GAUHATI UNIVERSITY

A Training Report submitted in partial fulfillemt of the requirements for the award of the Degree of the Bachelor of Business Administration ( Industry Integrated ) , Gauhati University on

Comparitive Analysis Between Kotak Mahindra Bank and HDFC Bank

FOR KOTAK MAHINDRA BANK , NEW FRIENDS COLONY BRANCH , NEW DELHI

Under Organization Guidance Of :

Under Institutional Guidance Of :

Mr. Deepesh Sharma Branch Sales Manager ( Retail Liabilities ) Kotak Mahindra Bank , New Friends Colony

Dr. M.P.Gupta Director General G.S.M.S. , Delhi

Prepared and Submitted By : Ashna Kalra G.U. Registration No. 003864 of 2009-2010

STUDENTS DECLARATION

I hereby declare that the Training Report conducted at

KOTAK MAHINDRA BANK , NEW FRIENDS COLONY , NEW DELHI .

Under the guidance of Dr. M.P.Gutpa

Submitted in Partial fulfillment of the requirements for the Degree of

MASTER OF BUSINESS ADMINISTRATION ( Industry Integrated )

TO

GAUHATI UNIVERSITY , GUWAHATI

Is my original work and the same has not been submitted for the award of any other Degree / Diploma fellowship or other similar titles or prizes .

Place :

New Delhi

Ashna Kalra

Date :

18-07-10

Reg. No. - 003864

CERTIFICATE

This is to certify that Ashna Kalra , a student of the Gauhati University has prepared her Training Report entitled Comparitive Analysis Between Kotak Mahindra Bank and HDFC Bank under my guidance . She has fulfilled all requirements under the regulations of the MBA (IIP) , Gauhati University , leading to the MBA (IIP) degree . This work is the result of her own investigation and the project ; neither as a whole nor any part of it was submitted to any other University or Educational Institutionfor any research or diploma .

I wish her all all success in life .

Dr. M. P. Gupta Director General Global School Of Management Science

CERTIFICATE OF THE ORGANISATION

To , The Director, NIAM, New Delhi.

This is to certify that Ms. Ashna Kalra of MBA ( Industry Integrated ) course of Gauhati University at Global School Of Management Science has undergone

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

Her performance during the training period was extremely satisfactory .

Authorized signatory

Mr. Deepesh Sharma , Branch Sales Manager ( Retail Liabilities ) , Kotak Mahindra Bank , New Friends Colony .

ACKNOWLEDGEMENT

No duty is more urgent than that of returning thanks

I would like to take this opportunity to express my deep sense of gratitude to all those who have contributed significantly in the successful completion of this project .

Firstly , i would like to thank Kotak Mahindra Bank , New Friends Colony Branch , New Delhi , for having given me an opportunity to undergo summer training in their company .

My deep-rooted respect and sincere gratitude to Mr. Deepesh Sharma (Branch Sales Manager , Kotak Mahindra Bank ) who in spite of his busy schedule listened to my problems and suggested prompt solutions . I am grateful to him for providing me with all the necessary insights and inputs and helping me all throughout my summer training programme . He has always been a source of guidance, inspiration and motivation to me .

I would also like to express my sincere gratitude to Dr. M.P. Gupta ( Director General , Global School of Management Science ) , NIAM , all the faculty members , colleagues and friends for their encouragement , support , guidance and assistance provided for undergoing my management training and preparing this project report . All of them helped me immensely during the course of my training .

Last but not the least , my heartfelt thanks to my dear family members whose blessings, inspiration and encouragement have resulted in the successful completion of this project . Im thankful to them for their kind cooperation, advice and encouragement during the long and arduous task of preparing this project report.

I hope that I have been successful in my endeavour. . However, I accept the sole responsibility for any possible errors of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice. . Discrepancies , mistakes , if any , are solely mine.

THANK YOU ALL

CHAPTER 1 : INTRODUCTION

( 1.1 ) GENERAL INTRODUCTION ABOUT THE SECTOR

A bank is an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans or make an investment to derive a profit from the difference in the interest rates paid and charged, respectively .

India has a well developed banking system. Infact , without a sound and effective banking system , India cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process

Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre-independence era to provide financial assistance to traders, agriculturists and budding Indian industrialists. The origin of banking in India can be traced back to the last decades of the 18th century. The General Bank of India and the Bank of Hindustan, which started in 1786 were the first banks in India. Both the banks are now defunct. The oldest bank in existence in India at the moment is the State Bank of

India. The State Bank of India came into existence in 1806. At that time it was known as the Bank of Calcutta. SBI is presently the largest commercial bank in the country. The banking industry in India is sufficiently capitalized and regulated. The economic and financial conditions here are better than in any other country. Liquidity, credit, and market studies have proven Indian banks to be resilient. They have negotiated the downturn in the global economy well. The role of central banking in India is looked by the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India. Reserve Bank was nationalized in 1947 and was given broader powers. In 1969, 14 largest commercial banks were nationalized followed by six next largest in 1980. But with adoption of economic liberalization in 1991, private banking was again allowed. The central bank is the apex financial institution in the banking and financial system of a country. It is regarded as the highest monetary authority in the country. It acts as the leader of the money market. It supervises, control and regulates the activities of the commercial banks. It is a service oriented financial institution. The Reserve Bank of India (RBI) is the topmost body monitoring the Banking Industry. Any shortcomings or discrepancies are dealt with by the RBI The banking industry in India is divided into scheduled and non-scheduled banks ie. the commercial banking structure in India consists of : Scheduled Commercial Banks and Unscheduled Banks . Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934.

RBI includes only those banks in this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the Act.

67,000 scheduled bank branches are located in India. They consist of cooperative banks and commercial banks. The Public Sector Banks form the base of this sector in India. These are those banks in which the Government of India holds a stake . They account for 78% of the assets in the banking sector. The Private Sector banking is also making headway. They are leading in mobile banking, phone banking, ATMs, and Internet Banking sectors. The government doe not have any stake in these banks. Now a days even foreign banks are increasingly establishing their base in India. JP Morgan, Standard Chartered, Bank of America, and many other international banks have established centers in India to tap its potential. The government constantly encourages foreign investment in this sector, as the entry of foreign players will help the sector to flourish . FDI in Indian banking can lead to improved efficiency, better capitalization, and improved adaptability. So the government is attracting FDI, FII, and NRIs in this field. Even with the global recession, the investment in the banking industry is still prevalent though the volume may have been reduced. FDI in India grew by 145% between 2006 and 2007 and by 46.6% during 20072008. The FDI in 2009 was down to 18.6%. However, with the recession abating the investments are sure to rise. Overall, the Indian banking industry has immense potential for further growth and expansion.

( 1.2 ) INDUSTRY PROFILE

(a) ORIGIN AND DEVELOPMENT OF THE BANKING INDUSTRY

Banking system in India has its roots in since ancient times. The first banks were the religious temples of the ancient world, and were established in the third millennium B.C. Temples were chosen as they were sacred and thus possibilities of a theft taking place was minimal. The temple priest or the merchants were left with the work of account keeping. Later on in the evolution of the banking system came the money lenders (SAHUKARS) who are prominent even today in the villages of India. Despite these early informal modes of banking, the first conventional bank in India, though conservative, was established only in 1786. The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks with mostly Europeans shareholders. In 1865 Allahabad Bank was established and was fir the first time set up exclusively by Indians. Punjab National Bank Ltd. was set up in 1894 with its headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

10

From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: Table 1.1: Banks established during 1786-1969 YEAR 1786 1807 1809 1840 1843 1865 1894 1906 1913 1920 1935 1991 BANK General Bank of India Bank of Hindustan Bank of Bengal Bank of Bombay Bank of Madras 1st bank established exclusively by Indians -Allahabad Bank Punjab Bank of India Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank Bank of Mysore Imperial Bank RBI Liberalisation of Banking practices

1st PHASE 1. During the first phase the growth was very slow and banks also experienced periodic failures. 2. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). 3. Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. It tightly

11

controlled the banking environments and was conservative in its approach especially towards the fixation of interest rates. 4. Public had lesser confidence in the banking system and relied more on the depositing their money with the Postal services of India. As an aftermath deposit mobilization was slow. Also as the economic condition of the country was not very strong during those times people did not have enough money to experiment with and mostly choose to give it to traders who would give better rate of return. 2nd PHASE 1. It was in the year 1955 that the Government took major steps towards the Indian Banking Sector Reform. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. 2. In the year 1969 a major drive to nationalize banks was carried out for example seven banks forming subsidiary of State Bank of India were nationalised and 14 major banks in the country were nationalized. 3. The nationalisation of these and the other banks 80% of the banking segment in India under Government ownership thus strengthening the fundamental base of these banks. Also these helped in gaining the faith and confidence of the people in the banking system and these institutions. This

12

step helped the institutions in raising the levels of deposits and advances from 800% to 11000%. 4. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

1949: Enactment of Banking Regulation Act. 1955: Nationalisation of State Bank of India. 1959: Nationalisation of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalisation of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalisation of seven banks with deposits over 200 crore

3RD PHASE This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalisation of banking practices. The major reforms of the banking system which has shaped the success story of Indian banking system were done in this phase. Some of the reforms areTo create an environment for banks to flourish by deregulating interest rates, reducing reserve requirements and allocating credit to certain sectors. (Y V Reddy: Banking sector reforms in India - an overview)

13

It is result of these reforms that the people have options to choose which banker to bank with. They are flooded with variety of options from which they can choose and decide how they wish to invest their money. The country is flooded with foreign banks and their ATM stations. Banks are putting sincere Efforts to give a satisfactory service to customers. The entire system became more convenient and swift and customers ease is the priority. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.

(b)

GROWTH AND PRESENT STATUS OF THE BANKING INDUSTRY

A Sound and healthy banking system forms the backbone of any economy. The Indian banking industry is going through competitive times. With the lowering of entry

14

barriers and liberalization of banking practices the competition has become intense and scope of differentiation on the basis of products sold has significantly reduced. Banks are now focusing more on services and maintaining customer relationships in order to enhance their hold in the market. Net banking, phone banking, home banking and ATM banking services are the new focus areas.

The competition is not just from the multinational and foreign banks but is also emanating from within the banking system, financial sector reforms and domestic players. All public sector banks, private sector and foreign banks along with non banking finance companies are competing for the same segment. The fact that India was only marginally affected by the financial turmoil in the western countries because of its strong policies and sound regulations has only led to add to the already intense competition in the industry. The news has reassured the public at large that the Indian financial and banking systems have a strong base and thus it has helped more people to invest in banks and also attract foreign bankers to India. This has lead to increasing the level of competition.

Indias banking sector is growing at a fast pace. India has become one of the most preferred banking destinations in the world. The reasons are numerous: the economy is growing at a rate of more than 8%, Bank credit is growing at 30% per annum and there is an ever-expanding middle class of about 250 to 300 million people (larger than the population of the US) in need of financial services. The rural market segment is yet to be exploited. The disposable income with the public is growing, also there is a change in mindset and people are no more against taking credits and loans. This has significantly increased the potential Market for bankers. All this enables double-digit

15

returns on most asset classes which is not so in a majority of other countries. Foreign banks in India achieving a return on assets (ROA) of 3%, their keen interest in expanding their businesses is understandable. Indian markets provide growth opportunities, which are unlikely to be matched by the mature banking markets around the world.

The interplay between policy and regulatory interventions and management strategies will determine the performance of Indian banking over the next few years. Legislative actions will shape the regulatory stance through six key elements: industry structure and sector consolidation; freedom to deploy capital; regulatory coverage; corporate governance; labor reforms and human capital development; and support for creating industry utilities and service bureaus. Management success will be determined on three fronts: fundamentally upgrading organizational capability to stay in tune with the changing market; adopting value-creating M&A as an avenue for growth; and continually innovating to develop new business models to access untapped opportunities. Through these scenarios, we can paint a picture of the events and outcomes that will be the consequence of the actions of policy makers and bank managements.

( c ) FUTURE OF THE BANKING INDUSTRY

A healthy banking system is essential for any economy striving to achieve good growth and yet remain stable in an increasingly global business environment.

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The Indian banking system has witnessed a series of reforms in the past, like deregulation of interest rates, dilution of government stake in PSBs, and increased participation of private sector banks. It has also undergone rapid changes, reflecting a number of underlying developments. This trend has created new competitive threats as well as new opportunities.

The strong banking regulatory system has helped India to weather the storms of global credit crunch. India's central bank RBI has already made cuts in Cash Reserve Ratio, or CRR, and Statutory Liquidity Ratio, or SLR, to pump more liquidity into the economy. The interest rates are also at record lows.

The future of banking will undoubtedly rest on risk management dynamics. Only those banks that have efficient risk management system will survive in the market in the long run. The effective management of credit risk is a critical component of comprehensive risk management essential for long-term success of a banking institution.

Consolidation :

Consolidation, which has been on the counter over the last year or so, is likely to gather momentum in the coming years. Post April 2009, when the restrictions on

17

operations of foreign banks will go, the banking landscape is expected to change dramatically. Foreign banks, which currently account for 5% of total deposits and 8% of total advances, are devising new business models to capture the Indian market. Their full-fledged entry is expected to transform the business of banking in many ways, which would be reflected in terms of greater breadth of products, depth in delivery channels and efficiency in operations.

Despite the stiff resistance from certain segments, consolidation holds the key to future growth. This view is underpinned by the following:

Owing to greater scale and size, consolidation can help save costs and improve operational efficiency. Banks will also have to explore different avenues for raising capital to meet norms under Basel-II Owing to the diversified operations and credit profiles of merging banks, consolidation is likely to serve as a risk-mitigation exercise as much as a growth engine.

Though there is no confirmation yet, speculative signals arising from the market point to the prospect of consolidation involving banks such as Union Bank of India, Bank of India, Bank of Baroda, Dena Bank, State Bank of Patiala, and Punjab and Sind Bank. Further, the case for merger between stronger banks has also gained ground a clear deviation from the past when only weak banks were thrust on stronger banks. There is a case being made for mergers between banks with a distinct geographical presence coming together to leverage their respective strengths.

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Globalization :

Growing integration of economies and the markets around the world is making global banking a reality. The surge in globalization of finance has already begun to gain momentum with the technological advancements which have effectively overcome the national borders in the financial services business. Widespread use of internet banking will widen frontiers of global banking, and make marketing of financial products and services on a global basis possible. In the coming years globalization will spread further on account of the likely opening up of financial services under WTO. India is one of the 104 signatories of Financial Services Agreement (FSA) of 1997. This gives Indias financial sector including banks an opportunity to expand their business on a quid pro quo basis.

As per Indian Banks' Association report Banking Industry Vision 2010, there would be greater presence of international players in Indian financial system and some of the Indian banks would become global players in the coming years. So, the new mantra for Indian banks is to go global in search of new markets, customers and profits.

Technology :

There is an imperative need for not mere technology upgradation but also its integration with the general way of functioning of banks to give them an edge in

19

respect of services provided to their constituents, better housekeeping, optimizing the use of funds and building up of MIS for decision making, better management of assets & liabilities and the risks assumed which in turn have a direct impact on the balance sheets of banks as a whole. Technology has demonstrated potential to change methods of marketing, advertising, designing, pricing and distributing financial products and services and cost savings in the form of an electronic, self-service product delivery channel. These challenges call for a new, more dynamic, aggressive and challenging work culture to meet the demands of customer relationships, product differentiation, brand values, reputation, corporate governance and regulatory prescriptions. Technology holds the key to the future success of Indian Banks.

Internet, wireless technology and global straight-through processing have created a paradigm shift in the banking industry. The explosive growth of both the Internet and mobile and wireless technology is revolutionizing the way the financial industry conducts business. The overall wireless technology market is expected to grow profoundly in the coming years.

Regulations :

The RBI's approval for banks to raise funds abroad through innovative capital instruments holds great significance. Such fund-raising, which includes preference shares, will, however, not just substitute equity; it could have unintended consequences on the strategies of banks and their profitability. While the cost of raising monies through such instruments is likely to be higher (close to 10 per cent), the consequent higher leverage on equity funds is likely to result in expansion of

20

return on net worth. This is because the same amount of capital supports a higher volume of business, generating higher profits.

Skilled Manpower :

There will be a sea change for employees too. Secure jobs will be replaced by contractual appointments, for a specified period of time. The unions will merge into the shadows and bank managements will turn effective. As a result there will be swifter turn over of personnel in banks. But at the same time, skilled personnel from other disciplines will enter banks in increasing numbers.

Factors like skills, attitudes and knowledge of the human capital play a crucial role in determining the competitiveness of the financial sector. The quality of human resources indicates the ability of banks to deliver value to customers. Capital and technology are replicable but not the human capital which needs to be valued as a highly valuable resource for achieving that competitive edge.

Business model, which comprises a comprehensive range of business solutions delivered through a unique balance of portfolio and relationship management must be incorporated.

Future Challenges :

Competition Customer Retention

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Globalization Shrinking Margin

Some Suggestions :

Strong In-house research & market Intelligence Focused marketing- Focus on region-specific campaigns rather than national media campaigns

CONCLUSION:

What will the future of Indian banking look like? Will the reform in banking sectors face the same fate as in power and telecom? It is increasingly evident that the economy offers opportunities but no security! Therefore, the future will belong to those who develop good internal controls, checks and balances and a sound market strategy. Business Growth, Cost Efficiency and Evolution are therefore regarded as key drivers which will have to be addressed.

CHAPTER 2 : PROFILE OF THE ORGANISATION

( 1.1 ) ORIGIN OF THE ORGANISATION

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Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates. The group has a net worth of over Rs. 2,900 crore, employs around 8,800 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 282 cities and towns in India and offices in New York, London, Dubai and Mauritius. The Group services around 2 million customer accounts.

The Kotak Mahindra group is a financial organization established in 1985 in India. It was previously known as the Kotak Mahindra Finance Limited, a non-banking financial company. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. is the first company in the Indian banking history to be converted from a private financial institution to a bank. The bank is headed by K.M. Gherda as Chairman and Uday Kotak as Executive Vice Chairman & Managing Director. Shankar Acharya is the chairman of board of Directors in the company. A stake in the group was taken in by industrialists Harish Mahindra and Anand Mahindra and this is the time when the company changed its name to Kotak Mahindra Finance Limited. The following diagram shows a picture of kotaks success through the years.

Figure 1: Kotaks progress chart

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1.2 GROWTH AND DEVELOPMENT OF THE ORGANISATION

Within a small span of 6 years, the bank has spread it wings in several sphere of finances. Presently, spread in 82 cities in India, the bank caters to the needs of its 5.9

24

million customers spread throughout the length and breadth of country and even abroad. By the end of FY 2007-2008, the Kotak Mahindra Bank had about 178 branches spread all over the country and it plans to add some more branches by the end of FY 2010.

The bank is one of the most admired financial services providers in India because of its state-of-the-art financial solutions for countless needs of individual and corporate clients. In addition to Internet banking and phone banking, the bank provides suitable banking facilities through SMS services, Mobile banking, Home banking, Netc@rd and BillPay facility to name a few.

The entire Kotak Mahindra group has a net worth of over Rs. 6,327 crore and at the end of FYP 2007-2008,it was reported that the consolidated profit of Kotak Mahindra Bank individually was Rs 991.2 crore which was 84% higher than the consolidated profit of Rs 538.2 crore in FY07. Kotak Mahindra Bank has 75 ATMs at 41 locations in the country which are 24x7 accessible. Before the free transactions facility of RBI was made mandatory to all the ATM operating banks in India from April 1, 2009, Kotak Mahindra Bank had underwent under a treaty with the HDFC Bank to provide free network free of cost to most of its customers through its 1335 ATMs spread in the country to ensure comfort to its customers.

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

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1992 Enters the Funds Syndication sector Brokerage and Distribution businesses incorporated into a separate company 1995 Securities. Investment Banking division incorporated into a separate company Mahindra Capital Company The Auto Finance Business is hived off into a separate company - Mahindra Prime Limited (formerly known as Mahindra Primus Limited). Mahindra takes a 1996 significant stake in Ford Credit Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Group's entry into information distribution. Enters the mutual fund market with the launch of Mahindra Asset Management 1998 Company. 2000 Mahindra ties up with Old Mutual plc. for the Life Insurance business. Securities launches its on-line broking site (now www.securities.com). 2000 Commencement of private equity activity through setting up of Mahindra Venture Capital Fund. 2001 Matrix sold to Friday Corporation 2001 Launches Insurance Services Mahindra Finance Ltd. converts to a commercial bank - the first Indian company 2003 to do so. 2004 Launches India Growth Fund, a private equity fund. Group realigns joint venture in Ford Credit; Buys Mahindra Prime (formerly 2005 known as Mahindra Primus Limited) and sells Ford credit Mahindra. 2005 Launches a real estate fund Bought the 25% stake held by Goldman Sachs in Mahindra Capital Company 2006 and Securities

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(2.3)

PRESENT STATUS OF THE ORGANISATION

Kotak Mahindra Bank Ltd. is presently one of the finest banking services providers in India. The specialized products by Kotak Mahindra Bank India that drive mass interest among the customers are Kotak Mahindra Life Insurance and other insurance products, Kotak Mahindra Mutual Fund, and Kotak Mahindra Securities, Kotak Mahindra Bank Credit Cards, Kotak Mahindra Bank Home Loan products, Kotak Mahindra Bank personal loan, Kotak Mahindra Bank Visa C@rd and many more products.

The Group's principal activity is to provide banking and related services. The Group operates in four business segments: Treasury and Balance Sheet Management Unit (BMU), which includes dealing in money market, forex market, derivatives, investments and primary dealership of government securities; Retail Banking, which

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includes lending, commercial vehicle finance, personal loans, agriculture finance, other loans and home loans, Branch banking, which includes retail borrowings covering savings, current, term deposit accounts and branch banking network/services including distribution of financial products, and credit cards; Corporate Banking, which comprises wholesale borrowings and lendings and other related services to the corporate sector; As of 31-Mar-2010, it had a network of 249 branches.

The various banking products by Kotak Mahindra Bank include:

Banking & Savings Banking Accounts Demat Deposits NRI Services Convenience Banking

Investments & Insurance Life Insurance Mutual Funds Share Trading Structured Products Gold Estate Planning

Loans & Borrowings Car Finance

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 Home Loans Loans Against Property Personal Loans

Corporate & Institutional Corporate Finance Investment Banking Institutional Equities Treasury

( 2.4 ) FUNCTIONAL DEPARTMENTS OF THE ORGANISATION

Marketing

Marketing at Kotak Mahindra Bank categorises in to four departments - Marketing Communications, PR & Corporate Communications, Marketing Activation & Marketing Operations. These departments act as an advisory and support channel towards marketing strategies and PR planning to ensure effective brand building through brand awareness and visibility. The objective is to implement effective campaigns and promotions which would help in meeting the business targets and getting media coverage for the same. We provide support at two broad levels - Branch Marketing and Central Marketing.

Human Resource 29

The HR professional contributes to the organization by constantly assessing the effectiveness of the HR function. He also sponsors change in other departments and in work practices. To promote the overall success of his organization, he champions the identification of the organizational mission, vision, values, goals and action plans. Finally, he helps determine the measures that will tell his organization how well it is succeeding in all of this.

Wholesale Bank

We offer corporate clients & institutions a complete range of highly focused banking services & solutions. Our service offerings are specially structured, taking into account client's specific needs and keeping in perspective their risk profile. Kotak Bank will offer all services, products & solutions in keeping with the credit & risk management philosophy & policies of the Bank as well as in keeping with the relevant RBI circulars & guidelines issued from time to time.

Retail Liabilities Operations (RL Ops)

The image of a typical operations unit has changed over the years from a processing centre to a more customer focused service delivery unit. RL-Ops facilitates the customer to establish a relationship with the bank. The Retail Liabilities Central Processing Centre (RL-CPC Mumbai) functions as a hub for processing the account opening forms sourced from Western India, over and above the centralised activities

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such as Direct Banking/Salary Uploads/Account Closures for PAN India. Regional Processing Centre (RPC) Ahmedabad caters to branches in Gujarat, RPC Delhi caters to the branches in North and Eastern part of India while RPC Chennai caters to branches in the South.

Technology Technology has opened up new markets, new products, new services and efficient delivery channels for the banking industry. Online electronics banking, mobile banking and internet banking are just a few examples. Information Technology has also provided banking industry with the wherewithal to deal with the challenges the new economy poses. Information technology has been the cornerstone of recent financial sector reforms aimed at increasing the speed and reliability of financial operations and of initiatives to strengthen the banking sector. The IT revolution has set the stage for unprecedented increase in financial activity across the globe. The progress of technology and the development of world wide networks have significantly reduced the cost of global funds transfer. It is information technology which enables banks in meeting such high expectations of the customers who are more demanding and are also more techno-savvy compared to their counterparts of the yester years. They demand instant, anytime and anywhere banking facilities. IT has been providing solutions to banks to take care of their accounting and back office requirements. This has, however, now given way to large scale usage in services aimed at the customer of the banks. IT also facilitates the introduction of new 31

delivery channels--in the form of Automated Teller Machines, Net Banking, Mobile Banking and the like. Further, IT deployment has assumed such high levels that it is no longer possible for banks to manage their IT implementations on a stand alone basis with IT revolution, banks are increasingly interconnecting their computer systems not only across branches in a city but also to other geographic locations with high-speed network infrastructure, and setting up local area and wide area networks and connecting them to the Internet. As a result, information systems and networks are now exposed to a growing number.

( 2.5 ) ORGANIZATION STRUCTURE

The Kotak group comprises of Kotak Mahindra Capital Company, Kotak Securities, Kotak Mahindra Investments, Kotak Mahindra Prime, Kotak Mahindra Asset Management Company, Kotak Mahindra Trustee Company, Kotak Investment Advisors Limited, Global Investments Opportunities Fund, Kotak Mahindra (International), Kotak Mahindra (UK), Kotak Mahindra Inc., Kotak Mahindra Corporate Banking
Treasury

Group Structure .
Retail Lending

Trusteeship Services, Kotak Forex Brokerage and Wealth Management Kotak Mahindra Old Mutual Life Insurance. In the above companies Kotak Mahindra Old Mutual Life Insurance is a
*100%
Capital Company

Retail Branch Banking

*100%
Kotak Securities

100%
Mahindra Investments

*100%
Mahindra P rime

100%
Asset Management Company
Mutual fund

100%
Trustee Company

74% subsidiary, however all the other companies Kotak 100% subsidiaries of Kotak. are Mahindra Kotak Mahindra Kotak Mahindra Kotak Mahindra Kotak Kotak
Old Mutual Life Insurance IP Os Private equity Project advisory M&A Stock broking eBroking Distribution Investment Lending Car Finance & other lending Trustee Company

*74%

26% held by Old Mutual

Life insurance

*100%
Kotak Investment Advisors Limited
Private E quity fund Realty fund

*100%
Global Investments Opportunities Fund

*100%
Kotak Mahindra (International)
Advisory Services Investment Management

*100%
Kotak Mahindra (UK)

*100%
Kotak Mahindra Inc.

100%
Kotak Mahindra Trusteeship Services
Trustee Company

100%
Kotak Forex Brokerage
Interbankforex broking

Asset Management Broker/Dealer Broking Investment Management

Servicing around 5.6 mn customer accounts. 32

*Includes direct and indirect holdings

( 2.6 ) PRODUCT AND MARKET PROFILE OF THE ORGANIZATION COMPETITORS ie. HDFC BANK

History

HDFC Bank was incorporated in the year of 1994 by Housing Development Finance Corporation Limited (HDFC), India's premier housing finance company. It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.The Bank commenced its operations as a Scheduled Commercial Bank in January 1995 with the help of RBI's liberalization policies. HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Mastercard Maestro debit card as well.

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In a milestone transaction in the Indian banking industry, Times Bank Limited (promoted by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. As per the scheme of amalgamation approved by the shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a strong deposit base of around Rs. 1,22,000 crore and net advances of around Rs. 89,000 crore. The amalgamation added significant value to HDFC Bank in terms of increased branch network, geographic reach, and customer base, and a bigger pool of skilled manpower.

1.1. HDFC was incorporated in 1977 with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 100 million.

Business Objectives

The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. Another objective is to increase the flow of resources to 34

the housing sector by integrating the housing finance sector with the overall domestic financial markets.

Organisational Goals

HDFC's main goals are to a) develop close relationships with individual households, b) maintain its position as the premier housing finance institution in the country, c) transform ideas into viable and creative solutions, d) provide consistently high returns to shareholders, and e) to grow through diversification by leveraging off the existing client base. Geographical Presence Bank at present has an enviable network of 1,725 branches spread in 779 cities across India.All branches are linked on an online real-time basis. Customers in over 500 locations are also serviced through Telephone Banking. The Bank also has 4,232networked ATMs across these cities. The bank is looking at countries such as Canada and Singapore to expand its branch networks abroad.The bank has already applied for licenses in Bahrain and Hong Kong and currently having a representative office in Dubai. Customer Profile base

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corp to small & mid-sized corporates and agri-based businesses Under Retail Banking Services HDFC has adopted mass banking strategy.

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HDFC Bank Mission and Objective

Mission - to be "a World Class Indian Bank", benchmarking ourselves against international standards and best practices in terms of product offerings, technology, service levels, risk management and audit & compliance. Objective - to build sound customer franchises across distinct businesses so as to be a preferred provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, consistent with the Bank's risk appetite. SAVING ACCOUNT PRODUCT OFFERING: Regular Savings Account Premium Savings Account

REGULAR SAVINGS ACCOUNT

Kotak Mahindra Bank's Ace Savings Account has been designed as a gateway to a world of financial benefits and privileged banking transactions. The account carries benefits ranging from personal investment advisory services to free banking transactions. You will find that this package of services and privileges is unmatched by any other savings account in the market.

Features & Benefits :

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 Wide network of branches and over thousand ATMs to meet all your banking needs no matter where you are located. Bank conveniently with facilities like NetBanking and MobileBanking- check your account balance, pay utility bills or stop cheque payment, through SMS. Never overspend- Shop using your International Debit Card that reflects the actual balance in your savings account. Personalised cheques with your name printed on each cheque leaf for enhanced security. Take advantage of BillPay, an instant solution to all your frequent utility bill payments. Instruct for payment over the phone or through the Internet. Avail of facilities like Safe Deposit Locker, Sweep-In and Super Saverfacility on your account. Free cash withdrawals on any other Bank's ATM* Free Payable-at-Par chequebook, without any usage charges upto a limit of Rs.50,000/- per month. Free InstaAlerts for all account holders for lifetime of the account. Free Passbook facility available at home branch for account holders (individuals)

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Description Charges

of Regular Savings Account

Minimum Balance (Average Quarterly Balance)

Rs. 10,000 (Urban), Rs. Option 1 5000 (Semi-urban) NIL with a Fixed deposit of Option 2 Rs. 50,000 Rs. 750 per qtr (Urban & Option 1 Semi-urban)

Charges on non maintenance thereof Option 2

In case of non maintenance of Rs. 50,000 Fixed Deposit - Rs. 750 per qtr (Urban & Semi-urban)

PREMIUM SAVINGS ACCOUNT

By maintaining an average quarterly balance of just Rs. 25,000/- one get a host of premium services from HDFC Bank absolutely free. Features Free unlimited transactions: Cash withdrawal and balance enquiry, at all HDFC Bank ATMs & at all non HDFC Bank domestic ATMs using your HDFC Bank Debit Card Free Gold Debit Card for primary account holder for lifetime of the account. Gold Debit Card for other account holders at Rs 250/- p.a.

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 Free Woman's Advantage/International Debit Card for all account holders for lifetime of the account. Free Payable-at-Par (PAP) chequebook, without any usage charges upto a limit of Rs. 2 lac per month. Above Rs. 2 lac, charge of Rs.3.50/- per Rs. 1,000/- on the full amount. Free Demand Drafts on HDFC Bank locations, upto a limit of Rs. 1 lac per day. Free Demand Drafts on HDFC Bank locations, upto a limit of Rs. 1 lac per day. Self/Third Party Cash Deposit/Withdrawal at non-home branches, upto Rs 50,000/- per day free. Above Rs 50,000 a charge of Rs 2.90 per thousand on the full amount would be applicable. Optional MoneyMaximizer (sweep- out) facility for conversion of your surplus money into high earning fixed deposits, at the threshold of Rs.1,25,000/- . In the event of the balance in SavingsMax account exceeding / reaching Rs.1,25,000/-, the amount in excess of Rs.1,00,000/- will be swept out in to a Fixed Deposit with a minimum value of Rs.25,000/- for a 1year 1day period Free BillPay & InstaAlerts for all account holders for lifetime of the account. Free NetBanking, PhoneBanking & MobileBanking.

SPECIAL PREVILEGES Insurance Benefits One can enjoy an Accidental Hospitalization cover of Rs. 1lac per annum on Savings Max account. One can also claim daily cash allowance at Rs.1,000/- per day for a maximum of 15 days per year, for each day of hospitalization

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due to an accident. This is a re-imbursement cover, extended only to the first holder of the Savings Max account. It would be applicable after the completion of the 1st calendar quarter, post the quarter of a/c opening. Eg. If the Savings Max a/c is opened in August 2009, the insurance benefit will apply only from January 2010. For the claim to be accepted & processed, the first holder of the Savings Max account should have fulfilled the below 2 conditions - Maintained an Average Quarterly Balance of Rs. 25,000/- (irrespective of enjoying the benefit of a zero balance account with a Fixed Deposit of minimum Rs. 1,00,000/-) in the calendar quarter previous to the quarter of the date of accident. One should have done at least 1 purchase - point of sale (POS) transaction at a merchant establishment using the Debit Card in the previous 3 months before the date of accident.

CURRENT ACCOUNT OFFERED

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

FEATURES

Free Account to account funds transfer between HDFC Bank accounts Free payment and collection through RTGS. Free payment and collection using NEFT (through Netbanking) Free up to 50 Demand Drafts per month and can be issued from any HDFC Bank Branch

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 Free up to 50 Pay Orders (PO) per month and can be issued from any HDFC Bank Branch. Free anywhere collection & payment transactions (clearing) within HDFC Bank branch network (except Dahej), up to Rs.100 lacs per month. HDFC Bank offers you Doorstep Banking, a channel, which is convenient, secure and hassle-free. Now, you can enjoy the benefits of banking right at your doorstep. The Bank will arrange to render the services like Cash & Cheque Pickup and Cash Delivery, through a reputed agency. 300 "At Par" cheque leaves free per month.

( 2.7 ) MARKET PROFILE OF THE ORGANISATION

Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporates.

The group has a net worth of over Rs. 2,900 crore, employs around 8,800 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 282 cities and towns in India and offices in New York, London, Dubai and Mauritius. The Group services around 2 million customer accounts.

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SAVING ACCOUNT PRODUCT OFFERING: o Ace Savings Account o Pro Savings Account o Edge Savings Account

ACE SAVINGS ACCOUNT (AQB 50000)

Kotak Mahindra Bank's Ace Savings Account has been designed as a gateway to a world of financial benefits and privileged banking transactions. The account carries benefits ranging from personal investment advisory services to free banking transactions. Features & Benefits: Free access at all domestic and international VISA ATMs: One no longer have to worry about locating your Bank or Partner Bank ATM - Use the first VISA ATM that you spot, for free cash withdrawal or balance enquiry transactions.

Multiple access channels: Access your account anytime through your land line, mobile phone or internet to get information on your account balance or track your transactions. One can even transfer funds through Phone Banking or Net Banking.

Financial payments facilitated through the savings account: Use the free Kotak Payment Gateway to make online payments for your utility bills, credit cards, online trading of shares or even online shopping.

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Quick and easy funds transfer: Transfer funds easily and with speed, to a beneficiary account at another bank. One can avail of this facility by walking into any of our branches or by simple logging on to Net Banking. Account holder also gets a free multi-city cheque book so that money from his account is transferred to the beneficiary's account at any of kotak branch locations, in the fastest possible time.

Free banking transactions: One can issue demand drafts or send cheques for collection anywhere in the country for no extra charge.

Active Money: Helps earn better returns in savings account, with the ActivMoney facility that automatically sweeps out idle funds, above a threshold, from the account into Term Deposits. These Term Deposits are sweep back into the account to meet fund requirements when one withdrawals exceed the balance available in the account, thereby providing maximum liquidity.

Free investment account: Use the Net Banking facility to purchase/redeem mutual funds online while directly debiting / crediting ones bank account. Further, a free investment account for tracking your investments with the Bank is provided. This account provides a consolidated view of all your mutual fund investments across schemes with updated returns status, latest NAV information and research reports.

Dedicated relationship manager: Account holder gets a one point contact for all banking related queries and transactions. The relationship manager is qualified to help with financial planning and sound investment decisions in order to meet financial goals.

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Family Savings Account: The Kotak Ace Savings package allows customers to extend the Kotak banking experience to three of his family members. Under this scheme one is eligible to open 3 Edge Savings Account with NMC waiver on all 3 accounts, so long as the AQB of your ACE account is maintained.

Online trading account : Link the savings account to your online trading with Kotak Securities to enable transfer of funds from your bank account to your account with Kotak Securities and vice versa.

PRO SAVINGS ACCOUNT (AQB Rs 20000)

Kotak Mahindra Banks Pro Savings Account is an account packed with powerful features to provide a superior banking experience at a very comfortable balance requirement. It is one of the best products being offered in the entire industry.

Features & Benefits

Unlimited Access to your bank account at over 35,000 VISA and Cash net ATMs in India and over 388,000 Merchant Establishments which accepts VISA credit/debit cards in India.

Multiple access channels

Free investment account

Financial payments facilitated through the savings account

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 Quick and easy funds transfer Unlike the Ace account this facility is available in only 15 locations through Net Banking.

ActivMoney

Dedicated relationship manager

Free banking transactions

Family Savings Account Unlike Ace Under this scheme one is eligible to open Only 1 Edge Savings Account with NMC waiver so long as the AQB of your ACE account is maintained.

EDGE SAVINGS ACCOUNT (AQB Rs 10000)

Kotak Mahindra Banks Edge Savings Account is a complete financial package customized to suit individual banking needs

Features & Benefits Unlimited Access

Multiple Access Channels

Financial payments facilitated through the savings account

Quick and easy funds transfer Quick funds transfer to a third party account with another Bank is available across 15 locations through Net Banking.

ActivMoney

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 Family Savings Account Under this scheme one is eligible to open Only 1 NOVA Savings Account with reduced AQB of 5000 Rs.

CURRENT ACCOUNT FEATURES

1. Remittance/ Payment Solutions - Demand Drafts/ Bankers Cheques, Payable At-par Cheques books, Funds Transfer, NEFT and RTGS. 2. Receipts/ Collections Solutions - Local & Payable At- par Cheque Clearing,Out station Cheque Collection, 3. Cash Transactions Free Cash Deposits at Home Branch Location 4. Home Banking 5. ActivMoney - Interest is paid on these as per the no. of days for which these actually remain as TD! For earning any interest, a swept out TD < 15 lakhs should remain for a min of 15 days & for a swept out TD > or = 15 lakhs, it should remain in for a min of 7 days, as per RBI. 6. Charges Reversal Offer (Only for NEO Current Account)- For accounts that maintain an average bal of Rs. 25,000 or more, over the term of the account, in a financial year, 50% of all charges levied for the services & transactions availed during the year, shall be reversed centrally at the end of each financial year. Reversals capped at a max. limit of Rs. 1000 p.a. NMC charges excluded. Account should be open at the end of the financial year & should not be in TOD/ Dormancy. 7. Credit Access - Unsecured overdraft facility upto 3.5 times of AQB maintained (max. Rs 10 Lakhs) offered to firms >3 yrs old; subject to approvals.

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8. KValue - Unsecured OD offered to firms >3 yrs old. No hypothecation of stocks etc. involved but financials like balance sheet, P&L statement, bank account statement needed. Credit is given upon successful account performance over the first 6 months of account opening, subject to approvals. Credit limits upto a max. limit of Rs 50 Lakhs. 9. OD against TD 10. Phone Banking and Net Banking 11. Web Pay - A highly secured Internet based Banking system to transfer the funds from customers account to the Beneficiary accounts maintained with Kotak Mahindra Bank from anywhere and anytime. Customer can make periodic payments like salaries, reimbursements, vendor payments, service charges etc. automatically through multiple account fund transfers through file upload facility. 12. Visa Money Transfer for Credit Card Payments & Funds Transfer 13. E Tax Online Payment of Direct Taxes 14. Trade & Forex Services

CURRENT ACCOUNTS OFFERED 1. Neo Current Account. 2. Edge Current Account. 3. Pro Current Account. 4. Elite Current Account. 5. Ace Current Account.

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CHAPTER 3 : DISCUSSIONS ON TRAINING ( 3.1 ) SUDENTS WORK PROFILE , TOOLS AND TECHINIQUES USED .

Taking LMS

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My summer training of 2 months has been a complete learning experience , When I joined this esteemed organization , my organization guide told me to take the inhouse examinations which all employees of Kotak Mahindra Bank have to compulsorily undergo within the first 9 months of joining the organization . These are conducted on the computer system and we can take them at any time convenient to us . These exams are known as LMS which means LEARNING MANAGEMENT SYSTEM .

LMS consists of about 100 papers which covers all aspects of banking . For every exam paper , study material is available in the form of powerpoint presentations and and word dpcuments . These are available of the intranet of the company . We just need to log in with our specific employee id and password , refer to the material , study and appear for the exam .

Making Service Calls

It is a common practice in banks to sell products and services and never look back thereafter . Since all salesmen are always chasing their monthly targets , taking out time to talk to their existing clients and understanding any current need or any other problems with respect to the products and services of the bank , is often rare . I capitalized on this opportunity . I took the data of 500 clients or more from my fellow colleagues and made service calls to all the clients .

In these calls , I thanked the customer for being a member of the Kotak family and then resolved any issues and complaints that they were facing . This not only widened

49

my horizon in terms of understanding products and services better but also gave me a lot of satisfaction each time I could help someone .

Marketing and Selling of CASA and other products

Since no organization can survive without making profits and profit is only made after doing sales , I had to perform the same role . I made tele- calls to customers ie. Both existing and non-existing and persuaded and convinced them to buy the companys products . Although 80 % prospects dont even bother to hear you , I had to struggle with the other 20 % .

I was happy to sell 3 savings account , one demat / trading account and one term deposit . I received much appreciation for the same .

Other Operational Activities

At times my boss would give me some routine operational tasks to perform such as entering data , tallying it etc ,

( 3.2 ) KEY LEARNINGS

From these 2 months training , I learnt the following : 1. I read extensively about many topics since I had to appear for LMS . This increased my knowledge base manifolds.

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2. Since I made service calls to clients , I became aware of the different kinds of problems faced by clients and also understood the method of getting it resolved . 3. While marketing and pitching company products , I got aware of the various offerings by the bank and also learnt the effective ways of converting a prospect into a lead . 4. The daily operational activities taught me how to use the different softwares and applications in a computer . 5. Observation about my co-colleagues and their working style also made me aware of a lot of things . As they say ACTIONS SPEAK LOUDER THAN WORDS .

CHAPTER 4 : STUDY OF SELECTED RESEARCH PROBLEMS ( 4.1 ) STATEMENT OF RESEARCH PROBLEM

To make a comparative analysis of the various current accounts and savings accounts of Kotak Mahindra Bank and HDFC Bank .

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( 4.2 ) STATEMENT OF RESEARCH OBJECTIVES

To understand the differences in customer preferences while choosing savings account and current account between Kotak Mahindra Bank and HDFC Bank. To suggest changes that could be adopted by both the banks.

( 4.3 ) RESEARCH DESIGN AND METHODOLOGY

Research Design Area of study The study has been carried out for the customers of Kotak Mahindra and HDFC banks in New Delhi, India

Sources of data Primary data has been collected by handing out questionnaires to customers of Kotak Mahindra and HDFC banks. The study has also used secondary data obtained from RBI annual reports.

Sampling technique Simple random sampling technique has been used to generate a sample of customers of Kotak Mahindra and HDFC banks.

Sample size

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100 questionnaires were handed out randomly to respondents of which 88 held accounts in either Kotak Mahindra or HDFC banks. The remaining 12 respondents held accounts in other banks and therefore their preferences became irrelevant to the study. Hence the sample size for the study is 88.

Tools for the study To study the differences in the performance of Kotak Mahindra and HDFC banks, the questionnaire was used as a tool to analyse the customer preferences of both the accounts .

CHAPTER 5 : ANALYSIS ( 5.1 ) ANALYSIS OF DATA

SWOT analysis of Kotak Mahindra Bank

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STRENGTHS:

Capital markets franchise Professional management Strong technology Strong capital structure Construction equipment financing business Comprehensive cash management system Capturing supply chain businesses NPA is at 1.30%, Total Deposits Rs15, 645 crore, Net Advances Rs16, 625 crore, Capital Adequacy Ratio 16%.

WEAKNESS:

Wholesale Funding Costs Late comer in the industry Less Promotional Activities

OPPORTUNITIES:

Low loan and retail penetration Stressed Asset Business

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Mass Banking

THREATS:

Capital Market slow-down Competition Rising Rates Other better saving, investment option available (like Insurance, Mutual fund, Realestate, Gold) Brand value of competitors is stronger.

SWOT analysis of HDFC Bank

STRENGTHS

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Right strategy for the right products. Superior customer service vs. competitors. Great Brand Image. Products have required accreditation. High degree of customer satisfaction. Good place to work Lower response time with efficient and effective service. Dedicated workforce aiming at making a long-term career in the field.

WEAKNESSES

Some gaps in range for certain sectors. Customer service staff needs training. Processes and systems are weak. Management cover is insufficient. Sect oral growth is constrained by low unemployment levels and competitive staff.

OPPORTUNITIES

Profit margins trends are positive in next five years. Bank could extend to overseas aggressively. Introduction of new engineered products and better service applications by the bank. Could seek better customer deals. Fast-track career development opportunities for employees on an industry-wide basis.

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An applied research center to create opportunities for developing techniques to provide added-value services.

THREATS

Legislation could impact. Great risk involved Very high competition prevailing in the industry. Vulnerable to reactive attack by major competitors. Lack of infrastructure in rural areas could constrain investment. High volume/low cost market is intensely competitive.

( 5.2 ) SUMMARY OF FINDINGS

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1. Distribution of different types of accounts held by the customers of Kotak Mahindra and HDFC Banks.

The results of the data collected show that there is no difference in the types of accounts that are held in the two banks. Out of 44 respondents of Kotak Mahindra Bank 33 respondents have a savings account which is similar to the data of HDFC Bank.

2. Distribution of different types of savings accounts held by the customers of Kotak Mahindra and HDFC Banks.

In both the banks customer preference is more towards availing a lower AQB account. In case of Kotak Bank 30 out of 44 respondents availed Edge account (the lowest level account offered). This again highlights that Kotak Mahindra Bank can capitalize on the opportunity to convert these account holders into Ace or Pro account holders by educating them of the additional benefits available with these accounts.

3. Distribution of different types of current accounts held by the customers of Kotak Mahindra and HDFC Banks.

The graph highlights that in HDFC Bank there is more number of customers using higher end current account product than Kotak Mahindra Bank customers. In Kotak Mahindra Bank there are more users of Edge Current Account than Ace or Pro account. Thus there lies an opportunity for Kotak Bank to lure the customers to adopt Ace or Pro current accounts.

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4. Distribution of income (per month) earned by the customers of Kotak Mahindra Bank and HDFC Bank.

The income reported by the respondents of the two banks is similar. The difference in the type of customers of the two banks lies in the fact that Kotak Mahindra Bank has customers whose income per month is greater than Rs. 1 lac. However out of 44 respondents of HDFC Bank no one had an income level greater than Rs. 1 lac.

5. Distribution of waiting time experienced by the respondents of Kotak Mahindra Bank and HDFC Bank in respective bank branches.

The data shows that 75% of the customers of Kotak Mahindra Bank have to wait less than ten minutes for their transaction to process. Only 25% of respondents have to wait for more than ten minutes. However in case of HDFC Bank 75% of the respondents have to wait for more than ten minutes for their transaction to process. This highlights the efficiency of Kotak Mahindra Bank in providing quicker services to its customers.

6. Accessibility of bank branches

Out of 44 respondents of HDFC Bank 38 respondents feel that the branches of HDFC bank are easily accessible to them. Only 13% customers of HDFC Bank feel that the bank branches are not easily accessible. However in case of Kotak Mahindra Bank 31% of the respondents feel that branches of the bank are not easily accessible. This

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implies that there is a need to increase the number of branches for Kotak Mahindra Bank.

7. Accessibility of ATMs

Out of 44 respondents of HDFC Bank 9% customers of HDFC Bank feel that the bank ATM is not easily accessible. However in case of Kotak Mahindra Bank 31% of the respondents feel that ATM of the bank is not easily accessible. Chi Square test was conducted for the sample data of 88 respondents to see whether there is a significant difference in the accessibility of ATMs by the customers of Kotak Mahindra Bank and HDFC bank.

8. Distribution of preferred modes of banking by customers of Kotak Mahindra Bank and HDFC Bank.

The respondents of HDFC bank view both net banking and branch banking modes of banking as equal. However more respondents of Kotak Mahindra Bank prefer branch banking than net banking. Kotak Mahindra Bank could take measures to improve and promote net banking and educate its customers about net banking to improve its performance. This is also important because respondents feel that the branches of Kotak bank are not easily accessible. Thus to expand its customer base Kotak can focus to help customer adopt net banking mode.

9. Distribution of preference of customers for change in bank working hours of Kotak Mahindra Bank and HDFC Bank.

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Of the total 44 respondents of Kotak Mahindra Bank 68% of the respondents feel that the bank should increase its working hours. Only 32% of the respondents feel that there is no need of increasing the working hours of the bank. Chi Square test was conducted for the sample data of 88 respondents to see whether there is a significant difference felt in the need to increase the working hours by the customers of Kotak Mahindra Bank and HDFC bank.

10. Distribution of waiting time experienced by the respondents of Kotak Mahindra Bank and HDFC Bank in respective ATMs.

The data shows that approximately 75% of the customers of Kotak Mahindra Bank have to wait less than five minutes for their transaction to process. Only 27% of respondents have to wait for more than five minutes. However in case of HDFC Bank 61% of the respondents have to wait for more than five minutes for their transaction o process.

11. Receiving timely information regarding account

70% respondents of Kotak Mahindra Bank feel that they receive information regarding their accounts by the bank within proper time. Only 15% of the respondents of the bank feel that they do not receive timely information from the bank. However the data collected from HDFC bank shows that 52% respondents feel they receive timely information whereas 47% respondents felt that they do not receive updates of

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

12. Distribution of average monthly balance maintained by the customers of Kotak Mahindra Bank and HDFC Bank

In both the banks maximum number of respondents keep an average monthly balance of less than Rs. 25000 in their account.

13. Distribution of level of satisfaction experiences by the customers of the Kotak Mahindra Bank and HDFC Bank.

More than half of the respondents of HDFC Bank feel that they are not satisfied with the bank. On the other hand only 34% of the customers of Kotak bank feel that they are not satisfied with the bank. This clearly highlights the efficiency of Kotak Mahindra Bank in keeping its customers satisfied.

14. Distribution of level of satisfaction experienced by the customers of the Kotak Mahindra Bank and HDFC Bank with respect to the knowledge of bank employees.

The data reveals that 93% of the customers of Kotak Mahindra Bank feel that the bank employees are have knowledge to satisfy their queries. CHAPTER 6 : SUMMARY AND CONCLUSIONS

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( 6.1 ) SUMMARY OF LEARNING EXPERIENCE

From these 2 months training , I learnt the following : I read extensively about many topics since I had to appear for LMS . This increased my knowledge base manifolds. Since I made service calls to clients , I became aware of the different kinds of problems faced by clients and also understood the method of getting it resolved . While marketing and pitching company products , I got aware of the various offerings by the bank and also learnt the effective ways of converting a prospect into a lead . The daily operational activities taught me how to use the different softwares and applications in a computer . Observation about my co-colleagues and their working style also made me aware of a lot of things . As they say ACTIONS SPEAK LOUDER THAN WORDS .

( 6.2 ) CONCLUSIONS AND RECOMMENDATIONS

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Suggestion for the HDFC BANK HDFC must focus on the quality of service they are providing thus resulting into reduction in service gaps. Should work on improvement of the Banking Process and Systems for the Growth. HDFC must look forward toward hiring of competent staff to provide quality services. Must gives Sufficient time for the effective Services. Must use Strong Capital Structure for the Capital Growth.

Suggestion for the KOTAK MAHINDRA BANK.

Arrangement of more & more motivational Activities for the Staff to achieve the Target. Must appoint the active employees in the Bank for the Fast Working Process. Use the Customer reference to make the many Bank Customer. Using the right Strategy for increase the Sales for the Product. Must provide the high degree of Customer Satisfaction According to the Demand. Open more Kotak ATM outlets for the Customers. Improving the Loan Policies/Plans of the Growth of the Bank.

APPENDIX

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QUESTIONNAIRE

Dear Respondent, I am Ashna Kalra , student of Global school of Business, New Dehli. I request you to please fill this questionnaire. I assure you that information shared will be kept confidential. Name _________________________ E -mail Address __________________________ Location _________________________ Contact No. __________________________ 1. 2. With which bank do you hold an account? Kotak Mahindra Bank HDFC Bank Which type of account do you operate in your bank? Current Account Savings Account Please indicate your Income per month <25 K 25 50 K 50 1 L 3. Others ________________ Both 1L 2L >2L

If you bank with Kotak Mahindra, proceed to question 3, else proceed to question 6. Which Current Account do you hold with Kotak Mahindra Bank? Ace Elite Pro Edge Neo Which Savings Account do you hold with Kotak Mahindra Bank? Ace Pro Edge Rate (on a scale of 10) the following bank services offered by Kotak Mahindra Bank that you find most useful.(Please do not give same ratings to any of the two services) Active Money facility in savings account Zero balance family account offer for Pro savings account holders Wealth statements offered Net card facility Cheques pick up and drop facility NEFT and RTGS facilities provided Advance payment offer for Demat account holders Proceed to question 9. Which Current Account do you hold with HDFC Bank? Apex Max Plus Flexi Which Savings Account do you hold with HDFC Bank? Premium Regular Rate (on a scale of 10) the following bank services offered by HDFC Bank that you find most useful.(Please do not give same ratings to any of the two services) Opening Account even with NIL initial payment Fastest NEFT and RTGS facilities provided ATM availability after every 500 meters Credit card offered with savings account ( limit Rs 75000) Please rank (on a scale of 1 to 10; 1 being the lowest) the factors that you consider before opening an account in a bank.

4. 5.

6.

Trade

7.

8.

9.

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

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Yes No 11. Are your bank ATM easily accessible to you? Yes No 12. Which modes of banking do you prefer more? Net banking Branch Banking 13. Do you feel employees of your bank have proper knowledge to satisfy your queries? Very good Good Average Poor 14. Do you feel your bank should increase its working hours till late evenings. Yes No 15. How long do you have to wait in your banks branch for your transaction to process? < 10 min 10 to 30 min >30 min 16. How long do you have to wait in your banks ATM (Queue time)? < 5 min 5 to 15 min >15 min 17. Are you provided with all the timely information you require from your bank? Yes No Sometimes 18. What is the average monthly balance you maintain in your account? < 25000 25-50000 50-100000 1-150000 19. Are you satisfied with the banking services provided to you? 1.5- 200000 >250000 Very poor

Satisfied Average Needs Improvement 20. Which additional banking service do you feel your bank should provide? _____________________________________________________________

BIBLIOGRAPHY

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Philip kotler

Marketing Management

C.B. Gupta

Business Organization and Management

Internet

www.google.co.in www.kotak.com www.bis.org www.hdfcbank.com www.moneycontrol.com http://papers.ssrn.com www.scribd.com www.rbi.org.in

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