Savings Account as well as your Kids
Advantage Account.
Free Funds Transfer between your Savings Account and your Kids Advantage Account.
50
Opt for systematic Investment in Mutual Funds to plan for your childs future.
Free InstaAlerts for all account holders for lifetime of the account.
Pension Saving Account
A Pension Saving Account is a Zero Balance Account that accumulates your pension
over the years. It comes with a free International Debit Card and facilities like Phone and
Net Banking. You can access this Account from any branch within the HDFC network
and also request for transfer to another bank.
Features & Benefits
The Pension Saving account is a Zero Balance Account.
Timely credit of receivables
Free International Debit Card.
Enjoy facilities such as NetBanking, PhoneBanking, BillPay, ATM facility, inter-city
and inter-branch banking.
Pension Accounts are transferable from one branch/bank to another.
The HDFC Bank advantage
Pension Accounts are opened immediately after advice, and deliverables reach in time-
within the 1st and 5th of the new month (in case of EPFO) and last day of the month (in
case of Central Govt. Civil Pensions).
Timely communication to the customer on receipt of the PPO.
51
No delays in commencement of pension disbursals (subject to all the stipulated
terms/conditions are fulfilled by the pensioner).
Dispatch of credit advice containing detailed calculations of the amount credited each
month within 10 days of the payment.
Timely issue of Form- 16A (by April 15th) for tax deducted at source in the immediately
previous financial year.
Timely intimation of revisions due to changes in rates of Pension or Dearness
Allowance. Immediate action in case family pension devolves to the spouse.
Family Savings Group
The Family Savings Group links together upto four individual HDFC Bank accounts
(same family) under a single group. Take advantage of the group Average Quarterly
Balance (AQB) and operate your individual accounts without worrying about minimum
balance.
Features & Benefits
All account holders can operate their account freely without worrying about their
minimum balance.
Family members with NRI status can also be part of the group.
Get 5 Free Cash withdrawal transactions on SBI ATMs per group per month.
Upto 2 free DD's/ MC's on HDFC Bank locations per account per month (max. up to Rs.
25,000/- per instrument per day).
Free International Debit Card for all account holders till the account is part of the Family
group. (NRO Accounts will be issued only ATM cards)
52
Free BillPay & InstaAlerts facility for all account holders till the account is part of the
Family Group.
Free Standing Instructions for investment into Mutual Funds.
Free OneView to access all your accounts.
Free MobileBanking, NetBanking & PhoneBanking.
Enjoy a Savings account to Savings acount sweep-in to a nominated account (sweep-in
to NRE accounts not permitted from resident / NRO accounts).
Payable-at-par facility at a nominal cost for all accounts in the family group.**
**Available only on request at the branch.
Cash delivery @ Rs. 50/- per delivery***
Free Email statements .
***Available in select cities only.
Avail Preferential pricing on:
Lockers : 25% Discount on the annual rent.
Gold Debit Card : Rs. 250/- for life for all account holders till they are a part of the
Family Savings Group.
Demat Account : 1st year Folio maintenance charges waived for all new demat accounts
opened.
HSL Trading a/c : Special Registration price of Rs. 799/- for all new HSL accounts
opened.
53
Forex : Charges applicable on purchase of traveller's cheques waived for Family group
customers.
Mudra Gold Bars : Special relationship discount.
Titanium Credit Card : Special one-time fee of Rs. 999/- for the primary applicant of all
a/cs grouped. Add-on cards free.
Gold Credit Card : Special one-time fee of Rs. 750/- for the primary applicant of all a/cs
grouped. Get an add-on card Free. Silver/Value Plus Credit Card : Free for life-time.
Kisan No Frills Savings Account
Features & Benefits
Initial Pay-In & AQB requirement = Nil
Free Cash Deposit at ATM / Branch
One Branch Cash Withdrawal Transaction & Two ATM Withdrawal Transactions Free
per month
Free Balance Enquiry / Cheque Deposit / Mini Statement transactions on HDFC Bank
ATMs
One Cheque book of 25 Leaves free
Free NetBanking , MobileBanking and PhoneBanking
Free Monthly email statements .
Eligibility & Account Operation
Individuals fulfilling the following set of criteria are eligible to open a Kisan No Frills
Savings Account:
54
Resident Individuals (sole or joint account) who may be an Agriculturalists / Farmers
having own Agricultural Land or having income from Agricultural Resources.
Account Operation
Initial Pay-In & AQB requirement = Nil
Charges on non-maintenance of AQB = Nil
Extra cheque books @ Rs. 5 per leave.
Additional cash withdrawal Rs. 15 and Rs. 50 per transaction for ATM & Branch
respectively.
SB a/c opening form.
Valid ID/ Address Proof.
PAN Card / Form 61.Form 60 (if required).
1 Passport Size photograph.
KYC & AML Form.
Fees & Charges for Kisan No Frills Savings Account
Description of
Kisan No Frills Savings Account
Charges
Minimum Balance
(Average Quarterly Nil
Balance)
Charges on non
Nil
maintenance thereof
Initial Pay-in Nil
Cheque Book One 25 Leaves Cheque Book free
Extra Cheque Book @ Rs. 5 per leave.
55
Account Statements
Quarterly statements sent by post.
- Free
Passbook issuance* Free
Duplicate passbook
Rs 100/-
issuance*
Cheque Collection -
Local Clearing Free
Zone
Balance Enquiry /
Cheque Deposit /
Mini Statement Free
transactions on
HDFC Bank ATMs

Free Cash Deposit at ATM / Branch.
One free cash withdrawal transaction
Branch transactions at Branch & Two free ATM
withdrawal transactions per month.
Phonebanking Free
Mobilebanking Free
Netbanking Free
ATM Card Free
ATM Card - Rs. 100 (plus taxes).
Replacement
56
charges
at home branch for account holders (individuals)
Other Charges as per S&F brochure apply.
As per the Finance Bill 2006, all fees and charges mentioned above will attract Service
Tax @ 12% and Education Cess @ 2% of the service tax amount effective 19th April
2006.
57
COMPARISON CHART
(OF SAVING ACCOUNT)
SERVICES ICICI BANK HDFC BANK SBI BANK

1. BRANCHES 33(DELHI)- 19(DELHI)- 3(DELHI)-
400(IND) 210(IND) 28(IND)

2. ATM’S (DEL/IND) 112(DELHI)- 66(DELHI)- 21(DELHI)-
560(IND) 125(IND) 103(IND)

3. ATM/DEBIT CARDS ATM/DEBIT ATM/DEBIT ATM/DEBIT
CARD CARD CARD

4. CHARGES FOR DEBIT CARD RS.99/- p.a. RS.100/- P.A. RS.150/- P.A.
5. ATM CARD ACCESS TO OTHER NO NO NO
BANK
6. DEBIT CARD ACCESS TO YES YES YES
OTHER BANK
7. CHARGES PER TRANSACTION (RS.50 PER (RS.55-100 PER RS.50/- PER
TRANS) TRANS) TRANS

8. LOCKER FACILITY YES (RS.750/-) YES YES
9. CHQ DEPOSITS BOXES ALL YES YES
BRANCHES &
ATM
10. GLOBAL DEBIT CARD YES YES YES
11. GLOBAL CREDIT CARD YES YES YES
12. AVERAGE BANKING HOURS 8AM-8PM 10AM-4PM 10AM-4PM
13. SUNDAY BANKING NO NO NO
14. MINIMUM BAL-SAVING RS.5000/- RS.5000/- RS.10000/-
15. CHARGES FOR NON RS.300 PER RS.150 RS.300 PER
MAINTAINING MIN. BALANCE QUARTER RS.500 PM QUARTER

16. CASH WITHDRAWL/DAY/ATM RS15000/- RS.15000 RS.25000/-
17. CASH TRANS FROM NON YES NO YES
BRANCH
18. STATEMENT CHARGES FREE FREE FREE
19. 24 HRS BRANCH NO NO NO
58
20. 365 DAYS BRANCH NO NO NO
21. AUTOMATED CHQ BOOK NO NO NO
REORDER
22. MULTI CITY BANKING YES NO YES
23. NATIONAL CLEARING YES YES YES
24. SPEED CLEARING YES YES YES
25. NET BANKING YES YES YES
26. MOBILE BANKING YES YES YES
27. PHONE BANKING YES YES YES
28. DMAT YES YES YES
29. PRIORITY BANKING YES (10 LAC) YES (10 LAC) YES
30. FLEXIBILITY OF INTEREST YES YES YES
RATES
31. DOOR STEP BANKING YES NO YES
32. CHASH DELIVERY YES NO YES (CHARGED)
(CHARGED)
33. CASH PICK UP YES NO YES (CHARGED)
34. CHQ PICK UP FREE ONCE A NO YES
DAY
35. PAY ORDER YES YES YES
THE BANKING HABIT OF THE CONSUMERS
A. Type of bank in which a consumer have their accounts
Based on 60 questionnaires that were collected.
NATIONALISED BANK
PRIVATE
MULTINATIONAL
BANK
The above chart shows that of the 60 consumers questioned, 30% of them had their
accounts in Nationalized Banks, 10% in private banks, and 20% had their accounts in
Multinational Banks.
59
This shows that the consumers still have full belief on the Nationalized Banks. The share
of the MNC’s is only 20%. Their share has been increasing since the past years but they
have to provide more services and commitment to gain more customers.
60
B. USE OF THE DEBIT CARD
YES
NO
We find that out of 60 consumers, 25% of them still not use the Debit Card. Now we
should make the consumers aware of the facilities that they can acquire through the use
of the Debit Card. The Bank should Also bring in lucrative offers along with their debit
card, like purchase of cinema tickets with the help of a debit card, increase in the discount
rates from around 10% to around 20%on the purchases made through a debit card. A
consumer will surely be attracted towards a bank giving these benefits along with their
debit card. The new user will feel that they have a magic band in their hands and will be
grateful to the bank as well.
61
C. STANDING OF HDFC BANK AMONG VARIOUS BANKS.
7%
40%
53%
ICICI BANK UTI BANK HDFC
From the above chart we find that out of 100, only 8% had their account with standard
chartered, 30% had it with ICICI, 40% with SBI, 7% with HDFC, and 10% with
Citibank. With the help of the chart we can see that Standard Chartered Bank (SCB)
have to go a long way to penetrate into the lifestyle of the consumers. They have to beat
their competitors by providing more services than are given by them. SCB should try and
increase its services by making its debit card freely usable in any bank’s ATM machine
free of cost and there shouldn’t be any limitation on the cost free use till four
transactions, as it is now.
62
D. IMPORTANCE OF THE BANKING FACILITIES PROVIDED TO THE
CUSTOMERS
100
90
80
70
60
50
40
30
20
10
0
ATM
PHONE BANKING
BANKING HOURS
LOCKER FACILITY
365 DAY BRANCH

INSURANCE FACILITY
CASH/CHEQUE PICK UP
DRAFTS/PAYORDERS
RESTAURANTS/SHOPPING
WITH A/CS
FREE
DISC. IN
Y- HDFC depicts the rating in percentages

X-HDFC shows the various facilities provided
We see here that the ATM facilities, insurance benefits, banking hours, discount in
restaurants free drafts/pay orders and 365 days banking plays an important role in
moulding a customers. So the Standard Chartered Bank should maintain the commitment
that it gives to its customers. So that a satisfied customer willingly gives references for
new account with the bank.
63
E. FACTORS INFLUENSING A CONSUMERS DECISION TO OPEN UP AN
ACCOUNT.
Based on questionnaires that were collected.
100
90
80
70
60
50
40
30
20
10
0
Charges for
Brand name
service
Overdraft Limit
Branch timing
ATM/Branches
Advertisements
Nework of
Facilities provided
Minimum balance
Proximity to bank
Recommendations
by the bank
criteria
premises
by friends
Y-HDFC shows the rating in percentages

X-HDFC gives him various factors influencing a consumer’s decision
We see here that the proximity of a bank premises to a customer is of a vital importance.
On the whole Standard Chartered Bank doesn’t have many branches or ATM centers like
ICICI. Existence of a bank in close proximity of a customer plays a vital role in
influencing him for opening an account with that bank. Thus Standard Chartered Bank
should try and increase the number of branches as well as its own ATM centers, even
though it has tie ups with other banks for the use of their ATM machines.
• Most of the services provided by Bank in almost the same as any other
private or multinational banks
• HDFC Bank gives 100% withdrawal 2-in-1 accounts.
64
OBJECTIVE
The following survey was mainly done with an objective to know the state of
mind of an individual who is opening a saving account with HDFC BANK.
• To know which all others bank are key players.
• Features and services that influences the customer while he / she is into
opening an account with a bank.
• Customer perception regarding the services provided by the HDCF BANK.
• Care will be taken that all statements is positive statements to make the
analysis process easy.
• For analyzing a single variable more than one statement is used in order to
cross check whether the respondents consistently gave the responses.
• To come out with conclusion and suggestions based on the analysis and the
Interpretation of data.
65
METHODOLOGY
DATA SOURCES
Research design is a research plan which requires that what data are to be collected, what
research techniques and instruments are to be used, how a sample is to be selected, and
how information is to be collected from this sample.
A research design specifies the methods and procedures for conducting a particular study.
Broadly speaking, research design can be grouped into three categories-exploratory
research, descriptive research, and causal research.
Primary Data
Primary Data: - The sources of Primary data were Personal interviews.
Secondary data
Secondary Data: - The sources of secondary data were the books and magazines.
QUESTIONNAIRE DESIGN / FORMATION
Descriptive research is used in this project report in order to understand the evolving
competitive environment in the banking sector in India and to make a comparative study
among few banks operating in public private and foreign sector. This is the most popular
type of research technique, generally used in survey rese7arch design and most useful in
describing the characteristics of consumer behavior. The method used were following
• Questionnaire method.
• Direct Interaction with the users.
SAMPLE DESIGN
Sampling is simply the process of learning about the population on the basis of sample
drown from it. It is that part of the universe which is selected for the purpose of
investigation. Sampling may be defined as a part of the whole, which represents all the
characteristics of the whole under consideration.
Sample size: 50
i Sampling unit
For understanding the role of consultancy firms following points are considered in
preparing the questionnaire:
66
ii Sampling Technique
It is very difficult to collect information from every member of a population .As
time and costs are the major limitation that the researcher faces.
iii Sampling Area
Survey was conducted in the different location of Delhi.
iv Sampling Size
Sampling is simply the process of learning about the population on the basis of
sample drown from it. It is that part of the universe which is selected for the purpose
of investigation. Sampling may be defined as a part of the whole, which represents
all the characteristics of the whole under consideration.
Sample size: 100
Limitation
Territory managers generally don’t take the lead in cracking a deal. The pressure is
exerted on the sales executives to do all the stuffs. Sometimes the sales executive
fails to convince the target customer and bank loses business. Frankly speaking no
manager of a big corporate wants to meet a sales executive and due to this business
opportunity is lost.
Other banks like ICICI, ABN AMRO and AMEX have a well defined sales force.
This is the reason why they have a better reputation in the market.
Month closing is a nightmare for every sales executive. To complete the target they
roam from one corporate to other. If entry is not allowed they start pitching the
potential customers at the gate itself (those coming out for a fag etc).
This gives the bank a bad name and it affects future business prospects.
All the senior officials know this but they hesitate to stop the executives from doing
so. They are more concerned about meeting the target than extending the bank’s
image.
Rejection rate is very high. It nears 70%. It means out of 100 applications only 30
applicants get a credit card.
Lack of synchronization among the teams affects Bank’s business also. Sometimes
sales executive of different teams land up at a corporate at the same time. To fulfill
their targets they start dragging each other’s client. This gives bank a bad name.
67
Team leaders fail to motivate the sales executives. A dissatisfied sales executive can
never crack a deal.
These are some of the points where other bank scores above us. I was part of the
corporate team and I found the above-mentioned points the weaknesses of the
company.
68
REPORT OF DATA COLLECTION – FINDINGS &
ANALYSIS
1. Do you Know about HDFC Bank?
(a) Yes - 92%
(b) No - 8%
8%
92% Yes
No
92% people out of 100 are aware of HDFC bank.
69
2. Have you ever opted for services & products from HDFC Bank?
(a) Yes - 61%

(b) No - 39%
39%
61% Yes
No
61% out of 100 people have opted for services & products from HFDC bank
70
3. How can open Savings Bank Accounts current account HDFC Bank?
(a) IDBI Bank 19%
(b) HDFC Bank 8%
(c) HDFC bank 42%
(d) CITI Bank 7%
(e) SBI Bank 12%
(f) ABN AMRO Bank 2%
(g) Others 10%
45%
42%
40%
35%
30%
25%
19%
20%
15%
12%
10%
10% 8%
7%
5%
2%
0%
IDBI HDFC Axis CITI SBI Bank ABN Othe rs
Bank Bank Bank Bank AMRO
Bank
%out of 100 want to open savings account vid HDFC Bank.
71
4. How did you come to know about Home loan?
(a) Advertisement - 76%
(b) Word of Mouth - 14%
(c) Referred by your company / Friend - 10%
10% Advertisement
14%
Word of Mouth
Referred by your
company/friend
76%
76% out of 100 came to know bout home loans offered by HDFC Bank through
Advertisement
72
5. What made you select this particular bank for the services & Products?
Emi - 78%
Brand name - 3%
Procedures - 9%
Facilities - 1%
Policies - 7%
Advertisement - 2%
78%
80%
70%
60%
50%
40%
30%
20%
9%
10% 7%
3% 2%
1%
0%
EMI P roc edur es P olic ies
78% out 100 chose HDFC Bank because of its Emi’s.
73
6. How do you like saving account regarding product and services by different
banks?
(a) Good - 68%
(b) Average - 19%
(c) Bad - 13%
13% Good
Average
Bad
19%
68%
68% out of 100 people find saving account regarding product and services as Good
74
7. What motivates you for selecting any bank for saving account regarding
product and services?
(a) EMI - 76%
(b) Brand name - 4%
(c) Procedures - 9%
(d) Facilities - 3%
(f) Policies - 8%
76%
80%
70%
60%
50%
40%
30%
20%
9% 8%
10% 4% 3%
0%
EMI Brand Name Procedures Facilities Policies
76% people chose saving account regarding product and services.
75
8. Which Bank would you prefer if you have never applied for Car Loan?
(a) IDBI Bank - 12%
(b) HDFC Bank - 17%
(c) HDFC bank - 56%
(d) CITI Bank - 7%
(e) SBI Bank - 5%
(f) ABN AMRO Bank - 3%
60% 56%
50%
40%
30%
20% 17%
12%
7%
10% 5%
3%
0%
IDBI Bank Axis Bank ICICI Bank CITI Bank SBI Bank ABN Amro
Bank
56% people would prefer HDFC bank for car loans
76
9. How often do you use Debit card for Merchant establishment in a month?
How often do you use your Debit card in merchant establishments in a month?
50%
50%
45% 41%
40%
35%
30%
25%
20%
15%
9%
10%
5%
0%
As a debit card Merchant other users
Establishment
Normal Debit card usage is also very low, about 50% of the customers use it only as
ATM card. Only 8-9% uses it profusely in merchant establishments.
77
10. Are you aware of the royalty points provided by the bank for every transactions
made?
94%
100%
90%
80%
70%
60%
50%
40%
30%
20% 6%
10%
0%
In this figure it is shown that just 6% customers are fully aware of the royalty points that
are provided by the bank, and a huge 94% are in obscurity
78
11. Do you use Net Banking facility?
0.7
62%
0.6
0.5
38%
0.4
0.3
0.2
0.1
0
Yes No
The above figure shows that about 38% of the customers use Net Banking and the
transactions they normally do is balance enquiry, balance transfer, request for a cheque
book or go for a bank statement.
79
12. How often do you use Net Banking facility in a month?
60%
52%
50%
40%
33%
30%
20% 15%
10%
0%
1-3 times/month regularly irregular users
As far the frequency of Net banking is concerned, about 33% of the customers use it 1-3
times in a month and 15% use it quite regularly.
80
13. Are you aware of bill payment facility provided by the HDFC bank?
74%
80%
70%
60%
50%
40% 26%
30%
20%
10%
0%
Bill Payment is a recently launched Service but quite astonishingly 74% of the customers
are not clear about its concept & its registration, only 26% have a clear idea.
81
14. Have you registered yourself for Mobile banking service?
52%
0.52
0.51
0.5
0.49
48%
0.48
0.47
0.46
Yes No
It is seen that although 84% of the customers are familiar with M-Power only 48%
among them uses this service & the rest are ignorant.
82
15. How would you rank the services of the bank?
40%
36%
35% 33%
30%
25%
20% 17%
14%
15%
10%
5%
0%
Excellent Good Fair Unsatisfactory
Last but not the least the question was asked to the customers about the services &
products of HDFC Bank N.V. and the result came out is quite pleasing which shows that
83% customers are satisfied with this bank. Approximately 33% customers rated its
service and products as quite good & around 14% gave it an excellent batch. But the only
concern is 17% who have rated the bank as unsatisfactory. The comments of the
customers along with their suggestions are jotted down in the following pages.
83
CONCLUSIONS & IMPLICATIONS
It was found that all the branches have not been able to contribute their due share to the
overall growth of the bank.
About 14% of the branches have sho decline in deposits levels whereas about 16% of
branches could not show even 5% growth in deposits.
F It was also found that the market share of the Bank in deposits was l,6l°/ in March
2003, which has been coming down and reached 1.22% in 2007. During 2007-2008 the
growth in banks aggregate deposits was 1 1 .09% as against the banking industry growth
of 1 7.29% which has resulted in to further slippage in Bank market share to 1 .6% in
March, 2008.
Because of the stiff competition of various banks in the market, focus of Indian Bank
should be immense on advertisement and promotion.
ATM facility should be given to the students with "Zero balance of debit" so that the
students can easily get money at any time and at anywhere they want.
Sunday should be made as a full working day for both the branches so that people will
easily transact at any time.
Newspapers mainly, Times of India, Hindustan Times and Economic Times and different
magazines should be kept for the customers by which they feel relaxation until their
transactions are over.
Proper feedback system should be there and feed back forms should be kept for the
customers. The customers coming into the bank should fill up these forms and it should
be collected on daily basis. By analyzing these bank will easily come across its feedback
and accordingly modify them. So that the customers will feel proud of themselves as
well as their bank.
The head office should appoint smart and handsome/beautiful employees in the metro
cities so that customer will feel proud over himself or herself.
One person should be appointed at every branch of Delhi for the collection of outstanding
payments.
In case of Sundays pamphlets of various schemes should be distributed along with
newspapers mainly Times of India, Hindustan Times and Economic Times. So that
people will easily come across our bank and its schemes.
84
Interior space should be extended so that people will freely move during business/rush
hours.
One signboard of "Government sector banks" should be placed towards the West side so
that the trespassers will easily come across the bank.
Information regarding the bounced cheques should be immediate informed to the
concerned person so that he/she can arrange some alternatives.
Variable recurring deposit scheme should be more flexible our customers suggested that
variable RD scheme should include daily/weekly/fortnightly submission of installments.
In case of vehicle loan, some percentage of discount should be given to the customers on
purchase of new vehicle either 2-wheeler or 4-wheeler from the company side on the
reference of the bank.
Proper water and toilet system should be provided in both the branches for customers and
bank employees and that should be well noticed to everybody.
After completing my thesis I can say that HDFC is one of the top banks performing in
India. It was started in 1955 and since then it has kept it’s dignity in spite of increasing
competition. It has collaborated with certain foreign companies in order to increase its
asset value and goodwill. It has been dealing in many products like accounts, demats,
loans, cards etc.
The marketing strategies adopted by the bank are innovative and impressive. Since
majority of population stays in villages the bank has to explore the rural markets also. In
addition to this the bank should have a branch in every city of the country. By keeping a
regular check the operating cost can be minimized.
The main aim of the bank should be bringing money from other countries to India. From
the findings it is clear that there is an intense competition in banking industry and as a
result prices are declining at a regular pattern. The reason for this increasing competition
is the increase in demand and aggressive promotional campaigns done by the banks.
85
RECOMMENDATIONS
1 The customers should be imparted with enough knowledge of the products &
services because only if the customers are aware of those, then only they can be
prospect for the bank.
2 Customers should be sources by well educated personnel & shouldn’t be

misguided by way of cost and services.
3 In case of bill payment service Noida is deprived of paying their electricity bill so
that can be considered.
4 Idea cellular service & Tata Indicom in the telecom sector should be included in
the list of billers.
5 There is also a high demand for Tata AIG to be included in the insurance sector of
the bill payment service.
6 There are lots of customers who are having Idea & Reliance mobile connection
who are devoid of mobile banking service so ABN AMRO can join hand with
these two organizations.
7 The main thing which should be rectified is delay in sending the product &
services to the customers. The bank should look after those closed applications,
which are kept in the branch in unprocessed manner day after day such as IA
Debit cards & bill payment registrations.
8 The IA Debit card must be revised with some other features like discounts in
refilling automobiles, special discounts in big shopping malls, etc to compensate
the high debit card charges.
9 Joining hands with Jet Airlines & Air Sahara in case of IA Debit card will help to
increase its prospects.
86
BIBLIOGRAPHY
 Banking: The Network is the bank’, by Yogesh Sharma, Dataquest, January 31,
2003
 ‘Race will end in survival of the fittest’, The Financial Express, November 29,
2003.
The Times of India, 26 July, 2005
‘The future is in e-banking’ by Mr. K.V. Kamath (Managing Director, ICICI),
April 14, 2006 Business Line.
‘RBI road map for banking’, The Indian Express, July 21,2004
http://www.hdfcbank.com
http://www.hdfcbank.com/aboutus/general/default.htm
http://www.hdfcbank.com/aboutus/general/Promoter.htm
http://www.hdfcbank.com/aboutus/general/business_focus.htm
http://www.hdfcbank.com/aboutus/general/capital_structure.htm
http://www.hdfcbank.com/common/pdf/corporate/annualreport_05-06.pdf
http://www.blonnet.com/2006/02/09/stories/2006020904010100.htm
http://www.hdfcbank.com/aboutus/cg/annual_reports.htm
http://www.hdfcbank.com/common/pdf/corporate/Accounts.pdf
http://www.hdfcbank.com/personal/accounts/classic_sal_acc.htm
87
ANNEXURE
Questionnaire
Name --------------------------------------------------------------------
Age ----------- Sex --------. Occupation -------------------------------
1. Do you Know about HDFC Bank?
(a) Yes {}
(c) No {}
2. Have you ever opted for services & products from HDFC Bank?
(a) Yes {}
(b) No {}
3. How can open Savings Bank Accounts current account HDFC Bank?
(a) IDBI Bank {}
(b) HDFC Bank {}
(c) HDFC bank {}
(d) CITI Bank {}
(e) SBI Bank {}
(f) ABN AMRO {}
(g) Others {}
4.How did you come to know about Home loan?
(a) Advertisement {}
(b) Word of Mouth {}
(c) Referred by your company / Friend {}
5. What made you select this particular bank for the services & Products?
Emi {}
Brand name {}
Procedures {}
Facilities {}
Policies {}
Advertisement { }
88
6. How do you like the Marketing strategy by different banks?
(a) Good {}
(b) Average {}
(c) Bad {}
7. What motivates you for selecting any bank for home loan?
(a) EMI {}
(b) Brand name {}
(c) Procedures {}
(d) Facilities {}
(f) Policies {}
8. Which Bank would you prefer if you have never applied for Car Loan?
(a) IDBI Bank {}
(b) HDFC Bank {}
(c) HDFC bank {}
(d) CITI Bank {}
(e) SBI Bank {}
(f) ABN AMRO {}
10. How often do you use Debit card for Merchant establishment in a month?
How often do you use your Debit card in merchant establishments in a month?
a) As a debit card
b) Merchant Establishment
c) Other users
11. Are you aware of the royalty points provided by the bank for every
transactions made?
a) Aware
b) Not Aware
11. Do you use Net Banking facility?

a) Yes
b) No
12. How often do you use Net Banking facility in a month?
89
a) 1-3 times/month
b) Regularly
c) Irregular users
13. Are you aware of bill payment facility provided by the HDFC bank?
a) Not clear about bill payment

b) Clear about bill payment
14. Have you registered yourself for Mobile banking service?

a) Yes
b) No
90

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INTRODUCTION

 Tele Draft facility

 Cash delivery at door step and

 The banks should have a minimum net-worth of Rs1bn.

 The promoters holding should be minimum 25% of the paid up capital.

Long term instruments

HISTORY OF BANKING INDUSTRY

Individual Home Loans

Account and lower interest rates on loans, to name a few.

your Demat Account on the Internet.

Loans for every need

easy documentation and quick delivery.

computer or an exciting holiday.

attractive interest rates.

shares, till Rs. 20 lakh.

Current Account: Get a personalized chequebook, monthly account statements, inter-

branch banking and much more.

NRI Services: A comprehensive range, backed by unmatched features and world-class

service, ensures NRIs all the banking support they need.

drafts, to meet your travel needs.

Standard Life Insurance Co. Ltd.

RULES AND REGULATIONS

SWOT ANALYSIS (HDFC BANK)

of its equity also.

• IndusInd handles one of the largest volumes of international banking business in

of 178 foreign banks overseas is pivotal in this success.

This was substantiated by an EPS figure of 6.11 as on 31 March 2005. Extrapolating

capacity of the bank was increasing.

management, more often referred to as Asset-Liability Management (ALM).

shown on this front.

customer segments and making use of their resources more productively.

• Removal of the 5 percent limit of advances to be put in investments, and making it

can go in for aggressive investment strategies to maintain the profitability.

evident from a decreasing credit-deposit ratio.

market standing and rich deposit base.

disadvantage of these banks.

(i) Investment In Sri Lanka

In October 1999, HDFC Investment Limited, a wholly owned subsidiary of

become an equity partner in the proposed housing finance company to be promoted by

(ii) Credit Information Bureau (CIB)

HDFC has signed a memorandum of understanding with State Bank of India

share capital of the CIB.

(iii) Information Technology and Web Enable Services

Several opportunities have emerged in information technology and web enabled

investments in this area.

propertymartindia.com to provide an entire range of real estate services through the

acquiring/selling a property. The customer is provided a wide range of properties at one

from other sites to hdfc.com.

The website offers information on products and services of the corporation,

including interactive tools such as a monthly installment calculator and deposit

for income-tax certificates, statement of accounts, prepayment information and checklist

Loan and Deposits

Loan, Non-Residential Premises Loans For Professionals). (ii) Deposits (Non-

Cumulative Deposits, Cumulative Deposits, Annual Income Plan, Monthly

Monthly Income Plan, Individual Interest Rates, Senior Citizens Deposits).

5. Trusts – (i) Non-Cumulative Deposits (ii) Cumulative Deposits (iii) Annual

Income Plan (iv) Monthly Income Plan (iv) Interest Rates.

7. Property Services - (i) Builders (ii) HDFC Reality

TERMS AND CONDITIONS: -

applications. However, the co-applications need not be co-owners.

property (including the cost of the land). HDFC lends up to a maximum of

Rs.1,00,00,000 on a Home Loan to an individual. The loan repay over a