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CHAPTER-1
INTRODUCTION
of Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime. In the first half of the 19th century the East India Company established three banks; the Bank of Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Madras in 1843. These three banks also known as Presidency Banks, were independent units and functioned well.
These three banks were amalgamated in 1920 and a new bank, the Imperial Bank of India was established on 27th January 1921. With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial Bank of India was taken over by the newly constituted State Bank of India. The Reserve Bank which is the Central Bank was created in 1935 by passing Reserve Bank of India Act 1934. In the wake of the Swadeshi Movement, a number of banks with Indian management were established in the country namely, Punjab National Bank Ltd, Bank of India Ltd, Canara Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the Central Bank of India Ltd. On July 19, 1969, 14 major banks of the country were nationalized and in 15th April 1980 six more commercial private sector banks were also taken over by the government. Today the commercial banking system in
1.3.4 Private Sector Banks 1. Old generation private banks 2. New generation private banks 3. Foreign banks in India 4. Scheduled Co-operative Banks
the state and managed the currency of the country. Indigenous bankers used to maintain a regular system of accounts and borrowers used to sign the loan deeds. Money changing came into vogue and the state regulation of the business became more systematic. Indigenous bills of exchange came also in use. The maximum rates of interest were fixed.
Sector Banks' (PSB) share of deposits from 31% to 86%. The two main objectives of the nationalizations were rapid branch expansion and the channeling of credit in line with
the priorities of the five-year plans. To achieve these goals, the newly nationalized banks received quantitative targets for the expansion of their branch network and for the percentage of credit they had to extend to certain sectors and groups in the economy, the so-called priority sectors, which initially stood at 33.3%. The main policy changes were the introduction of Treasury Bills, the creation of money markets, and a partial deregulation of interest rates. Besides the establishment of priority sector credits and the nationalization of banks, the government took further control over banks' funds by raising the statutory liquidity ratio (SLR) and the cash reserve ratio (CRR). From a level of 2% for the CRR and 25% for the SLR in 1960, both witnessed a steep increase until 1991 to 15% and 38.5% respectively. In summary, India's banking system was at least until an integral part of the government's spending policies. Through the CRR and the SLR more than 50% of savings had either to be deposited with the RBI or used to buy government securities. Of the remaining savings, 40% had to be directed to priority sectors that were defined by the government. Besides these restrictions on the use of funds, the government had also control over the price of the funds, i.e. the interest rates on savings and loans. This was about to change at the beginning of the 1990s when a balance-of-payments crisis was a trigger for far-reaching reforms.
Statutory pre-emption
The degree of financial repression in the Indian banking sector was significantly reduced with the lowering of the CRR and SLR, which were regarded as one of the main causes of the low profitability and high interest rate spreads in the banking system. During the 1960s and 1970s the CRR was around 5%, but until 1991 it increased to its maximum legal limit of 15%. From its peak in 1991, it has declined gradually to a low of 4.5% in June 2003. In October 2004 it was slightly increased to 5% to counter inflationary pressures, but the RBI remains committed to decrease the CRR to its statutory minimum of 3%. The SLR has seen a similar development. The reduction of the CRR and SLR resulted in increased flexibility for banks in determining both the volume and terms of lending.
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distorted market mechanism led to a deterioration of Public Sector Banks' profitability. Enhancing the profitability of PSBs became necessary to ensure the stability of the financial system. The restructuring measures for PSBs were threefold and included recapitalization, debt recovery and partial privatization. Prior to any privatization, the balance sheets of PSBs had to be cleaned up through capital injections. In the fiscal years 1991/92 and 1992/93 alone, the GOI provided almost Rs40 billion to clean up the balance sheets of PSBs. Between 1993 and 1999 another Rs120 billion were injected in the nationalized banks. In total, the recapitalization amounted to 2% of GDP.
Banks, as we all know, are subjected to more intense regulation as compared to the non-financial firms. Bank regulation is now increasingly getting risk-centric. This process had its origin in the Cooke Committee or the Basel I proposals which for the first time prescribed a risk-based capital adequacy framework for banks by recognizing that different counterparties had different risks and therefore had to be risk-weighted differently
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Management success will be determined on three fronts: 1) fundamentally upgrading organizational capability to stay in tune with the changing market 2) adopting value-creating M&A as an avenue for growth 3) Continuously innovating to develop new business models to access untapped opportunities. Changes in regulations and bank capabilities reduce intermediation costs leading to increased growth, innovation and productivity. Banking becomes an even greater driver of GDP growth and employment and large sections of the population gain access to quality banking products. Management is able to overhaul bank organizational structures, focus on industry consolidation and transform the banks into industry shapers. The Reserve Bank of India has, in the service of our country, a proven track record and professionalism, which have lent it considerable credibility - both domestically and globally. This credibility enables the RBI to confidently carry the reforms forward to credibly maintain price and financial stability, while enabling self-accelerating equitable growth at elevated levels The Indian financial sector is ready for consolidation, said 95 per cent of the respondents. Given the increased competition, and the implementation of Basel II norms in the near future, the banking industry of the country would be better
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off with six to seven banks as big as State Bank of India, said the survey.
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Areas that need improvement include diversification of markets beyond big cities, human resources systems, size of banks, high transaction costs, and infrastructure and labor inflexibilities. some strategies that can help India achieve a world class banking system are consolidation, strict corporate governance norms, and regional expansion within the country and outside, higher FDI limits and Free Trade Agreements with countries where India has comparative advantage in banking sector. India has among the lowest penetration of retail loans in Asia. Though the sector has been growing at around 15 per cent, there is still a huge opportunity to tap into. Retail loans and lending to small and medium enterprises will emerge as the two biggest areas of growth in the future for the Indian banking sector The total assets in the banking sector today are estimated to be at Rs 17 trillion and total deposits are estimated at Rs 13 trillion. There are over 290 scheduled banks in the country today, of which 190 are regional rural banks. There are just 9 Indian private sector banks. Together the banking industry offers 66,000 branches across India.
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CHAPTER-2
PROFILE OF THE ORGANIZATION
and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.
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Promoter
HDFC is Indias premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception is 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain a market leader in mortgages.
Business Focus
HDFC Banks mission is to be a World-Class Indian Bank. The Banks aim is to build sound customer franchises across distinct businesses so as to be the preferred provided of banking services in the segments that the bank operates in and to achieve healthy growth in profitability, consistent with the banks risk appetite.
Capital Structure
The authorized capital of HDFC Bank is Rs.450 crore (Rs.45 billion). The paid-up capital is Rs282 crore (Rs.28.2 billion). The HDFC Group holds 24.2% of the banks equity while about 13.1% of the equity is held by the depository in respect of the banks issue of American Depository Shares (ADS/ADR Issue)..
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Distribution Network
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1400 branches spread over 600 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 Banks 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.
Management
Mr.Jagdish Kapoor took over as the banks 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 Citibanks operations in Malaysia. The Banks Board of Directors is composed of eminent individuals with a wealth of experience in public policy, administration, industry and commercial banking. Senior
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executive representing HDFC are also on the Board Senior banking professionals with
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substantial experience in India and abroad head various businesses and functions and report to the Managing Director.
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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. We have a wide array of retail loan products including Auto Loans, Loans against Securities, Personal Loans and Loans for Twowheelers.
3. Treasury Operations
Within this business, the bank has three main product areas a) Foreign Exchange and Derivatives b)Local Currency Money Market & c) 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 are provided through the bank's Treasury team. The Treasury business is responsible for managing the returns and market risk on the bank's investment portfolio.
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The above business groups are supported by the following groups: Audit & Compliance Credit & Market Risk Finance, Administration & Legal Human Resources Information Technology Operations
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ORGANIZATION CHART
Chairman
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Sales Manager
SALES Manager 1
SALES Manager 2
SALES Manager 4
TEAM LEADER
TEAM LEADER
TEAM LEADER
TEAM LEADER
BDE 1 BDE 2
BDE 1 BDE 2
BDE 1 BDE 2
BDE 1 BDE 2
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3) Personal Loan
Loans up to Rupees one million for any purpose. Flexible Repayment Options ranging from 12 to 48 months. Repayment through Easy Monthly Installments (EMIs). Low Rate of Interest Hassle free loans - No guarantor/security/collateral required Speedy loan approval Service at the customer's doorstep Further, there are additional privileges for HDFC Bank account holders like: Special rates of interest. For existing Auto Loan customers with a clear repayment of 12 months or more from even any of the approved financiers of HDFC Bank, a hassle free personal loan without income documentation can be obtained. For existing HDFC Bank Personal Loan customer with a clear repayment of 12 months or more, personal loan can be enhanced.
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5) Fixed deposits
Wide range of tenures Choice of investment plans Partial withdrawal permitted Safe custody of fixed deposit receipts Auto renewal possible Loan facility available
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9) Direct Banking Account 10) Tax Saver Fixed Deposits 11) Roaming Current Account 12) Young Stars or Kids Account 13) Savings Max Account / Regular Account / Plus Account 14) D-Mat Account 15) Family Account 16) NRI account
SERVICES:
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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.
healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed
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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. HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values - Operational Excellence, Customer Focus, Product Leadership and People. 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 acquisition added significant value to HDFC Bank in terms of increased branch network, expanded geographic reach, enhanced customer base,
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skilled manpower and the opportunity to cross-sell and leverage alternative delivery channels.
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HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1400 branches spread over 600 cities across India. All branches are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and active member base.
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CHAPTER 3
DISCUSSIONS ON TRAINING
3.1 Students work profile (Roles and responsibilities)
The internship period in HDFC Bank was a good learning experience. I worked for Direct Sales team of the organization as a Business Development Executive where my job was to loing for Personal Loan of bank and source new customers at the HDFC Bank LTD. In WhiteFeild Branch . My work involved some field work as well as making extensive cold calls to customers in order to generate database and keep updates on customer satisfaction. Every new Business Development Executive of the sales team have to undergo a three day compulsory product training in the Indira Nagar Head Branch, of HDFC Bank Ltd., Bangalore. Once every member of the team is trained on the products i.e.
Personal Loan of the bank, the manager-in-charge sets a weekly target for the team as well as for each team member. The team leader keeps track of the targets and arrange for the necessary changes in case the targets are not achieved.
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Every day my work would start off with calling up customers and make follow ups of those customers who are interested in personal loan with HDFC Bank. Apart from
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calling, I also need to report the daily sales report to my manager on a regular basis. Once the follow up calls are made, my job wants me to interact with the customers regarding the products, in and outside the organization. Hence my next steps include fixing appointments for the interested customers and collecting the essential documents to log in the application forms. Also, a BDE need to go on field for generation of new database and organizing sales activities in order to boost up sales. The assigned job responsibilities also include creating loyal customers and conducting promotional campaigns, giving presentations, handling customer queries and last but not the least, achieving the set targets.
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follow with product presentations and promotional activities. During the course I had the opportunity to deal with some big clients like IT companies, BPOs and small enterprises which were helpful exposures to learn sales and marketing tactics. Last but not the least, every BDE of the sales team had individual targets to achieve. I had a target of login of Rs. 10,00,000/- per month which I successfully achieved and maintained during the internship period.
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CHAPTER 4
STUDY OF SELECTED RESEARCH PROBLEM
4.1STATEMENT OF RESEARCH PROBLEM
In todays era of cut throat competition, it is very importance to gain a cutting edge over the competition, and develop a large market share. This is only possible if there is a large customer base for the company. The company must gain confidence of the
customers and provide services par excellence. Therefore, undertaking the project helps in assessing the customer care level of HDFC BANK. The study is applied descriptive as well as diagnostic in nature. It also tends to find the customer view about important aspects of the services. At the same time it was intended to find the customer view about the product and the quality of service improvement. In short this problem can be defined as: Are customers satisfied with the services at HDFC?
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y y y y y
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Primary data:
Primary data are datas, which are original in nature, and are
collected by the researcher. The method used to collect the primary data was Survey Method. The survey method included a structured questionnaire that was given to the respondent.
Secondary data:
compiled in advance for another needed purpose. Secondary data is an important method to know the present problem faced by the account holders in the field of HDFC Bank. Newspapers, articles, books, magazines etc. have been used to prepare the questionnaire.
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Sample Size:
Sample size of 100 customers are taken from the White Field branch of HDFC Bank
Scales:
Respondents were given a scale whose positions range from Highly Satisfied to Highly Dissatisfied
Area of survey:
The area selected to find the satisfactory level was in and around White Field area and Indra Nagar.
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ANALYSIS The above table shows that 22% of the respondents fall under the age group of 20 30 years, 43% of the respondents fall under age group of 30 40 years and 35% of the respondents belonging to age group of 40 and above years.
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INFERENCE Hence it clearly shows that he majority of the respondents fall under the age group of 3040 years i.e. 43%.
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ANALYSIS The table shows that there are 57% of male respondents and 43% of female respondents
INFERENCE Thus the table clearly shows that the majority of the respondents are male i.e. 57%.
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ANALYSIS The above table shows that there are no respondents who have a monthly net take home salary of less than Rs 15,000; there are 23% of the respondents who fall under Rs 15,000 Rs 30,000 household income and 77% fall under the more than Rs 30,000 net take home salary category. INFERENCE The table clearly shows that the majority of the respondents have more than Rs 20,000 of monthly net take home salary that is 77%
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ANALYSIS The above table relates that the 65% of the respondents think its extremely important for the interest rate to be convenient, 20% of the respondents think it is somewhat important, 15% of the respondents think its not so important while none of them think its not at all important. INFERENCE Table number 7 clearly shows that majority of the customers think that it is very
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5) THE IMPORTANCE OF PROCESSING FEES AND TIME IN HDFC BANK ACCORDING TO CUSTOMRES
RESPONDENTS 10 62 23 5 0 100
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ANALYSIS From the above table it can be analyzed that out of 100 respondents 10% are highly satisfied with the processing fees & time of the bank, 62% are satisfied, 23% are neutral, 5% are dissatisfied and none are highly dissatisfied. INFERENCE Therefore, it can be inferred that almost 5% of the respondents are not happy with the processing fees & time.This indicates that the customers are not satisfied with the processing fees & time
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VERY IMPORTANT SOMEWHAT IMPORTANT NOT SO IMPORTANT NOT AT ALL IMPORTANT TOTAL
30% 45%
20 5
20% 5%
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100%
ANALYSIS The table shows that according to 30% of the respondents it is very important that the size of the EMI is appropriate, 45% of the respondents think it is somewhat important, 20 % of the respondents said it is not so important while 5% of the respondents replied that it is not at all important. INFERENCE Hence the table clearly shows that the majority of the respondents think it is somewhat important for the EMI to be appropriate.
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7) IMPORTANCE OF DEVELOPMENT EXECUTIVE IN HDFC BANK WITH REGARD TO PERSONAL LOAN ACCORDING TO CUSTOMER
VARIABLES HIGHLY SATISFIED SATISFIED NEUTRAL DISSATISFIED RESPONDENTS 15 55 20 10 PERCENTAGE 15% 55% 20% 10%
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0 100
0% 100%
ANALYSIS The above table shows that out of 100 respondents,15 % of the respondents are highly satisfied with the development executive of HDFC Bank, 555 are satisfied, 20% are neutral while 10% are dissatisfied with the customer care and none are highly dissatisfied.. INFERENCE Development Executive is of immense importance in todays world and a key tool for an organization in order to gain new customers and boost up sales and market share. Therefore, HDFC Bank should work towards the dissatisfied customerby regular training to its employees or making the procedure more customer friendly.
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Respondents on customer
0% 10% 20% 15% HIGHLY SATISFIED SATISFIED NEUTRAL 55% DISSATISFIED HIGHLY DISSATISFIED
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5.
The only draw back that HDFC bank has in compare to other banks is only regarding the interest rates which is considered to be low in comparison to other bank. While most of the banks charges high monthly installment for the repayment of loan with compare to HDFC bank.
6. Enable customers to get personal loan easily and provide variety of other banking scheme to the personal loan customer .
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CHAPTER 5
SUMMARY AND CONCLUSION
5.1 SUMMARY OF LEARNING EXPERIENCE
My experience with HDFC Bank as a Business Develoment Executive during the three months internship period has helped me to a great extent in dealing with customers and with their tastes and expectations. With the changing market scenario and increased competition, it is very important to treat the customer as the king and to keep him happy When it comes to sales, customer relationship plays a significant role. To cater to each customer is an art to learn. Having gone through continuous interactions with customers and working for the sales team in the bank, I have learnt that it is very important to understand the needs and requirements of the customer and accordingly sell him the product. Working with HDFC Bank was a good learning opportunity which enabled me to learn about its wide range of products and services. The project has helped me to have an understanding of customer requirements and of the service industry.
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Recommendations
1. The processing time which is now 10 days , must be reduce to 9 days ,so more and more people can apply for the urgent loan for unforeseen calamities 2. Scheduling regular promotional activities like canopies, company visit etc. to know the more and more people about the loan facilities based on their salary i.e. Personal Loan. 3. More number of scheme is provided to the current salary holder cutomer with HDFC Bank with different features .
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4. Proper and general instruction about the product with latest changes and working provides to the executive . 5. The interest rates made to be more liberal to cutomer to customer on the basis of their salary and company profile . 6. The process of funding the loan needs to be more simple so that the customer can understand the product according to their needs. 7. There should be more executive especially inbig and crowded branches in the main part of the town. 8. Special schemes should be provided for small scale sector business employees as well new package of offers and discounts should be provided for high network people
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ANNEXURE
5.4 Questionnaire
1. Name ______________________________________
2. Age
3. Gender
Married
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<Rs.15, 000 Rs.15, 000-Rs 30, 000 > Rs.30, 000 6. How important is it for an employee to greet you with a smile?
Very important Somewhat important Not so important Not at all important 8. How important are the bank Interest Rates according to you?
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Very important Somewhat important Not so important Not at all important 9. How important are the benefits and facilities provided by HDFC for personal loan to you?
10. What is your level of satisfaction with respect to the executive services of the bank?
Highly dissatisfied
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11. What is your level of satisfaction with respect to customer care measures undertaken by the bank?
12. What is your level of satisfaction with respect to the quality of overall service provided by the bank?
Highly dissatisfied
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13. What is your level of satisfaction with respect to special schemes offered by bank?
the
14. What is your level of satisfaction with respect to the response time for grievance handling?
Highly dissatisfied
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15. What is your level of satisfaction with respect to the tenure period for the loan provided by the bank?
FAQ
Qu.1 What are the benefits of having a Salary Account for my Personal loan? Ans.1 You get preferred interest rates, priority processing and simpler documentation if you have a Salary Account with HDFC Bank. This is taken into account at the time of disbursal of the loan. You can pay through Standing Instructions to debit your HDFC Bank account with the EMI amount
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Qu.2 How much loan can I avail of? You can avail of a loan from Rs 50,000/- to Rs 15,00,000/- depending on your income and repayment capacity. You can club the income of your spouse if you wish to increase your loan amount
Qu.3 How do I repay my Personal loan? You pay the loan in equated monthly installments. The loan will be paid through postdated cheques or through Standing Instructions to debit your HDFC Bank account with the EMI amount. Calculate how much you will repay each month
Qu.4 What security do I need to provide to obtain this loan? To obtain the loan, there is absolutely no need to provide any security or collateral
Qu.5 What are the loan tenure options? You can repay your loan over a period of 12 to 60 months
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Once you submit your application form and supporting documents, we shall give approval within 72 hours provided everything is in order. All loan approvals are at the sole discretion of the bank.
Qu.7 Can I repay the loan earlier? You can choose to repay your loan anytime after 6 months of availing the loan at a maximum pre-payment penalty of 4% of the principal outstanding on your loan.
BIBLIOGRAPHY
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JOURNALS :
1. HDFC bank universe 2. Internal reports 3. Presentation material 4. Brochures
WEBSITES:
. 1. www.hdfcbank.com
2. www.google.co.in
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3. www.icicibank.com
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4. www.citibank.com
5. www.utibank.com
NEWSPAPERS
The Times of India The Economic Times Business Standard
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