SUMMER TRAINING REPORT ON

ANALYSIS OF CUSTOMER SATISFACTION IN BANKING SECTOR OF HDFC BANK

HDFC BANK LTD.

Submitted in partial fulfillment of the requirements for the award of the degree of Bachelor of Business Administration (BBA)

Affiliated To

Guru Gobind Singh Indraprastha University, Delhi

Guide: Guide Name

Submitted by: Student Name Roll No.:

Institute of Information Technology & Management New Delhi 110018 Batch (2009-2012)

CERTIFICATE
I, Mr./Ms._______________________________, Roll No. ________________ certify that the Summer Training Report (Paper Code-------) entitled Analysis of Customer Satisfaction in Banking Sector of Jammu & Kashmir Bank is done by me and it is an authentic work carried out by me at ___________________________ (Name of the firm or company). The matter embodied in this has not been submitted earlier for the award of any degree or diploma to the best of my knowledge and belief.

Signature of the Student Date:

Certified that the Summer Training Report (Paper Code-------) entitled ____________ done by Mr./Ms._______________________________, Roll No. ___________, is completed under my guidance.

Signature of the Guide Date: Name of the Guide: Designation:

Countersigned Prof. .. Director

ACKNOWLEDGEMENT
The present work is an effort to throw some light on Analysis of Customer Satisfaction in Banking Sector of HDFC Bank. The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people, ... With an overwhelming sense of gratitude, I acknowledge the valuable guidance and consistent encouragement extended to me by our knowledgeable faculty members like with whose guidance, I am able to accomplish this endeavor. Their technical acumen and years of experience have provided me with crucial inputs at a critical stage. I also extend my heartfelt thanks to my family and friends for their support directly or indirectly provided to me.

enrollment no._________________

EXECUTIVE SUMMARY
In the present age, the corporate world has become highly competitive. Hence, only that service company can sustain which enjoys a competitive edge over the others. This requires the formulation of policies and strategies keeping in view the existing financial position, but formulation of these strategies is only possible when the company enjoy a strong knowledge base of the environment prevailing. Assessments of environmental position/condition of an industry/a company on the part of management trainee/management require coupling his/her theoretical knowledge with some practical exposure and experience. The project is an attempt to find out the ways of customer satisfaction adopted by the banks in the real world. So that it would be useful for a manager and staff in the real business when he will have the responsibility to do the same. The research methodology in this project is of descriptive nature. A comprehensive study was done to gather the primary data by conducting personal interview. For any bank, which exists, the prime motive is that it should be concerned with the customer satisfaction. In todays competitive scenario where there is a lot of competition, the emphasis was to study the usefulness of the current schemes and services of the HDFC Bank Ltd. and also to study the working result so as to find out what is still required in the banking industry to face competition at all levels. The project was a great source of learning and a good experience as it made us aware of professional culture and conduct that exist in the organization.

CONTENTS
S.No. 1 2 3 4 5 6 7 8 9 10 11 12 Topic Certificate (s) Acknowledgements List of Tables List of Figures List of Symbols List of Abbreviations Chapter-1: Profile of the Firm/Company Chapter-2: SWOT Analysis of the Company Chapter-3: Analysis of Financial Reports of the Company Chapter-4: Lessons Learnt References/Bibliography Appendices LIST OF TABLES Table No. 1 2 3 4 Title Page No. Page No. -

LIST OF FIGURES Figure No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Title Page No.

LIST OF ABBREVIATIONS S.No. 1 2 3 4 5 6 7 8 9 Abbreviated Name CRM EPS CS Int DA R/B MRK TC HDFC Full Name Customer Relationship Management Earning Per Share Customer Satisfaction Introduction Data Analysis Reference & Bibliography Marketing Table of Content Housing Development Finance Corporation

CHAPTER -1 PROFILE OF THE COMPANY

PROFILE OF THE COMPANY

INTRODUCTION What is a bank? Bank is defined as an institution for the keeping, landing and exchanging etc. of money. Economists have also defined a bank highlighting its various functions. According to Crowther, the banker business is to take the debt of other people to offer his own in exchange and thereby create money. Thus a bank is an institution that accepts deposits from the public in turn advances loans by creating credit.

It is different from other financial institutions in that they cannot create credit though they may be accepting deposits and making advances. Types of banks: Commercial banks: are those banks which perform all kinds of banking functional such as accepting deposits, advancing loan, cr.creation and agency functions. They are also called joint stock banks as they are organized in the same manner as joint stock companies. They usually advance short term loans to customers some of commercial banks in India are Andhra Bank, Canara Bank, Indian Bank, PNB etc. Exchange banks: are those banks, which deal in foreign exchange and specialize in financing trade. They are called foreign exchange banks. In India these exchange banks have their head offices located outside India. These banks also render other services such as collecting and supplying information about the foreign customers providing remittance facilities etc. such as chartered bank, Gridlays bank. Industrial banks: are those banks, which provide medium term and long-term finance for industries for the purchase of land, machinery, etc. They underwrite the debenture and shares of industries and also subscribe to them such as industrial development bank of India, industrial finance corporation of India etc. Agricultural banks: are those banks, which provide cr. To farmers for short term, medium term and long term needs. In India, commercial banks, regional rural banks and agricultural cooperative banks provide short-term loans to farmers. Such as national bank for agriculture and rural development, NABARD.

Cooperative banks: are those financial institutions, which are organized on the principle of cooperation. They provide short term, medium term loans to their members. In rural area there are agriculture cooperative banks, which are also cooperative banks, which perform the function of ordinary commercial banks but give loan to their members only. They also get funds from the RBI. There is a state cooperative bank in every state of India with its branches at the district level known as the central cooperative banks. Saving banks: help promote small saving and mobilize them. They have been very successful in Japan and Germany. In India post office act as saving bank. Central banks: is the apex bank, in a country, which controls its monetary, and banking structure. It is owned by the govt. of the country and operates in national interest. It regulates and issues currency, performs banking and a agency services for the state, keeps cash reserves of commercial banks, keeps and manages international currency, act as the lender of the last resort, acts as the clearing house and controls of credit. The RBI is the central bank in India. Banking system The banking system is an integral sub-system of the financial system. It represents an important channel of collecting small saving from the households and lending it to the corporate sector. The Indian banking system has the RBI as the apex body for all matters relating to the banking system. It is the central bank of India. It is the bankers to all other banks. Functions of RBI: 1. Currency issuing authority. 2. Banker to the government.

3. Banker to other banks. 4. Framing of monetary policy. 5. Exchange control. 6. Custodian to foreign exchange and gold reserves. 7. Development activities. 8. Research and development in the banking sector.

1.1. Company profile of the organization BACKGROUND: The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an in principle approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBIs liberalization of Indian Banking Industry. The bank was incorporated in August 1994 in the name of HDFC Bank Limited, with its registered office in Mumbai, India. The bank commenced operations as a Scheduled Commercial bank in January b1995.

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 in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the clear market leader in mortgages and banking services in India. Its outstanding loan portfolio covers over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different markets segments and also was a large corporate HDFC Banks business philosophy is based on four core values: Operational Excellence, Customer Focus, Product Leadership and People. The Bank signed a strategic business collaboration agreement with Chase Manhattan Bank in February 1999.Plus /Cirrus and American Express Credit / Charges cardholders. It is the only bank in India which provides access to all the 3 major International Card Networks on its ATM network. Distribution Network HDFC Bank is headquartered in Mumbai. The Bank of present has an enviable network of over 241 branches spread over 129 cities all across the country. All branches are linked on an online real time basis. Customers in 39 locations are also serviced through Telephone 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. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE have a strong and active member base.

The Bank also has a network of alamost over 775 networked ATMs across these cities. Moreover, HDFC Banks ATM network can be accessed by all domestic and international Visa/Master Card, Visa Electron/Maestro, Capital Structure: The authorized capital of HDFC Bank is Rs. 450 crores. The paid up capital is Rs. 281.2 crores. The HDFC Group holds 24.5% of the banks equity while about 13.3% of the equity is held by the depository in respect ofteh banks issue of American Depository Shares (ADS/ADR Issue). The Indian Private Equity Fund, Mauritius (IPEF) and Indocean Financial Holdings Ltd., Mauritius (IFHL) (both funds advised by JP Morgan Partners, formerly Chase Capital Partners) together hold about 11.6% of the banks equity. Roughly 18% of the equity is held by FIIs, NRIs/OCBs while the balance is widely held by about 300,000 shareholders. The shares are listed on the The Stock Exchange, Mumbai and the National Stock Exchange. The Banks American Depository Shares are listed on the New York Stock Exchange under the symbol HDB. 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, share holders of Mission and Vision: HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team determined to accomplish the vision of becoming a world-class Indian bank benchmarking ourselves against international standards and best practices in terms of product offerings, technology, service levels, risk management and 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 Banks risk appetite. We are committed to do this ensuring the highest levels of ethical standards, professional integrity and regulatory compliance.

Business strategy emphasizes the followings: Increase our market share in Indias expanding banking and financial services industry by following a disciplined growth strategy and delivering high quality customer service; Leverage our technology platform and open, scaleable systems to deliver more products to more customers and to control operating cost; Maintain our current high standards for asset quality through discipline credit risk management; Develop innovative products and services that attract our targeted customers and address inefficiencies in the Indian financial sector; Continue to develop products and services that reduce our cost of funds; and Focus on high earnings growth with low volatility.

Awards and Accolades HDFC Bank began operations in 1995 with a simple mission: to be a World Class Indian Bank. We realized that only a single minded focus on product quality and services excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal. It is extremely gratifying that our efforts towards providing customer convenience have been recognized both nationally and internationally. In the year 2000, leading financial magazine Forbes Global named us it list of The 300 Best Small Companies in the world and as one of the 20 for 2001 best small companies in the world. There have been some other proud moments as well. London Based Euromoney magazine gave us the award for Best Bank India in 1999, Best Domestic Bank in India in 2000, and Best Bank in India in 2001 and 2002. Hong Kong based Finance Asia Magazine rated us Best Domestic Commercial Bank in India in 1999, 2000 and 2001 respectively and Best Local Bank in India in 2002. Asiamoney magazine has named us Best Commercial Bank in India 2002. The Economic Times has conferred on us The Economic Times Awards for Corporate Excellence as the Emerging Company of the Year 2000-01. Leading Indian business magazines Business India named us Indias Best Bank in 2000. Another leading Indian business magazine Business Today in a survey rated us Best Private Sector Bank in India in 1999.

For our use of information technology we have been recognized as a Computerworl Honors Laureate and awarxded the 21st Century Achievement Award in 2002 for Finance, Insurance & Real Estate category by Computerworld, Inc., USA. Our technology initiative has been included as a case study in their online global archieves.

NASSCOM and economictimes. Com have named us the Best IT User in Banking at the IT Users Awards 2003. We are aware that all these awards are mere milestones in the continuing, never ending journey of providing excellent service tour customers. We are confident, however, that with your feedback and support, we will be able to maintain and improve our services. Product Range: Savings, Fixed Deposits, Current and Demat Accounts Savings Accounts: Apart from the usual facilities, you get a free ATM Card, Interbranch banking, NetBanking, Bill pay, Phone Banking, Debit Card and Mobile Banking, among others. HDFC Bank Preferred: A preferential Savings Account where you are assigned a dedicated Relationship Manager, who is your one point contact. You also get privileges like fee waivers, enhanced ATM withdrawal limit, priority locker allotment, free Demat Account and lower interest rates on loans, to name a Sweep-In Account: A fixed deposit linked to your Savings Account. So, even your Savings Account runs a bit short, you can issue a cheque (or use your ATM Card). The money is automatically swept in from your fixed deposit into your Savings Account. Super Saver Account: Gives you an overdraft facility up to 75% of your Fixed Deposit. In an emergency, you can access your funds while your Fixed Deposit continues to earn high interest. HDFC Bank Plus: Apart from Regular and Premium Current accounts we also have HDFC Bank Plus, a Current Account and then some more. You can transfer up to Rs. 50 lakh per month at no extra charge, between the four metros. You can also avail of cheque clearing between the four metros, get cash delivery/pickup upto Rs. 25,000/- home delivery opf Demand Drafts, at par cheques, outstation cheque clearance facility, etc.

Demat Account: Conduct hassle free transactions on your shares. You can also access your Demat Account on the Internet. Phone Banking: 24 hour automated banking services with 39 PhoneBanking numbers available. ATM 24 hour banking: Apart from routine transactions, you can also pay your utility bills and transfer funds, at any of our ATMs across the country all year round. Intercity/ Interbranch Banking: Access your account from any of our 241 branches in 129 cities. Net Banking: Access your bank account from anywhere in the world, atanytime, at your own convenience. You can also view your Demat Account through NetBanking. International Debit Card: An ATM card you can shop with all over the country and in over 140 countries with. You can spend in any currency, and pay in Rupees. Mobile Banking: Access your account on your mobile phone screen at no airtime cost. Use SMS technology to conduct your banking transactions from your cellphone. Bill Pay: Pay your telephone, electricity and mobile phone bills through our ATM, Internet, Phone or mobile phone. No more standing in long queues or writing cheques. Loans: Personal Loans: Take a loan of up to Rs. 3 lakh for a wedding, education, purchase of a computer or an exciting holiday. New Car Loans and Used Car Loans: Finance up to 90% of the cost of car, new or used! And the loans come to you with easy documentation and speedy processing at attractive interest rates. Loans Against Shares: Get an overdraft up to Rs. 10 lakh at an attractive interest rate against physical shares, up to 50% of the market value of your shares. In case of Demat Shares, you can get a Loans Against Shares of up to 65% of the market value of your shares, till Rs. 20 lakh. Two Wheeler & Consumer Loans: To help you buy the best durables for your home. You are responsible for regularly reviewing these terms adnconditions. Continued use of the site after any such changes shall constitute your consent to such changes.

4. Copy right: All information, content, materials, products (including but not limited to text, content, photographs, graphics, video and audio content) is protected by copyright in the favor of HDFC Bank under applicable copyright laws and is also protected otherwise under general intellectual property law. All information submitted to HDFC Bank through this Site shall be deemed to be the property of HDFC Bank, and HDFC Bank shall be free to use any ideas, concepts know how or techniques provided by a visitor at this Site, in any manner whatsoever HDFC Bank is not bound by the obligation of confidentiality regarding submitted information unless the visitor has a direct customer relationship with the bank or unless specifically agreed or required by law. 5. Personal and Non commercial use restriction: You may not copy, reproduce, sell, redistribute, publicsh, enter into a database, display, perform, modify, transmit, license, create derivatives from, transfer or in any way exploit any part of any information, content, materials, services available from or through the Site, except that you may download material from this Service for your own personal, noncommercial use. 6. Liability Disclaimer: (a) HDFC Bank does not warrant that the services and products offered by the Site will be uninterrupted or error free. There may be delays, omissions, interruptions and inaccuracies in the products, services, information or other materials available on this site. HDFC Bank is also not responsible for the availability or content of other services that may be linked to this Site. Hyperlinks to other internet sites are at your own risk, the content, accuracy, opinions expressed, and other links provided by these sites are not verified, monitored or endorsed by HDFC Bank does notmake any warranties, and express or implied, including without limitation, those of merchantability and fitness for a particular purpose, title or non infringement with respect to any information or services or products that are available or advertised or sold through this Site. HDFC Bank does not make any representations, nor do we we endorse the accuracy, completeness, timeliness or reliability of any advice, opinion, statement or other material or database displayed, uploaded or distributed by this Site or available through links in this Site. We reserve the right but are not required to correct any errors or omissions in this Site. HDFC Bank may make improvements and/or changes to Site provided therein at any time.

(b) Although HDFC Bank will take serious steps to prevent the introduction of viruses, vandals, worms, Trojan horses or other destructive materials to this Site, HDFC bank does not guarantee or warrant that this Site or the materials that may be downloaded from this services do not contain such destructive features. HDFC Bank is not liable for any damages or harm attributable to such features. If you rely on this Site and any materials available through this Site, you do so solely at your own risk. (c) HDFC Bank, each of its officers, directors, shareholders, parents, subsidiaries, affiliates, agents, or licensors shall not be liable for incidental indirect, consequential special, punitive, exemplary damages or any damages whatsoever, including but not limited to damages for lost revenues or profits, loss of business or loss of data arising out of or any way related to the use and performance of this Site or for any claim, loss or injury based on errors, omission, interruptions or other inaccuracies in arising out of the use of the Site, whether based on contract, tort, negligence, strict liability or otherwise. If you are dissatisfied with any portion of the Site your sole and exclusive remedy is to discontinue using the Site and the related services. 7. As a condition of your use of the Site you warrant that you will not use the Site for any purpose that is unlawful, or prohibited by these terms and conditions. You may not use the Site in any manner that could damage, disable or impair the Site or interfere with and other partys use or enjoyment of the Site. 1. HDFC Bank shall not be considered in default of its obligations hereunder if performance of such obligations is prevented or delayed by causes beyond its reasonable control, including without limitation, Internet failures, computer equipment failures, telecommunciation equipment failures, other equipment failures, electrical power failures, strikes, virus, other malicious computer code, hacking, acts of God or government, war, riots, acts of civil disorder, labour disputes, failure or delay of transportation, non performance of third parties. 2. These terms and conditions may be withdrawn/superseded at any time whatsoever, by HDFC without any prior notice.

3. The Courts in Mumbai alone shall have exclusive jurisdictions as regards any claims ormatter arising out of dealings with us, and all dioputes will be governed by the laws of India. 4. These terms and conditions are in addition and not in derogation oft eh applicable terms and conditions relating to the services that you amy obtain, including without limitation net banking.

Ownership Rights Certain rights that a shareholder in a company enjoys: To transfer the shares. To receive the share certificates upon transfer within the stipulated period prescribed in the listing agreement. To receive notice of General Meetings, abridged Annual Report, the Balance Sheet and the Profit and Loss Account and the Auditors Report. To appoint proxy to attend and vote at the general meetings. In case the member is a body corporate, to appoint a representative to attend and vote at general meetings of the company on its behalf. To attend and speak, in person at general meetings. Proxy cannot vote on show of hands but can vote in respect of poll. To vote at the general meeting on show of hands wherein every shareholder has one vote. In case of poll, the number of votes of a shareholder depends on the proportion of equity shares held by him with the total paid up equity capital of the company. To demand poll along with the other shareholder(s) who collectively hold 5000 shares or is not less than 1/10 of the total voting power of the total paid up capital of the Company. To requisition an extraordinary general meeting of the Company by shareholders holding not less than 1/10 of the total paid up capital of the company. To move amendments to resolutions proposed at meetings. To receive dividend and other corporate benefits like rights, bonus shares etc. as and when declared/announced. To take inspection of the various registers of the company. To inspect the minutes books of the general meetings and to receive copies thereof after complying with the procedure prescribed in the Companies Act, 1956. To appoint or remove director(s) and auditor(s) and thus participate in the management through them.

To proceed against the company by way of civil or criminal proceedings.

To apply for the winding up of the company. To receive the residual proceeds upon winding up of a company. Kindly note that the rights mentioned above are prescribed in the Companies Act, 1956 and should be followed only after careful reading of the relevant sections. These rights are not necessarily absolute.

Trusts Our trust services provide you with the dual advantages of a secure depository and efficient administration of your securities. Our solutions help you maximize returns, meet fiduciary responsibilities, and improve operational efficiency. Knowing that our clients needs are complex and varies, we leverage our extensive expertise and experience to provide you with a customized set of benefit and investment services that work best in assisting your employee benefits program. And whats more, since we take on custodian services for all types of securities, you can protect your securities from loss, theft, damage or destruction. In addition to the benefits of a securities account, you can also take advantage of our other services such as professional investment advice as well as banking products. You will receive important information concerning changes in RBI policy and auctions in timely fashion. Based on your instructions, we will bid for your in RBI auctions, settle your purchase or sale transactions, convert your securities from physical to dematerialized mode. All the work involved in handling securities transactions is taken care of. Incoming credits will be immediately deposited to your account and you receive regular statement of interest, redemption and payments. You can also request at a predefined interval a custody account or account statement showing clearly the accounts current holdings. Our Phone Banking facility enables you to stay informed about your account around the clock.

1.9. Source of data collection

OBJECTIVES To find out parameters of customer satisfaction. Help the bank to know customer needs from the bank, so that accordingly they can equip themselves accordingly to the market. To do the performance evaluation of the organization with respect to growth, productivity and profitability. Research Design: There are 3 types of researches: Exploratory research Descriptive research Casual research

From the above researches, I decided to employ blend of exploratory research and descriptive research, as it is concerned with discovering the general nature of the problem and the variables that relate to it. Data Collection Method: Data collection is done mainly through two sources namely primary and secondary. Secondary source is nothing but utilizing somebody elses earlier effort and work. Primary source is when the data collection is done for the first time. I had taken up both secondary database and to have greater accuracy I decided to go in for collection of primary database.

To tap secondary database I went through the brochures of the companies and even through the web sites of all the companies. To tap the primary database I decided to go in for Survey Method. Various tools can be used to conduct a survey. These tools are very important to trigger a stimulus, which would bring out their attitude and ideas. I have used Questionnaire as a tool for the above-mentioned purpose. QUESTIONNAIRE DESIGN A close-ended Questionnaire has been used in this Project to know the satisfaction level of the customers of the Bank in order to improve the services in the near future. SAMPLE DESIGN SAMPLE SIZE: 100 60 Males and 40 Females SURVEY AREA: The survey was carried out in North Delhi. Stratified sampling technique has been used.

SAMPLING TECHNIQUE:

TIME FRAME: The time frame has been six to Seven weeks.

LIMITATIONS OF THE STUDY The main source of data is primary data, though secondary data has not been ignored. 100 samples do not reflect the opinion of customers as whole. Time limit was another limitation and there may be possibility of committing a general error. Due to change in time, policies may change.

CHAPTER 2 SWOT ANALYSIS OF THE COMPANY

S.W.O.T ANALYSIS OF J&K BANK Strengths:

Public sector has 84% share in the total assets of the indignity. One of the positive outcomes of nationalization has been that of emprquence of branch network spread across every nook and corner of the country. This coupled with membership by the state made these banks enormous in term of size. PSBs have a significant individual depositor base rendering stability of the asset base. The share of investments of public sector accounted for 87% of the industry, indicating the dominance of PSBs. PSBs rank higher in deposits, advances and profits, due to their vast net work and sheer size of staff. Banking business measured in deposits is still dominated by the PSBs. the market share of ISB account for 85% market share on the advances front too is dominated by the PSBs whose advance from 82% of the market. Weakness: PSBs have low credit to deposit ratio. Though the PSBs have huge resource base, with competition increasing at a faster pace, PSBs have a highlevel of NPAs (bad loans), huge overhead coats and high break-even

they are likely to log behind in the long run. The complacency could cost them heavily. levels. The lack of customer orientation and low level of computerization too is leading to their inefficiency. The productivity is less than the other two sections. Borrowing of the PSBs have increased more than other two sectors, which is Expenditure per branch is continuously increasing as the branches are not properly The PSBs which command about 91% of the total bank branches and about 86% of the

contributing to the losses. managed. baking business in the country are already saddled with huge work force. This workforce

operating under the protective umbrellas of mechanization and computerization for fear of losses of employment opportunities. Present for potential. PSBs are very much behind in the technology aspect. Services such as neatly printed statements of accounts, automatic and prompt updating of passbooks, ATMS etc. are some of the benefits that customers are being deprived of at PSBs. Private Sector Bank Strengths: Private sector banks have a high credit to deposit ratio and they have kept their operating With technology and customer orientation, private sector banks are at the higher level as Private sector banks have a high level of capital adequacy ratio. Private sector banks are fairly advanced in the use of technology. Services such as neatly expenses low. compared to PSBs and on the level playing field with foreign banks.

printed statements of accounts, automatic and prompt updation of passbook AIMS etc are some of the benefits that customers are enjoying at these banks. Weaknesses: Private sector banks unlike PSBs have less number of branches to their reach and Private sector banks have low growth in average advances, this aspect is dominated by For private sector banks the average NPAs stand at 15.52%. Private sector banks do not examine their business with a long term perspective. Many of these banks tend to look at short term opportunities and gains. coverage is not very extensive. the PSBs.

Foreign Banks Strengths Foreign banks have high credit to deposit ratio. Foreign banks are the leaders in technology and customer services.

Foreign banks are the leaders in technology and customer services. Foreign banks have high level capital adequacy ratio. Foreign banks show that the increase in the borrowings which earlier amounted to losses The average spread enjoyed by the foreign sector is higher than that earned by other For foreign banks the average NPA stand at les than 10% which is lower than the other

is now signaling profits. sectors. two sector. Weaknesses: Foreign banks have very less number of branches and hence their reach is very low as Foreign banks have concentrated on corporate banking and fee based income. The Recommendation. Managers should recognize that a certain amount of conflict will almost always exist compared to PSBs. business focus for most foreign banks must shift to retail mobilization.

between professional and hierarchical authority and control systems. The key is to transform this conflict into motivation by structurally insulating these workers from organization pressure, while simultaneously making them aware of the importance that their work holds of the firms well being and its continued competitive advantages. They should recognize that managing high-technology and professional employees is significantly different from managing non-professionals have a different set of values and characteristics, which have been gained through their socialization in the technical specialty. Managers need to be cognizant of those values and characteristics if they are to anticipate tension points and enhance the fit between the individual and the job. They should attempt to develop HR practices and policies that have had some success in attracting, motivating and retaining the high-tech work force. That requires, at a minimum, knowledge of or systematic diagnosis of organizational practices, and matching HR practices to the organizations culture. It also requires that a cadre of competent HR manager manage the transition. The days of ready-fire-aim are over for high-technology firms seeking competitive advantages in their markets.

They should study the change process and learn from their experiences from change

owing to internal and external factors, including departures from tradition, new leaders with new visions, crisis or other starting events, key decisions on the part of senior management or tests of their infrastructure ability to accommodate change. Firm also change because of change. But professionals and other high-tech workers must clearly see the need for change, otherwise, they may not support the change, or they may even sabotage it, therefore communication must be reemphasized. They should design jobs and work relationship to take advantage of technical specialties. For example, rotating professionals through multiple role and job responsibilities can sensitize them to new ideas and opportunities. They should establish career sensitive tracking systems so that career development They should utilize a menu of salient relevant that are relevant for high tech and becomes an integrated part of their firm practices. professional workers. These reminders ideally should be linked to performance, but in some cultures they might be linked so effort, risk taking, or other relevant behaviors.

CHAPTER 3 ANALYSIS OF FINANCIAL REPORTS OF THE COMPANY

ANALYSIS OF FINANCIAL REPORTS OF THE COMPANY

Balance Sheet of HDFC Bank Mar '11 12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 465.23 465.23 0.00 0.00 24,914.04 0.00 25,379.27 208,586.41 14,394.06 222,980.47 28,992.86 277,352.60 Mar '11 12 mths Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 25,100.82 4,568.02 159,982.67 70,929.37 5,244.21 3,073.56 2,170.65 0.00 14,601.08 277,352.61 559,681.87 28,869.10 545.53 15,483.28 14,459.11 125,830.59 58,607.62 4,707.97 2,585.16 2,122.81 0.00 5,955.15 222,458.56 466,236.24 20,940.13 470.19 13,527.21 3,979.41 98,883.05 58,817.55 3,956.63 2,249.90 1,706.73 0.00 6,356.83 183,270.78 396,594.31 17,939.62 344.44 12,553.18 2,225.16 63,426.90 49,393.54 2,386.99 1,211.86 1,175.13 0.00 4,402.69 133,176.60 582,835.94 17,092.85 324.38 5,182.48 3,971.40 46,944.78 30,564.80 1,917.56 950.89 966.67 0.00 3,605.48 91,235.61 202,126.73 7,211.88 201.42 457.74 457.74 0.00 0.00 21,064.75 0.00 21,522.49 167,404.44 12,915.69 180,320.13 20,615.94 222,458.56 Mar '10 12 mths 425.38 425.38 400.92 0.00 14,226.43 0.00 15,052.73 142,811.58 2,685.84 145,497.42 22,720.62 183,270.77 Mar '09 12 mths 354.43 354.43 0.00 0.00 11,142.80 0.00 11,497.23 100,768.60 4,478.86 105,247.46 16,431.91 133,176.60 Mar '08 12 mths 319.39 319.39 0.00 0.00 6,113.76 0.00 6,433.15 68,297.94 2,815.39 71,113.33 13,689.13 91,235.61 Mar '07 12 mths Mar '10 12 mths ------------------- in Rs. Cr. ------------------Mar '09 12 mths Mar '08 12 mths Mar '07 12 mths

Source : Dion Global Solutions Limited

Table 3.2: Profit loss account

Profit & Loss account of HDFC Bank ------------------- in Rs. Cr. -------------------

Mar '11 12 mths Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses 9,385.08 2,836.04 2,510.82 497.41 5,205.97 0.00 8,045.36 3,004.88 20,435.32 Mar '11 12 mths Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 997.52 392.64 892.15 6,174.24 8,456.55 84.40 165.00 545.53 3,926.40 -2.65 4,532.79 8,456.54 0.00 767.62 124.53 19,928.21 4,433.51 24,361.72

Mar '10 12 mths

Mar '09 12 mths

Mar '08 12 mths

Mar '07 12 mths

16,172.90 3,810.62 19,983.52 7,786.30 2,289.18 3,395.83 394.39 3,169.12 0.00 7,703.41 1,545.11 17,034.82 Mar '10 12 mths 2,948.70 -0.93 3,455.57 6,403.34 0.00 549.29 91.23 64.42 120.00 470.19 935.15 294.87 640.52 4,532.79 6,403.33

16,332.26 3,470.63 19,802.89 8,911.10 2,238.20 2,851.26 359.91 3,197.49 0.00 7,290.66 1,356.20 17,557.96 Mar '09 12 mths 2,244.94 -0.59 2,574.63 4,818.98 0.00 425.38 72.29 52.77 100.00 344.44 641.25 224.50 497.67 3,455.57 4,818.99

10,115.00 2,205.38 12,320.38 4,887.12 1,301.35 974.79 271.72 3,295.22 0.00 3,935.28 1,907.80 10,730.20 Mar '08 12 mths 1,590.18 -0.06 1,932.03 3,522.15 0.00 301.27 51.20 44.87 85.00 324.38 436.05 159.02 352.47 2,574.61 3,522.15

6,889.02 1,510.24 8,399.26 3,179.45 776.86 727.53 219.60 2,113.28 0.00 2,590.66 1,246.61 7,016.72 Mar '07 12 mths 1,382.54 -0.35 1,455.02 2,837.21 0.00 223.57 38.00 43.29 70.00 201.42 288.38 114.14 261.57 1,932.03 2,596.12

Source : Dion Global Solutions Limited

Table 3.3: Cash flow

Cash Flow of HDFC Bank Mar '11 12 mths Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 5818.66 -375.83 -1122.74 1227.99 -273.56 29942.40 29668.83

------------------- in Rs. Cr. ------------------Mar '10 12 mths 4289.14 9389.89 -551.51 3598.91 12435.78 17506.62 29942.40 Mar '09 12 mths 3299.25 -1736.14 -663.78 2964.66 564.74 14778.34 15343.08 Mar '08 12 mths 2280.63 3583.43 -619.82 3628.34 6591.95 8074.54 14666.49 Mar '07 12 mths 1638.75 666.63 -311.40 1637.88 1993.11 6188.66 8181.77

DATA ANALYSIS
CUSTOMERS RESPONCE 1. Are you aware that the HDFC Bank is having ATM Centers? Yes-----------------------------------------------90% No-------------------------------------------------10%

Fig.3.1 INTERPRETATION 1. 90 % of the Customers are aware of the HDFC Banks ATM centers. 2. 10% of the Customers are not aware of the HDFC Banks ATM centers.

2. Credit Card owned Yes-----------------------------------------------40% No-------------------------------------------------60%

yes , 40%

no, 60%

yes
Fig.3.2 INTERPRETATION

no

1. 40% of the Customers are having HDFC Banks Credit Cards. 2. 60% of the Customers are not having HDFC Banks Credit Cards.

3. Are you intending to take loans for financing your Assets? Yes-----------------------------------------------67% No-------------------------------------------------33%

no, 33%

yes, 67%

yes

no

Fig.3.3 INTERPRETATION 1. 67% of the Customers are intending to take loans for financing their Assets. 2. 33% of the Customers are not intending to take loans.

4. Do you have a Demat account? Yes-----------------------------------------------46% No-------------------------------------------------54%

y e s , 46% no , 54%

y es no

Fig. 3.4: INTERPRETATION 1. 46% of the Customers have Demat account. 2. 54% of the Customers dont have Demat account.

5. A Convenient Branch to get to Yes-----------------------------------------------75% No-------------------------------------------------25%

no, 25%

yes, 75%

yes

no

Fig. 3.5:

INTERPRETATION 1. 75% of the Customers said that the Branch is Convenient to get to. 2. 25% of the Customers said that the Branch is not convenient to get to.

6. Branch Hours are convenient Excellent-----------------------------------------------25% Good----------------------------------------------------47% Satisfactory---------------------------------------------20% Poor------------------------------------------------------8%

Poor, 8% Satisfactory , 20%

Excellent, 25%

Good, 47%

Excellent

Good

Satisfactory

Poor

Fig 3.6:

INTERPRETATION 1. 25% of the Customers said that the Branch Hours are Excellent. 2. 47% of the Customers said that the Branch Hours are Good. 3. 20% of the customers said that the Branch Hours are Satisfactory. 4. 8% of the customers said that the Branch Hours are Poor.

7. The Branch layout is spacious and uncluttered Excellent-----------------------------------------------21% Good----------------------------------------------------73% Satisfactory---------------------------------------------13% Poor------------------------------------------------------3%

Poor, 3% Satisfactory , 4% Excellent, 21%

Good, 73%

Excellent

Good

Satisfactory

Poor

Fig. 3.7 INTERPRETATION 1. 21% of the Customers said that the Branch Layout is Excellent. 2. 73% of the Customers said that the Branch Layout is Good. 3. 4% of the Customers said that the Branch Layout is Satisfactory. 4. 3% of the Customers said that the Branch Layout is Poor.

8. I spend very little time waiting in line to get service from the tellers. Excellent-----------------------------------------------9% Good----------------------------------------------------81% Satisfactory---------------------------------------------6% Poor------------------------------------------------------4%

Poor, 4% Satisfactory , 6%

Excellent, 9%

Good, 81%

Excellent

Good

Satisfactory

Poor

Fig. 3.8 INTERPRETATION 1. 9% of the Customers said that the service is Excellent. 2. 81% of the Customers said that the service is Good. 3. 6% of the Customers said that the service is Satisfactory. 4. 4% of the Customers said that he service is Poor.

9. Counter staff is immediately available to provide counter service. Yes-----------------------------------------------67% No------------------------------------------------13%

no, 33%

yes, 67%

yes

no

Fig. 3.9

INTERPRETATION 1. 67% of the Customers said that the Counter staff is immediately available to provide counter service. 2. 33% of the Customers said that the Counter staff is not immediately available to provide counter service.

10. Phone calls to the Branch are handled quickly and efficiently Excellent-----------------------------------------------31% Good----------------------------------------------------50% Satisfactory---------------------------------------------10% Poor------------------------------------------------------9%

Po r, 9 o % Sa tisfa ry cto ,1 % 0 Exce n lle t, 3% 1

Go ,5 % od 0

Exce n lle t

Go od

Sa tisfa ry cto

Po r o

Fig. 3.10 INTERPRETATION 1. 31% of the Customers said that the phone calls attending service is Excellent. 2. 50% of the Customers said that the phone calls attending service is Good. 3. 10% of the Customers said that this service is Satisfactory. 4. 9% of the Customers said that the phone calls are not attended properly.

11. The staff is very courtous and helpful Excellent-----------------------------------------------80% Good----------------------------------------------------10% Satisfactory--------------------------------------------02% Poor-----------------------------------------------------08%
P o, 8 or % S tis c r a fa toy ,2 % Go , 1 % od 0

E c lle t, xe n 8% 0

E c lle t xe n

Go od

S tis c ry a fa to

Po or

Fig. 3.11:

INTERPRETATION 1. 80% of the Customers said that the Staff is Excellent. 2. 10% of the Customers said that the Staff is Good. 3. 2% of the Customers said that the Staff is Satisfactory. 4. 8% of the Customers said that the staff is not helpful at all.

12. The staff is well informed about the banks product and services Excellent-----------------------------------------------25% Good----------------------------------------------------47% Satisfactory---------------------------------------------20% Poor------------------------------------------------------8%

no, 25%

yes, 75%

yes

no

Fig 3.12: INTERPRETATION 1. 75% of the Customers said that the Staff well informed. 2. 25% of the Customers said that the staff is not well informed about the Products & Services.

13. The Branch has a pleasant and friendly atmosphere Excellent-----------------------------------------------80% Good----------------------------------------------------15% Satisfactory---------------------------------------------03% Poor------------------------------------------------------02%

Poor, 2% Satisfactory , 3% Good, 15%

Fig

Excellent, 80%

Excellent

Good

Satisfactory

Poor

3.13

INTERPRETATION 1. 80% of the Customers said that Branch atmosphere is Excellent 2. 15% of the Customers said that the Branch atmosphere is Good. 3. 3% of the Customers said that the Branch atmosphere is Satisfactory.

4.

2% of the Customers said that the Branch atmosphere is Poor.

14. My accounts are handled accurately Excellent-----------------------------------------------64% Good----------------------------------------------------27% Satisfactory---------------------------------------------06% Poor------------------------------------------------------03%

Poor, 3% Satisfactory , 6% Good, 27% Excellent, 64%

Excellent

Good

Satisfactory

Poor

Fig 3.14: INTERPRETATION 1. 64% of the Customers said that Account handling is Excellent 2. 27% of the Customers said that the Account handling is Good.

3. 4.

6% of the Customers said that the Account handling is Satisfactory. 3% of the Customers said that the Account handling is Poor.

15. I am well informed concerning any changes in services. Excellent-----------------------------------------------46% Good----------------------------------------------------34% Satisfactory---------------------------------------------19% Poor------------------------------------------------------01%

Poor, 1% Satisfactory , 19% Excellent, 46% Good, 34%

Excellent

Good

Satisfactory

Poor

Fig. 3.15 INTERPRETATION 1. 46% of the Customers said that they are well informed about any changes in services. 2. 34% of the Customers said that they almost get informed about any changes in Services. 3. 19% of the Customers said that they sometimes get informed about the changes.

4.

1% of the Customers said that they are not at all get informed about any changes services.

in

CHAPTER-4 LESSONS LEARNT

TRAINING When a new employee joins an organization induction is the first exposure. He/she should be properly welcomed in the organizations. Made to know his /her positive vis a vis others : acquired with companys rules, regulations and working conditions. The employee is also to be trained in relations to the job requirement very from organization to organization eg, a highly trained person in account will still require induction training when he or she joins new organization. Information and non up gradation of knowledge is the key to success in tourism sector and all employees must have updated knowledge. For example, a ticketing person must know the recent operating routes of airlines and the face structures etc. He or she cannot man the ticketing counter with obsolete knowledge. Hence it is she duty of management keep providing in house training to the employees. These training programs should be designed for maintaining and improving current job performance and at the same time development programs and at the same time development programs should be taken up for equipping the employees should be taken up equipping the employees with such skill which are required for future job. Next stage comes in the form of the selection process. For this certain steps are requires. The candidates who have applied are put to scrutiny & those fulfill the requirements are called for interviews in fact the selection process caries from organization to organization to organization. An organization may conduct written tests, group discussion problem solving exercise presentations or interviews etc for completing the selection process. You must remember here hat the candidate should be selected on the merit basis in relation to the job specification rather on the basis of other external consideration or pressures. A wrong selection not only affects the performance of the job but also brings a bad image ot those

involved in the selection process. Very often employees selected on other considerations do not find receptivity among other employees (Seniors, equals or subordinates).

Motivation The quality of service in tourism depends on the job satisfaction of the employees. We have discussed earlier the characteristics of those organizations which are termed as service leaders. Hence, it is the mangers rewards and incentives, this is also related to positive strokes. For example, it is very cash to tell an employee you have done this work badly or you do not know how to work. These are negative stroke which can remotivate an employee. The same can be said in a positive manner like the work you have done could be done better by a little more concentration or you can still improve upto by marking full use of your capability. Employees exceptions should also be kept in mind their achievement or good performance should be duly recognized. This also helps in the retention of good employees in the organization. Appraisal Systems Performance appraisal is an important but difficult task of the manger. This can be carried out in two ways: 1. Informal performance appraisal This means a continuous process of giving feedback to sub ordinates about their performance in the organization. In this process, a manger spontaneously tells the employee how he or she has performed in relation to a particular work. 2. Formal performance appraisal Many organizations adopt formal appraisal methods on a monthly quarterly or an yearly basis. This is done through a Performa, which has certain set questions regarding the job requirements. In certain cases, the superior officers are asked to their subordinates. This exercise helps the management in identifying employees, for promotion or whether they need additional training. It his also sends a massage to the employees that how their performance

is being rated by the management. In many organization promotions, rewards and bonus etc are decided on the basis of performance appraisal.

BANKING SYSTEM
The Banking system is an integral Sub system of the financial system. It represents an important channel of connecting small savings from the households and lending it to the corporate sector.

The Indian Banking system has the Reserve Bank of India (RBI) as the apex body for all matters relating to the banking system. It is the Central Bank of India. It is the banker to all other banks.

Functions of RBI: 1. Currency issuing authority. 2. Banker to the Government 3. Banker to other banks 4. Framing of monetary policy 5. Exchange control 6. Custodian of foreign exchange and gold reserves 7. Development activities 8. Research and Development in the banking sector. Following is the classification of banks: 1. Non scheduled Banks: These are banks which are not included in the second schedule of the Banking Regulation Act, 1965. It means they do not satisfy the conditions laid down by that schedule. They are further classified as follows:

i) ii)

Central Co-operative Banks & Primary Credit Socieities. Commercial Banks

2. Scheduled Banks: Scheduled Banks are banks which are included in the second schedule of the Banking Regulation Act, 1965. According to this schedule a scheduled bank. (a) (b) Must have paid up capital reserve of not less than Rs. 5,00,000/Must also satisfy the RBI that its affairs are not conducted in a

manner detrimental to the interest of its depositors. Scheduled banks are sub divided as: 1. State co-operative Banks: 2. These are co-operative owned and managed by the state. 3. Commercial banks. 4. These are business entities whose main business is accepting deposits and extending loans. Their main objective is profit maximization and adding shareholder value. These are further sub divided as: 1. Indian Banks: These banks are companies registered in India under the companies Act. Their place of origin is in India. These are also sub divided as: 1. State Bank of India and its subsidiaries. 2. This group comprises of the State Bank of India (SBI) and its seven subsidiaries viz. State Bank of Patiala, State Bank of Hyderabad, State Bank of Tranavcore, However, TIER-II capital can not be more than 50% of TIER 1 capital. 1. TIER-I Capital 2. This refert to the core capital that provides the most permanent and ready support against unexpected losses. Equity investments in subsidiaries, intangible assets, losses in current period and those brought formed from previous years, will be deducted from TIER I capital. Tier I capital consists of the following unemployments :1. Paid up equity capital 2. Statutory reserves

3. Other undisclosed resumes Capital reserves representing surplus arising out of sale proceeds of assets also be added to TIER I capital.

3. TIER-I Capital This consists of capital elements that are not permanent and are not readily available to meet unforeseen contingencies. Following are its components: 1. Undisclosed reserves and cumulative perpetual preferences shares. 2. Undisclosed reserves often take the character of disclosed reserves. Also when cumulative perpetual preferences shares are fully paid up 8. These are banks that were registered outside India and had originated in a foreign country. RBI Norms to be followed by Banks 1. Capital Adequate Ratio (CAR) 2. Cash Reserve Ratio (CRR) 3. Statutory Liquidity Ratio (SCR) 4. Bank Rate 5. Exposure Norms 1. Capital Adequacy Ratio (CAR): In India banks are institutions where deposits place their hard earned savings on the assumptions that the risk shall be borne by the bank. In such a scenario, the banks must have enough capital to meet unforeseen continues so that the confidence of the deposits is not shaken. To fulfill this need the RBI has laid down the norms of capital adequacy that need to be fulfilled by banks. The banks have to maintain the capital Adequacy Ratio (CAR) specified by RBI from time to time.

2.

Cash Reserve Ratio (CRR):- CRR is the minimum reserve deposits which banks have to

compulsory keep with the RBI. These are calculated as specific percentage to Resolvable liabilities arrived at in the basis of net renewal and time liabilities (NDTL). 3. Statutory liquidity Ratio (SLR): According to Sec. 24(2-A) of amended Banking Regulation Act, 1949 a scheduled bank and every other banking company, shall, in addition to the cash reserves maintained by them under Sec. 42 of RBI Act, maintain reserves in cash or gold named at price not exceeding the current market price or in unencumbered approved securities valued at price determined. The banks should maintain such reserves not exceeding 40% and not less than 25% as the RBI may from time to time specify, of the total of its demand and time liabilities (NDTL), as on last Friday of the second preceding fortnight.

4.Bank Rate. The rate of which RBI lends to commercial banks by rediscounting bills or eligible paper is called the bank rate. It is basically the refinancing rate. the banks decide the interest rates based on the bank rate. It is also should be the RBI to control inflation. Following chart shows the 5.Exposure Norms: The RBI has stipulated certain ceiling relating to advances and interest rates which banks have to adhere to which carrying out their lending operations. Some of them are as follows: a. Exposure to a single borrower should not exceeds 15% of advances. b. Exposure to a business group should not exceeds 40% c. Exposure to stock market should not exceed 5% of total advances as at the end of previous year.

CLASSIFCATION OF BANK

Reserve Bank of India

Scheduled Banks

Non

Sched uled

State Co-opBank

Commercial Ba nk

Indian Banks

Foreign Banks

Public sector

Private sector

Private sector Banks

SBI & its Subordi

Nationalized Banks

Regional Rural Banks

FUNCTIONS OF A BANK
Functioning of a bank is among the mere complicated of corporate operations. Since banking involves dealings directly with money, governments in most countries regulate this sector rather stringently. In India, the regulation traditionally has been very strict and in the opinion of certain quarters, responsible for the present condition of banks, where NPA are of a very high order. The process of financial reforms, which started in 1991 has cleared the ..somewhat but a lot remains to be done. The multiplicity of policy and regulations that a bank has to work with makes its operations even more complicated, sometimes bordering on illogical. This section, which is also intended for banking professional, attempts to give an overview of the functions in as simple manner as possible. Banking Regulation Act of India, 1949, defines Banking as accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheques, draft order or otherwise. During from this definition and view edsolely from the point of view of the customers. Banks essentially perform the following functions. 1. Accepting deposits is one of the two major activities of the banks- Banks are also called custodians of public money. Basically, the money is accepted as deposit for safekeeping. But since the banks are this money to earn interest from people who need money. Banks shall a part of this interest with the depositors. However, accepting deposits and keeping track of money involves a lot of bookkeeping and other operations. Let us see what the banks must maintain to provide this service. An effective branch network to reach the targeted customer base. A system of intra branch accounting with separate accounts for each customer A system reconciliation of the end of the study Availability of adequate funds at each branch. Trained staff for effective customer services. Infrastructures inputs like space, stationary, comfortable environment etc.

2.

Lending money to the public Lending money is one of the two major activities of any bank. In a way, the bank acts as an intermediary between the people who have the need for money to carry out business transactions. This activity places its own requirements on the resources of the Bank. For effective functioning of this, a bank must posses: Skills to appraise the potential borrowers and the activity. Legal skills for documentation. Skills to follow up of monitor the end use of money lent by it. An effective credit delivery system. Review of credit portfolio.

3.

Transfer of Money: Apart from accepting deposits and lending money, banks also carry out, on behalf of their customers the act of transfer of money both domestic and foreign from place to another. This activity is known remittance business. Banks issue, demand drafts. Bankers cheques, money orders etc. for transferring the money. Banks also have the facility of quick transfer of money also know as telegraphic transfer or little cash orders. To delivery this service, a bank must have: An effective branch network or correspondent relationships. A system of inter branch reconciliation Availability of funds at allt eh center.

4.

Trustee Business Banks also act as trustees for various purposes e.g. whenever a company wishes to issue secured debentures, it has to appoint a financial intermediary as trustee who takes charges of the security for the debenture and looks after the interests of the debenture holders. Such entity necessarily have to have expertise in financial matters and also be of sufficient standing in the market/society to generate confidence in the

minds of potential subscribes to the debenture. While banks must posses the following to be effective and retain that: 5. A track record of sufficient length. Facilities for safe keeping. Legal skills to take necessary steps for the trusteeship.

Safe Keeping Bankers are in the business of providing security to the money and valuables of the general public, while security of money is taken care of through offering various types of deposit schemes, security of valuables is provided through maiming secured space available to general public for keeping these valuables. These spaces are available in the shape of lockers. The latter are small compartments with dual locking facility built into strong cupboards. These are stored in the Banks strong room and are fully secure. Lockers can neither be opened by the hirer or the bank individually. Both must come together and use their respective keys to open the locker. To make this facility available to its customers, the Bank must provide: Physical structures to house the lockers Locker cabinets Security arrangements Record of access to lockers

6.

Government Business: Earlier Government business used to be exclusively carried out by Government treasures where all type of transactions took place. However, now banks act on behalf of the Government to accept its tan and non tan receipts most of the Government disbursements like pension payments and tax refunds also take place through banks. While the banks carry out this business for a free to be paid by the Government, providing this service requires a lot of effort and organization. The banks must provide: Interfere with the public. Liaison with local Government departments and Govt. treasury.

Arrangement for reconciliation with the Government accounts department Necessary infrastructure, stationery etc. to cater to the numbers. FRAME WORK FOR ANALYSIS OF BANKS

Banks can be broadly analysed on the following parameters. 1. Size of a Bank Usually the thumb rule is all other things remaining constant bigger than the size of a bank, the better it is. This is judged by following. 1. 2. 3. Deposits This includes the demand, time as well as savings deposits from all the sources within and outside India. Net profits. This is the final free profit available for appropriation. This can either be ploughed back or distributed as dividend. 2. Operational Efficiency: This refers to how efficiently a bank manages its business. An efficient bank will managers its business. An efficient bank will manage the same asset size at a lower cost than an efficient one. 1. 2. Interest Income/Average working funds. This refers to how much interest income, or operating income a bank can earn for every rupee spent on the working funds. The higher the ratio be better. Average working funds, are the total resources (total assets or liabilities) employed by a bank. 3. 4. Non Interest Income/Average working fund. This refers to how much other income or fee based income or income from non fund based activities a bank can earn for each rupee spent on the working funds. The higher the ratio the better. This also denotes a banks capability to work on low spreads. 5. 6. Operating Expenses/Operating Income. This ratio denotes how much a bank has to spend on operating expenses for every rupee earned.

The lesser the ratio, the better. 7. Cost of Deposits This is the ratio of total Interest Expnaded/Total deposits. This indicates the cost of funds to a bank. Thus a bank that can obtain funds at a lower cost in a position to earn better profits in the future. 3. Earnings Quality: This parameter lays importance on how a bank earns its profits. This also explains the sustainability and growth in earnings in the future. 1. 2. Income spread/Average working funds. Income spread is the difference between interest income earned and interest expanded. This ratio shows how much a bank can earn for every rupee of working fund spent. The higher the ratio of the better. 3. 4. Operating profit/average working funds. This ratio indicates how much a bank can earn from its operations net of the operating expenses for every rupee spent on working funds. The higher the ratio, the better. 5. 6. Net profit/Assets. This ratio measures the net free profits earned for every rupee of asset owned. A higher ratio means better income generating capacity of the assets. A higher ratio indicates better earnings potential in the future. 7. 8. Net Profit/Net worth This ratio measures the return on net worth or the return on equity. This is a very important ratio for the shareholders. A higher ratio mans that the shareholders funds are utilized in a better manner than would have been elsewhere. Also, only a high return on equity justifies retention of profits. 9. Other income/net interest income other income includes fee based income, income from non crore activities, income from non fund based exposures and other activities. This ratio determines the future ability to work on low spreads. This also indicates whether the bank is solely reliant on interest income for its profit or are there other sources of income as well.

4. Productivity: This parameter indicates how efficient are the banks employee and branches in generating business and profits. 1. 2. 3. 4. 5. 6. 7. Business per Branch. Business of a bank is equal to sum of deposits and advances. This ratio indicates whether the branches of bank are used optimally or not. Business per employee. This ratio is used to find out whether a bank is relatively over or under staffed. The higher the ratio, the better. Operating profits per employee. This is also a ratio to check whether a bank is over or under staffed. The higher the ratio, the better. Operating Profits per branch. This ratio is denotes the profitability per Branch. The higher the ratio, the better. 5. Capital Adequacy: Capital adequacy indicates whether the bank has enough capital to absorb unexpected losses. It is required to maintain depositor confidence and presenting the bank from going bankrupt. 1. 2. Capital Adequacy Ratio (CAR). The banks have to maintain the capital adequacy ratio (CAR) specified by RBI from time to time. Capital Adequacy Ratio is equal to the ratio of TIER-I and TIER-II capital tot eh aggregate of risk weighted assets (RWA). Thus CAR = (TIER 1 + TIER II) RWA higher tighter CAR norms. Also high CAR denotes high safety against bankruptcy. However, a CAR over 2- 3% above the statutory norms indicate that the funds are not deployed properly by the banks. The current requirements is 9% which is to be raised to 10% by March 2002. 3. 4. TIER-I capital. This refers to the core capital that provides the most permanent and ready support against unexpected losses. Equity investments in subsidiaries,

intangible assets, losses in current period and those brought forward from previous years, will be deducted from TIER I capital. 5. 6. Debt Equity ratio: This is calculated as the proportion of total outside liability to net worth. Thus this ratio is equal to (capital + Reserves)/Deposits + Borrowings + other liabilities). This ratio thus indicates the banks financial lowerage. 7. 8. Advances / Assets. This ratio indicates a banks aggressiveness in lending which ultimately results in better profitability. Higher ratio of advances/deposits is preferred to a lower one. 9. 10. G-secs to investments. This ratio indicates a banks strategy as being high profits high risk or low profits low risk. Govt. securities are generally considered as the most safe debt instrument, which as a result carries the lowest return. 11. G-sec to assets: This ratio again shows whether a bank is conservation or aggressive in its approach towards making profit. Higher ratio indicates conservation and a lower ratio indicates aggressiveness. 6. Asset Quality: This indicates what types of advances the bank has made to generate interest income. When loans are given to highly rated blue chip corporate, the rates attached are lower than that by lower rated doubtful corporate. These asset quality indicates the type of debtors of the banks. 1. 2. Non performing asset. These are the assets that are doubtful to return the principal/or interest due in the near future. This results in huge losses to a bank. Thus a bank with a low profit but at the same time low NPA is preferable to the one having higher profits and higher NPA. 3. Contingent liabilities / total assets.

4.

This is the ratio of non funded exposure of a bank to the total assets. Such exposures result in high losses in cases of default. Thus the lower the ratio, the better.

5. 6.

Advance growth. This indicates the increases in the lending activity year to year (YOY).If this ratio is greater than the average ratio for the industry, it indicates that the bank is aggressively trying to increase its profits by increasing its advances. This may also result in higher losses due to loans turning bad (NPA).

1. Advances yield. 2. This indicates the interest income earned by the bank from its lending activity. Generally, yield increases with the increases in the lick perception of the assets. Thus a high yield indicates that the bank has invested in more risky assets, which may be harmful for the future profitability of the banks. Investments/Assets: This ratio indicates the proportion of investments to the total assets of a bank. A higher ratio means that the bank has conservatively kept a high cushion of investment to guard against NPA. However, this affects its profitability adversely. 7. Management Quality: This parameter is used to evaluate management quality so as to assign premises to better quality banks and discounts pooley managed ones. 1. 2. 3. 4. Credit/deposit ratio. This indicates the total advance as proportion of total deposits. It indicates the managements aggressiveness to improve in some by higher lending operation. Return on Average Net Worth This indicates the return on shareholders funds. It should be reasonably be above the cost of capital to warrant ploughing back of the profits. This ratio is very important from share valuations point of view. Average net work is the simple average of opening and closing balances of net worth. 5. Asset growth:

This is the balance sheet growth indicating an aggressive attitude towards growth. 8. Liquidity: Banks are in a business where liquidity is of prime importance. Among assets cash and investments are the most liquid of a banks assets. 1. 2. 3. 4. 5. 6. 7. 8. Liquid Asset/Total Asset. Liquid assets consist of cash balance and investments. This proportion indicates the overall liquidity position of a bank. Cash Assets/Total assets. Cash has the highest liquidity and safely among all assets. Investments/total assets. Investments are the second most liquid assets. This ratio measures investments as a proportion of total assets. G-sec / total assets. G-sec are the most liquid and safe investments. This ratio measures G-sec, as a proportion of a total assets.

Nationalised banks
1. Size The total deposits mobilized by national banks is Rs. 2562.9 bn that is just around 29% of the deposits mobilized by all the scheduled banks together. Also the growth in deposits areas average at 16.87%. Thus inspire of their sheer number (19 banks) they have not been able to mobilize enough deposits. However, they contribute to a third of the total profits earned by all SCBs. However, the growth in net profits was just 36.28%. This shows tiredness in their bottomline, as they have not been able to desire new ways to earn income. 2. Operational Efficiency: Nationalized banks aearn more interest income per rupee of assets than they other bank. They earn 14.24paise of interest income and 1.67 of paise non iterest income for every rupee of assets. Thus nationalized banks seem more efficient than other banks as far as earnings on assets is concerned. However, they are among the least prudent banks next only to the foreign banks, in spending money on operating expenses. They spend almost a fourth (24.93%) of every rupee earned as operational income, which is increasing rapidly at a rate highest in the sector. Also the cost of deposits is highest in the industry for them at 13.84 that has been increasing at the rate of 12.49%. YOU inspire of the large network of branches. Thus, though the income generated on assets is high, the spending is also very high indicating future trouble, since only the efficient banks can survive the imminent shakeout. 3. Earnings Quality: Nationalized banks have an interest margin higher than even the foreign banks. This indicates that the growth in their assets, the income will increase more than that earned by any other bank with a similar growth in assets. However one of the major concerns is the low non interest income. Hence, the operating profit is only 1.90% of the assets next only to the foreign banks. Thus even though the interest spread is highest, due to lower non interest income, the operating profits get subdued. The net profit is however only marginally higher at 0.72% than the industry average of 0.66%, which has grown at 1.28% YOU thus under performing the sector. This

reflects higher provisioning due to higher NPA (Non Performing Assets). Thus in their aggressiveness to increase yield. Nationalized banks have put in their money into more risky assets leading to higher NPA & lower net profits. However from the point of view of owners, nationalized banks return the highest rate on net worth at 15.70% highest in the industry. This is due to very high capital gearing of Rs. 20.67 of debt for every rupee of equity, once again highest in the industry,. However, a growth rate of 28.03% in this raises doubts over the sustainability of such returns in future. 4. Capital Adequacy: The capital adequacy ratio of nationalized banks is 11.14%, higher than the statutory requirement of 9%. However, it is lesser than that of all other groups. This indicates that the scope of expansion for the bank in future is very low. Also the RBI has announced that it would increase the CAR to 12% in a phased manner. In view of such regulations these banks may have to raise capital either by a rights issue or through subordinated debt. The debt equity ratio is also the highest in the industry at 20.67 times that makes these banks most dangerous to lend funds to. Hence, in future these capital starved banks have to raise their equity capital to warrant future growth. However, this bank group ahs a diversified portfolio of assets. Advances comprises only 38.37% of the total assets and investments another 36.10%. the advances are growing marginally faster than the assets at 40.82% however this group is aggressively increasing investments deposits have gone into investments. Also government securities comprise of 75% of total investments which are also increasing their share in incremental deposits indicating high liquidity of majority of investments. 5. Asset Quality: The Net NPA of this groups was at Rs. 174 bn. Forming almost 57.85% of the total NPA of the sector. The high NPA levels were due to lending at high rates to doubtful

borrowers (reflected in the high interest yield). Also the figure is increasing @ 1.53% annually, much higher than the sector average of 6.81%. this is the most worrisome aspect of this group and represents a drag on the bottomless of the banks. A control of NPA shall greatly improve the bottom line of these banks. However, nationalized banks have a very low non funded exposure at 28.87% that is way below the entire industry average at 59.63%. This shows limited vulnerability to credit risks on future incomes. But for each rupee of incremental asset, 4.018 paise worth non funded exposure is taken by the bank indicating an alarming trend. Also the advances have grown at 19.01% lower than the sector average of 2.09%. However, the advances yield is a whopping 38.96 (industry average is 22.44%) which indicates investment in riskeier assets (indicated by high NPA levels) since yield is inversely proportional to the risk perception of an asset. The bright spot seems to be the reducing yield growth at 29.03% of the total assets increasing at 51.40% of incremental assets indicating better asset liability management. 6. Management Quality: Advances are made at average 50.35 paise for every rupee of deposits mobilized increasing at 55.61% of the incremental deposits. Thus the management is conservative in its approach to lending. Profit earned on the average owner capital is 16.97% second highest in the sector. This indicates better management of the banks from shareholder wealth creation point of view. Also the assets have grown at 17.66% indicating conservative attitude towards growth. However, the high NPA reveal the management till towards profitability at the cost of safety. 7. Liquidity: This group has 52.98 liquid assets as a percentage to total assets marginally higher than the sector average of 55.26%. Thus half the assets can be liquidated quickly to meet unexpected losses. The ratio of growth of liquid assets to total assets is increasing at a declining rate of 40.54% mainly due to development of incremental assets in investments instead of cash. However, investments are 36.01% of total assets and G-sec are at 27.22% indicating a proper mix of assets and balancing of risk and return.

Conclusion
The leadership process involves in influencing the individual and group behavior toward achievement of HDFC bank goals. It is concerned with traits, philosophy and behavior of the leaders the leader, the characteristics of subordinates and the superior. It is obvious that HRD is a major component of the broad managerial function and has roots and branches extending throughout and beyond HDFC bank. It is a major sub-system of organizations which are inter-related and inter-dependent. Every personnel managers responsibilities include planning for people, organizing people, staffing with people, directing people, gaining the commitment, internet and effect of people and applying controls to people. Internal sources are the most obvious sources. These include personnel already on the pay-roll of HDFC Bank i.e. its present working force whenever any vacancy occurs. Somebody from within the organization is upgraded, transferred promoted or sometimes demoted. This source also include personnel who were once on the pay-roll of the company but who plan to change in the quality of production, fluctuations in work requirements, and changes in the organizational structure, the introduction of new lines or reduction in the workforce due to a shortage or a surplus in same section so that lay offs may be avoided, fillings in off the vacancies which may occur because of separations or because of the need for suitable adjustments in business operations such transfers are known as production transfers, flexibility transfers or organizational transfers. The purpose of such transfers is the stabilize employment in an organizations. They are generally controlled centrally through and by the personnel department. It was found out during the study that the following causes hampered the growth of the banking sector. These causes need to be addressed properly as that the remedial measures adopted prone effective and actually succeed in improving the functioning of these banks. Unrealistic assumptions have been behind plans and projections made in respect of critical aspects of the banks operations such as seduction of NPAs, recovery, creation of fresh NPAs, generation of non-interest income, etc. under most of these heads the performance of the banks has been wide off the projections made.

Inspite of their weak bank image, these banks are able to garner deposits obviously because of government ownership, deposit insurance and the public perception that government support would always be available. Investments are replacing advances, particularly remunerative advances and income from non-fund based business is not growing or is growing very marginally. The capability of these banks to do full range banking already been happenings. It is obvious that HRD is a major component of the broad managerial.

Recommendation

Managers should recognize that a certain amount of conflict will almost always exist between professional and hierarchical authority and control systems. The key is to transform this conflict into motivation by structurally insulating these workers from organization pressure, while simultaneously making them aware of the importance that their work holds for the firms well being and its continued competitive advantages.

They should recognize that managing high-technology and professional employees is significantly different from managing non-professionals have a different set of values and characteristics, which have been gained through their socialization in the technical specialty. Managers need to be cognizant of those values and characteristics if they are not anticipate tension points and enhance the fit between the individual and the job.

They should attempt to develop HR practices and policies that have had some success in attracting, motivating and retaining the high-tech work force.

That requires, at a minimum, knowledge of or systematic diagnosis of organizational practices, and matching HR practices to the organizations culture. It also requires that a cadre of competent HR manager manage the transition. The days of ready-fire aim are over for high-technology firms seeking competitive advantages in their markets.

They should study the change process and learn from their experiences from change owing to internal and external factors, including departures from tradition, new leaders with new visions, crisis or other starting events, key decisions on the part of senior management, or tests, of their infrastructure ability to accommodate change. Firm also change because of change. But professionals and other high-tech workers must clearly see the need for change, otherwise, they may not support the change, or they may even sabotage it, therefore communication must be reemphasized.

They should design jobs and work relationship to take advantage of technical specialties. For example, rotating professionals through multiple role and job responsibilities can sensitize them to new ides and opportunities.

They should establish career sensitive tracking systems so that career development becomes an integrated part of their firm practices.

They should utilize a menu of salient relevant that are relevant for high tech and professional workers. These reminders ideally should be linked to performance, but in some culture they might be liked so effort, risk taking, or other relevant behaviors.

Body of the report (As per Appendix A)

CHAPTER -1: CHAPTER 2: CHAPTER 3: CHAPTER-4:

PROFILE OF THE COMPANY SWOT ANALYSIS OF THE COMPANY ANALYSIS OF FINANCIAL REPORTS OF THE COMPANY LESSONS LEARNT

References & Bibliography Appendices

REFERENCES/BIBLIOGRAPHY

ANNUAL REPORT WWW.GOOGLE.COM WWW.HDFCBANK.COM NEWSPAPER BUSINESS India BUSINESS TODAY

APPENDICES

QUESTIONNAIRE Please help us to please you, but first thank you for being our customer. We are extremely anxious to make our operation the finest possible, but we need your help, principally because you see us objectively. Will you be kind enough to check off some answers on the self-improvement questionnaire? NAME: _______________________________ 1. How would you rate the overall Quality of service you receive from THE J&K Bank? EXCELLENT GOOD SATISFACTORY POOR

2. A Convenient Branch to get to EXCELLENT GOOD SATISFACTORY POOR 3. Branch Hours are convenient EXCELLENT GOOD SATISFACTORY POOR

4.

The Branch layout is spacious and uncluttered. EXCELLENT GOOD SATISFACTORY POOR

5.

I spend very little time waiting in line to get service from the tellers. EXCELLENT GOOD SATISFACTORY POOR

6.

Counter staff is immediately available to provide counter service. EXCELLENT GOOD SATISFACTORY POOR

7.

Phone calls to the Branch are handled quickly and efficiently. EXCELLENT GOOD SATISFACTORY POOR

8.

The staff is very courteous and helpful. EXCELLENT GOOD

 SATISFACTORY POOR 9. The staff is well informed about the Banks products and services. EXCELLENT GOOD SATISFACTORY POOR 10. The Branch has a pleasant and friendly atmosphere. EXCELLENT GOOD SATISFACTORY POOR 11. My accounts are handled EXCELLENT GOOD SATISFACTORY POOR 12. I am well informed concerning any changes in services EXCELLENT GOOD SATISFACTORY POOR

Signature: _________________ Name: _________________