4th sem projct.docx

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Transcript of 4th sem projct.docx

INTRODUCTION OF INDIAN BANKING INDUSTRYBanking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865.By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.At the end of late-18th century, there were hardly any bank in India in the modern sense of the term. At the time of the American Civil War, a void was created as the supply of cotton to Lancashire stopped from the Americas. Some banks were opened at that time which functioned as entities to finance industry, including speculative trades in cotton. With large exposure to speculative ventures, most of the banks opened in India during that period could not survive and failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century.The Bank of Bengal, which later became the State Bank of India.

BANKINGBanks have played a pivotal role in the process of development of the district over the years, especially after the formation of the district in 1993. Apart from dispensing credit, the Banks have also brought about social changes. The contribution of the banking sector in the field of overall development of the district is elaborated in the following paragraphs.At the beginning of the 20th century, Indian economy was passing through a relative period of stability. Around five decades have elapsed since the India's First war of Independence, and the social, industrial and other infrastructure have developed. At that time there were very small banks operated by Indians, and most of them were owned and operated by particular communities. The banking in India was controlled and dominated by the presidency banks, namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras - which later on merged to form the Imperial Bank of India, and Imperial Bank of India, upon India's independence, was renamed the State Bank of India. There were also some exchange banks, as also a number of Indian joint stock banks. All these banks operated in different segments of the economy.The presidency banks were like the central banks and discharged most of the functions of central banks. They were established under charters from the British East India Company. The exchange banks, mostly owned by the Europeans, concentrated on financing of foreign trade. Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency banks, and the exchange banks. There was potential for many new banks as the economy was growing. Lord Carson had observed then in the context of Indian banking: "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments.Under these circumstances, many Indians came forward to set up banks, and many banks were set up at that time, a number of which have survived to the present such as Bank of India and Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank.Indian banking sector can be divided mainly into four broad categories namely public sector Banks, old private sector banks, new private sector banks, and foreign banks. The other categories of banks include co-operative banks and regional rural banks. Since these banks dont form a substantial chunk of the banking system, we will focus on the first four categories.

BANKING SYSTEM IN INDIA

BANKS IN INDIA

FOREIGN BANKSCENTRAL BANKNATIONALISEDBANKSPRIVATE BANKS

CENTRAL BANK: RESERVE BANK OF INDIANATIONALISED BANK IN INDIAThe Banking System in India is dominated by nationalized banks. The Nationalization of Banks in India took place in 1969 by Mrs. Indira Gandhi the then Prime Minister. The major objective Behind Nationalization Banks was to spread banking Infrastructure in Rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. These Banks were State Bank of India Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank Union Bank of India

PRIVATE BANK IN INDIAAll the banks in India were earlier private banks. They were founded in the pre-independence era to cater to the banking needs of the people. But after nationalization of banks in 1969 public sector banks came to occupy dominant role in the banking structure. Private sector banking in India received a fillip in 1994 when Reserve Bank of India encouraged setting up of private banks as part of its policy of liberalization of the Indian Banking Industry. Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Axis Bank Bank of Rajasthan Catholic Syrian Bank Centurion Bank of Punjab City Union Bank Development Credit Bank Dhanalakshmi Bank Federal Bank Ganesh Bank of Kurundwad HDFC Bank ICICI Bank IDBI Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank Limited KarurVysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Lord Krishna Bank Nainital Bank Ratnakar Bank SBI Commercial and International Bank

FOREIGN BANKS IN INDIAForeign Banks are likely to succeed in their niche markets and be the innovators in terms of technology introduction in the domestic scenario. The outlook for the private sector banks indeed looks to be more promising vis--vis other banks. While their focused operations lower but more productive employee force etc will stand them good, possible acquisitions of PSU banks will definitely give them the much needed scale of operations and access to lower cost of funds. Standard charted Bank Deutsche Bank Bank of America Citi Bank ABN Amro Bank HSBC Bank

CBS NETWORKINGCore Banking Solutions is new jargon frequently used in banking circles of India.The advancement in technology especially internet and information technology has led to new way of doing business in banking. The technologies have cut down time ,working simultaneously on different issues and increased efficiency. The platform where communication technology and information technology are merged to suit core needs of banking is known as Core Banking Solutions. Here computer software is developed to perform core operations of banking like recording of transactions, passbook maintenance, interest calculations on loans and deposits, customer records, balance of payments and withdrawal are done. This software is installed at different branches of bank and then interconnected by means of communication lines like telephones, satellite, internet etc. It allows the user (customers) to operate accounts from any branch if it has installed core banking solutions. This new platform has changed the way banks are working.

HISTORY OF BANKINGThe period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for the Indian banking. The years of the First World War were turbulent, and it took toll of many banks which simply collapsed despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed during the years 1913 to 1918 as indicated in the following table:YearsNumber of banksthat failedAuthorized capital(Rs. Lacs)Paid-up Capital(Rs. Lac)

19131227435

191442710109

191511565

1916132314

191797625

191872091

POSTINDEPENDENCEThe partition of India in 1947 had adversely impacted the economies of Punjab and West Bengal, and banking activities had remained paralyzed for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:1. In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.2. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."3. The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors.However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19th July, 1969

NATIONALISATIONBy the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large employer, and a debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Actuation and Transfer of Undertaking) Bill, and it received the presidential approval on 9th August, 1969.A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India.After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

LIBERALISATIONIn the early 1990s the then NarasimhaRao government embarked on a policy of liberalization and gave licenses to a small number of private banks, which came to be known as New Generation tech-savvy banks, which included banks such as UTI Bank(now re-named as Axis Bank) (the first of such new generation banks to be set up), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, kick started the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 49% with some restrictions.The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more.CURRENT SITUATIONCurrently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomousBody with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M & A as, takeovers, and asset sales.In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them.Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. BANKING NETWORKThe total number of branches has gone up from 81 to 93 during the last decade to cater to the banking need of thegrowing population of the district. The number of branches of each bank operating in the district is as under.S NoName of the BanksNo. of Branches.

1.Andhra Bank2

2.Bank of Baroda4

3.Bank of India1

4.Canara Bank1

5.Indian Overseas Bank5

6.Indian Bank1

7.Punjab National Bank1

8.State Bank of India14

9.United Bank3

10.United Commercial Bank14

11.Union Bank2

12.Syndicate Bank1

13.DhenkanalGramya Bank27

14.Angul United Central Co-op.Bank12

15.CARD Bank4

16.Orissa State Co-op. Bank1

17.Orissa State Financial Corporation1

T o t a l93

Apart from a good network of Bank branches, NABARD is having its district office at Dhenkanal with operational area in Angul district also. The major activities of NABARD in the areas of Planning, Coordination, Monitoring and Development is being accomplished through preparation of Potential Linked Credit Plan as a fore runner of SAP, participation in various meetings and with an effective rapport with the officials of government, banks, NGOs etc.Under the Lead Bank Scheme evolved by Reserve Bank of India, the lead bank responsibility is shouldered by United Commercial Bank having its office at Angul. The Lead District Manager coordinates and monitors the preparation and implementation of Annual Credit Plans and various government programmes. Dhenkanal Gramya Banksponsored by Indian Overseas Bank is operating in this district.

DEPOSITSThe overall deposits of the banks together has increased manifold during the last decade. The total deposits of Rs.161.45 crores at the end ofMarch, 1994 have swelled to a tune of Rs.961.99 crores by the endof financial year 2002-2003. The Commercial Banks have a lions share in the deposit portfolio having 80% of the market share followed by RRB and CCB with 11% and 9% market share respectively.

ADVANCESThe overall advances of the banks have shown an increasingtrend during the last decade. At the end of March 1994 the total outstanding advances stood at a level of Rs.62.41 crores, which has gone up to a level of Rs.390.96 croresat the end of March, 2003. The priority sector has a share of Rs.259.29 crores i.e. 66% of the total advances, of which Agriculture constitute Rs.87.93 crores i.e. 22% of the total advances.The Commercial Banks have the maximum share of 55% in the advances portfolio, followed by RRB, CCB and other financing institutions with 22%, 15% and 8% share respectively.The credit dispensed has also increased manifold during the last decade. Rs.154.99 crores of credit was dispensed during 2002-03 compared to Rs.16.02 crores dispensed during 1993-94. Under this portfolio, the share of commercial banks was also highest at Rs.85.30 crores constituting 55% of the total credit deployment followed by RRB, CCB and other financial institutions with a share of 27%, 17% & 1% respectively. The trend in credit deployment under various purposes has also undergone change by addition of new areas of financing like housing, education, consumer durable, transport etc. Nevertheless agriculture enjoys due importance. Rs. 42.95 crores has gone to this sector during 2002-03 as against Rs. 3.66 crores in 1993-94.GOVERNMENT SPONSORED PROGRAMMESIn order to fulfill social commitments, the banks in the district have come forward to extend financial assistance in respect of a plethora of government sponsored programmes so as to improve the living condition of the targetgroups through gainful employment. Some of the major programmes having the participation of banks are as under.The details of credit deployment of various banks operating in the district under the annual credit plans during the last decade are as under.(Rs.in lakes)Year/SectorsParticularsAgricultureNon-Farm sectorOther prioritySectorTotal priority sectorNon priority sectorTotal advance

1993-94Target5761322971,0054551,460

Achievement3661283758697331,602

1994-95Target4711873269842631,247

Achievement5721916101,3735971,970

1995-96Target8592557051,8193042,123

Achievement1,0242721,0652,3615442,905

1996-97Target1,1374201,1882,7453803,125

Achievement1,2353531,3482,9361,0914,027

1997-98Target1,8815311,8554,2674924,759

Achievement1,6682051,9623,8351,5115,346

1998-99Target2,1832892,0744,5451,9986,543

Achievement2,1822892,0744,5451,9986,543

1999-2000Target2,7478572,3345,9381,2387,176

Achievement2,6022672,0894,9582,5227,470

2000-2001Target2,5387192,7447,0011,7048,705

Achievement2,7824782,3915,6513,7759,426

2001-2002Target4,1268212,9487,8952,20010,095

Achievement3,3403465,4799,1655,60714,772

2002-2003Target48908954,32310,0982,94513,043

Achievement42952115,1769,6825,81715,499

RECOVERY OF BANK DUESThe recovery of bank dues has not been commensurate with the growth of loans and advances. Though in terms of absolute figures the recovery has gone up substantially, the same in percentage term has shown a moderate change and has settled at 45-50% during the last few years. The poor recovery has adversely affected the CARD bank, which has weakened the financial strength of this part of the banking structure. The liberal measures to augment recovery like One Time Settlement Scheme of RBI and the various compromise settlement schemes of respective banks have contributed in the percentage increase in recovery of bank dues.

MAJOR PLAYERS OF BANKING SECTORPRIVATE BANK IN INDIA ICICI Bank HDFC Bank IDBI Bank Indusland Bank Centurian Bank Axis Bank

PUBLIC BANKS IN INDIA State bank of India Bank of Baroda Bank of India Corporation Bank Oriental Bank of commerce State Bank of Hyderabad Dena BankFOREIGN BANKS IN INDIA Standard charted Bank Deutsche Bank Bank of America Citi Bank ABN Amero Bank HSBC BankBanks play a positive role in economic development of a country as repositories of communitys savings and as purveyors of credit. Indian Banking has aided the economic development during the last fifty years in an effective way. As recourse to this, the commercial banks opened branches in urban, semi-urban and rural areas and have introduced a number of attractive schemes to foster economic development. Banks have been playing a catalytic role in area development, backward area development, extended assistance to rural development all along helping agriculture, industry, international trade in a significant manner. In a way, commercial banks have emerged as key financial agencies for rapid economic development. By contributing to government securities, bonds and debentures of term-lending institutions in the fields of agriculture, industries and now housing, banks are also providing these institutions with an access to the common pool of savings mobilized by them, to that extent relieving them of the responsibility of directly approaching the saver. A country like India, with different regions at different stages of development, presents an interesting spectrum of the evolving role of banks, in the matter of inter-mediation and beyond. And banks have to place considerable reliance on the mobilization of deposits from the public to finance development programmes.Commercial banks provide short-term and medium-term financial assistance. The short-term credit facilities are granted for working capital requirements. The medium-term loans are for the acquisition of land, construction of factory premises and purchase of machinery and equipment. These loans are generally granted for periods ranging from five to seven years. Certain transaction, particularly those in contracts of sale of Government Departments, may require guarantees being issued in lieu of security earnest money deposits for release of advance money, supply of raw materials for processing, full payment of bills on the assurance of the performance etc. Commercial banks issue such guarantees also.RBI is governed by a central board (headed by a Governor) appointed by the Central Government.The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years.Supervisory Functions: The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949 have given the RBI wide powers of supervision and control over commercial and cooperative banks, relating to licensing and establishments, branch expansion, liquidity of their assets, management and methods of working, amalgamation, reconstruction and liquidation. The nationalization of 14 major Indian scheduled banks in July 1969 has imposed new responsibilities on the RBI for directing the growth of banking and credit policies towards more rapid development of the economy and realization of certain desired social objectives. Promotional Functions: The Bank now performs a variety of developmental and promotional functions, which, at one time, were regarded as outside the normal scope of central banking. Accordingly, the Reserve bank has helped in the setting up of the IFCI and the SFC: it set up the Deposit Insurance Corporation of India in 1963 and the Industrial Reconstruction Corporation of India in 1972. As far back as 1935, the RBI set up the Agricultural Credit Department to provide agricultural credit. But only since 1951 the Banks role in this field has become extremely important.

The Co-operative bank has a history of almost 100 years. The Co-operative banks are an important constituent of the Indian Financial System, judging by the role assigned to them, the expectations they are supposed to fulfill, their number, and the number of offices they operate. Their role in rural financing continues to be important even today, and their business in the urban areas also has increased phenomenally in recent years mainly due to the sharp increase in the number of co-operative banks. along with some small scale industries and self-employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for self-employment, industries, small scale units, home finance, consumer finance, personal finance, etc.According to NAFCUB the total deposits &lendings of Co-operative Banks is much more than Old Private Sector Banks & also the New Private Sector Banks.Though registered under the Co-operative Societies Act of the Respective States (where formed originally) the banking related activities of the co-operative banks are also regulated by the Reserve Bank of India. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.(a) Short term lending oriented co-operative Banks within this category there are three sub categories of banks viz state co-operative banks, District co-operative banks and Primary Agricultural co-operative societies.Features of Cooperative Banks They function with the rule of one member, one vote. Function on no profit, no loss basis. Co-operative banks, as a principle, do not pursue the goal of profit maximization. Co-operative bank performs all the main banking functions of deposit mobilization, supply of credit and provision of remittance facilities.Co-operative Banks provide limited banking products and are functionally specialists in agriculture related products. However, co-operative banks now provide housing loans also.The State Co-operative Banks (SCBs), Central Co-operative Banks (CCBs) and Urban Co-operative Banks (UCBs) can normally extend housing loans uptoRs 1 lakh to an individual. The scheduled UCBs, however, can lend uptoRs 3 lakh for housing purposes. The urban and non-agricultural business of these banks has grown over the years. The co-operative banks demonstrate a shift from rural to urban, while the commercial banks, from urban to rural. They get financial and other help from the Reserve Bank of India NABARD, central government and state governments. For commercial banks, the Reserve Bank of India is lender of last resort, but co-operative banks it is the lender of first resort which provides financial resources in the form of contribution to the initial capital (through state government), working capital, refinance. Primary agricultural credit societies provide short term and medium term loans.The sources of their funds (resources) are (a) central and state government, (b) the Reserve Bank of India and NABARD, (c) other co-operative institutions, (d) ownership funds and, (e) deposits or debenture issues.Inter-bank deposits, borrowings, and credit from a significant part of assets and liabilities of co-operative banks. Some co-operative banks are scheduled banks, while others are non-scheduled banks.Co-operative Banks are subject to CRR and liquidity requirements as other scheduled and non-scheduled banks are. Since 1966 the lending and deposit rate of commercial banks have been directly regulated by the Reserve Bank of India.Although the main aim of the co-operative bank is to provide cheaper credit to their members and not to maximize profits, they may access the money market to improve their income so as to remain viable.PRODUCTS AND SERVICES OFFERED BY BANKSThe different products in a bank can be broadly classified into: Trade Finance.Retail Banking and Trade finance operations are conducted at the branch level while the wholesale banking operations, which cover treasury operations, are at the hand office or a designated branch. Deposits Negotiating for Loans and advances Book-Keeping (maintaining all accounting records)Trade Finance: Drawing, accepting, discounting, buying, selling, collecting of bills of exchange, promissory notes, drafts, bill of lading and other securities. Buying and selling of bullion. Foreign exchange Purchasing and selling of bonds and securities on behalf of constituents.Apart from the above-mentioned functions of the bank, the bank provides a whole lot of other services like investment counseling for individuals, short-term funds management and portfolio management for individuals and companies.

Some of common available banking products are explained below:A credit card is nothing but a very small card containing a means of identification, such as a signature and a small photo.These bills are assembled in the bank and the amount is paid to the bank by the card holder totally or by installments. The bank charges the customer a small amount for these services. The card holder need not have to carry money/cash with him when he travels or goes for purchasing. The major players in the Credit Card market are the foreign banks and some big public sector banks like SBI and Bank of Baroda.2)Debit Cards: Debit Card is a prepaid or pay now card with some stored value. Debit Cards quickly debit or subtract money from ones savings account,or if one were taking out cash. To get a debit card along with a Personal Identification Number (PIN). The customer never overspread because the amount spent is debited immediately from the customers account. So, for the debit card to work, one must already have the money in the account to cover the transaction. Debit Card holder need not carry a bulky checkbook or large sums of cash when he/she goes at for shopping. The major limitation of Debit Card is that currently only some 3000-4000 shops country wide accepts it. Also, a person cant operate it in case the telephone lines are down.The ATMs are used by banks for making the customers dealing easier. ATM card is a device that allows customer who has an ATM card to perform routine banking transaction at any time without interacting with human teller. This can be done by inserting the card in the ATM and entering the Personal Identification Number and secret Password. It provides the customers with the ability to withdraw or deposit funds, check account balances, transfer funds and check statement information. To transfer money to and from accounts. To order cash.Advantages of ATMs: ATMs provide 24 hrs., 7 days and 365 days a year service. Privacy in transaction The transaction is completely secure you need to key in Personal Identification Number (Unique number for every customer). Alternative to extend banking hours. Alternative to new branches and to reduce operating expenses. Increased market penetration.The ATM services provided first by the foreign banks like Citibank, Grind lays bank and now by many private and public sector banks in India like ICICI Bank, HDFC Bank, SBI, UTI Bank etc. Over the past year up to 44 banks in Mumbai, Vashi and Thane, have became a part of SWADHAN a system of shared payments networks, introduced by the Indian Bank Association (IBA). The payer issue a digital cheques to the payee and the entire transactions are done through internet. Electronic version of cheques are issued, received and processed. The customer accesses the merchant server and the merchant server presents its goods to the customer. The merchant validates the e-cheque with its bank for payment authorisation. The merchants bank forwards the e-cheque to the clearing house for cashing. The merchants bank updates the merchants account.The e-chequing is a great boon to big corporate as well as small retailers. Most major banks accept e-cheques. Thus this system offers secure means of collecting payments, transferring value and managing cash flows. These banks are dispensing with the use of paper cheques. The system called electronic fund transfer (EFT) automatically transfers money from one account to another. In this system the sender and the receiver of funds may be located in different cities and may even bank with different banks.The other important type of facility in the EFT system is automated clearing houses. These are the computer centers that handle the bills meant for deposits and the bills meant for payment. In big companies pay is not disbursed by issued cheques or issuing cash.5) Telebanking: Telebanking refers to banking on phone services..a customer can access information about his/her account through a telephone call and by giving the coded Personal Identification Number (PIN) to the bank. To get a particular work done through the bank, the users may leave his instructions in the form of message with bank. Information on the current interest rates. Request for a DD or pay order.6) Mobile Banking: A new revolution in the realm of e-banking is the emergence of mobile banking. On-line banking is now moving to the mobile world, giving everybody with a mobile phone access to real-time banking services, regardless of their location. But there is much more to mobile banking from just on-lie banking. It provides a new way to pick up information and interact with the banks to carry out the relevant banking business. The potential of mobile banking is limitless and is expected to be a big success. Booking and paying for travel and even tickets is also expected to be a growth area.According to this system, customer can access account details on mobile using the Short Messaging System (SMS) technology6 where select data is pushed to the mobile device. The wireless application protocol (WAP) technology, which will allow user to surf the net on their mobiles to access anything and everything. Already ICICI and HDFC banks have tied up cellular service provides such as Airtel, Orange, Sky Cell, etc. in Delhi and Mumbai to offer these mobile banking services to their customers.The Internet Banking now is more of a normal rather than an exception due to the fact that it is the cheapest way of providing banking services. As indicated by McKinsey Quarterly research, presently traditional banking costs the banks, more than a dollar per person, ATM banking costs 27 cents and internet banking costs below 4 cents approximately. ICICI bank was the first one to offer Internet Banking in India. Reduce the transaction costs of offering several banking services and diminishes the need for longer numbers of expensive brick and mortar branches and staff. Increase customer loyalty. Attract new customers.

Electronic Cash: Companies are developing electronic replicas of all existing payment system: cash, cheque, credit cards and coins.Direct Deposits: Earnings (or Government payments) automatically deposited into bank accounts, saving time, effort and money.Point of Sale transactions: Acceptance of ATM/Cheque at retail stores and restaurants for payment of goods and services. This system has made functioning of the stock Market very smooth and efficient.9) Demat: Demat is short for de-materialization of shares. In short, Demat is a process where at the customers request the physical stock is converted into electronic entries in the depository system.How to Operate DEMAT ACCOUNT? After opening an account with any bank, by filling the demat request form one can handover the securities. There is no physical movement of share certification any more. Any buying or selling of shares is done via electronic transfers.2) The DP will debit hi s account with the number of shares sold by him.4) Payment for the electronic shares bought or sold is to be made in the same way as in the case of physical securities. Banking Services The receipt of the customers deposits The payment of the customers cheques drawn on himself1) Advances Overdraft, Cash Credit, etc.3) Financial Services Bill discounting etc.5) Money Transmission Funds transfer etc.7) Services of place or time ATM Services.

Customer service is the service provided in support of a banks core products. Customer service often includes answering questions; handling complaints. Quality customer service is essential to building cordial customer relationship.Customer service is the most important duty of the banking operations. Prompt and efficient service with smile will develop good public relations reduce complaints and increase business.

Changing customer expectations: Today the customer is more demanding and more sophisticated than he or she was thirty years ago. The need for a relationship strategy: To ensure that a customer service strategy that will create a value preposition for customers should be formulated implemented and controlled. It is necessary to give it a central role and not one that is subsumed in the various elements of the marketing mix.Quality, Consistency and Durability at low price are the final expectations of a customer. Quality will have to be unambiguous, of world class quality. Quality cannot be of minimum acceptable standards.The ten key areas of customers services to be attended timely and regularly are:ii. Updating of savings pass books.iv. Cleanliness and Upkeep of premises.vi. Advance intimation to customers for rewards of Term Deposits Receipts on maturity.

INTRODUCTION TO THE COMPANY

COMPANY PROFILE

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

Business ObjectivesThe primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial marketsSocial responsibilityThe social responsibility function at HDFC is not just restricted to a few specialists or narrowly defined set of activities packaged somewhere out of sight. It is a daily part of what the company strives to be: responsive, imaginative and sensitive in the way we treat our customers, business associates, shareholders, employees and the wider world in which we operate. The brief accounts of select grants from the Shelter Assistance Reserve and other initiatives described in the following pages are suggestive of our approach.The year 2005-06 marked a decade of HDFCs varied initiatives in the area of micro-finance with continued bulk-lending operations towards micro-enterprises and low-income housing. The year also saw India facing a terrible succession of natural calamities, from the floods in Mumbai and other parts of Maharashtra to the earthquake in the Himalayan region of Kashmir. HDFC joined hands with local level organisations to provide relief to the victims in the affected areas. In each case, the spirit and response of the people involved was characteristically generous and inspiring.Shelter Assistance ReserveDuring the year, HDFC extended support towards several social causes resulting in an overall utilisation of Rs. 476.56 lacs from the Shelter Assistance Reserve. This involved the funding of numerous development initiatives by way of grants to over 150 partner NGOs.The segment-wise break-up of the utilisation is highlighted in the chart below.Cited below are a few examples of projects funded by way of grant support out of the Shelter Assistance Reserve during 2005-06: Anandwan A way of lifeIt is said that there is no greater force in the universe than the one that drives the human spirit. Anandwan is a living epitome of the sheer dominance of the human spirit over an overtly misunderstood and stigma associated disease viz. leprosy. A township(just off the NagpurChandrapur highway)set up almost five decades ago by the non agenarianGandhian activist ShriMurlidharDevidas alias Baba Amte, Anandwan is synonymous with the welfare and settlement of persons afflicted by leprosy who are cast away by their families and society due to the shame and dishonor linked with this disease. Over a period of time the township has extended its humanitarian activities to any individual suffering from a physical handicap who is discarded by society.

Today, the township accommodates nearly 5000 inmates who are either leprosy inflectedor suffer from some physical handicap. These inmates are encouraged to lead a normal life and become self-reliant by way of gainful employment in a plastic re-cycle project and as agriculturists tending to the fields where cotton and wheat is grown.Residential units, which were built for the seinmates nearly 45 years ago, are now in a dilapidated condition and some of these,need to be reconstructed entirely. HDFC along with Sir Ratan Tata Trust has joined hands with the Maharogi SewaSamiti (a trust founded by Baba Amte) for part funding of the reconstruction and retrofitting expenses.

Kinship for childrenSOS Childrens Villages of India is a part of the worldwide SOS Childrens Village movement present in 131 countries across the world. SOS provides orphaned childrena closest alternative to a natural family i.e. a SOS family where they find the sanctuary of a home and a family to grow up with. Within the security of a family, children can grow-up into independent and responsible citizens of society. An SOS family typically consists of 9 or 10 children who live together with their SOS Mother in a family home. Each Village has between 10 to 20 family homes.SOS Childrens Villages of India has 34 Childrens Villages and 122 allied projects including facilities for Tibetan children. The organisation provides direct care to 15,000 children through its childrens villages and indirect care to nearly 200,000 children through various community programmes.SOS has recently started the Corporate for Child partnership where in the donor company can make a commitment towards adopting the education, health (including nutrition) and living expenses of an SOS family. HDFC has partnered with SOS Indiain adopting two families living in the SOS Childrens Village at Faridabad.

Ramakrishna Mission Students HomeThe Students Home Chennai which was established in 1905, is one of the oldest social service organisations in India and is a part of the Ramakrishna Mission, West Bengal.Originally the Mission had started a centre in Chennai to cater to the needs of orphaned and destitute boys. Free boarding and lodging was provided to the children but as the numbers grew the Mission decided to set up a Residential High School. Along with academic training the school also started providing vocational training and has now developed into a Residential Technical Institute.

Currently the Home provides boarding, lodging and education to 400 orphaned /destitute boys in the age bracket of 10-19.As part of its centenary, the school wants to add two new courses to the existing syllabus- Mechanical Engineering and Computer Technology. With the increase in the number of students attending the courses, the Home is building additional hostel facilities. HDFC has taken up the boarding and lodging expenses of the new students for a period of two years.

Childline @ Ten Nine EightA phone number that spells hope for millions of children across urban India(mostly the vulnerable ones on the street) CHILDLINE is a 24-hour, free, emergency phone service for children who are in need of any aid or assistance. Any concerned adult or a child in need of help can dial 1098, the toll free number to access Childlines services across the country. Childline responds not only for emergency needs but also links the children to services for their long-term care and rehabilitation.HDFC has partnered with Childline to support the extension of their existing center in Goa.Being a large tourist destination, Goa attractsa large number of foreigners and thereby increases the threat of child labour, paedophilia and child abuse, child trafficking etc. The existing Childline center works out of Panjim responding to calls made in and around North Goa. With the shift in migrant population to South Goa, the center saw the number of calls coming in from South Goa increase. It became difficult for the existingcenter to reach the child within the hour hence an extension of the center was required. HDFC has committed to partnering with Childline on this project for a period of 3 years.

NGOMela 2005Concern India Foundation has been organising NGO Melas (trade fair / exhibition)every year since 1995. This large-scale event serves as a platform for NGOs to present themselves, market their products and create awareness on their work. The Melas include demonstrations of various arts and crafts by skilled artisans who are otherwise unable to reach their products to the metropolitan clientele. The event also helps raise much needed financial resources for NGOs from across the country and enables them to network with each other while exposing them to a competitive market scenario.

This year, the NGO Mela was organised in Mumbai with HDFC as the main sponsor. Over 100 NGOs from all over the country participated in the event. These included NGOs working with youth, destitute children, women in distress, disabled persons, tribal communities and on issues such as environment, rural livelihoods etc.

Self-reliance Thru Skills & TrainingThe SPJ Sadhana School housed at Sophia College, Mumbai has been training physically and mentally handicapped students to develop their learning and basic skills over the last 32 years. A team of highly trained teachers and professionally qualified therapists, each of whom has hands on experience, look at making the best use of the capabilities and skills of the students such as nurturing the special talents each individual manifests and encouraging him/her to work on them.Years of such experience have crystallized into a five-year vocational course, which, while tapping a trainees special gift and fostering it, aims to equip that student to be launched into a self-reliant and productive life. The course covers training in art and crafts, tailoring, fast-food cookery and office. skills. Some of the projects of the SPJ Sadhana School have successfully metamorphosed into separate entities now operating as sister concerns, namely (i) The Shraddha Charitable Trust and (ii) Om Creations. The Shraddha Charitable Trust is a workshop providing productive support and training to students who have passed out of Sadhana School and takes pride in producing eco-friendly items only. The autistic adults receive intensive training for income-generating activities including sticking, painting, packing, sorting etc. and are then integrated into the workshop as full time workers for products ranging from bags to office folders to paper weights and several other household items.

The Om Creations on the other hand is a pioneering project of the Sadhana School for the girl students. Om Creations has a Catering section wherein the students are trained to make cookies, biscuits, pickles, sweets and other snacks with the help of instructors. The Trust also has an Art & Craft section wherein a variety of articles like handbags, gift bags, napkins, mats, jewelry pouches, trays, plates, mugs etc. are made.

These items are bought by retail department stores, grocery shops, corporate bodies and individuals and a part of the sales proceeds goes back to the adults giving them a sense of economic independence. HDFC has been regularly supporting the SPJ Sadhana School and its two sister organizations by providing grant funds towards their programme and infrastructure expenses and sponsoring their fund-raising events.

EMPLOYEE INITIATIVESRun Mumbai Run and it did!!Some ran with spirit, some with determination and some with causes but all with a heart. Seasoned athletes and puffing minnows alike hit the tarmac with a bang at the 3rd Mumbai Marathon held on January15, 2006. This year, the marathon saw the pounding of nearly 30,000 pairs of feet, setting the cash registers ringing. The event raised money for over 100 charities with the committed amount reaching close to Rs. 5 crore.Not to be left behind was team HDFC. A majority of the Mumbai region staff (148employees, almost twice of last year) and some with their families and friends participated in the Dream Run of 7 Km in support of two Mumbai-based NGOs ALERT India and Child line India Foundation.Aids Walk for Life 13 States 300 cities Over 6,000 Kms 36 exemplary individuals Over 2 million educated on an oft-misunderstood and stigma associated disease

After covering 6,800 Kms across thirteen states in the country, The AIDS Walk for Life reached its pinnacle in New Delhi. Today, more than 5 million people in India are infected with HIV/AIDS. Yet, very little is known about the disease. On December 1,2005 World AIDS Day, our HDFC Delhi team joined the 36 heroes in propagating awareness creation for combating HIV/AIDS. The Walk is a unique and theatrical way of spreading awareness in the interiors of the country where conventional awareness campaigns may not penetrate. HDFC is proud to be associated with Project Concern India as a corporate sponsor supporting the cause of AIDS awareness. .

Origami Moulding Paper into LifePaper is a very versatile and ubiquitous medium. All of us, without an exception have at some time or another folded a piece of paper and transformed it into something that must have given us immense pleasure at that time. Unknowingly we were practicing theart of ORIGAMI. India was selected to host the Origami Peace Tree Festival 2006 through the Origami Mitra (an association of Origami enthusiasts). HDFC joined hands with Origami Mitrain conducting Origami Workshops for visually impaired children of the NAB Workshop for the Blind and mentally challenged children of the S. P. J. Sadhana School. The children were able to visualize the immense scope of this ancient art by merely using their two hands as tools without having to resort to glue or scissors.HDFCs Little Indian IdolsThe challenge was in chalking out a programme that stimulates a childs creative instincts and provides the children with a platform to showcase their talent. HDFC did just that by holding a creativity-cum-talent workshop for primary school children in Nerul, Navi Mumbai. The workshop was a 2-day programme with professional facilitators that packed in a mini-theatre workshop, a create wealth from waste competition, story telling, painting and much more for over 140 children.A painting competition was organized by Delhi office for 5th and 6th standard students. Over 400 students participated in this contest helping young minds give vent to their imaginations.HDFC participated in the Fun Day Out kids extravaganza in Pune by organizing a coloring competition for children. The Pune office organized an exhibition of these drawings and felicitated every participant.

RESPONDING TO NATURAL CALAMITIESTerrible TuesdayMumbai the financial capital of the country, the city that never stops nor sleeps and yet the metro was thrown into complete chaos on July 26, 2005. Heavy and incessant rains set off floods and landslides battering normal life and forcing rail, road and air traffic to a virtual standstill. Millions of citizens were affected stranded for hours, even days at railway platforms, offices, in traffic jams while others waded through chest-deepwater to reach their destinations. The record 944 mm of rains that lashed the metropolis took the death toll to over 1000. The citys low-income working class, living in slums and shanties, watched helplessly as their homes disappeared under water.

In spite of this catastrophe, the Mumbaikar spirit was clearly visible in every nook and corner of the city with people coming out to aid those stranded on the road through the night. HDFC partnered with famous singer Ms. UshaUthup to capture this never-say-die spirit of Mumbai through the videoMumbaiMeriHai. The song encapsulates the Mumbaikar spirit of reaching out in times of need and rising back with full zeal and enthusiasm in spite of the adversities.Not to be left behind was our Mumbai region staff. A collection drive for relief material was organized immediately after the disaster through our Church gate, Parel and Vashi offices. Our staff donated wholeheartedly to this cause. The relief material was distributed to flood-affected families in the slums of Mumbai and Navi Mumbai through local NGOs having a strong community presence.HDFC was also able to obtain medicines from GlaxoSmithKline, which were distributed among NGOs conducting health camps in various slums and low-income neighborhoods in the city.

Further, HDFC extended grants to several NGOs coordinating relief and rehabilitation efforts in various parts of Mumbai and NaviMumbai. The relief process included provision of dry ration, potable water, emergency medical aid, provision of blankets and plastic sheets etc. HDFC partnered with the Sir Ness Wadia Foundation and The Bombay Community Public Trust to provide education material (specifically note books, uniforms and stationery) to municipal school children in the severely affected areas.

Kashmir EarthquakeAn earthquake of magnitude 7.6 struck the Himalayan region of Kashmir on October 8, 2005 resulting in colossal loss of life and property in Pakistan as well as India. On the Indian side, it is reported that the disaster left more than 1300 people dead and some 2500 injured, while over 1500 were missing. Through our Jammu, Ludhiana and Chandigarh offices, HDFC provided relief material in the form of blankets, pulloversand milk powder for the immediate needs of the victims of the earthquake. In this initiative, HDFC partnered with Child line India Foundation (CIF) and their partner organization Youth Technical Training Society(YTTS), Srinagar. YTTS worked very closely with the Indian Army in planning and carrying out the relief measures. The packaged relief material was transferred from Ludhiana to Chandigarh from where it was airlifted to Jammu.

HDFC also partnered with The SOS Childrens Villages of India, who had already started emergency relief work for families with a primary focus on children. SOS has offered (with the willingness of the J&KGovt.) to undertake long-term care of 100 orphaned children from this tragedy through their existing SOS village in Srinagar.Contribution from HDFCs employees and a matching grant from HDFC have helped further SOSs commitment for long-term rehabilitation of orphaned children in Kashmir.

RURAL HOUSING SCHEME FOR EWSWomens Welfare AssociationWomens Welfare Association (WWA) is a renowned NGO, which has been serving rural poor in the Wayanad district of Kerala since 1978. WWA promotes integrated people-centered rural development for improving the quality of life and the living conditions of village communities irrespective of caste, creed and political leaning. Women from different walks of life are members of its General Body.

HDFC has been associated with WWA since 2003 in the area of housing loans to the economically weaker section (EWS) households. HDFC has sanctioned threehousing loans amounting to Rs. 134 lacs for onward lending to the members of WWA.The cumulative disbursement as onMarch 31, 2006 stood at Rs. 98.62 laces for construction of 219 dwelling units. With the active involvement of all the stakeholders including the beneficiaries, WWA project staff and HDFC officials, the ABHAYA housing project has become a steppingstone to achieve the goal of housing for allinWayanad district.

The implementation of the scheme is being carried out in three phases the preparatory stage followed by physical implementation and development of appropriate recovery mechanisms. In the preparatory stage, WWA gives emphasis on Save and Build concept. The beneficiaries mobilize their own contribution towards the house construction by way of small thrifts or savings, which ultimately helps WWA to select the beneficiaries in accordance with the basic principles of credit, viz. character, capacity and capital. The orientation given by the HDFC officials also helps to generate transparency and a clear understanding about the housing loan products. There payment of the loan is structured based on affordability of the WWA members and the recovery mechanism is also being developed in a participatory way.

Voice from Mrs. Sainaba, one of the project beneficiaries....We have lost our property which was mortgaged for the treatment of our son and we have been residing in a rented house, giving Rs. 750/- per month for the last four years. With the support of WWA, we have got Rs. 54,000/- from HDFC and we could construct a small house. I am glad that the loan which I could never dream of getting, as per advice from other banks has now been granted to me by HDFC within the shortest period and I find it much convenient to pay Rs. 581/- as monthly payment to HDFC.

FORUM FOR RURAL ENVIRONMENT AND ECONOMIC DEVELOPMENTForum for Rural Environment and Economic Development (FREED) was established in1992 as an innovative programme in micro-finance to promote livelihoods with a special emphasis on environment protection and ecological preservation. It has a strong client focus and its products and delivery systems have been designed accordingly. FREEDoperates in Alappuzha district of Kerala withover 13,000 active borrowers.FREED first approached HDFC during 2004 to obtain a housing loan for its members for new construction. HDFC sanctioned Rs. 54 laces for onward lending to 100 members. The successful implementation of theGRAMASREE housing project within a period of six months paved the way for sanctioning of two more housing loans amounting to Rs. 129 lacs and a micro-finance loan of Rs. 25 laces. As of March 2006,FREED has availed a total disbursement of Rs. 149 laces from HDFC.Unlike most MFIs in India, FREED has not appointed field officers to transact directly with the clients. Instead, it works through the leaders of their SHG federations, which fosters transparency and a sense of ownership among the members. The operational strategy developed inconsultation with different stakeholders, especially with the HDFC officials, for the long-term housing loan product, has helped the organization to implement the housing schemes in a systematic way.

The first site-visit report generated by the representatives of FREED provides a clear understanding about the borrower extent of land, location sketch, type of house to be constructed, plinth area, total estimated cost, allocation of funds, application of cost reduction technologies, etc. The subsequent visits by HDFC officials to the project locations, helps in orienting the clients on various issues while advising them on certain dos and donts. The action-reflection praxis at FREED has further led to evolving appropriate tools for better implementation of the scheme.

MICRO ENTERPRISE FINANCE FACILITYActivists for Social Alternatives The Activists for Social Alternatives (ASA) commenced operations in 1986 as a facilitating agency for empowering the poorest of the poor women. During the course of its growth, ASA felt that economic development of women would be the strongest base for their social, cultural and political empowerment. ASA observed that the savings and credit program held the greatest potential for improving the economic status of large number of rural women. In 1993, ASA started adopting the essentials of Grameen principles and initiated a full-fledged micro finance program (meaning Dawn of theRural Poor) in Tiruchirapalli district.

ASA follows the Grameen Bank model and has evolved its products and delivery systems in accordance with the felt needs of the community. ASA-GV provides collateral-free credit to poor women organised in groups of five (known as Grameen Banking Groups) at the village level. These groups are federated into centers, each centre being constituted with 20 groups. The centers are further federated into branches. ASA-GV now operates in 11 districts of Tamil Nadu with 45 branches serving more than 90,000 members spread over 2,500 villages.

HDFC has been associated with ASA since 2002 when the first loan of Rs. 50 laces was sanctioned under the micro-enterprise finance facility (MFF). The total loan sanctioned under MFF to ASA is Rs. 250 laces for onward lending to 3000 members and the amount disbursed as of March 31, 2006 is Rs. 150 laces. In addition, HDFC has sanctioned Rs. 200 laces towards housing up gradation loans of which Rs. 100 lacesstood disbursed.

Through the provision of micro-finance and development services, ASA has empowered their women clients and improved their access to and control over financial resources. The following case is an illustration of the impact of ASAs micro-finance initiative:

Lakshmi, aged 28 hails from a backward family and was unable to study beyond 4th standard due to intense poverty. She did menial jobs to support her familys survival. It was at this juncture, that the ASA-GVmicro-finance program came to her rescue. Borrowing the first loan of Rs. 3,000, she purchased a sewing machine to support her parents and save money for her wedding expenses.

She married Ayappan, a hired laborer of a cycle shop. Ayappans low income was insufficient for the family expenses. Here again, she sought the aid of ASAGV and borrowed the 2nd loan of Rs. 7,000 which was invested in their cycle shop with 5 bicycles. Renting out these cycles, they earned Rs. 500 per week. After repayment of the 2nd loan, Lakshmi took the 3rd loan ofRs. 9,000 to purchase tape recorders, mic and sound system to be rented out for functions and weddings. Now she is a proud mother and is able to provide good education to her two sons. Lakshmi says My life would have been in chaos if GV had not helped me. Going for a 4th loan of Rs. 10,000 she has recently bought additional bicycles and also sells spare parts for them.

Evangelical Social Action Forum.The Evangelical Social Action Forum (ESAF)was established as an NGO in 1992 by a group of like-minded individuals, who shared the objective of working for the poor and marginalized sections of the society. ESAF undertakes various developmental activities, including micro-enterprise development, community development and rehabilitation, advocacy and vocational training. ESAFs activities were entirely based in Kerala till 2003. In October 2003, ESAF started community development programmes in the Vidharbha region of Maharashtra and in the state of Chhattisgarh.

The micro enterprise development (MED) department, of which micro-finance is a part, is one of the key interventions of ESAF and its objective is to provide a package of financial and business development services to the socio-economically challenged. Besides micro-finance, MED is active in handicrafts promotion, training and marketing.

ESAF first approached HDFC in 2001 for an MFF loan of Rs. 20 laces. It was a small beginning, but the outcome was a multi-faceted impact in the community. The members started thinking of initiating group enterprises and the same materialized through subsequent loans from HDFC. HDFC has sanctioned three MFF loans to ESAF amounting to Rs. 220 laces of which Rs. 170 laces stood disbursed as on March 31, 2006.

Women in business can sometimes find it difficult to assert themselves, but- a member of JyothisSangam, Kodungallur and her friends dared to poke into what we understand as a mans stronghold. They collectively undertook concrete brick manufacturing with the support of credit made available to them by HDFC through ESAF. Subhashini and her friends found that coming together as a group helped them to be bold in their approach and to create a thriving business.

Our activity brings us happiness. Not only to us but to our clients and even to those who visit and see us.says Subhashini. After finishing their household work they gather together at around 11o clock everyday and make more than 100 bricks in a day. Today, they stand as a group of 25 members having three enterprises viz, concrete brick manufacturing, goat rearing and mat weaving. Having availed loans of more than Rs. 2 lace, the group is proud to say that they have always been regular in repayment of their loansOrganizational GoalsHDFCs main goals are to- Develop close relationships with individual households Maintain its position as the premier housing finance institution in the country, Transform ideas into viable and creative solutions, Provide consistently high returns to shareholders, and To grow through diversification by leveraging off the existing client base.

Corporate strengths Strong brand Customer base of over two billion Stable and experienced management High service standards High quality loan portfolio Provision for contingencies Constant up gradation of contingencies One of the best capital adequacy ratio

Awards 2002 - Rated as the best non banking financial company in Asia by institutional investor research group 2001 - Asias top 10 managed company in finance sector by euro money 2001 - Asia money declared HDFC as Indias second best managed company 2000 CII-EXIM bank commendation certificate for commitment to TQM 1999 - IMC Ramakrishna Bajaj national quality award in service category financial institutions 1998 - excellence in service industry by IIMM and top management club (Pune) 1998 - best company in India for strategy and management and industrial relations by Asia money 1994-95 and 1996-97 - best presented accounts in SAARC region by south Asian federation of accounts in financial sector 1997 - one of the five best Indian boards by business today 1997 - most competitive company by euro money 1995 and 1996 - Indias best managed company by Asia money

HistoryThe Standard Life Assurance Company ("Standard Life") was established in 1825 and the first Standard Life Assurance Company Act was passed by Parliament in 1832. Standard Life was reincorporated as a mutual assurance company in 1925.The Standard Life group originally operated only through branches or agencies of the mutual company in the United Kingdom and certain other countries.

Banking, Healthcare & Investments The group set up Standard Life Bank, its UK mortgage and retail savings banking subsidiary, in 1998 and Standard Life Investments, which had previously been the in-house investment management unit of the groups life assurance and pensions business, was separated into a distinct legal entity in the same year, with the aim of establishing it as an independent investment management business providing services to both the group and third party retail and institutional clients. The group acquired Prime Health Limited (subsequently renamed Standard Life Healthcare) in the United Kingdom in 2000. Standard Life Healthcare expanded in March 2006 with the acquisition of the PMI business of First Assist.

Standard Life Asia Limited/Joint ventures The groups Hong Kong subsidiary, Standard Life Asia Limited (SL Asia), was incorporated in 1999 as a joint venture and became a wholly-owned subsidiary of Standard Life in 2002. The groups operations in Hong Kong were established to give the group a presence in the Far East from which it could expand into China. The groups joint ventures in India with Housing Development Finance Corporation Limited (HDFC) were incorporated in 2000 (in relation to the life assurance and pensions joint venture) and 2003 (in relation to the investment management joint venture). The groups joint venture in China with Tianjin Economic Development Area General Company (TEDA) became operational in 2003.

Standard Life International Limited The group also incorporated Standard Life International Limited (SLIL) in 2005 for the purposes of providing the group with an offshore vehicle, based in Ireland, through which it could sell tax-efficient investment products into the United Kingdom. Sales of these products commenced in 2006.

Service companyFollowing the groups strategic review in 2004, the group established a service company structure for the provision of central corporate services to the groups business units. Standard Life Employee Services Limited (SLESL) supplies a wide range of central services to the rest of the group, including IT, facilities, legal and human resources services, and employs staff working in the groups UK and Irish operations (other than SLI, SLB and SLH, which employ their staff directly). This service company structure was created to enable Standard Life to comply with regulatory restrictions on the provision of non-insurance services and to exploit group-wide synergies.

Demutualization of Standard LifeOn 31 May 2006, Standard Life's voting members voted in favor of the Special Resolution for the demutualization of The Standard Life Assurance Company and the flotation of Standard Life plc on the London Stock Exchange.Structure of Standard Life plcStandard Life plc owns all of the businesses and companies in the group. Standard Life plc is a holding company which is owned by its shareholders (including those Eligible Members who received and retained shares received as a result of demutualization).

Alternative textual explanation Standard Life plc structureUnderneath Standard Life plc are Standard Life Healthcare Limited, Standard Life Investments (Holdings) Limited (and underneath it, Standard Life Investments Limited), Standard Life Oversea Holdings Limited, Standard Life Employee Services Limited, Standard Life Assurance Limited and Standard Life's Joint Venture interest in China

Underneath Standard Life Oversea Holdings are Standard Life Asia Limited and Standard Life Financial Inc (and underneath it, The Standard Life Assurance Company of Canada).

Underneath Standard Life Assurance Limited are Standard Life Direct Limited, Standard Life Savings Limited, Standard Life Direct Limited, Standard Life Trustee Company Limited, Standard Life Bank Limited, Standard Life Pensions Funds Limited, Standard Life International Limited and The Standard Life Assurance

Customer statisticsCustomersStatistics

Worldwide customersApproximately 7 million

Customers in the UKOver 5 million

With profits members worldwide2.4 million

Standard Life people Awards 2002 - Company of the year 2001 - Best personal pension provider 2000 - Company of the year 1999 - Company of the decade 1996 97 - Company of the year 1995 - 4 star service award 1992-94 - overall best company 1991 - 3 star service award 1990 - Best mortgage services

Standard Life in the 1800s1821- Insurance Company of Scotland founded1825- Life Insurance Company of Scotland founded by the partners in the Insurance Company1832 - Name change to Standard Life Assurance Company1833- Agencies opened in Canada1834- Agency opened in Ireland1837- 3 George Street premises bought - occupied in 1839.1842- First London Office1845- Formation of the Colonial Life Assurance Company to aid expansion overseas1846- Montreal office opened1847- Agencies opened in Madras, Bombay, Uruguay and Shanghai1854- Agencies opened in South Africa1864- Minerva Life Assurance Company acquired.1865-Victoria and Legal and Commercial Assurance Company acquired.1866-Merger with Colonial Life1869-First branch office in India opened in Calcutta1876 -Bombay branch opened1877 -India Life Assurance Company acquired1888 -Branch opened Montevideo1890 -Offices opened Brussels and Copenhagen1892 -Offices opened Christania (Oslo), Norway and Stockholm, Sweden1895 -Offices opened Port Elizabeth and Johannesburg, South Africa

Standard Life in the 1900s1900-Office opened Shanghai 1904 -Office opened Barcelona and office built in Cairo1905 -Bonus passed1920 -Commence pensions business at a time when occupational schemes were in their infancy1922 -First staff magazine published1925 -Mutualisation1934 -Heritable Securities and Mortgage Investment Association1937 -Staff pension scheme established1941 -London office bombed during the Blitz1950 -Pensions business expands. Largest life office in Scotland1952 -South African business transferred to the South Africa Life Assurance Company1960 -Largest mutual in UK1961 -New Head Office for Canada opened in Sherbrook Street, Montreal1966 -Setting up o in Europe, a consortium of SLAC and six European offices1973 -Business in Jamaica transferred to Jamaica Mutual1979 -Unit linked products launched1985 -Over 10bn assets now managed1986 -Launch of Unit Trusts1990 -Standard Life Act of Parliament1993 -Prosperity SA in Spain acquired1994 -Prime Health acquired1995 -Joint venture in India1996 -Shanghai office opened. Branch established in Germany1997 -Standard Life Bank formed1998-Standard Life Investments launched Standard Life Assurance Company's Representative Office, Beijing, China, officially opened1999-Standard Life Austria begins operations

Standard Life from 20002000-175th Anniversary of Standard Life Members vote to retain mutual status Standard Life Asia is launched in Hong Kong2001-Joint venture with HDFC launched in Mumbai, India2002- Alexander Scott Bell retires as Group Chief Executive. Iain Lumsden appointed as Group Chief Executive2003-Joint venture with Hengan launched in Tianjin, China2004-Strategic Review of business announced Group Chief Executive Iain Lumsden retires Sandy Crombie appointed as Group Chief ExecutiveTrevor Matthews appointed as Chief Executive UK Life and PensionsFunds under management exceed 100 billion for first time.Keith Skeoch Appointed as Chief Executive of Standard Life Investments2005-Standard Life confirms its intention to demutualise and float on the London Stock Exchange2006-Special General Meeting is held on 31 May at which 98% of those voting back the company's proposal to demutualise and float on the stock exchange. Standard Life floats on the London Stock Exchange on 10 July 2006 with the Offer Price set at 230p. Standard Life joins the FTSE 100 index on 18 July.

HDFC Standard Life -The PartnershipHDFC Standard Life Insurance is a joint venture between India's largest housing finance provider, HDFC and Europe's largest Mutual Life Assurance company - The Standard Life Assurance Company (U. K).The Standard Life Assurance Co. is one of the very few insurance companies in the world to have received 'AAA' rating from two of the leading international credit rating agencies, Moody's and Standard & Poor's. Standard Life was recently voted 'Company of the Decade' in U.K. by the Independent Brokers called IFAs.HDFC is a well-known & trusted name in India. Since its inception in 1977 they have maintained their position as the premier Housing Finance Institution in the country. They value integrity, commitment, teamwork and excellence in customer service.HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement.Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship.

The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.

In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India.Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank.In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000

Incorporation of HDFC Standard Life Insurance Company Limited:The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited.Our ambition from as far back as October 1995 was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC as on March 31, 2007 holds 81.9 per cent of equity in the joint ventureGiven Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations. HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance company's in India are measured.

ABOUT CRISIL AND ICRACRISIL and ICRA (The Internet Rating Association) both are non-profit organizations being set up for rating financial institutions. CRISIL was incorporated in 1987 and in the next year it commenced the rating of companies. In 1989-90 CRISIL started credit assessment service for banks and launches CRISIL Rating Scan to announce new and current ratings and disseminates the CRISIL ratings rationale. In 1992-93 CRISIL evolves a methodology and framework of bank ratings. In the same year CRISIL introduces Rating Set-Debentures and CRISIL Rating Set-Fixed Deposits and publishes CRISIL Rating Digest

VARIABLE RATE DEPOSIT: - Interest rate on variable deposit is linked to the benchmark rate and will vary from time to time with benchmark rate. Benchmark rate is that rate which is applicable on HDFC fixed rate deposit product for the corresponding period. Rate of interest on the first day of interest period will be applicable for the entire interest period.Deposit once placed cannot be interchanged between fixed and variable rate till the date of maturity.

Benefits of an HDFC Individual Deposit:1. Highest Safety2. Tax benefit3. Attractive Returns4. Quick Loan Facility5. Nomination Facility6. Demand Draft Facility7. High Service Standards8. Electronic Clearing service

These benefits can be explained as follows: -1. Highest Safety: 'FAAA' and 'MAAA' rating affirmed for the eleventh consecutive year by CRISIL and ICRA respectively.

2. Quick Loan Facility: Loan against deposit is available after 3 months from the date of deposit up to 75% of the deposit amount subject to the other terms and conditions framed by HDFC. Interest on such loans will be 2% above the deposit rate3. Tax Benefits: TDS: No tax deduction at source on interest from deposits upto Rs. 5,000/- per branch in a Financial Year.

4. Attractive Returns: HDFC deposits are Available throughout the year and offer Attractive, Assured returns to investors. Interest rates offered are higher than that offered by most of the commercial banks.5. Nomination Facility: Individual depositors, singly or jointly, can nominate under this facility. In case the deposit is placed in the name of a minor only a person lawfully entitled to act on behalf of the minor can make the nomination. Power of attorney holder or any person acting in representative capacity as holder of an office or otherwise cannot nominate. The nominee shall have the right to receive the amount due in respect of deposit on death of all the depositors and payment by HDFC to the nominee shall constitute full discharge to HDFC of its liability in respect of the deposit. 6. Demand Draft Facility: Outstation depositors can send demand drafts after deducting demand draft charges. This facility is not available to investors under Easy way Savings. This facility is applicable for places where HDFC does not have an office.

7. High Service Standards: Depositors are offered across the counter services for new deposits, renewals, repayments and loan against deposit facility. Further, all enquiries through email, post, telephone and in person are attended to immediately.

8. Electronic Clearing Service: This facility is provided to depositors in select centers whereby the interest will be credited directly to the depositors' bank account. The depositor would receive a credit entry "ECS HDFC" in his passbook/bank statement. Intimation of interest credited would be sent on an annual basis. Your bank will not levy any charge for this facility as per present RBI guidelines.

Presently this facility is being offered by us at the following centers - ECS Centers: Ahmadabad, Bangalore, Bhubaneswar, Kolkata, Chandigarh, Chennai, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, Nasik, New Delhi, Pune and Vadodara.

ANNUAL INCOME PLAN

PERIOD(MONTHS)RATE OF INTEREST(% PER ANNUM)MAXIMUM DEPOSIT WITHOUT TDS (Rs)

INDIVIDUALSSENIOR CITIZENS

12-2324-3536-5960-845.756.006.506.7586,00083,00076,00074,00080,00076,00071,00068,000

Maximum Deposit Amount Rs. 5,000

Other main features attached to HDFC deposits: -1. Mode of acceptance: -Deposits can be made by cash/cheques/demand drafts. Cheques and drafts are drawn in the favors of HOUSING DEVELOPMENT FINANCE CORPORATION Ltd or HDFC Ltd and should be marked Account Payee Only.

2. Renewals and Repayment: - For renewals or repayment of deposit, the duly discharged deposit receipt must be surrendered to HDFC at least a week before the date of maturity. A crossed Account Payee cheque favoring the first named depositor will make repayment of deposit amount.

3. Agents: - HDFC invites deposits through the channel of authorized agents. HDFC has agent network of over 50,000 and a depositor base of around 1 million.

4. Premature Withdrawals: - premature withdrawals will not be allowed before completion of 3 months from the date of deposit. In case of request for premature withdrawal after the expiry of three months, the rates given in the following table shall apply: -

TABLE FOR PREMATURE WITHDRAWALS: -Months completed from the date of depositRate of interest payable

3 less than 6 No interest

6 less than 12 3.50% p.a

12 less than maturityFixed rate deposit:2% less than the rate applicable for the completed period.

Variable rate deposit:2% less than the rate applicable for the completed period under variable rate deposit product on the respective interest reset dates.

POSITION OF HDFC DEPOSITS: -HDFC has a depositor base of 1 million. Public deposits constitute approximately 80% of the total deposits of the corporation. Deposits of HDFC for past few years are as follows: - YEARSDEPOSITS

1995-96 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2512.69 3502.19 4423.79 5252.40 6223.85 7249.83 8491.02 9121.55 9337.65 7840.09

Fixed deposits can be shown with the help of following diagram. The graph shows that HDFC deposits are increasing upto 2005-06and showed a decline in 2006-07

FIXED DEPOSITS FOR HDFC

COMPARISON OF INTEREST RATES OF FIXED DEPOSITS OF DIFFERENT NATIONALISED BANKSInterest rates for fixed deposits for different nationalized banks with respect to different time period can be shown with the help of following graphs: -Interest rates are for following banks: -(1). HDFC(2). State Bank of India(3). Punjab and Sindh Bank(4). Centurian Bank of Punjab(5). Indus Ind Bank(6). Bank of Baroda(7). ICICI Bank(8). IDBI Bank(9). UTI Bank(10). Standard chartered (11). HSBC Bank(12). ING Vyasya(13). Union Bank of India(14). State Bank of PatialaIn the above table we can see that HDFC Ltd provides maximum interest rates for the time period of 1-2 years that is 7.50 %.Fixed Deposit Flexibility of tenure - 7 days to 10 years Liquidity Premature / Partial withdrawal permitted (subject to applicable charges) Loan / Overdraft upto 90% of FD amount Option of monthly / quarterly payout available Competitive interest rate - Know interest rates for various tenures Convenient ways to open a FD Internet Banking Phone banking ICICI Bank Branch What documentation is required to open a senior citizen FD?While opening the account, the customer needs to provide proof of age establishing that he/she is a Senior Citizen. To accomplish this, either of the following can be submitted: Secondary School Leaving Certificate (10th Class)

LIC Policy

Voters Identity Card

Pension Payment Order

Birth Certificate issued by the competent authority

Passport

Defence ID Card / Govt ID Card (Provided they have the cardholder's photo, signature and date of birth)

PSU Issued ID Cards

Senior Citizen Cards issued by Indian Airlines / Indian Railways

PAN Card

INTEREST RATES ON FIXED DEPOSITS OF DIFFERENT BANKSIndian Banks - Public Sector

BANK NAME / DURATION1 - 2yrs2 - 3yrs3 - 5yrs

Allahabad Bank8.008.258.25

Andhra Bank9.009.258.60

Bank of Baroda8.758.758.50

Bank of India8.758.257.75

Bank of Maharashtra8.308.308.30

Canara Bank8.758.758.50

Central Bank of India8.258.258.50

Corporation Bank9.159.259.25

Dena Bank8.508.508.25

IDBI Bank8.759.009.25

Indian Bank8.508.508.50

Indian Overseas Bank8.258.258.75

Oriental Bank of Commerce8.508.508.50

Punjab & Sind Bank8.509.009.00

Punjab National Bank8.758.508.50

State Bank of Bikaner&Jaipur8.509.259.00

State Bank of Hyderabad8.508.758.75

State Bank of India7.758.258.25

State Bank of Mysore8.758.508.50

State Bank of Patiala8.509.008.25

State Bank of Travancore8.508.758.75

Syndicate Bank9.009.009.00

UCO Bank8.008.258.25

Union Bank of India8.008.758.75

United Bank of India8.258.509.00

Indian Banks - Private Sector

BANK NAME / DURATION1 year < 2 years2 years < 3 years3 years < 5 years

Axis Bank8.758.257.00

City Union Bank9.009.009.00

Development Credit Bank7.507.757.75

HDFC Bank8.008.258.25

ICICI Bank8.008.258.50

IndusInd Bank9.008.758.75

ING Vysya Bank8.508.758.75

Karnataka Bank9.759.509.25

Kotak Bank8.759.009.00

Tamilnad Mercantile Bank9.259.258.75

The Bank of Rajasthan Ltd8.008.258.50

The Catholic Syrian Bank8.608.808.80

The Dhanalakshmi Bank8.608.758.75

The Federal Bank9.258.758.75

The J & K Bank8.508.508.50

The Karur Vysya Bank10.009.759.00

The Lakshmi Vilas Bank10.109.007.75

The South Indian Bank9.258.758.75

TNSC Bank9.008.508.50

Yes Bank8.258.508.75

Home Loan Rate of Interest( Last edited on : 08 May 2011 )

Bank InterestRates

State Bank Of India9.50% - 10.25%

ICICI Bank10% - 10.75%

HDFC Ltd9.75%-10.25%

LIC Housing9.90% - 10.75%

DHFL10.25% - 11%

India Bulls9.75% - 10.25%

Union Bank of India10.50% - 11.75%

Bank of Baroda10.50% - 12%

Personal Loan( Last edited on : 08 May 2012 )What is a Personal loan?Personal Loan is an unsecured loan for personal use which doesnt require any security or collateral and can be availed for any purpose, be it a wedding expenditure, a holiday or purchasing consumer durables, the personal loan is very handy & caters to all your needs. The amount of loan can be ranged from Rs. 50,000 Rs. 20 lakh & the tenure for repaying the loan varies from 1 to 5 years. More Information about personal loan section click articles about personal loan and Personal loan must read.Top of FormInstant Personal Loan Quote From All Banks

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Comparison Of Personal Loan Interest Rate Of Various BankName Of BankEffective Interest RateEMINo.Of EMIProcessing Fee

HDFC BANK14%3491362%

ICICI BANK15.5%3418362% to 3%

PNB13%336936-

RESEARCH METHDOLOGYINTRODUCTIONResearch in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. Infact, research is an art of scientific investigation. Research is a systematized effort to gain new knowledgeResearch is an original contribution to the existing knowledge for its advancement. It is the pursuit of truth with the