SUMMER TRAINING REPORT ON TRENDS AND PRACTICES OF HDFC BANK:RETAIL ABNKING CONDUCTED AT HDFC BANK, Ambala City

In partial fulfillment of the requirement for the award of the degree of MASTERS OF BUSINESS ADMINISTRATION (Session 2007-2009)
UNDER THE GUIDANCE OF:

Submitted by:
SAURABH ANAND

Mr. Rajeev Bansal

Roll no: 1207783 MBA 3rd Semester

Submitted to MAHARISHI MARKANDESHWAR INSTITUTE OF MANAGEMENT MULLANA, AMBALA (HARYANA)

Index
Contents (A) (B) (C) (D) Declaration Certificate Preface Acknowledgement 9 11 14 Page No:

Executive Summary Chapter 1 - Introduction Chapter 2 - Review of Literature Chapter 3 - Research Methodology (a) Objective of study (b) Type of Research (c) Research Design (d) Sources of Data (e) Sampling unit (f) Sample size (g) Type of Sampling (h) Method of data collection (i) (j) Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Instrument used for data collection Limitation Industry Profile Company Profile Retail Banking Data Analysis & Findings Suggestion Conclusion Bibliography Annexure 17 29 40 77 92 94 96 98

DECLARATION

This report is result of my eight weeks management summer training at HDFC BANK. I here by declare that project report title RETAIL BANKING conducted at HDFC BANK, Ambala City. Submitted in partial fulfillment of requirements for Degree of Masters of Business Administration. This report is bonafide research work carried out by me. No part of this report has been submitted for award on any other diploma, degree, fellowship or other similar title or prizes. This report is based on my personal opinion hence cannot be referred to for official or legal purpose.

(SAURABH ANAND) Roll No: 1207783

PREFACE
Practical training is an important part of the theoretical studies. It is of an immense importance in the field of management. It offers the student to explore the valuable treasure of experience and an exposure to real work culture followed by the industries and there by helping the students to bridge gap between the theories explained in the books and their practical implementations. Training plays an important role in future building of an individual so that he/she can better understand the real world in which he has to work in future. The theory greatly enhances our knowledge and provides opportunities to blend theoretical with the practical knowledge. I have completed the summer training programme at HDFC BANK, Ambala and have covered the RETAIL BANKING products and services offered by HDFC BANK and their awareness amidst customers. I have tried to cover each and every aspect related to the topic with best of my capability.

(Saurabh Anand)

ACKNOWLEDGEMENT
Perseverance, inspiration and motivation have always played a great role in the success of any venture. At this level of understanding it is often difficult to understand the wide spectrum of knowledge without proper guidance and advice. This report conveys my heartiest thanks to Mr.Rajeev Bansal (BM) and all the Officers and Staff Members of HDFC BANK and I am also thankful to all the team of this Unit, Who have given me their full cooperation and devoted their valuable time for rendering me their needy services and guidelines during the training period. With those sincere and precious efforts, I have been able to complete my practical training successfully. Last but not the least I would like to express my gratitude to Dr. Sanjeev Marwah (Director) who have provided me with the opportunity to work on this project report.

Project Guide: Mr. Rajeev Bansal Mr. Vaibhav Kohli Mr. Harinder Singh

SAURABH ANAND

MBA(3rd Sem.)

EXECUTIVE SUMMARY
Retail Banking has immense opportunities in a growing economy like India. As the Indian growth story goes further, Retail Banking is going to emerge as a key growth driver. The rise of growing Indian middle class is an important factor contributing in this regard. The younger population not only has increasing purchasing power, but as far as acquiring personal debt is concerned, they are perhaps more comfortable than our previous generations. Banks are now involved in bundling of services and usage of various distribution channels have increased the retail base to a larger extent. Some of the key issues related to the Retail Banking industry in India are financial inclusion, responsible lending, access to finance, regulation and financial crime prevention etc. With these issues surfacing the Retail Banking industry, lets see what are the challenges involved in the industry. First, retention of customers is going to be a major challenge. According to a research by Reichheld and Sasser in the Harvard Business Review, 5% increase in customer retention can increase profitability by 35% in banking business, 50% in insurance and brokerage and 125% in the customer credit market. Thus banks need to emphasize retaining customers and increasing market share. Second rising indebtedness, could turn out to be a cause for concern in the future. RBI is concerned about the rising high growth in the retail segment especially in the housing and real estate segment, thus RBI as a temporary issue measure has put in place risk containment measures and increased the risk weight from 100 to 125 % in the case of consumer credit including credit cards market. Third information technology poses both opportunities and challenges. Even with ATM machines and Internet banking, many consumers still prefer the personal touch of their neighbourhood branch bank. Technology has made it possible to deliver services throughout the branch network, providing instant updates to checking accounts and rapid movement of money for stock transfers etc. However this dependency on the information network has brought IT departments additional responsibilities and challenges in managing, maintaining and optimizing the performance of retail network of branches. Specific challenges include ensuring that account transaction applications run efficiently between the branch offices and data centres. Fourth, KYC issues and money laundering risks in retail banking is yet another important issue. Tackling the KYC norms is one of the biggest challenges faced by the Indian retail banking industry.

HDFC BANK is a new generation private sector bank offering a wide spectrum of retail, SME and corporate banking products and services. It has been among the earliest banks to offer a technology-enabled customer interface that provides easy access and superior customer service. HDFC BANK has a nationwide reach through its network of 500 branches and 1200ATMs. The bank aims to serve all the banking and financial needs of its customers through multiple delivery channels, each of which is supported by state-of-the-art technology architecture. HDFC BANK offers various products and services dealing with retail banking ranging from various saving and business accounts, loans and other wealth management products including mutual funds, life insurance and general insurance. HDFC BANK has tied up as a Twin Engine for insurance with AVIVA Group for life insurance and ICICI Lombard for General Insurance. The major inferences drawn under the research project were: The potential of retail banking is growing at a considerable pace due to the favorable demographic trends of population in India with its 70% population falling under the age group 35 years. The unawareness amidst the customers is considerable as the use of plastic money in India ranges just to a minor figure of 1% as compared to that of US viz. 18% which is a positive sign in one way depicting that there is a lot of scope yet to be witnessed by Indian Economy. The merger between Bank of Punjab and HDFC BANK has created a remarkable impact on the working of the combined entity HDFC BANK which shows the positive signs of growth. There is a lot of competition amongst various private and public sector banks on the grounds of quality, services, rate of interests, etc. Due to the high level of competition in the economy, the bank really needs to concentrate more towards promotional strategies for enhancing the awareness of its products and services amongst present and potential customers.

INTRODUCTION

Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth. Retail banking is undergoing dramatic changes. The old relationship between banks and customers is changing. Changing business models, cost relations, customer relations, deregulation, convergence of economic and monetary policies, globalization of financial markets and systems, incessant introduction of new products and services, more discerning, more demanding and less loyal customers are a few of the important change drivers. As the players in the market adapt themselves to tougher competition ahead, they have to alter their product mix, delivery channels and corporate structure to serve their functional role. Some of the banking activities that are deemed very appropriate today were considered inappropriate, difficult and `out of policy pronouncement of central banks' in the past. To quote one example, housing finance and consumer durable loans that are very personal in nature, were considered `inflationary' and were discouraged by banks some 15 years back. But today the situation is different. Similarly in future, banks may have to serve customers by bundling certain financial services that are not currently combined or they may merge banking services with non-banking services such as tickets to concerts, sporting events, vacation planning and the like. Thus the market will redefine the roles and banks have to gear themselves up for a fierce competition. Retail banking is gaining importance with the changing customer preferences. Customers are seeking products and services that help them simplify and take control of their lives. The greatest challenge for the retail banks will be to provide `Anytime, Anywhere, banking' to retain their customers. Unless they penetrate deep into the retail market today, their survival will be jeopardized. Distribution channel, human resources, technology, operation, etc., are the key areas, where transformation is needed for banks to become a leader in retailing business. Retail banking in India is experiencing a fierce competition as the foreign, private and public sector banks are competing with one another to expand their respective market share. Leading banks are now adopting product-centric and channel-centric models to penetrate the market. With the increasing competition, customer service is becoming the key factor for differentiation. Impact of Internet on retail banking also plays a vital role. Credit card issuers have greeted the Internet revolution with a sense of profound feeling of opportunity and a vague feeling of dread as well. The competition is heating up between the on-line start-ups and the traditional credit card issuers. While the start-ups have the advantage of state- of-the art technology.

LITERATURE REVIEW
Across the globe Retail Banking has been a innovation in the commercial banking sector in recent years. The growth of retail lending, especially in the emerging economies like India is attributable to the rapid advances in the information technology, and several macroeconomic and financial sector reforms. In recent times India has experienced a surge in Retail Banking. The retail loan market has been transformed from a sellers market to a buyers market. Lets first understand what is Retail Banking. Retail Banking refers to the dealing of commercial banks with individual customers, both on liabilities and assets side of the balance sheet. Fixed, current and savings account for the liabilities side, while mortgages, loans (housing personal, educational etc) on the assets side. Also some of the other services offered are of credit cards, depository services etc. Todays retail banking sector is comprised of 3 basic characteristics Multiple Products: (deposits, credit cards, insurance etc), Multiple Channels of Distribution: (call centre, branch, internet etc), Multiple Customer Groups: (consumers, small businesses etc) Retail banking in India is not a new phenomenon. It has always been present in India in various forms. For the last few years it has been very popular with the mainstream banking for many banks. The typical products being offered in the Indian retail banking segment are housing loans, consumption loans for purchase of durables, auto loans etc. The loans are being marketed under different brand names to differentiate the products offered by other banks. In recent past retail lending has been a key profit driver for banks. While new generation private sector banks have been able to create a niche in this regard, the public sector banks are also not lagging behind. Banks are leveraging their vast branch network and outreach, public sector banks have aggressively tried to grab a larger slice of the retail pie. By international standards however there is still much scope for retail banking in India. Retail loans constitute around 8-9% of GDP in India vis--vis about 35% of other Asian economies. Still Indian retail banking has grown to a larger extent. What we need to see is that what have been the drivers of retail banking in India. First being that of economic prosperity and consequent increase in purchasing power has given a consumer boom. Second, changing consumer demographics, indicate vast potential for growth in consumption. India is one of the countries having highest proportion (70%) of the population below 35 years of age. Third, technological factors play a major role. Convenience banking in the form of debit cards, internet, phone banking, anywhere and anytime banking have attracted a lot of people in the banking field. Technological innovations relating to the use of credit/debit cards, ATMs phone banking etc have all contributed to the growth of

retail banking in India. Fourth, treasury income of the banks which have strengthened the bottom lines of the bank in the past years have been on a decline. In such a scenario, retail business provides a good vehicle of profit maximization. Indian retail banking grew by a phenomenal 44.4% in 2005-06 to touch Rs 3,538 billion. This growth has been despite the increase in risk weight by RBI for Housing and Real estate loans. Housing constitutes around 52% of all retail loans; it grew at a robust 44.35% during 2005-06. In 2005 the total asset size of the Indian retail banking industry grew at a rate of 120% to $66 billion. The retail banking industry in India is expected to reach a value of $300 billion by 2010. There is a need for constant innovation in retail banking. Banks now need to use Retail as a growth trigger. This requires product innovation, development, differentiation, prudent pricing, technological upgradation, cost reduction and cross-selling. While retail banking offers phenomenal opportunities for growth, the challenges are equally important to watch. How far the retail banking is able to lead growth of the Indian banking industry in future would depend upon banks to meet the challenges and make use of the opportunities profitably. However the kind of technology used and the efficiency of operations would provide the much needed competitive edge for success in retail banking business. Furthermore in all this, customers needs, expectations and convenience is of great importance. The banking sector in India is catering this and demonstrating continuous innovation in Retail Banking and would continue to do so with the economy moving at a faster pace. Retail banking would change in a larger perspective and banks would need to prepare themselves for a better Retail Banking platform.

RESEARCH METHODOLOGY

What is research?
Research in common parlance refers to the search for knowledge. It is a scientific and a systematic search for pertinent information on a specific topic. According to Advanced Learners Dictionary, meaning of research is a careful investigation or inquiry especially through search for new facts in any branch of knowledge Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying haw research is done scientifically.

Objective of the study:

To know the working of the bank. To study the different products and services offered under retail banking. To check the customer awareness and their satisfaction. To be well conversant with value added services. To gain insight of customer attitude towards various investment options available.

Type of research: Exploratory Descriptive

Sample size: 150 Methods of data collection: Observation Method Questionnaire

LIMITATIONS

 As the sample size considered for the research was 150, it was not possible to draw accurate conclusions. Due to the limited availability of time, the study had been done on a small scale which increases the chances for misinterpretations. Reluctance of people in taking active participation due to lack of interest. Sampling errors is another limitation. Lack of availability of data due to paucity of time.

History of Banking in India

Without a sound and effective banking system in India it 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 reason of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money have become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:

Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.

PHASE 1
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, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Punjab National Bank Ltd. was set up in 1894 with headquarters at Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve India came in Indians, Lahore. Baroda, Bank of 1935.

During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. 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). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders.

PHASE2
Government took major steps in this Indian Banking Sector Reform after independence. 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.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. 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.

After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

PHASE3
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 liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money. 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.

Nationalization of Banks in India

The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. It nationalized 14 banks then. These banks were mostly owned by businessmen and even managed by them.

Central Bank of India Bank of Maharashtra Dena Bank Punjab National Bank Syndicate Bank Canara Bank Indian Bank Indian Overseas Bank Bank of Baroda Union Bank Allahabad Bank United Bank of India UCO Bank Bank of India

Before the steps of nationalizations of Indian banks, only State Bank of India (SBI) was nationalized. It took place in July 1955 under the SBI Act of 1955.

Nationalization of Seven State Banks of India (formed subsidiary) took place on 19th July, 1960. The State Bank of India is India's largest commercial bank and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000 branches and it offers -- either directly or through subsidiaries -- a wide range of banking services. The second phase of nationalisation of Indian banks took place in the year 1980. Seven more banks were nationalised with deposits over 200 crores. Till this year, approximately 80% of the banking segment in India were under Government ownership. After the nationalisation of banks in India, the branches of the public sector banks rose to approximately 800% in deposits and advances took a huge jump by 11,000%.

1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1969: Nationalization of 14 major banks. 1980 : Nationalization of seven banks with deposits over 200 crores

Major Banks in India

ABN-AMRO Bank Abu Dhabi Commercial Bank American Express Bank Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharastra Bank of Rajasthan Bank of Ceylon BNP Paribas Bank Canara Bank Catholic Syrian Bank Central Bank of India China Trust Commercial Bank Citi Bank City Union Bank Corporation Bank Dena Bank Deutsche Bank Development Credit Bank Dhanalakshmi Bank Federal Bank HDFC Bank HSBC ICICI Bank IDBI Bank Indian Bank

Indian Overseas Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank JPMorgan Chase Bank Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank Oriental Bank of Commerce Punjab National Bank Punjab & Sind Bank Scotia Bank South Indian Bank Standard Chartered Bank State Bank of India (SBI) State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Patiala State Bank of Indore State Bank of Mysore State Bank of Saurastra State Bank of Travancore Syndicate Bank Taib Bank UCO Bank Union Bank of India United Bank of India United Bank Of India United Western Bank AXIS Bank Vijaya Bank

TRENDS IN INDIAN BANKING

Indian Banking Industry - Overview

The main objective of the Indian Banking Sector reforms of the 1990s was to have a good and efficient financial system. As the new economy now continues to grow much higher, new demands are placed on the Banking industry. Higher growth is contributing to increase in higher income categories households and this has led to higher consumption thus ultimately leading to more demand for financial savings. On the production side, industrial production has accelerated , trade has increased in terms of exports thus leading to a lot of investment demand in this area. Thus higher consumer demand and production demand has led banks to bring new and new products and innovate continuously and produce more customized products thereby increasing competition in the sector. If Indian banks have to sustain such high demand pressures it has to expand both organically and inorganically. Looking at the global banking scenario only 22 banks figure in the top list of top 1000 banks and only 5 in the top list of 500 banks. Though banking in India has changed a lot, it has shown signs of transformation whereby it can feature in the top rung of banks. The loan book of the banks has increased tremendously and also the credit has exceeded the deposit growth. What has been the heartening feature of the Indian banking system is that the loan expansion was broadbased including corpoarte, agriculture, retail, and the SME sector. Indian banks have also realized that with organic growth there is a need to grow inorganically as well, to be competitive with other players in the market. For e.g. State Bank if India, Indias largest bank has acquired 76% stake in the Keynian Bank, Giro Commercial Bank. ICICI Bank, Bank if India, Bank of Baroda have also followed the same route. Even nationally banks like Bank if Punjab has been merged with Centurion Bank to form HDFC BANKLtd, Ganesh Bank has also been merged with Federal Bank. Many such instances have started growing in the Indian banking industry thereby giving signals that inorganic growth is important to compete and sustain in the Indian banking industry. To meet these challenges of growing through inorganic growth and Indian banks going global, banks have started following international norms. There has been increased transparency in the system. The use of technology in the banking industry has changed things a lot, thus creating faster processes, addressing customer problems in a more efficient way etc. India has also compiled with all the Core Principles of Effective Banking Supervision of the Basel Committee. The roadmap for adoption of Basel II is also under formulation. In brief, in the current banking system there are around 222 commercial banks in India operating with more than 68,000 branches (as per March 2006). Also the size of the Banking industry has gone up over 6 times from Rs 5984 bn in 1995 to over Rs 36,105 bn in 2006. Banks have been supporting the growth in the economy by financing productive sectors. The Indian banking system is thus in a transition phase and public sector banks still dominate the Indian banking system. Banks are also in the process of consolidating their position and also capitalizing on the strength of their huge networks and customer bases. Overall the banking

system is currently changing on a massive phase with the system moving from a scene of large number of small banks to small number of large banks.

Banking in the New Millennium

We're living in a world dominated by the new idea economy, ticking to the beat of Internet time, where customers are quality conscious, time conscious and price conscious. Technology is creating new agile players making the existing ones obsolete. In this scenario, the role of internet and its impact on banking still appears to be a puzzle. Banks around the world are subject to the same radical changes -new competition, technology, deregulation, and globalization. But, eventually, the classic rules of business will reassert themselves in this virtual environment and the winners will be the first and best movers. The challenges in this millennium for the banking industry are enormous. The technology and Banking sector reforms together are lifting the competitive intensity of the Banking business. In Banking, embedding knowledge into products can enhance value, and connecting different knowledge sources can create innovative products. The banks that are first to market with the right mix of technologies, strategies and partnerships would be the sure winners. The banking environment worldwide is undergoing massive transformation. Despite the, not so favorable, market sentiments and an apparent backlash against dotcoms, serious players in established industries like banking, remain convinced that the Internet will have a profound impact on the banking sector. Coming home, Indian banking sector has come a long way from being a sleepy business institution to a highly proactive and dynamic entity. Indian banking system is in the midst of a technological revolution. It is impacting the Indian industry in three ways - firstly, by providing efficient and effective delivery channels, secondly, it is dramatically influencing the client profile, which in turn leads to the third change i.e. the Human Resources Management. As a service sector, it calls for a change in the attitude of the personnel that would have a salutary effect on customers. Indian Banking that was operating in a highly comfortable and protected environment till the beginning of 1990s has been pushed into the choppy waters of intense competition. Mergers and acquisitions, have been heating up in the new private banking sector since the HDFC-Times Bank merger came through in November 1999. The deal shook an otherwise placid Indian banking world and generated a kind of pressure on banks to shake hands with their peers to cope up with the competition. Going forward, the premium valuations of private banks compared to sector banks depend on their ability to maintain high earnings growth and of assets. The current downturn in the economic activity could result increase of non-performing assets for most of the banks. The winner public quality in the in the

market would be the one who can sustain the high growth in business without compromising the asset quality. In this millennium, banks should strive to achieve significant increases in their productivity, efficiency, and profitability. The areas of challenges that lie ahead for the Indian banking sector would be: Restructuring and Reorganizing banks' setup, leaner offices, merging and forging of strategic alliances to take advantage of the geographic spread of branch network of banks, develop new products and services that would meet the emerging needs of customers and professionalizing management structures that would be responsive to the changes in the business environment.

E-banking: The New Age Banking

Technology innovation and fierce competition among existing banks have enabled a wide array of banking products and services, being made available to retail and wholesale customers through an electronic distribution channel, collectively referred to as e-banking. The integration of e-banking applications with legacy systems implies an integrated risk management approach for all banking activities of a banking institution. Latest recommendations of Basle committee recognise that each bank's risk profile is different and requires a tailored risk mitigation approach appropriate for the scale of e-banking operations, the materiality of the risks present and the willingness and ability of the institution to manage their risks. This implies that a "one size fits all" approach to e-banking risk management issues may not be appropriate. Banks have traditionally been in the forefront of harnessing technology to improve products and efficiency. Technology is altering the relationships between banks and its internal and external customers. Technology has also eroded the entry barriers faced by many industries. With one time investment, technology has brought about superior products and channel management with a special focus on customer relationship. The incremental costs incurred for expansion and diversification are also more beneficial. The major driving force behind the rapid spread of e-banking is its acceptance as an extremely cost effective delivery channel. But on the flip side, it is associated with risks such as reputation risk, security risk, cross-border risk and strategic risk, which are unique to e-banking. Banks need to have an effective disaster recovery plan along with comprehensive risk management system in place to tackle the problems. An effective risk management tool is significant not only to the bank but also to the banking system as a whole. All these issues underscore the importance of sound supervisory policies and a high level of international cooperation among the bank regulators. The Basle Committee on Banking Supervision has taken the lead in this area through the creation of its Electronic Banking Group - a group comprising 17 central banks and bank supervisory agencies in the late 1999. The main focus of this group has been to develop sound risk management practices.

Internet has created plenty of opportunities for players in the banking sector. While the new entrants have the advantage of latest technology, the good-will of the established banks gives them a special opportunity to lead the online world. By merely putting existing services online won't help the banks in holding their customers close. Instead, banks must learn to capitalize their customers' different online financial-services relationships.

E-banking players.
Today, Malaysian commercial banks have the privilege of advanced and efficient delivery channels for their products and services. This includes automated teller machines (ATMs), automated self-banking channels such as the BSN Commercial Bank's Electronic Banking Center (EBC) and Phileo Allied Bank's virtual kiosks and PC-banking. One unique feature that differentiates Malaysia from other countries is the responsible role played by the government. In order to encourage consumers to embrace information technology, the Malaysian government is allowing a deduction of RM500 (US $ 130) from taxable incomes on every computer purchased, thereby setting a trend for others to follow.

Retail Banking: The `Stars

Retail banking is undergoing dramatic changes. The old relationship between banks and customers is changing. Changing business models, cost relations, customer relations, deregulation, convergence of economic and monetary policies, globalization of financial markets and systems, incessant introduction of new products and services, more discerning, more demanding and less loyal customers are a few of the important change drivers. As the players in the market adapt themselves to tougher competition ahead, they have to alter their product mix, delivery channels and corporate structure to serve their functional role. Some of the banking activities that are deemed very appropriate today were considered inappropriate, difficult and `out of policy pronouncement of central banks' in the past. To quote one example, housing finance and consumer durable loans that are very personal in nature, were considered `inflationary' and were discouraged by banks some 15 years back. But today the situation is different. Similarly in future, banks may have to serve customers by bundling certain financial services that are not currently combined or they may merge banking services with non-banking services such as tickets to concerts, sporting events, vacation planning and the like. Thus the market will redefine the roles and banks have to gear themselves up for a fierce competition. Retail banking is gaining importance with the changing customer preferences. Customers are seeking products and services that help them simplify and take control of their lives. The greatest challenge for the retail banks will be to provide `Anytime, Anywhere, banking' to retain their customers. Unless they penetrate deep into the retail market today, their survival will be jeopardized. Distribution channel, human resources, technology, operation, etc., are the key areas, where transformation is needed for banks to become a leader in retailing business.

Retail banking in India is experiencing a fierce competition as the foreign, private and public sector banks are competing with one another to expand their respective market share. Leading banks are now adopting product-centric and channel-centric models to penetrate the market. With the increasing competition, customer service is becoming the key factor for differentiation. Impact of Internet on retail banking also plays a vital role. Credit card issuers have greeted the Internet revolution with a sense of profound feeling of opportunity and a vague feeling of dread as well. The competition is heating up between the on-line start-ups and the traditional credit card issuers. While the start-ups have the advantage of state- of-the art technology, the conventional issuers have their brand names, good customer base and economies of scale to their advantage. But to survive in the virtual world, banks have no choice but to establish an on-line presence quickly and decisively

Banking Sector: Current Trends

The Banking industry is currently undergoing dramatic global change at a rapid pace. This section gives a picture of the current scenario of the banking sector. Financial stability has always been an integral concern of central banks. The importance of this has been reminded by the events of the recent years. The South-East Asian crisis and the collapse of the high profile Barrings bank calls for an effective risk management system. The New Basle Accord is one such attempt. The New Basle Accord with its three pillar-minimum capital requirement, supervisory review processes and market discipline is aimed at developing risk sensitive standards in the banking industry. But this Accord seems to have run into controversy right from the day one. The new framework if accepted would provide incentives for banks to enhance the risk measurement and management capabilities. In recent years, credit derivatives have evolved as major risk management tools. It was the new international rules of the Basle Accord, 1988 that brought credit derivatives into existence. Banks seeking to reduce their exposure and related risk-based capital requirement to corporate credit have found derivatives to be more efficient than securitization. The future of credit derivatives seems to be very rosy. With the improvement in technology, brilliant research work in various financial institutions and the accumulation of significant knowledge on credit experience and analysis, credit derivatives are positioned as powerful product. Coming home, the Indian banking industry has come a long way from being a sleepy business institution to a highly proactive and dynamic entity. The liberalization and economic reforms have largely brought about this transformation. The entry of private banks has revamped the services and product portfolio of nationalized banks. With efficiency being the major focus, the private banks are leveraging on their strengths. To compete with the private banks, the public sector banks are now going in for major image changes and

customer friendly schemes. "The Banking Sector- Coming Challenges" is a commentary on the Indian banking sector, which is facing tremendous internal and external challenges in this transitory phase. Over the years, the Co-operative Banks have played an important and useful role in the financial and social upliftment of the non-creamy segments of the society. They have expanded by leaps and bounds over the past decade. Co-operative banks are under the dual control of RBI and the respective state's Registrar of Co-operative Societies. This dual control has been a source of great criticism. Investigations by RBI has brought to light the fact that Madhavpura Mercantile Co-operative Bank (MMCB), abused the system in three ways: diversion of funds, massive exposure to one particular broker and the pay order scam. RBI has unearthed a string of co-operative banks, exposed to the stock market through the pay order route. Unfortunately, RBI has demonstrated its ability better as an investigator than as a 'policeman'. The multi-crore MMCB scam, which rocked the faith of thousands of trusted investors shows how regulators, negligence can affect the whole system. If not checked and controlled, this weak link between the regulators and banks would bring down the whole system. The paper "Cooperative Banks-Colluding for a Crisis", highlighting the MMCB episode, narrates the plight of the co-operative banks.

COMPANY PROFILE
HDFC BANK is a new generation private sector bank, offers a wide spectrum of retail, SME and corporate banking products and services. It has been among the earliest banks to offer a technology-enabled customer interface that provides easy access and superior customer service.

HDFC BANK has a nationwide reach through its network of 500 branches and 1200ATMs. The bank aims to serve all the banking and financial needs of its customers through multiple delivery channels, each of which is supported by state-of-the-art technology architecture. The shares of the bank are listed on the major stock exchanges in India and also on the Luxembourg Stock Exchange. Among HDFC BANK's greatest strengths is the fact that it is a professionally managed bank with a globally experienced and capable management team. The day-to-day operations of the bank are looked after by Mr.Aditya Puri, Managing Director assisted by a senior management team, under the overall supervision and control of the Board of Directors.

MANAGEMENT TEAM

Mr. Rana Talwar

- Chairman

Mr. Shailendra Bhandari Mr. Tejbir Singh Mr. Vivek Vij Mr. Anil Jaggia Mr. Ashokan Ms. Tarini Vaidya Ms. Shalaka Gadekar

- Managing Director and CEO - Executive Director - Head Retail Banking - Chief Operating Officer - Head Corporate Banking - Head Treasury - Head Human Resource

VISION MISSION VALUES VISION:

We will be Indias most respected and admired financial services brand. We are passionate about creating magic in peoples lives through personalized service and partnering them in realising their dreams.

We will achieve this by demonstrating the highest levels of Integrity, delivering consistently superior performance and creating value for our employees, customers, shareholders and the communities we work and live in.

MISSION:

To be a respected, nationwide, full service bank with a focus on the growth segments of the economy To be leaders in our chosen segments, committed to excellence in all we do To be customer centric, creating a wow experience through personalized service To build strong relationships with our employees, our customers and our shareholders To be of service to the community in which we work and live in.

VALUES:
1. Integrity... 2. Teamwork... 3. Customer Centricity... 4. Passionate Ownership... 5. Excellence ... Walk the talk One team one dream Serving the frontline Energy in action Being the best

FINANCIAL HIGHLIGHTS OF HDFC BANK

PROFIT & LOSS ACCOUNT (Rupees in Crores)

Mar`03 12 mths 371.34 92.08 463.42 269.3 24.82 85.01 48.75 60.9 0 172.43 47.05 488.78 Mar`03 12 mths -25.36 -9.9 -120.4 -155.66 0 0 0 0 Mar`04 12 mths 333.79 88.34 422.13 203.82 31.29 113.39 36.14 142.63 0 181.15 142.3 527.27 Mar`04 12 mths -105.14 129.41 -155.66 -131.39 0 0 0 0 Mar`05 12 mths 346.09 134.95 481.04 168.21 42.7 146.75 29.73 68.54 0 220.74 66.98 455.93 Mar`05 12 mths 25.11 0 -131.39 -106.28 0 0 0 0.25 Mar`06 12 mths 803.2 398.24 1201.44 404.44 142.43 308.9 51.48 206.39 0 537.49 171.71 1113.64 Mar`06 12 mths 87.8 0 -121.39 -33.59 0 0 0 0.62 Mar`07 12 mths 1268.53 442.13 1710.66 698.95 221.31 427.54 56.97 184.51 0 741.04 149.29 1589.28 Mar`07 12 mths 121.38 0 73.72 195.1 0 0 0 0.77

Income Interst earned Other Income Total income Expenditure Interst expended Employee cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provision and Contingencies Total Expenses

Net Profit for a year Extra ordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning per share (Rs.)

BALANCE SHEET

BUSINESS SEGMENTS OF HDFC BANK

RETAIL BANKING

TREASURY

BUSINESS SEGMENTS

INVESTMENT BANKING

CORPORATE BANKING

Retail Banking.
HDFC BANKoffers following products and services in retail banking:

Retail Assets: Personal Loans: Competitive interest rates with high dependability and
quick assistance in meeting all your personal requirements.

Two Wheeler Loans: Super fast loans with competitive interest rates
and superior features.

Property Loans: We offer Home Loans / Commercial Property Loans /

Overdraft against property / Loan against property.

Commercial Vehicle / Construction Equipment Loans: We are

one of the oldest players in this segment.

Miracle Credit Cards:

Participate in a huge initiative for underprivileged children. A Miracle happens when you get the card as well as when you use it! Earn seva points on your spends on the Miracle Card, which will be contributed to adopting underprivileged children Gurujis dream. All this by just using a credit card as you normally would. The card is free for life, has an amazingly low interest rate of 0.99% (for first 6 months) and you can enjoy 0 % interest rate on balance transfer for the first 3 months.
Free

for life Credit Card contribution of Rs. 50/- for underprivileged children. Earn Seva Points on your Spends to help underprivileged 0.99% interest rate for 6 months. 0% interest rate on Balance Transfer.
Initial

children.

Retail Liability

Current Account: There are 4 types of Current Accounts which offers

services ranging from Free anywhere banking, Quick outstation collections, Free Internet Banking, Current account with free fund transfers, Free Muliticity Cheque, Free DD/ POs on HDFC BANK and non HDFC BANK locations and much more. *

Savings Bank Account: We offer 4 types of Savings Bank accounts

with many features like Unlimited cash withdrawal Free at other bank ATMs, Muliticuty Cheque Books, Free Internet Banking and much more*

Fixed Deposits: We offer attractive interest rate of 8.5% on Fixed

Deposits and for senior Citizens we offer interest rate as high as 8.75%*

NRE Account: It will give your family access to operate your account and
enjoy the best of convenient features and benefits such as Free Gold Debit Card to main applicant and joint mandate holders, Free Multicity Cheque book, Free SMS alerts, Free Money Transfer and Internet Banking.even while you are away.

Wealth Management Products Insurance: We offer life Insurance products through a tie-up with Aviva
Life Insurance for total security, risk protection, long term savings and retirement planning. We also offer General Insurance through a tie up with ICICI Lombard General Insurance.

Mutual Funds: We are having tie up with more than 25 Fund houses and
offer research based Mutual Fund products with superior post tax returns and customized investment options.

Portfolio Management services: We offer complete financial

planning as per your need and risk appetite and offer advice according to your investment priorities.

Other services provided by HDFC BANK:

Demat Account E-Broking IPO Funding Prepaid Gift Card Visa Money Transfer Utility Bill Payments

Corporate Banking
HDFC BANK offers following products and services in Corporate Banking.

Corporate and SME: We offer an entire range of client-centric banking solutions and services to Corporate and SME customers. Treasury: HDFC BANKhas a fully equipped, high tech treasury, which has
separate trading desks for foreign exchange & domestic markets. The trading desks are supported by state of the art software platforms. We have online connectivity to the entire branch network to effect instantaneous funds transfer.

Financial, Institutional & Govt.Group: We offer tailor made financial

solutions that include Liability, Asset and Services related products to Public Sector Undertakings, Central and State Government Boards, Government Departments, Cooperative Banks and Financial Institutions

Trade Finance: Following are our range of Trade related services for the
exporter and importer: Export Trade Finance Import Trade Finance Domestic Trade Finance Remittance Services Foreign Exchange Services

Channel Finance: A unique working capital facility to dealers / distributors of

established corporate without disturbing current banking arrangements

Cash Management Services : HDFC BANK offers Cash management

Services under the name "'Cash & Transaction Services'' (CATS) a service specially designed to suit your every business need, whether it is for Cheque collection or making payments at various locations. This service is fully supported by a framework of V-Sat and leased line connectivity with all our countrywide network of branches and through specific inter-linkages with carefully selected correspondent banks. Presently we have 243 branches covering 112 locations and a correspondent bank tie-up with 14 major banks covering more than 3000 locations for collections and 700 locations for payments.

INTRODUCTION TO RETAIL BANKING

What is retail banking? Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth. Types of retail banks Commercial bank has two possible meanings:
Commercial bank is the term used for a normal bank to distinguish it from an investment bank. (After the great depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital markets activities. This separation is no longer mandatory.) o Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking). Community development bank are regulated banks that provide financial services and credit to underserved markets or populations. Private banks manage the assets of high net worth individuals. o Offshore banks are banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.
o

Savings bank accept savings deposits. o Postal savings banks are savings banks associated with
national postal systems.

RETAIL BANKING PRODUCTS

RETAIL BANKING PRODUCTS

LIABILITIES

ASSETS

INVESTMENTS

SAVINGS A/C CURRENT A/C FIXED DEPOSIT DEMAT A/C

PERSONAL LOAN PROPERTY LOAN TWO-WHEELER LOAN AUTO LOANS CONSTRUCTION EQUIPMENT LOAN COMMERCIAL VEHICLE LOAN CREDIT CARDS CHANNNEL FINANCING

MUTUAL FUNDS LIFE INSURANCE GENERAL INSURANCE E-BROKING

LIABILITIES SAVINGS A/C:

At HDFC BANK, they believe in making a customers life simple. They understand exactly how valuable our time is. Precisely why they've developed a savings bank account with a host of options to take care of our money and ensure that it grows. Establishing one of India's largest network of branches among private banks, their state-of-the-art technology combined with perfect banking expertise provides us with the best banking experience. Integrating each branch through satellite technology to implement their innovative services. HDFC BANKmeets our every requirement. Because when it's for the customers, nothing less than the best is good enough.

TYPES OF SAVINGS A/C

Regular Savings Account Savings Plus Account Savings Max Account Kids Advantage Account Pension Savings Account No Frills Account

BENEFITS OF SAVINGS A/C

INTERNET BANKING: Access your account anywhere / anytime

through Internet banking Service. These services allow you to view your account balance, view and print statements, transfer funds between accounts all at the click of a mouse. ANYWHERE BANKING: The instant you become a customer of HDFC BANK, you have the luxury of accessing your Savings Bank Account from any of our branches spread across the country. Whether your transactions involve withdrawals, deposits or even a statement of

account, HDFC BANKs ready to do your bidding. Furthermore, there are no restrictions on withdrawal amounts FAST COLLECTION OF CHEQUES: Our state-of-the-art network facilitates quick credit of your cheques. So now, your Savings Bank Account receives the credit within 7 working days. In addition, we also have a facility to collect your cheques from any place in India. DEMAND DRAFTS AT 150 CENTRES: HDFC BANK world of convenience ensures that you no longer need to wait for your demand drafts. Simply leave your instructions at your branch and pick your demand draft in the shortest possible time. EXTENDED WORKING HOURS: We've kept our doors open beyond office hours. Banking work need not wait until tomorrow anymore. INSTANT BANKERS CHEQUE: Effect the payment that you want in the minimum time required. Our banker's cheques are provided on order.

CURRENT A/C:
At HDFC BANK, They aim to give your business the cutting edge. Using their
nationwide network, their state-of-the-art technology, and sprightly attitude, to provide you the best banking experience. They have put together one of the largest network of branches among private banks in India to be at arm's reach wherever you are. They've integrated each branch through satellite technology, to effect your transactions in a flash. They have chalked out a wide range of schemes and services, so your business gets your kind of banking support. At HDFC BANK, they believe one size never fits all. They thus designed and tailor-made their Current Account schemes to suit your requirements. They take pride in being able to provide what you need. In providing nothing less than the best. Because when it's for you, nothing less than the best is good enough.

TYPES OF BUSINESS A/Cs

REGULAR SILVER SILVER PLUS GOLD DIAMOND NAME OF ACCOUNT REGULAR SILVER SILVER GOLD PLUS
RS.10,000/Rs.25,000/Rs.50,000/Rs.1,00,000/-

PARTICULARS
MINIMUM AVERAGE

DIAMOND
Rs.5,00,000/-

QUARTERLY BALANCE REQUIRED NONMAINTAINANCE CHARGE (QUARTERLY)

LESS THAN Rs.1,00,000/Rs.1,110/Rs.1,110/Rs.2750/Rs.4,400/Rs.6,600/-

Less than 50% of AQB

Above 50% less than 100% of AQB

Rs.830/-

Rs.1,110/-

Rs.2,750/-

ABOVE Rs.1,00,000/LESS THAN Rs.5,00,000/AQBRs.4.400/-

BENEFITS OF CURRENT A/C

ANYWHERE BANKING: At HDFC BANK, you're not a customer of

just one branch. You have within arm's reach, our nationwide spread of branches willing to address your banking needs. All you need is an account with any one of our branches, and the entire HDFC BANK machinery is at your service. What's more, we've made sure there are no restrictions on withdrawal amounts. And you can obtain a balance statement and make enquiries at any branch. MULTI-CITY CHEQUES: Need to send payments from one city to another? No problem. For select customers, HDFC BANK gives the facility that enables one to issue cheques, pay cash at any of our wide network of branches INSTANT REMITTANCES: It takes us virtually no time to transfer funds from your account, to any of our branches. This is child's play for us and takes less than a minute. FAST COLLECTION OF CHEQUES: Trust the HDFC BANK network, to realize quick credit of your cheques. Your account receives credit from Metros within five working days. If you desire, we would also collect your cheques from any major town/city in India. You may check out our valued added collection system services. for customized collection

QUICK HIGH VALUE CLEARING: Your high-value cheques (Rs. 1,

00,000 and above within a certain area) deposited at our main branches in Metro towns are credited the same day by 4.00 p.m. CASH DELIVERY/ CASH PICK UP: We deliver cash up to Rs 1, 00,000 at your doorstep. Just call us. This facility is available at select

centres. Cash Pick up services are available at metro locations on a selective basis on charge basis. INSTANT BANKERS CHEQUE : Whenever you need to issue Bankers Cheques/ Pay Orders, we provide instant banker's cheques on request. DEMAND DRAFTS AT 150 CENTRES: With HDFC BANK at your side, there's no more waiting for demand drafts. Just ask us to issue demand drafts on more than 150 centres across the country.

FIXED DEPOSIT:
The deposits at Rs.148, 637 million grew 58% over those in 2006. The cost of deposits for the year ended March 31, 2007 at 5.6% increased due to the changes in the interest rate environment. The low cash deposits (CASA) for the bank stood at 31%.

SPECIAL FEATURES OF DEPOSITS:

ATTRACTIVE INTEREST RATES FLEXIBLE TENURES AUTO RENEWAL FACILITY OVERDRAFT AGAINST FIXED DEPOSITS NOMINAL FACILITY

CURRENT INTEREST RATES FOR DOMESTIC DEPOSIT (% P.A.) W.e.f. 7th March, 2007

Maturity Slab

7 - 14 days 15 - 30 days 31 - 60 days 61 - 90 days 91 - 180 days 181- 270 days 271 - 364 days 1 yr 1 day 3 years 3 yrs 1 day to less

Less than Rs.15,00,000/Deposit Effective rate p.a. Yield p.a. 5.00 % -5.50 % -5.75 % -6.00 % -6.75 % -7.75 % 7.83 % 8.00 % 8.16 % 9.75 % 10.11 % 8.50 % 9.57 %

Senior Citizens Deposit rate p.a. 5.50 % 6.00 % 6.25 % 6.50 % 7.25 % 8.25 % 8.50 % 10.05 % 9.00 % Effective Yield p.a. -----8.34 % 8.68 % 10.44 % 10.20 %

than 5 yrs 5 yrs and above DEMAT A/C

8.50 %

10.46 %

9.00 %

11.21 %

What is a depository?

A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities. In India at present we have two depositories NSDL & CD

How can I avail the service of a depository?

A depository interfaces with the investors through its agents called Depository Participants (DPs). If an investor wants to avail the services offered by the depository, the investor has to open an account with a Depository Participant. HDFC BANKis depository participant for NSDL & CDSL.

What are the facilities offered by HDFC BANK Depository Services?

HDFC depository offers the following facilities:

Opening of demat account. Dematerialization i.e., converting physical certificates to electronic form. Dematerialization i.e., conversion of securities in demat form into physical certificates Pledging/Hypothecation of dematerialized securities against bank loan Electronic credit of securities allotted in public issues, rights issue Receipt of non-cash corporate benefits such as bonus in electronic form Freezing of demat accounts, so that the debits from the account are not permitted Nomination facility for demat accounts Services related to change of address Effecting transmission of securities Account monitoring facility over Internet through "easi" facility (for accounts at CDSL only) Other facilities viz. holding debt instruments in the same account , availing stock lending/borrowing facility, etc. electronic settlement of trades in stock exchanges connected to NSDL/ CDSL

BENEFITS OF DEPOSITORY SYSTEM

Elimination of bad deliveries

In the depository environment, once holdings of an investor are dematerialized, the question of bad delivery does not arise i.e. they cannot be held "under objection". In the physical environment, buyer was required to take the risk of transfer and face uncertainty of the quality of assets purchased. In a depository environment good money certainly begets good quality of assets.

Elimination of all risks associated with physical certificates

Dealing in physical securities have associated security risks of theft of stocks, mutilation of certificates, loss of certificates during movements through and from the registrars, thus exposing the investor to the cost of obtaining duplicate certificates and advertisements, etc. This problem does not arise in the depository environment.

No stamp duty For transfer of any kind of securities in the depository.

This waiver extends to equity shares, debt instruments and units of mutual funds.

Faster settlement cycle The exclusive demat segments follow rolling

settlement cycle of T+3 i.e. the settlement of trades will be on the 3rd working day from the trade day. This will enable faster turnover of stock and more liquidity with the investor.

Faster disbursement of non cash corporate benefits like rights, bonus, etc.
Depository provides for direct credit of non cash corporate entitlements to an investors account, thereby ensuring faster disbursement and avoiding risk of loss of certificates in transit.

Reduction in brokerage by many brokers for trading in dematerialized securities

Brokers provide this benefit to investors as dealing in dematerialized securities reduces their back office cost of handling paper and also eliminates the risk of being the introducing broker.

ASSETS TWO WHEELER LOANS

Purpose: Finance for motorcycles, scooters & scooterettes. Persons eligible: Income: You need a Gross Annual Income of just Rs. 42,000/- for Self Employed and for Salaried Rs.54,000/- (Metro) and Rs.42,000 (Non Metro) Age: You should be between 21 to 60 years of age. Margin: Government employees: 15-20% Agriculturists : 30% Others : 25% Tenure: Minimum: 12 months Maximum: 36 months

PERSONAL LOANS
LOAN AMOUNT: ..

Salaried:
Minimum: Rs75000/Maximum: for salaried Gold - Rs.10 Lacs for salaried Non Gold - Rs.3 Lacs

Self-employed:
Minimum: Rs75000/Maximum: Rs. 10 Lacs (Rs. 15 Lacs for SEP and SENP BT) Minimum: 12 months Maximum: 60 months

TENURE: INTEREST RATES: As applicable from time to time PERSONS ELIGIBLE: INCOME:

Salaried: GROSS Rs. 75,000 per annum Self-employed (Professionals/Non Professionals): Gross income Rs. 1, 00,000 (ITR) Self employed: Minimum - 21 years and Maximum - 65 years Salaried: Minimum - 24 years and Maximum - 58 years

AGE:

CREDIT CARD (MIRACLE) WHAT IS A CREDIT CARD?

A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the user's account after every transaction. In the case of credit cards, the issuer lends money to the consumer (or the user). It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.

FEATURES:
International Acceptance Service Charges for Revolving Credit 1.25% FOR FIRST 6 MONTHS 3.15% AFTERWARDS Balance Transfer Rate 3.15% AFTERWARDS 0% FOR 3 MONTHS Access to 24-Hour Customer Care Centre EMI on Call facility Global Emergency Assistance Services Surcharge on Fuel (2.5%) 2.5% of transaction value or Rs 10 whichever is higher (0% surcharge HPCL pumps on transaction value upto Rs 3000). Forex and Travel Cheque Services Free Credit Period (Applicable provided the Total payment due shown in the previous statement is settled in full) Minimum: 22 days Maximum: 52 days Revolving Credit facility

at select

CONSTRUCTION EQUIPMENT LOAN

When you bank with HDFC BANK, you always find more time on your hands. Unlike other banks, our one-table clearance scheme gives you the convenience of completing all formalities within the comfortable confines of your home or office.

FEATURES:

EASY FINANCE:
HDFC BANKoffers you finance for a wide range of Construction Equipments of all manufacturers, be it Excavators, Vibratory rollers, Compactors, or Cranes Etc. You can avail upto 75 % finance on the Asset Value You can avail these speedy and hassle free loans with simple documentation and competitive rates of interest, combined with a speedy turnaround time. All of this absolutely no service charge or processing fee of any kind (excepting Stamp duty charges wherever applicable) QUICK DELIVERY: HDFC BANKalso organises the delivery of the construction equipment of your choice through a vast network of dealers.

DOCUMENTATION REQUIRED:
(Individuals/ Proprietorship Firms) 1. Balance sheet and profit & loss account duly certified / attested by Chartered Accountant for last 2 years. 2. Copies of Income tax return and computation of income tax for the last 2 years. 3. Copy of work orders / contracts. 4. Signature verification from bank. 5. Proof of address / residence.

CUSTOMIZED SCHEMES:

The bank has designed an array of financial schemes that cater to your business requirements. And with the flexibility that each scheme offers, you can get a finance option custom made to best suit your need. The extensive branch network linked by satellite technology, enables you to manage your receivables and payables easily all across the country.

REFINANCE
Need Working Capital. You can avail Refinance from us on your old Construction Equipments which are registered with RTO.

FLEXIBLE REPAYMENTS:
When it comes to repaying your loan, we offer you absolute freedom to pay back in 1, 2 or 3 years, at your convenience through post dated cheques .

COMMERCIAL VEHICLE LOANS

HDFC BANKalso organises the delivery of the commercial vehicle of your choice through a vast network of dealers.

FEATURES: Easy Finance

HDFC BANKoffers you finance for a wide range of Commercial Vehicles of all manufacturers, be it LCV, MCV or a HCV.You can avail upto 100 % finance on the Chassis cost .For Special Purpose Vehicles (SPVs) finance on the Body unit/ Tanker unit could be considered. You can avail these speedy and hassle free loans with simple documentation and competitive rates of interest, combined with a speedy turnaround time. All of this absolutely no service charge or processing fee of any kind (excepting Stamp duty charges wherever applicable).

Quick Delivery
When you bank with HDFC BANK, you always find more time on your hands. Unlike other banks, our one-table clearance scheme gives you the convenience of completing all formalities within the comfortable confines of your home or office.

Flexible Repayments
When it comes to repaying your loan, we offer you absolute freedom to pay back in 1, 2 or 3 years, at your convenience through post dated cheques.

Customised Schemes
The bank has designed an array of financial schemes that cater to your business requirements. And with the flexibility that each scheme offers, you can get a finance option custom made to best suit your need. Our extensive branch network linked by satellite technology, enables you to manage your receivables and payables easily all across the country.

Refinance
Need Working Capital. You can avail Refinance from us on your old Commercial Vehicles

Documentation Individuals/ Proprietorship Firms:

1. Balance sheet and profit & loss account duly certified / attested by Chartered Accountant for last 2 years.

2. Copies of Income tax return and computation of income tax for the last 2 years. 3. Copy of work orders / contracts. 4. Signature verification from bank. 5. Proof of address / residence. 6. Telephone numbers of office / residence. 1. Partnership Firms: Balance sheet and profit & loss account duly certified / attested by Chartered Accountant for the last 2 years.Copy of work orders / contracts. 2. Copy of partnership deed. 3. Authority letter to sign the agreement on behalf of the firm.

Private / Public Limited Companies:

1. Balance sheet and profit & loss account duly certified / attested by Chartered Accountant for last 2 years. 2. Memorandum and Articles of Association. 3. Copy of work orders / contracts. 4. Board resolution.

*Notes:
1. All loans at the sole discretion of HDFC BANK. 2. All taxes and statutory charges as applicable. 3. Payment through post dated cheques.

PROPERTY LOANS
HOME LOANS
Loans upto Rs. 50 Lakhs Maximum tenure: 25 years Special pre-approved loans for existing customers Loans available to Individuals, Firms, Private Limited Companies Also available for NRIs and Merchant Navy personnel No-income proof scheme available Loan available for new as well as resale properties Pre-payment Charges -No fees on part pre-payment -No pre-payment allowed in first 6 months -On closure before 5 years, 1.5% of original Loan amount -On closure between 5-10 years, 0.75% of original Loan amount -No pre-payment charges after 10 years

 Loans for purchase of Commercial Property

Loans upto Rs. 30 Lakhs Maximum Tenure : 15 years Available for purchase of shops, offices and showrooms Loans available to Individuals, Firms and Private Limited Companies Not available to NRIs Funding

- 100% of Agreement value plus stamp duty plus registration, or - 50% of Market value (whichever is lower) Pre-payment Charges - No fees on part pre-payment - No pre-payment allowed in first 6 months - On closure before 3 years, 2.5% of original Loan amount - On closure between 3-10 years, 1.5% of original Loan amount - On pre-closure after 10 years, 1% of original Loan amount

Loans Against Property

Available up to Rs. 50 Lakhs Against residential as well as commercial property Maximum tenure: 15 years Loans available to Individuals, Firms, Private Limited Companies Not available to NRIs Can be availed for working capital, debt consolidation, emergency expenses, children's education, and to buy property which cannot be otherwise funded. No-income proof scheme available Funding - up to 60% of market value in case of residential property and - up to 50% of market value in case of commercial property

Pre-payment Charges

- No fees on part pre-payment - No pre-payment allowed in first 6 months - On closure before 3 years, 2.5% of original Loan amount - On closure between 3-10 years, 1.5% of original Loan amount - On pre-closure after 10 years, 1% of original Loan amount

 Overdraft against property

property Companies Also available for Self employed professionals ( Doctors, Engineers, Architects, Chartered Accountants & MBAs) Not available to NRIs Attractive Interest rates for existing customers of HDFC BANK. Limit set for a period of 12 months, renewed annually Limit upto 50% of market value of property Fees of 1.0% Eligibility based on business turnover Available for Individuals, Partnership Firms & Private Limited Limits available up to Rs. 40 Lakhs Facility secured by self occupied residential/commercial

Booking Loans
Pre-approved loans for the purpose of booking of plots / offices / flats / shops in schemes promoted by Government owned development authorities such as DDA / HUDA / CIDCO / MHADA etc. Loan up to Rs. 5 lakhs Maximum Tenure: 12 months Available to Individuals, Firms and Private Limited Companies

Balance Transfer + Top Up

Balance Transfer facility available for existing Home Loans and Loans against Property Transfer your existing loan for a maximum tenure of 25 years Avail Top Up facility over and above existing loan up to Rs. 1 Crore for 15 years at attractive interest rates Loan sanction based on track record....no need for financial documents!! No guarantor required Faster Loan sanction

EDUCATION LOAN
The high cost of education in premier institution need no longer stand between you and your career aspirations. If you have the drive, we will take care of your finances.

While you plan your education in world class universities, Education Loan will take care of all your expenses from accommodation and tuition fees to purchasing computers. Yes, we believe in facilitating world class education to those who aspire. We believe in making careers happen ! Easily affordable terms and quick hassle free processing repayment on monthly installments. So what are you waiting for ? Just walk into your nearest HDFC BANKBranch and a team of executives will assist you in every way almost transporting you to your chosen university.

Eligibility: You are eligible if you:

Are a resident of India. Have an offer / admission letter / are bonafide student of a college / university in India or abroad.

Expenses Covered: The following expenses can be claimed under the scheme

Admission / Tuition fee to be payable to College / University / Institution. Air fare / Travel Expenses. Boarding and Lodging expenses. Books and Stationery expenses. Instruments / equipment / computer expenses required for the course undertaken. Examination / Library / Laboratory fee. Any other expense required to complete the course - like study tours, project work, thesis, etc

Rate of Interest:
As applicable from time to time. Repayment Plan

Repayment Plan:
Repayment of loan starts after studying & moratorium* period and can go up to a maximum of 7 years.

Moratorium period is a max. of 6 months after course completion or one month after getting a job whichever is earlier.

Documents Required:
The following papers/documents should accompany the Application Form to be executed by both the students and the parents/guardians

Documents required from both the student / co-applicant.

Identity Proof: Copy of Passport / Driving License / Voters Identity Card / Income Tax Pan Card. Residence Proof: Copy of Passport / Driving License / Voters Identity Card / Utility Bills Age Proof: Copy of Passport / Driving License / Income Tax Pan Card / Birth Certificate Signature Verification. One Singed Photograph (On the face).

Documents required from the co-applicant

Income Proof: Form 16 or Income tax returns for the last two years.

CHANNEL FINANCING
A unique working capital facility to dealers / distributors of established corporates without disturbing current banking arrangements. Simple security package & low turnaround time. Customers can go about doing their business as usual without having to worry about augmenting the working capital anymore.

Dealers:
Ensure enhanced supply to achieve higher sales and higher profits.

Manufacturers:
Achieve a higher turnover and ensure faster cash-flow. HDFC BANKincludes in its portfolio many of India's top brands, under the Channel Financing Scheme. The Channel Financing Scheme helps facilitate

the goods and cash flow between customers and their principal/ manufacturer. So, if customer is a dealer of any of the following products, this scheme is tailor-made for customers:

Automobiles Consumer Electronics Branded Ready mades FMCGs Office Automation

Other all-India branded products

Channel Financing Scheme:

Under the Channel Financing Scheme, the HDFC BANKundertakes Financing for all the dealers recommended by the manufacturers/ principal on an all India basis. This facility is extended for a maximum period of 90 days. After the 90-day period, a fresh facility may be rotated, on the basis of the Bank's experience and your manufacturer/ principal's advice. The Channel Financing Scheme is made available to you at extremely competitive rates, which are comparable with the best in the business.

Basic Information Required

Number of years of standing of your dealership.

A past record of business between you and your manufacturer. Your Certified Financial Statements or extracts for the past 3 years. A Letter of Recommendation from your manufacturer.

Security Documents that the Bank will ask for.

How the Scheme works for you?

You or your manufacturer forwards your request to the nearest branch of Centurion Bank of Punjab. Your request is then sent to the Banks Corporate Office in Mumbai. The Corporate Office decides on the limits and informs all the parties concerned of the same.

INVESTMENTS MUTUAL FUNDS

A mutual fund is a form of collective investment that pools money from many investors and invests their money in stocks, bonds, short-term money market instruments, and/or other securities. In a mutual fund, the fund manager trades the fund's underlying securities, realizing capital gains or losses, and collects the

dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding.

WHY IS IT SUCH A GOOD IDEA TO INVEST IN MUTUAL FUNDS?

Diversification: Mutual Funds invest their corpus in diversified

portfolios which reduces the risk contained in the investment. This also means that you can invest a small sum of Rs.5000/- and still be a part of a portfolio where the market value of single scrip might be much more than the total investment. Research: These mutual funds perform an extensive research of the company before making an investment decision giving you the benefit of expert advice. Liquidity: These funds are extremely liquid, some of them even have features like across-the-counter redemption. This feature is especially useful at times when the market is rising or falling. Professionally Managed: These funds are managed by professionals who have the required expertise in buying and selling stocks. As a result they make better decisions on entering and exiting a particular stock, which is very crucial for the overall performance of a portfolio. Moreover, mutual fund investment also rids the investor of maintaining records, eliminates hassles with the broker for payment, delivery and other arduous back office tasks. Savings on transaction costs: As purchases and sales are done in bigger quantities, the funds also get the advantages of lesser brokerage and other reduced transaction costs. Tax Advantages: In India these funds become even more attractive because of the tax advantages, like indexation benefits, long term capital gains tax, tax free dividends and much more.

TYPES OF MUTUAL FUNDS:

There are various types of mutual funds but the three basic types are as follows:

Debt / Income Funds Features

High safety Investment mainly in GOI Securities and AAA Bonds Attractive returns, but not guaranteed Have given better returns than bank deposits Return likely to be at least 1% higher than Fixed Deposit

Equity Funds Features

Invest in share markets many shares Objective is Long Term Capital Growth Diversification

Balanced Funds Features

Mixture of Debt and Shares Objective is Medium Term Capital Growth with much lesser risk.

MUTUAL FUNDS
SUGGESTED TIME HORIZON Growth Risk: Medium to High Period: 3 to 5 years Income Risk: Low Period: 1year plus Capital Preservation Risk: Low Period: Less than 1 year Long Term Equity Funds

Medium To Long - Term

Balanced Funds Short Term Debt Funds

TYPE OF MUTUAL FUNDS OFFERED BY HDFC BANK:

PERCENTAGE OF INVESTMENT IN GOVERNMENT AND BLUE CHIP COMPANIES IN DIFFERENT MUTUAL FUNDS BY HDFC BANK TYPE OF MUTUAL FUND SECURE BALANCED GROWTH INVESTMENT IN GOVERNMENT COMPANIES (%) 90 50 80 INVESTMENT IN BLUE CHIP COMPANIES (%) 10 50 20

Secure Funds Balanced Funds Growth Funds

Sector wise break up of % of investment made in different companies by HDFC BANK on your investment

INSURANCE
HDFC BANK has bancassurance partnerships with Aviva for Life Insurance & with ICICI Lombard for Non-life insurance. With their bancassurance partners, you can avail of the services of trained & certified professional consultants, who can guide you in ascertaining your insurance needs, and assist you in making an insurance plan that is just right for you. Choose from a plethora of diversified plans that help you take care of your varied needs like risk protection, family health, children education, children marriage, Vehicle insurance etc.

INSURANCE

LIFE INSURANCE

GENERAL INSURANCE

1)

LIFE INSURANCE LIFE LONG:

Flexibility to meet life's surprises

LifeLong is a flexible whole life savings cum protection plan, which is designed to change to meet your changing needs.

Flexibility in cover levels: You can choose different cover up to 100 times
your annual premium based on your age. You can also change the cover level with time depending upon your changing requirements. You also have the option of covering your spouse under the same policy.

Choice of funds: LifeLong offers you a choice between With Profits Fund and
3 Unit Linked Funds- Protector, Growth and Balanced which give you the flexibility of choosing how your money should be invested in terms of risk and the security of the return on the investment. You can also switch between the different unit-linked funds at any time.

Option of increasing your investment value: : LifeLong offers you the

flexibility of increasing the value of your investments at any time through top-up premiums.

Access your savings when you need them: You can make withdrawals
from your fund at any time after 3 policy years through the Partial Withdrawals option.

Protect the value of your investment:You can protect the real value of
your investment against inflation by opting for the Indexation option. This will ensure that you receive a meaningful amount at maturity of your policy.

Protect against unforeseen events: LifeLong offers 3 riders which you

can opt for to protect yourself against Accidental Death & Dismemberment, Critical Illness & Permanent Total Disability and avail of a Hospital Cash Benefit.

Tax Benefits: The premiums you pay are tax deductible under Sec 80C and
the maturity benefits are tax free under Sec 10(10D) of the Income Tax Act, 1961.

Eligibility:

The minimum age at entry is 18 years and the maximum age at entry is 60 years. The maximum age at entry with any rider is 55 years. The minimum annual premium is Rs. 6000

SAVE GUARD:
A simple way to secure your future.
Save Guard is a simplified, Unit Linked endowment plan that is specially designed to help you save for important milestones like your child's education and marriage, building a house or even creating a retirement fund.

No medical check up: This product can be bought with just a selfdeclaration of good health. Choice of three funds: Save Guard offers three Unit Linked

investment fund options of Secure Fund, Growth Fund and Balanced Fund. You can choose any of the funds (or a combination of funds) based on the risk and return mix you would like to opt for. Comfort of Capital Guarantee :Aviva guarantees that on maturity, the value of units in the Secure Fund will not be less than the total number of units in the Secure Fund, as at the end of the policy term, multiplied by their respective Unit Price applicable at the time of allocation, provided you have: o Paid all premiums due o Not switched to or from the Secure Fund at anytime during the policy term

This guarantee is on Secure Fund at maturity only and would exclude:

Units in respect of Balanced and Growth Funds. Units attributable to top up premiums.

Flexibility of withdrawal: You can make partial withdrawals from

your policy after ten policy years. The sum insured will be reduced by the amount of partial withdrawal. Tax benefits: The premiums you pay are tax deductible under Section 80C and the maturity benefits are tax free under Section 10(10D) of the Income Tax Act, 1961.

EASY LIFE PLUS:

The simplest way to insurance and investment
Easy Life Plus is a simple savings plan with the benefit of life protection. By choosing an appropriate premium level and term, you can match the maturity date of the policy to a specific savings need such as your children's education, wedding, etc.

No medical check up: This product can be bought with just a selfdeclaration of good health. Choice of funds: Easy Life Plus offers you a choice between With

Profits Fund and 3 Unit Linked Funds- Protector, Growth and Balanced which give you the flexibility of choosing how your money should be invested in terms of risk and the security of the return on the investment. You can also switch between the different unit-linked funds, free of cost at any time up to two times a year, for all future premiums.

Insurance cover:

The policy under Easy Life Plus is issued for fixed terms of 10, 15, 20 or 25 years. The cover level is 10 times the annual premium for policy terms 10, 15 and 20 years; 12.5 times annual premium for 25 year term. Protect against unforeseen events: Easy Life Plus offers in-built Accidental Death / Permanent Total Disability benefits. Tax benefit: The premiums you pay are tax deductible under Sec 80C and the maturity benefits are tax free under Sec 10(10D) of the Income Tax Act, 1961.

 TREASURE PLUS:
Children's savings plan that ensures your child gets more out of life.
Treasure Plus is a savings cum protection plan that helps create wealth for your child. Treasure Plus is a long-term investment plan with the added advantage of an insurance cover for you with your child as the beneficiary.

No medical check up: This product can be bought with just a self
declaration of good health. Insurance cover: The insurance cover is 120 times the monthly premium. Additionally, you also get a built in Accidental Death & Permanent Total Disability rider with the policy. Comfort of Capital Guarantee: Aviva guarantees that on maturity, the minimum maturity value will be the annualized premium multiplied by the policy term. Partial Withdrawals: Treasure Plus provides liquidity through partial withdrawals. Partial withdrawals are available during the last five years of the policy provided all due premiums under the policy have been paid and the policy term is greater than 10 years. Tax benefit: The premiums you pay are tax deductible under Section 80C and the maturity benefits are tax free under Section 10(10D) of the Income Tax Act, 1961.

2) GENERAL INSURANCE -Covers the events which may or may not happen.
-Relates to the assets.

LOAN SAFE :

Why do we need loan safe? -Cover to the earning member of the family- Death, disability and
critical illness leaves the family with no source of income to furnish the loan.

-Security for bank- Personal loan is not backed by any asset collateral. LS
take care of banks interest when genuine defaults caused due to the death or disability of the loanee.

What does Loan Safe protects? -Protects the customer in case of default due to reasons such as
Death of the applicant due to any accident or misfortune. Permanent total disability on account of an accident. Loss of employment. Loss of income due to critical illness hospitalization.

Coverage-principal
-Covers complete outstanding principal on the day of the event in the event of Death. Permanent total disability due to an accident.

What are critical illnesses? -Illness covered

Cancer. Myocardial infarction (heart attack). Stroke. Coronary Artery Bypass Surgery. End stage renal failure Major Organ transplant. Paralysis. End stage lever disease. Heart Valve replacement.

What is not covered?

Death from intentional self- injury, suicide or attempted suicide. War and acts of terrorism. Pre existing condition. Any critical illness discovered within 90 days of inception of the policy. Unemployment arising within 90 days of inception of the policy. Unemployment arising due to the reasons known to the insured. Resignation, VRS, super annuation or early retirement.

Loan safe Eligibility

Age at entry: 20 to 50 years. Minimum loan tenure: 12 months. Maximum loan tenure: 60 months.

Maximum amount covered: Rs.25 lakhs.

For self employed: only death and disability covers are available.
10% discount on premium available.

Loan safe-easy process

Just one sign Confirm the application for loan safe. Confirm that application is medically fit and doesnt suffer from CIs- in case CI suffered from tick the box the same would be excluded from the cover. HDFC BANK funds the premium along with the loan. Customer pays EMIs of premium (loaded with the loan EMI). Cover commences from first disbursement or IL received premiumwhichever is later.

Loan safe sales process

UBO to approach customer for loan sourcing. Pitch made for loan safe before sanction. Customers agree to take loan safe. UBO calculates premium, indicates tentative EMI payable (if funded by bank). UBO to give case to credit OPS for sanction. File to contain signed health declaration form from customer. UBO to write Loan Safe on file.

Pricing- Salaried Individuals

Premium range (Function of Loan Amount) Age : 20-50 years. Tenor: 1-5 years

Policy Period Loan period Age group 20-25 26-30 31-35 36-40 41-45

1 1 0.32% 0.32% 0.35% 0.41% 0.59%

2 2 0.56% 0.56% 0.62% 0.74% 1.08%

3 3 0.85% 0.85% 0.94% 1.17% 1.69%

4 4 1.15% 1.15% 1.27% 1.62% 2.33%

5 5 1.44% 1.44% 1.59% 2.11% 3.01%

46-50

0.83%

1.43%

2.30%

3.27%

4.36%

Claims Process
Customer lodges his claim at IL call center. Trigger Non-payment of EMI Bank sends notice to borrower. Customer is unable to pay the amount due : Borrower /Nominee submits proof of the event within 60 days. Bank forwards completed claim form along with supporting documents to IL. IL verifies claim and releases the payment to the bank. IL selects the claims in 21 days.

MOTOR INSURANCE:
Motor Insurance- Product and Type
Covers under the policy: Loss or Damage to vehicle. Third Party cover.

Type of insurance covers

Comprehensive cover Third party policy

Motor Insurance- Nature

Cover of asset for 1 year annual policy- renewal. Follow up for renewal at date of expiry of cover. Data base exercise Name and contact number. Make and model of the vehicle. Manufacturing year and month.(Purchase details) RTO location. No claim bonus. Date/Month of expiry.

Risk Guidelines
Only vehicles for personal use will be insured (T permit not insured). Only vehicles up to 7 tears of age will be insured.

Obsolete vehicles will not be insured. Five running vehicles will not be insured. Omni Versa Sumo Quails Travera

Documentation
In case of rollover Proposal Form Previous policy /cover note copy Renewal notice OR NCB Declaration Registration certificate Break in insurance report, if any Cheque/ Deposit Slip

Claims Process
Customer calls on 24/7 call center and claims the policy amount. The call center forwards the request to the IL claim department or suggests the customer a nearest Garage viz also referred as TRAUMA ASSISTANCE. IL claim department sends a surveyor to the garage. Customer settles the bills with the garage and IL reimburses the claim to the customer. OR, Customer picks the vehicle from the garage and goes home in a cashless settlement form and bills are settled by IL.

Selling points of HDFC BANK:

Cashless claim settlement facility-fast. Claim reimbursement in 5 days. 24/7 call center. Online policies.

FAMILY SHIELD:
How does family shield benefit customers?
Covers medical expenses during hospitalization.

 Medical expenses for a 30 day period immediately before hospitalization. Medical expenses for a 60 day period immediately after hospitalization.

Family shield-Floater Cover What is floater plan and how does it benefit customers?
All members of the family can covered under one single policy. The amount of cover (limited) covered floats over the entire family. No need to insure individual members separately. No hassles of tracking renewals for different members.

Family shield- eligibility

Minimum age: 3 months Maximum age: 60 years Medical tests for applicants above the age of 55 years at HDFC BANK designated centers. Children below the age of 5 years can be accommodated only in the floater plan.

Choice of cover amount

Rs.2 lakh per family Rs.3 lakh per family

Options also available to cover individuals separately. Rs.1 lakh, Rs.2 lakh and Rs.3 lakh for individuals.

Family Shield- Selling points

Floater cover. One/two year cover. Cashless facility (over 2000 renowned hospitals). Money back /no claim bonus. Convalescence cash benefit (10k on 10 days of hospitalizations). Income tax deduction up to Rs.10 k u/s 80 D. Free medical check op on two year floater covers.

Exclusions
Non-allopathic treatments. AIDS/HIV, obesity related treatments or diseases due to alcohol abuse

 Maternity or pregnancy related treatments. Pre- existing diseases covered after the 4th year. Cooling period for illness during the first 30 days of the policy. Two year exclusions.

Claims Planned Hospitalization

Customer to contact service provide (TPA) help- line no: 1600 44 8855 Mentioned in the health identity card. Customer to fax/ submit required documents e.g. Doctors certificate, etc. Obtain approval from the TPA Authorization for network /non-network hospitals obtained. Bill settlement by the TPA For networked hospitals bills will be settled directly with the hospitals. For Non- networked hospitals-bills will be settled by patient and the relevant documents, bills to be submitted to TPA. The amount will be reimbursed to the patient.

Claims Emerging Hospitalizations

TRAVEL INSURANCE:
Basic product:
Medical cover outside India Repatriation of remains in case of death.

Add on covers: E.G.:

PA cover Third party liability Passport loss Checked in loss of baggage Checked in delay of flight Financial emergency assistance Hijack distress allowance Home and content insurance

Premium calculation:
Destination(US and Canada / rest of the world) Age of the traveler

Duration of stay Choose your plan Silver. Gold. Platinum. Salt & pepper (for age group above 70 years).

Choose your sum insured

(50 k /100 k / 250 k / 500 k)

Selling points
32 plan options to take care of all price brands and requirements. Premium charged on a per day basis- savings Fast claim settlement within 7 days Covers pre- existing illness and maturity in life threatening situations.

HOME INSURANCE:
Home insurance covers:
Structure- The cost of construction of the house land is not insured since despite all natural and man made calamities, the land would remain intact. Contents- the cost of reinstatement or replacement of the contents.

Covers under structure:

Fire Explosion/ implosion Lightening Storms Tempest Floods Inundation Riots, strikes, malicious damage Missile testing operations Landslide, rockslide and subsidence Leakage from overhead tanks Impact damage Air craft damage Bush fire Earth quake

Exclusions under home insurance

Wear and tear Consequential loss Terrorism War, nuclear activities Theft Direct/ indirect involvement of owner/ domestic servant in the burglary

Insurance of contents
Besides fire and earthquake, the contents of a house can also be insured against burglary.

Sum Insured
Sum insured can be calculated as: Cost of construction per sq. ft. (Rs.750/- to Rs.1200/-) * built up area of the flat The maximum possible claim is up to the sum insured.

E-BROKING:
HDFC BANKoffers one-stop-solutions for all your Capital Market needs. The services include E-Broking, Savings Bank Account and Demat. Now you can enjoy the convenience of investing in a quick and riskreducing mechanism.

E-Broking: Trading in a smart way!

HDFC BANK in alliance with IL&FS Investsmart brings to you E-broking Services - Online and Offline. This alliance will offer you seamless stock trading due to electronic linkages of trading account, your banking account and demat account with high security online features. As a HDFC BANKcustomer, you'll get an array of customised online trading products offered by IL&FS Investsmart. You will be empowered with realtime streaming quotes, charts, alerts, portfolio, etc. You can also get historical financial data and charts, and advance technical analysis.

The HDFC BANKBroking services provides following benefits:

Triple Advantage -Banking account, Demat

account and Broking services at one terminal

Seamless settlement of securities and funds - Automatic delivery of shares from and

into your HDFC BANK Demat account. Credit of sale proceeds into your HDFC BANK banking account on settlement dates Trading in BSE, NSE and derivatives from a single screen.

High online security since all transactions

executed are in a safe and secure environment as it uses 128 bit SSL (Secure Socket Layer) technology

Speed - Orders are placed electronically and

executed instantaneously

E-mail confirmation of trades at the end of the day

Dial-a-trade provides you opportunity to trade over phone and take care of your enquiries

How do I Trade?

Online Process:

You log on to HDFC BANK's website www.hdfcbank.com Then click on the Online Trading icon and you will be directed to the Investsmart trading website. On the trading site there will be two levels of security to enter into the trading system. As a first step you will have to enter your user id and password provided to you. You will be logged in. Then, select the "smart invest" option from the drop down menu. You will be directed to the page where you will have to enter your trading password provided to you. Now you are ready to set up your preferred market watch and put in your trades.

The trading system of IL&FS Investsmart will provide an online link to the DP account of the customer. You will have the following options To sell the securities lying in your demat account with HDFC BANK Investsmart will set up limits to you for trading upto four times the value of securities lying in your demat account with HDFC BANK. You can also use the payment gateway to transfer funds to Investsmart from your banking account with HDFC BANK. Your trading limits will be calculated on the basis of your cash balance plus the value of the securities lying in your demat account with HDFC BANK

Offline Process:

You can also trade offline. Call from anywhere House, Office or even when you are travelling.

Settlement of Trade:
Shares sold will be automatically delivered to Investsmart by debiting your demat account with HDFC BANKand sales proceeds will be credited on the pay out day (currently T+2 days) to your banking account with HDFC BANK. In case of purchases, the shares will be credited to your demat account with HDFC BANKon the payout day (currently T+2 days). This ensures seamless settlement of both funds and securities for you.

Documents required to open the online/offline trading account:

The following documents will have to be filled by you: 1.IL&FS Investsmart Online Trading account opening form 2.Joint Power of Attorney (PoA) in favour of Centurion Bank of Punjab and IL&FS Investsmart. 3. In case you do not hold the banking account and/or DP account with us, then you will be required to open the same. The online trading account opening form of IL&FS Investsmart is a consolidated docket containing the agreements of BSE, NSE and F&O.

You will designate the HDFC BAN Kbank account and DP account for online/offline trading and mention the same in PoA

The various trading platforms offered by IL&FS Investsmart:

The following different options are available to cater to different needs of an investor:

Browser based product, called SmartInvest Desktop software (an exe. Product), called SmartTrade

SmartInvest:
SmartInvest is a browser-based system designed for customers who transact occasionally. It is ideal for investors who believe in the Buy and Hold approach towards investment in equities. SmartInvest's capability as a browser-based trading platform gives you the benefit of real-time streaming data with the flexibility of trading on any Internet capable system. With access to both the NSE & BSE, you are in the driver's seat when routing your order to the best price on either of the exchanges. SmartInvest's sophisticated yet easy to use point and click order entry interface allows you to react more quickly to the markets and make better decisions.

Features of SmartTrade:
Fully Customizable display Dynamic Charts with Indicators EOD Charts Real-Time market data Advanced Alert capabilities Live order status Track your orders real time Real time position updates Dynamic buying power

Derivative chain Lock terminal option Message window docking

Tariff: Account Opening Fee:

SMART INVEST: Rs 500/SMART TRADE: Rs 1000/-

Monthly Access Charges:

SMART INVEST: NIL SMART TRADE: Rs. 500/- per month, to be debited at the start of the month. The access charges or Rs. 500/- will be refunded to the client if his brokerage is in excess of Rs. 1,000/- in a month.

Brokerage:
Delivery Trade: 0.50 % + Statutory Costs Intraday Trade: 0.10 % + Statutory Costs for each Leg. Derivative Trade: 0.10 % + Statutory Costs for each Leg.

PERCENTAGE OF ACCOUNT HOLDERS

5% 5 ANALYSIS AND INTERPRETATION 5% 5

YES NO

Q1) Do you have an account with HDFC BANK? TABLE NO: 1

TYPE OF ACCOUNT

7% Inference: out of the sample of 150, 44% of people had an account with HDFC BANK.

33% 26%

Q2) Which account do you have? TABLE NO: 2

CA SA FDR CC/OD/LA

34%

PEOPLE AVAILED LOANS

Inference: out of the positive respondents, 26%
replied of operating current account,34% savings account ,26% FDRs and 7% cc/overdraft and loan account.

37%

Q3) Have you availed any loan from HDFC BANK? TABLE NO: 3
63%

YES NO

TYPE OF LOAN

Inference: The analysis of the questionnaires depict

that 37% of the respondents included the customers of 8% loan facilities offered by HDFC BANK. 11% 36% Two-Wheeler Home Personal Property Agricultural Construction Equipment Education Auto Commercial Vehicle

Q4) which loan have you availed?

17%

TABLE NO: 4
3% 11% 4% 3% 7%

INSURANCE HOLDERS

Inference: HDFC BANK offers various options for

loans. Out of the sample selected for research purpose, the maximum respondents were those who had availed the two-wheeler loan from HDFC BANK.

48%

Q5) Have you availed any insurance from HDFC

BANK

52%

YES NO

TABLE NO: 5

TYPE OF INSURANCE

Inference: 48% of people out of the selected

sample availed the insurance from HDFC BANK and rest 52% showed a negative response. 13%

8%

46%

HEALTH MOTOR MEDICAL GENERAL

Q6) Which insurance policy have you availed? TABLE NO: 6

33%

Inference: Out of the positive respondents, 46%

customers were those who availed health insurance schemes by HDFC BANK, 33% for motor insurance, 13% for medical and 8% for general insurance.

Q7) Have you invested in Mutual Fund schemes of

HDFC BANK? TABLE NO: 7

MUTUAL FUND INVESTORS

37%

YES NO

63%

Inference: out of the sample chosen 37% people

included the customers of HDFC BANK mutual fund schemes.

Q8) From where did you come to know about HDFC

BANK?

TABLE NO: 8

SOURCE OF AWARENESS

5% 8% 5%

16%

33%

33%

FRIENDS ARTICLES NEWSPAPER INTERNET RELATIVES OTHERS

Inference: HDFC BANK has shown a remarkable

growth since the merger of the two banks. The awareness from different sources amidst the customers was as follows: 16% through friends,33% via articles, 33%, 5%,8% and 5% from newspapers, internet, relatives and other sources respectively.

Q9) Reason for preferring deposits in HDFC

BANK?

TABLE NO: 9

REASONS FOR DEPOSITS

19%

43%

RATE OF INTEREST CUSTOMER SERVICE LEGAL FORMALITIES OTHERS

19%

19%

Inference: The customers who had made deposits

with HDFC BANK in either of the accounts showed a ratio of 43% for rate of interest preference, 19% for customer services, another 19% due to legal formalities and rest 19% due to other minor factors.

Q10) Reason for availing loan from HDFC BANK? TABLE NO: 10

REASON FOR AVAILING LOAN

13%

14%

38%

LOW INTEREST TAX BENEFIT QUICK DISPOSAL OTHERS

35%

Inference: those, who had availed the loans,

preferred the loan from HDFC BANK because of low interest up till the extent of 38% customers, 35% due to the tax benefit and 14% and 13% because of quick disposal and other sundry reasons.

Q11) Reason for investing in Mutual Funds via

HDFC BANK

TABLE NO: 11

REASONS FOR INVESTING

19% 31% RATE OF RETURN TAX BENEFIT RISK COVERAGE EASY PAYMENTS

15%

35%

Inference: customers who had invested their sums in

HDFC BANK held different reasons to make investments but, 31 % invested the amount because of high rate of return,35% due to tax benefits,15% for risk coverage benefits and 19% due to the facility of easy payments via installments.

Q12) Reason for not dealing with HDFC BANK? TABLE NO: 12

RESONS FOR NOT DEALING

4% 16% LACK OF AWARENESS POOR SERVICES 50% LOW RATE LOW LEVEL OF SECURITY

30%

Inference: out of the non-customers, 50% people are

unaware of the various services and products offered by HDFC BANK and 30% due to poor services, 16% due to low rate of return and 4% due to low level of security.

Q13) Opinion regarding the services of HDFC

BANK?

TABLE NO: 13

OPINION REGARDING SERVICES

22% 33% HIGHLY SATISFIED SATISFIED DISSATISFIED HIGHLY DISSATISFIED

17%

28%

Inference: in the sample of 150, the customers of

HDFC BANK have disparities in their opinions about the

services of HDFC BANK.33% customers present a highly satisfactory response, 28% satisfactory, 17% feel dissatisfied while, rest 22 % is completely dissatisfied by the services on various grounds.

FINDINGS
After the overall research conducted at HDFC BANKand study made on the products and services of its Retail Banking segment I have observed the following points: HDFC BANKhas shown a tremendous growth rate over the past years. The ratio of customers opting for FDRs is considerably high as compared to other accounts. The preference amongst the customers for the various loans offered at HDFC BANK has shown an enhancing trend over last two years. As it has been said that every coin has two faces, Inspite of all such positive observations certain discrepancies are also observed: The awareness of products and services offered by HDFC BANK, amidst customers is very less. There is a lack of concentration by management with regard to promotional activities. There is no ad campaigns organized to promote the preference, of services offered, amongst customers. Due to lack of account opening facilities at zero balance and precisely below Rs.5,000/- , the customers belonging to low income level are refrained to avail services of HDFC BANK.

SUGGESTIONS
The success of every organization depends on its ability as to how it communicates its caliber to its prospective and potential customers. With regard to HDFC BANK, I opine that the organization should concentrate on promoting its products and services so as to build brand preference amidst its customers.

 The quality of customer service shall also be improved to some extent. The facility of account opening below the balance of Rs.5000/- shall also be offered to serve the population belonging to the low income group. There shall be equal emphasis on quality improvement in terms of services offered to meet the prevailing competition level. There should be periodical customer meets conducted so as to know the various problems or grievances of the customers. This would also help the organization to improve upon its service quality. The rate on fixed deposits i.e. 9.5% is an competitive strategy adopted by the bank but as these rate of interests are flexible and are subject to change over different time periods a regular market research should be undertaken so as to gain the advantage of this USP (unique selling proposition). Even with regards to the Demat accounts the customers should be made aware of where and how are their funds utilized for capital maximization. The organization can tie up with various business associates to build the preference for loan appraisal by public.

CONCLUSION
On the basis of all the findings, I conclude my research project as follows: Though an upward trend has been observed in the performance of the bank, it can also be stated that awareness level amongst the customers about the product needs to be further worked upon because at the growing state of our economy, there is a lot more to be achieved. The customer services also need to be improved further because of the growing competition among the various upcoming banks both belonging to public and private sector. If a little more heed is concentrated towards the promotional campaigns, the performance would improve to a large extent. The rate of return on FDRs offered by HDFC BANK is comparatively more than the other banks. Retail banking segment has a bright opportunity for growth due to the favorable demographics and increasing rate of economic growth of our nation.

BIBLIOGRAPHY Secondary Data:

Books:
C R Kothari , Research Methodology, Second Edition - 2004 Sales Kit, HDFC BANK- 2007

Internet:
www.hdfcbank.com www.google.com www.dogpile.com www.yahoo.com www.moneycontrol.com www.welingkarblogs.com http://finance.indiamart.com/ http://icfaiuniversitypress.com/ www.ibef.org http://finance.indiamart.com/investment_in_ind

ia.html

QUESTIONNAIRE
NAME : ----------------------------------------------------ADDRESS : -------------------------------------------------------------------------------------------------------OCCUPATION : ----------------------------------------------------GENDER : ----------------------------------------------------PHONE NO. :-----------------------------------------------------ANNUAL INCOME: ---------------------------------------------------Q1) Do you have an account in HDFC BANK? Yes Q2) Which account do you have? Current Savings FDR CC/OD/LA No

Q3) Have you availed any loan from HDFC BANK? Yes Q4) Which loan have you availed? Two wheeler Home Education loans Personal Property Agricultural No

Auto Commercial vehicle

Construction equipment

Q5) Have you availed any insurance from HDFC BANK? Yes No

Q6) which insurance policy have you availed? Health Medical General Motor

Q7) Have you invested in Mutual Fund schemes of HDFC BANK? Yes No Q8) From where did you come to know about HDFC BANK? Friends Articles Newspapers Internet Relatives Other

Q9) Reason for preferring deposits in HDFC BANK? Rate of return Custo mer services Less formalities Other

Q10) Reason for availing loan from HDFC BANK? Low interest Quick disposal Tax benefit Other Q11) Reason for investing in Mutual Funds via HDFC BANK? Rate of return Risk coverage Tax benefit Easy payment

Q12) Reason for not dealing with HDFC BANK?

Lack of awareness Poor services

Low level of security Low rate of return

Q13) Opinion regarding the services of HDFC BANK? Highly satisfied Satisfied Q14) Any suggestions: Dissatisfied Highly dissatisfied

Dated: