MBA HDFC bank Porject

EXECUTIVE SUMMARY

Banks have become one of the most attractive ways for the average person to

invest their money. It is said that bank investment is the first priority of people to invest their

savings and the second place is for investments in mutual funds and other avenues. A bank

pools recourses from thousands of investors and then diversifies its investment into many

different holdings such as stocks, bonds, or government securities in order to provide high

relative safety and returns.

The Housing Development Finance Corporation Limited (HDFC) was amongst

the first to receive approval from the Reserve Bank of India (RBI) to set up a bank in the

private sector, as part of RBI’s liberalization of the Indian Banking Industry. HDFC Bank

was incorporated in August 1994 and commenced operation as a Commercial Bank in

January 1995.Currently, HDFC Bank has a nation spread over 110 cities across the country

and operates in three segments - Wholesale banking, retail banking and treasury services.

HDFC banks are called as deposit banks as they accept deposits from the public

and lend them for short period. HDFC banks encourage savings among general public and

supply financial needs of modern business. These banks are purely meant to finance traders

and others. It accepts deposits and lend to needy customers from short terms.

The Project is a “FINANCE PROJECT” which tries to explain in layman’s

language about the history & growth of banking industry and the second part of it deals with

‘‘THE COMPARITIVE STUDY OF RATIO ANALYSIS OF ICICI BANK WITH

SELECTED PRIVATE BANKS’’ which tries to explain about the comparative financial

performance of ICICI BANK with HDFC BANK, ING VYSYA BANK, CITI BANK, and

KOTAK MAHINDRA BANK.

The main objective of the project was to get an Overview of Banking Industry,

its set up, it’s working and to find out the bank’s relative strengths and weaknesses, analyze

the financial performance, analyze and compare various ratios in comparison with selected

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private banks viz. ICICI BANK, ING VYSYA, CITI BANK, KOTAK MAHENDRA & to

suggest appropriate measures for enhancing financial performance of the bank.

The research methodology used is primary and secondary data. Primary data has been

collected from the books of accounts of the bank i.e. trading and profit and loss account,

balance sheet, cash flow statement. Direct information was collected from the interaction

with executive of various levels. Secondary data has been collected from magazines, related

books, IBA web page and newspapers.

Analysis done by using Current Ratio, Proprietary Ratio, Solvency Ratio, Return on

Total Resource, Earnings per share, Fixed Asset to Net worth Ratio & Return on equity.

FINDINGS:

The current assets of HDFC BANK are very low compared to ICICI BANK current

assets i.e., Rs.3605.48 as against ICICI’S Rs.23551.85. As inferred by the above ratios HDFC

BANK has 1.49 ratios and it is higher than the standard level i.e., 0.5:1. Compared to HDFC

BANK with CITI BANK. As inferred by the above the HDFC BANK has 3.48 ratios it is not

satisfactory. To maintain stability in the firm for the long term the solvency position should

be lowered. To reduce the solvency ratio of HDFC BANK it has to decrease its deposits and

increase loans in the form of Home loans, Land loans, loan on phone, Home improvement

loan, Home equity loans etc. As HDFC BANK is getting 10.88 ratio of return on total

resources. And it is satisfactory. When compared to all other bank ICICI bank is very low

ratio of return on total resources.

SUGGESTIONS:

The short-term solvency position of the bank is not satisfactory. Bank has to increase

current assets or reduce current liabilities to strengthen its liquidity position and bring current

ratio nearer to the standards. Bank has to provide effective services to customers for

maintaining and building the brand image that helps the banks to have a competitive edge

over the other banks. The bank can enter into Mobile Banking aggressively in order to

capture young customers. The bank has to reduce its solvency ratio in order to maintain

stability in long term period. To reduce the solvency ratio of HDFC BANK it has to decrease

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its deposits and increase loans in the form of Home loans, Land loans, loan on phone, Home

improvement loan, Home equity loans etc.,

CONCLUSIONS:

The current assets of HDFC BANK are very low compared to ICICI BANK current assets

i.e., Rs.3605.48 as against ICICI’S Rs.23551.85. As inferred by the above the HDFC BANK

has 3.48 ratios it is not satisfactory. To maintain stability in the firm for the long term the

solvency position should be lowered. As HDFC BANK is getting 10.88 ratio of return on

total resources. It can increase the Net profit by reducing the interest on deposits of products

like Internet Banking, Mobile Banking, Standing Institutions, Debit- Cum-ATM Cards etc., It

can also reduce the salaries of the employees. Bank has to provide effective services to

customers for maintaining and building the brand image that helps the banks to have a

competitive edge over the other banks. The bank can enter into Mobile Banking aggressively

in order to capture young customers.

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INDUSTRY PROFILE

INTRODUCTION:

Financial sector reforms set in motion in 1991 have greatly changed the face of

Indian Banking. The banking industry has moved gradually from a regulated environment to

a deregulated market economy. The market developments kindled by liberalization and

globalization have resulted in changes in the intermediation role of banks. The pace of

transformation has been more significant in recent times with technology acting as a catalyst.

While the banking system has done fairly well in adjusting to the new market dynamics,

greater challenges lie ahead. Financial sector would be opened up for greater international

competition under WTO. Banks will have to gear up to meet stringent prudential capital

adequacy norms under Basel II. In addition to WTO and Basel II, the Free Trade Agreements

(FTAs) such as with Singapore, may have an impact on the shape of the banking industry.

Banks will also have to cope with challenges posed by technological innovations in banking.

Banks need to prepare for the changes. In this context the need for drawing up a Road Map to

the future assumes relevance. The idea of setting up a committee to prepare a vision for the

Indian Banking industry came up in IBA, in this background.

Managing Committee of Indian Bank’s Association constituted a committee

under the Chairmanship of Shri S C Gupta, Chairman & Managing Director, Indian Overseas

Bank to prepare a vision report for the Indian Banking Industry. The composition of the

committee is given at the end of the report.

The committee held its first meeting on 23 rd June, 2003 at Mumbai. Prior to the

meeting, the members were requested to give their thoughts on the future landscape of the

banking industry. A discussion paper based on the responses received from members was

circulated along with a questionnaire eliciting views of members on some of the specific

issues concerning anticipated changes in the banking environment. In the meeting, which

served as a brainstorming session, members gave their vision of the future. A second meeting

of the committee was held at Chennai on 7th August, 2003 to have further discussions on the

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common views, which emerged in the first meeting, and also to examine fresh areas to be

covered in the study.

The vision statement prepared by the committee is based on common thinking that

crystallized at the meetings. In the Chennai meeting it was decided to form a smaller group

from among the members to draft the report of the committee. The group met thrice to

finalize the draft report. The report was adopted in the final meeting of the committee held at

Mumbai.

Vision is to evolve into a strong, sound and globally competitive financial system,

providing integrated services to customers of all segments, leveraging on technology and

human resources, adopting the best accounting and ethical practices and fulfilling corporate

and social responsibilities towards all stakeholders. The vision is of an integrated banking and

finance system catering to all financial intermediation requirements of customers. Strong

market players will strive to uncover markets and provide all services, combining innovation,

quality, personal touch and flexibility in delivery. The growing expectations of the customers

are catalyst for our vision. The customer would continue to be the centre-point of our

business strategy. In short, you lose touch with customer, and you lose everything.

HISTORY OF BANKS:

The organized banking system in India is broadly divided into three categories, i.e. the central

bank known as the Reserve bank of India, the commercial banks and the Co-operative banks.

The reserve bank of India is the supreme monetary and banking authority in the country and

has the responsibility to control the banking system in country. It is known as the “RESERVE

BANK” as it keeps the reserve of all commercial banks. Banking Regulation Act of India,

1949 defines banking as “accepting, for the purpose of lending or investment of deposits of

money from the public, repayable on demand or otherwise and withdrawal by cheques, draft,

and order.”

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Most of the activities a bank performs are derived from the above definition. In addition,

Banks are allowed to perform certain activities, which are ancillary to this business of

accepting deposits and lending. A bank’s relationship with the public therefore revives

around accepting deposits and lending money. Another activity, which is assuming increasing

importance, is transfer of money – both domestic and foreign –from one place to another.

This activity is generally known as “remittance business” in banking parlance. The so-called

forex (foreign exchange) business is largely a part of remittance. It involves the buying and

selling of foreign currencies.

The law governing banking Activities in India is called “Negotiable Instruments Act 1881”.

The banking activities can be classifies as:

Accepting Deposits from public /others (deposits)

Lending money to public (Loans)

Transferring money from one place to another (Remittance)

Acting as trustees

Acting as intermediaries

Keeping valuable in safe custody

Collection business

Government Business

Commercial banks have been in existence for many decades. After1969 commercial banks

are broadly classified into nationalized or public sector and private sector banks. The state

bank of India and associate banks along with another 20 banks are the public sector banks.

The private sector banks include a number of Indian scheduled banks, which have not been

nationalized, and branches of foreign banks operating in India.

The Regional Rural banks (RRB’s) came into existence since the Middle of 1970s

with the specific objective of providing credit and deposit facilities particularly to the small

and marginal farmers, agricultural laborers and artisans and the small entrepreneurs.

Primary Co-operative credit societies or banks were originally set up in villages to

promote thrift and saving of the farmers and to meet their credit needs for cultivation. The

central or district co-operative banks above them state co-operative banks were established.

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The funds of RBI meant for agricultural sector actually pass through the State co-operative

banks and central co-operative banks. These have now spread to the urban areas.

Under the RBI Act 1934, banks were classified as scheduled banks and non-scheduled

banks. The scheduled banks are those, which are entered in the second schedule of RBI Act,

1934.they are banks, which have paid up capital and reserves of an aggregate value of not

less than 5 lakhs and which satisfy RBI that their affairs are carried out in the interests of the

depositors. All commercial banks – Indian and foreign, regional rural banks and state co-

operative banks are scheduled banks. Non-scheduled banks are those, which have not been

including in the second schedule of RBI Act1934.

The present banking scenario in the country looks extremely promising. For the past

few years most of the banks have posted very good results quarter after quarter and are

displaying their ability for high growth.

Banks are classified into several types based on the functions they perform.

Commercial Bank.

Investment or industrial Banks.

Exchange Banks.

Co-operative Banks.

Land Development Banks.

Savings Banks.

Central Banks.

COMMERCIAL BANKS

Commercial banks perform all the business transaction of a typical bank. Commercial Banks

accept three types of deposits, Like Savings Bank Deposit, Fixed Deposit and Current

Deposit. They accept these deposit, which are payable on demand or in short notice. As such

they lend or invest only for short duration. They funds for short-term needs of trade of

commerce.

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INVESTMENT OR INDUSTRIAL BANK

Investment Banks are those banks, which provide funds on long term for industries.

These Banks have specialized in providing long term loans to industries with a view to buy

plant of machinery. The investment Banks obtain funds through share capital, Debentures and

long term deposits from the public. They float bonds for the sake of mobilizing funds to

provide funds for big industries corporations. These banks also under write or issue new

shares of debentures of industrial concerns.

EXCHANGE BANKS

Exchange Banks are known as foreign Banks or foreign exchange Banks. The foreign

exchange banks provide exchange for imports trade. Their main function is to make

international payment through purchased sake of exchange bills.

CO-OPERATIVE BANKS

Co-operative Banks are promoted to meet the banking requirements of consumers.

They are established not only in the urban areas but also in the rural areas. In the rural areas

these banks supply finances to agriculture, while in the urban areas they provide finance to

consumer goods.

LAND MORTGAGE BANKS

Whenever agriculturist require investment loans, they have to approach land

development Banks. Where loans are given on long-term basis. It is based on the security of

the land.

SAVINGS BANKS

Savings Banks are specialized financial institutions established to mobilize savings

from the people. The primary object of the commercial Banks is to promote thrift among the

low and middle-income groups. The Banks also offer interest on these deposits.

CENTRAL BANKS .

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Central Bank in an apex Bank in the country, which keeps the entire banking system

unified, controlled and regulated. In fact, the central bank is the Bank, which formulates the

monetary policy. It regulates the notice issue. In India, the Reserve Bank of India is the

central Bank of India.

STRUCTURE OF BANKING SYSTEM IN INDIA

Banking Regulation Act, 1949

As per Section 5(c) of Banking Regulation Act, 1949 a "Banking Company" means any

company which transacts the business of banking in India.

Explanation: Any company which is engaged in the manufacture of goods or carries on any

trade and which accepts the deposits of money from public merely for the purpose of

financing its business as such manufacturer or trader shall not be deemed to transact the

business of banking within the meaning of this clause.

As per Section 5(b) of Banking Regulation Act, 1949, banking means the accepting, for the

purpose of lending or investment, of deposits of money from the public, repayable on demand

or otherwise, and withdraw able by cheque, draft, order or otherwise.

As per Section 5(d) of Banking Regulation Act, 1949, company means any company as

defined in Section 3 of the Companies Act, 1956 and includes a foreign company within the

meaning of Section 591 of that Act.

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As per section 51 of Banking Regulation Act, 1949, certain provisions of the Banking

Regulation Act are also applicable to the State Bank of India, any corresponding new bank, a

regional rural bank and any subsidiary bank. "Corresponding new bank" has been defined

under clause of section 2 of the DICGC Act to mean a corresponding new bank constituted

under the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 or

1980.

Meaning of Bank

According to banking regulation act of 1949 defines the term banking as accepting for the

purpose of lending or investment of deposits of money from the public, repay on demand or

otherwise and withdraw by cheques, draft or otherwise.

Kinds or types of bank: -

Commercial bank

Industrial bank

Foreign exchange bank

Co-operative bank

Agricultural bank

Land and development bank

Saving bank

Central bank

Commercial bank

These banks are also called as deposit banks as they accept deposits from the public and lend

them for short period. Commercial banks encourage savings among general public and

supply financial needs of modern business. These banks are purely meant to finance traders

and others. Thus commercial bank accepts deposits and lend to needy customers from short

terms.

Function of commercial banks

There are two functions namely primary and secondary function:

Primary function includes acceptance of deposits, advancing of loans.

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Secondary function includes agency function General, utility services.

PRIMARY FUNCTIONS

Acceptance of deposits

Banks accept deposits from the public. People keep deposit of money for safety, interest, easy

to transfer cheques. So they accept following types of deposit.

Current Account Deposits

These deposits constitute major portion of banks circulating medium of exchange. Normally

business people keep money in his accounts as they can withdraw and issues cheques any

number of times. Banks does not pay any interest for these deposits.

Saving Bank Account Deposits

People with steady and monthly income save their excess earning through this account. There

are certain restrictions in the withdrawals. Bank pays interest at a nominal rate. Small savings

are encouraged in this account.

Fixed Deposit Account

Money is accepted a fixed period it cannot be withdrawn before expiry of fixed period. The

interest rate is higher than other accounts. The longer the period is the rate of interests.

Advancing of Loans

The deposits received are invested by advancing loans to needy borrowers for higher rate of

interest. This function is source of profit for banks.

Overdrafts

This facility is extended to current account holders where they are allowed to overdraw more

than the credit standing in their account. Since the facility is only for respectable and reliable

customers, bank may not insist on security. The security will also be taken in the form of

fixed deposits, NSC’S, shares, LIC policy and so on.

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Cash Credit

Under this account bank gives loans to borrowers against certain security. The entire loan

amount will not be given at one time. It will allow the borrower to withdraw from time to

time depending on the values of stocks debt in the go-down. The interest rate is charged on

the amount withdrawn.

Discounting of the Bills of Exchange

This is a popular type of lending. If the holder of an exchange of bills needs money

immediately he can get it discounted by the bank.

The bank pays the present price of bills after deducting commission and when the bills

mature the banks can receive the payment form the party who accepted the bill.

Direct/Term Loans

Bank also gives loans to individuals or firms against collateral security. The amount

sanctioned will be credited to his requirements. Normally, industrialists, agriculturists and

others borrow these loans to start industries and for his working capital.

SECONDARY FUNCTIONS

Agency function

Transfer of Funds

Banks help customers in transferring of funds from one place to the other through

drafts and other instruments, collect cheques, bills, salaries, pensions, dividends, and

rents on behalf of customers from other agencies.

Undertake the payments of subscription, insurance, premiums, rents, etc.

Undertake to buy and sell securities, acts as representative for customers in other

banks or financial institutions, acts as a trustee, execute and administrator to manage

trust.

Carry out deceased customers desire, signs, transfer forms and document

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Banks give advice to customers on income tax matters.

General Utility Service

The banks will safe keep valuables and documents. It collects credit information regarding

customers, transfer of foreign exchange, providing advisory services to industry, commerce,

trade, project, prospectus, order writing the issue of shares and debentures of companies.

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 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 systems has reached even to

the remote corners of the country. This is one of the main reasons of Indian growth process.

The government regular policy for Indian bank since 1969 has paid rich dividends

with the nationalization of 14 major private banks in India.

Not long ago, an account holder had to wait for hours at the banks counter for getting

a draft of for withdrawing his own money. Today he has a choice. One is days when the most

efficient bank transferred money from one branch to other in two days. Now it is simple as

instant messaging of dial a pizza. Money has become the order of the day.

The first bank in India, through conservative, was established in1786. From 1786 till

today, the journey of Indian banking system can be segregated into three distinct phase. They

areas mentioned below.

Early phase from 1786 to1969 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 and banking

services reforms in1991.

Phase I

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The general bank of India was set up in the year 1786. Next came bank of Hindustan

and banal bank. The East Indian company establishment 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 starred as private shareholders banks mostly Europeans share holder.

In 1865 Allahabad bank was established and first time exclusively by Indians, Punjab

national bank ltd. Was set up in 1894 with headquarters at Lahore. Between 1906and 1913,

bank of India, Central bank of India, bank of Baroda, Canara bank, Indian bank, bank of

Mysore were set up. Reserve bank of India came in 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 activates 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. Reserve bank of India was vested with

extensive owners for the supervision of banking in India as the central banking authorities.

During those day’s public has lesser confidence in the banks. As an aftermath deposit

mobilization was slow. Abreast of it the savings banks facility provided by the postal

department was comparatively safer. Moreover funds were largely given to traders.

Phase II

Government took major steps in this Indian banking sector reforms after

independence. In 1955 ,it nationalization imperial bank with extensive banking facilities

on a large scale specially in rural and semi urban areas. It formed state bank of India to act

as the principal agent of RBI and to handle banking transaction of the union and state

government 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, and 14 major commercial bank 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.

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The following are the steps taken by the government of India to regulate banking

institution in the country:

.1949: Enactment of banking regulation act.

1955: Nationalization of state bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of14 major banks

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural bank.

1975: Nationalization of seven banks with deposits over 200 corers.

After the nationalization of bank the branches of the public sector bank India rose to

approximately 800% deposits and advance took a huge jump by 11000.

Banking in the sunshine of government ownership gave the public implicit faith

and immense confidence about the sustainability of these institutions.

Phase III

This has introduced many more products and facilities in the banking sectors in its

reforms measure. In 1991 under the chairmanship of M Narasimham, a committee was set

up 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 important than

money.

The financial system of Indian 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 resave

are high, the capital account is not yet fully convertible, and banks their customers have

limited foreign exchange exposure.

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COMPANY PROFILE

ORIGIN OF THE BANK

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive approval from the Reserve Bank of India (RBI) to set up a bank in the private sector,

as part of RBI’s liberalization of the Indian Banking Industry. HDFC Bank was incorporated

in August 1994 and commenced operation as a Commercial Bank in January 1995. Currently,

HDFC Bank has a nation spread over 110 cities across the country and operates in three

segments. Wholesale banking, retail banking and treasury services

Demerger

Demerger means the transfer, by the demerged company, of one or more of its undertakings

to any resulting company in such a manner that:

i) All the property/liabilities of the undertaking, being transferred by the demerged

company, immediately before the merger become the property/liabilities of the resulting

company by virtue of the demerger;

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ii) The property and the liabilities of the undertaking(s) being transferred by the

demerged company immediately before the demerger are transferred at values appearing in

its books of account;

iii) The resulting company issues , in consideration of the demerger, its shares on a

proportionate basis to the shareholders of the demerged company;

iv) Shareholders holding not less than three-fourths in value of the shares in the

demerged company (other than shares already held therein immediately before the demerger,

or by a nominee for the resulting company or, its subsidiary) become shareholders of the

resulting company or companies by virtue of the demerger;

v) The transfer of the undertaking is on a going concern basis;

vi) The demerger is in accordance with the conditions, if any, notified in this behalf under

section 72A (5) by the central government.

Unlike the merger in which all assets are sold, a divestiture/demerger involves selling

of some of the assets only. These assets may be in the form of a plant, division, product line,

subsidiary and so on. Although divestiture causes contraction from the perspective of selling

firm, it may not, however, entail decrease in its profits. On the contrary, it is believed by the

selling firm that its value will be enhanced by parting/divesting/demerging some of its

assets/divisions/ operating units. By selling such unproductive/non-performing assets and

utilizing cash proceeds in expanding/rejuvenating other leftover assets/operating units, the

firm is likely to augment the profits of the demerged/divesting firm.

HDFC BANK PRODUCTS:

Accounts and deposits Savings account

Current account

Fixed deposit

Loans Personal loan

Home loan

Educational loan

Loan against property

Commercial vehicle financial

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Express loan plus

Cards Credit card

Debit card

Prepaid card

Investment and insurance Mutual funds

Bonds

Equities & derivatives

Forex services Trade finance

Foreign currency cash

Payments &service

ACCOUNTS AND DEPOSITS:

Banking should be effortless and in HDFC Bank, the efforts are rewarding. No matter what a

customer's need and occupational status, the bank range of solutions those are second to

none. Whether the customer is employed in a company and need a simple savings account or

run his/her own business and requires a robust banking partner, HDFC Bank not only has the

perfect solution for them, but also can recommend products that can augment their planning

for the future.

Savings account:

These accounts are primarily meant to inculcate a sense of saving for the future,

accumulating funds over a period of time. Whatever be the occupation, the bank is confident

that the customer will find the perfect banking solution.

Current account:

The HDFC Bank Current Account offers multi-city banking. The customer can have the

power of multi-location access to their account from any of the bank’s 746 branches in 329

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cities. Besides the customer can do most of their banking transactions from the comfort of

their office or home without stepping out.

The bank’s ultimate aid is to help their in their business by offering their current

account with all the benefits they need to stay ahead of their competition.

At HDFC Bank, customer business needs are constantly evolving. The bank provides

customers with a choice of Current Account options to exclusively suit customer businesses -

whatever the size or scope. If a customer opens an HDFC Bank Current Account it can

control customer business operations centrally.

Fixed deposits:

Long-term investments form the chunk of everybody's future plans. An alternative to simply

applying for loans, fixed deposits allow the customer to borrow from their own funds for a

limited period, thus fulfilling their needs as well as keeping your savings secure.

LOAN:

Personal loan:

During occasion, our range of Personal Loans can help. The procedure is simple,

documentation is minimal and approval is quick.

Features & benefits:

Borrow up to Rs 10, 00,000 for any purpose depending on your requirements.

Flexible Repayment options, ranging from 12 to 48 months.

Repay with easy EMIs.

One of the lowest interest rates.

Hassle free loans - No guarantor/security/collateral required.

Speedy loan approval.

Convenience of service at their doorstep.

Customer privileges

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The HDFC Bank offers special rates for their customers.

An existing Auto Loan customer with a clear repayment of 12 months or more from any

of the bank approved financiers, customer can get a hassle free personal loan (without

income documentation).

An existing HDFC Bank Personal Loan customer with a clear repayment of 12 months or

more, bank can Top-Up customer personal loan.

Credit shield:

In case of death or total permanent disability of the loanee, the loanee/nominee can avail of

the Payment Protection Insurance (Credit Shield) which insures the principle outstanding on

the loan up to a maximum of the loan amount. Principle outstanding is defined as the amount

of loan outstanding (not including any arrears in payment or interest thereon) at the Date of

Loss, having accounted for payments made and interest accruing as determined in the Policy.

Hence, the amount covered does not include any principal added because of non - payment of

EMI and also will not include interest/ accrued charges.

Personal Accident Cover

In order to ensure that the customer’s family is taken care of the bank also offer a Personal

Accident cover of Rs.2, 00,000 at a nominal premium.

Premium will be charged for both these products which will be deducted from the loan

amount at the time of disbursal. A transaction fee of Rs.350 is deducted at the time of

disbursal. The service tax @ 12.36% is being charged.

Home Loan:

HDFC Bank brings HDFC home loans to the customer doorstep. With over 25

years of experience, a dedicated team of experts and a complete package to meet all the

customer housing finance needs, HDFC Home Loans, help them realize their dream.

Feature & benefits:

Home Loan - Home loans for individuals to purchase (fresh / resale) or construct

houses. Application can be made individually or jointly. HDFC finances up to 85%

maximum of the cost of the property (Agreement value + Stamp duty +

Registration charges).

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Home Improvement Loan - HIL facilitates internal and external repairs and other

structural improvements like painting, waterproofing, plumbing and electric works,

tiling and flooring, grills and aluminum windows. HDFC finances up to 85% of the

cost of renovation (100% for existing customers).

Home Extension Loan - HEL facilitates the extension of an existing dwelling unit.

All the terms are the same as applicable to Home Loan.

Land Purchase Loan - Be it land for a dream house, or just an investment for the

future, HDFC Land Purchase Loan is a convenient loan facility to purchase land.

HDFC finances up to 70% of the cost of the land (Conditions Apply). Repayment of

the loan can be done over a maximum period of 10 years.

Choose from Fixed Rate or Floating Rate with options to structure the customer

loan as Partly Fixed or Partly Floating.

Flexible repayment options to suit their individual needs.

Loan cover Term Assurance Plan - HDFC Standard Life Insurance Company Ltd.

offers an insurance plan which is designed to ensure that life's uncertainties do not

affect your family's interests and your precious home. LCTAP provides a lump-sum

payment on the unfortunate demise of the life assured.

This pure risk plan is designed in a way that the cover decreases as the customer repay

their home loan making it a low cost premium insurance plan. Insurance is the subject

matter of solicitation.

Automated Repayment of Home loan EMI – the customer can give us standing

instructions to repay their Home Loan EMIs directly from their HDFC Bank Savings

Account, thus, saving you the trouble of procuring, signing and tracking post-dated

cheques.

HDFC also offers In-house scrutiny of Property documents for your complete

peace of mind.

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Customer privileges - If you are an existing HDFC Home Loan customer, you can

avail of other loans (such as Personal Loans, Car Loans, Two-wheeler Loans and

Loan against securities) at lower interest rates.

Educational loan:

Features and benefits:

Loans up to Rs.10 Lakhs for Education in India and up to Rs.20 Lakhs for Education

abroad.

Attractive interest rates.

Repayment to start 1 year after course completion / 6 months after obtaining

employment (whichever is earlier)

Loan available up to tenure of 7 years including moratorium period.

Tax Benefits available under Section 80E of the IT Act

Hassle free loans and speedy approvals.

Convenience of service at their doorstep.

Loans available for other course related expenses also.

special privileges:

Loans disbursed directly to the educational institution.

Loan to be released as per fee schedules of institutes.

Exclusive Telegraphic Transfer facility available for courses abroad.

Loans available for short duration/ job oriented courses also.

Loan against property

HDFC Bank brings to the customer Loan against Property (LAP). The customer can

now take a loan against their residential or commercial property, to expand their business,

plan a dream wedding, and fund your child's education and much more.

The customer can depend on us to meet all their business requirements even to

purchase a new shop or office for their business. Loan to purchase Commercial Property

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http://www.hdfcbank.com/personal/loans/loan_securities.htm

http://www.hdfcbank.com/personal/loans/two_wheeler.htm

http://www.hdfcbank.com/personal/loans/new_car.htm

http://www.hdfcbank.com/personal/loans/personal_loans.htm

(LCP) is a specially designed product to help the customer expand their business without

reducing the capital from your business.


Loans from Rs. 2 Lacs on wards depending on their needs.

Borrow up to 60% of market value of the property.

Flexibility to choose between an EMI based loan or an Overdraft –the bank

also offer to the customer overdraft against their self-occupied residential or

commercial property and the customer can save money by paying interest only

on the amount utilized.

High tenure loans for ease of repayment.

Attractive interest rates.

Simple and speedy processing.

Specially designed products for Self Employed

Loan commercial financial

Overview:

The customers are looking at the right place. Bank offer hassle-free commercial vehicle loans

with the best terms for funding at the most attractive rates in India.

Loans are extended for the purchase of:

Commercial Vehicles - Loans for commercial vehicles (this includes buses, trucks, tempos,

tippers), LCVs (light commercial vehicles, HCVs (heavy commercial vehicles), MCVs

(medium commercial vehicles) and three wheelers.

We provide funding for all models of Telco, Ashok Leyland, Swaraj Mazda, Eicher, Bajaj

Tempo, Volvo etc.

Types of loan:

New Vehicles

Used Vehicle / Refinance

Balance Transfer

Top-Up loans

Express loan:

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The HDFC bank offer Express Loans Plus at your Doorstep to help fulfill all their needs. The

procedure is simple, documentation is minimal and approval is quick.


Borrow up to Rs. 100,000/- for any purpose depending on their needs.

Flexible repayment options, ranging from 12 to 36 months.

Loans at their Doorstep.

Repay with easy EMIs.

One of the lowest interest rates in the market.

Hassle free loans - No guarantor/security/collateral required.

CARDS:

The bank range of Cards helps the customer meet their financial objectives. So whether the

customers are looking to add to their buying power, conducting cashless shopping, or

budgeting their expenditure, the customer will find a card that suits you.

Credit card :

Besides arming the customer with unmatched spending power, the bank’s Credit Cards are

designed to meet their unique needs. Choose one that's tailored for the customer. The best

credit cards are available here, including even the online credit cards service Net safe.

Silver credit card:

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http://www.hdfcbank.com/personal/payments/netsafe.htm

The best features the customer could ask for in a credit card. Combined with all the

services offered by a world-class bank. Get all with the HDFC Bank International Silver

Credit Card. Spending money was never so rewarding.


All –purpose credit card the HDFC bank silver credit card can be used for all their

requirements, is it shopping, eating out, fuelling, up their vehicle, railway ticket reservation-

just about any financial requirement, planned or on impulse.

Earn while customer spend with us, money spent is money earned. For every Rs. 150

spend, the customer earn 1 reward points. The customer can redeem these accumulated points

for exciting gifts and offers from the bank exclusive rewards program.

Add on cards get up to 3 add-on cards for the customer spouse, parents, siblings(own

brother/sister), son and/or daughter (over 18 years) and allow them to enjoy the many

benefits of the HDFC bank international silver credit card.

Zero liability on lost card: In case their credit card gets lost, report it immediately to the

bank 24-hour call centre. After the customer carry zero liability on any fraudulent

transactions on their card.

Widely accepted

Accepted at over 110,000 merchant establishments across India and Nepal and close to 18

million merchant establishments around the world.

Gold credit card:

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It's overloaded with travel benefits - discounts, cash back offers, air miles redemption.

Get an HDFC Bank International Gold Card and get introduced to a whole new world

of privileges.


Up to 5% cash back on air ticketing

5% cash back on domestic air transactions above Rs.10000 through domestic

air line websites (2.5% on transactions below Rs.10000).

5% cash back on train ticketing

Get 5% cash back on railway tickets purchased with HDFC Bank Gold Credit

Card at the Indian Railways.

Note: The customer can earn up to Rs 1000/- cash back in a month on their Gold Credit Card.

Special Offers from HDFC Bank

8 paise discount on foreign exchange selling rates.

Locker facility at 20% discount on applicable rates.

4% off on applicable rates of Gold bars.

Waiver of 1st year Annual Maintenance Charges on Demat account and 50% waiver

in subsequent years.

0.25% off on applicable Auto loan rates.

Note: Offers are applicable only on new loans/lockers/ Demat accounts opened (or forex

transactions done) between 1 April 2007and 31 March 2008. To avail these offers, fill up the

applicable vouchers, attach them with the application forms of respective products and

present at the nearest HDFC Bank branch with a photocopy of your HDFC Bank Gold Credit

Card membership.

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Greater reward points

Earn 2 reward points per Rs 150 spent on the Gold Credit Card and redeem them

against air miles across leading airlines. The air and train transactions earning cash back will

not be eligible for reward points.

Rewards point’s redemption

After earning all those reward points on your HDFC Bank Gold Credit Card, redeem

them for exciting gifts and services. The customer could even convert them to airline miles

with India's leading airlines through the My Rewards programme.

Worldwide acceptance

Accepted at over 23 million Merchant Establishments around the world, including

110,000 Merchant Establishments in India.

Revolving credit facility

Pay a minimum amount, which is 5% (subject to a minimum amount of Rs.200) of

their total bill amount or any higher amount whichever is convenient and carry forward the

balance to a better financial month. For this facility the customer pay a nominal charge of just

2.95% per month (35.4% annually) (2.90% per month 34.8% annually for HDFC Bank

Account Holders).

Free Add- on Card

The customer can share these wonderful features with their loved ones too – the bank

offers the facility of an add-on card for their spouse, children or parents. Allow us to offer

add-on cards to the customer FREE OF COST with bank compliments.

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http://www.hdfcbank.com/applications/misc/rewardcatalog/cc_rewards.asp

Women’s gold credit card:

Presenting a Gold credit card exclusively for the new age woman. Another

proud offering from HDFC Bank Credit Cards replete with discounts, cash back programmes,

rewards and more.


5% cash back on your Monthly household purchases

Get whopping 5% cash back on all grocery/ supermarket & select departmental store

purchases on their woman's card. Here's more good news - there is no upper limit on this cash

back. It functions as the ideal household credit card.

Notes: The customer can earn up to Rs 1000 cash back in a month on their Woman's Gold

Credit Card.

5% cash back on mobile bill payments through smart pay

Pay their monthly mobile bills through HDFC Bank's "Smart pay" facility on their card, and

get 5% of their bill as cash back.

Accelerated rewards programme

Rewards simply multiply with Woman's Gold card. Get 5 reward points for every Rs.100

spent above Rs.5, 000 in a month. For spends up to Rs 5000 in a month the customer get 2

reward points per Rs 100 spent.

Wide choice of redemption

The bank gives reward to customer an array of redemption opportunities for their Points -

From microwaves to refrigerators, from Barbie dolls to latest Fashion labels, bank takes pride

in giving one of the widest options for getting rewarded. The customer can also redeem their

accumulated reward points for air miles on leading airlines like Jet Airways, Air India,

Kingfisher Airlines and Air Sahara.

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Discounts galore just for you

Get amazing discounts at select partner outlets like Kaya Skin clinic & Hide sign when the

customer uses HDFC Bank Woman's Gold Card.

Worldwide acceptance

Accepted at over 23 million merchant establishments around the world, including 110,000

merchant establishments in India.

Platinum plus credit card:

India's only platinum plus Credit Card offering exclusive travel and preferential

benefits. The HDFC Bank Platinum plus Credit Card is the best Platinum offering in the

market. It is the recognition of those who have "arrived in life". Enjoy a world of exclusive

privileges on the HDFC Bank Platinum plus Credit Card.


Exclusive travel benefits

Discounts at over 28,000 hotels and resorts worldwide

Enjoy discounts at over 28000 hotels and resorts across the world through a

complimentary Travel Club holiday membership (powered by RCI).

5% Cash back on Airline Bookings through HRG-SITA

Get 5% Cash back when the customer books their domestic air tickets for India's top

airlines (Air India, Jet Airways, Air Sahara and Kingfisher Airlines) through HRG-Sita.

Worldwide Concierge Services:

A toll free service to assist their needs any time during the day. The offering allows the

customer to avail of the following benefits:

Golf Course Referral and Reservation

Car Rentals, Limousine Referral and Reservation

Hotel Referral and Reservation

Special Events and Performance Assistance

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Flowers and Gift Delivery Service

Dining Referral and Reservation Service

Movie Tickets delivery

Estate / Tax Planning referral Service

Pretrip Information Services (including visas and inoculation requirements)

Embassy Referrals

Lost Luggage Assistance

Lost Passport Assistance

All these services available to the customer anytime, anywhere.

Accelerated Rewards Program - earn as you spend

The unique Rewards program on the Platinum plus Credit Card now let the customer

accumulate more reward points on using their card frequently.

- 2 points per Rs 150 up to Rs 10,000 spend p.m.

- 50% incremental (1 increment+2 normal=3 points per Rs 150) on incremental spend above

Rs 10,000 p.m.

0% Fuel surcharge

The customer can now fuel up as and when their want, without worrying about the surcharge

- enjoy complete freedom from fuel surcharge when the customer purchase fuel between Rs

400 and Rs 5000 with their Platinum Plus Credit Card.

Low interest rate

The customer can enjoy the Revolving Credit Facility of the Platinum plus Credit Card with

the remarkably low interest rate of 2.65% per month.

Balance Transfer

The customer can transfer the balances from their other credit cards to the Platinum plus

Credit Card, and enjoy an interest-free period of 3 whole months on the transferred amount.

Utility bills through your credit card

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Register their Platinum plus Credit Card with Smart Pay, HDFC Bank's Utility Bill payment

service. Ensure that all their utility bills are paid on time, without any hassle for the customer.

Debit card:

Easy shop international debit card:

HDFC Bank Easy Shop International Debit Card brings to the customer a world of

convenience.


Daily Limits: Rs. 15000 at ATMs for Withdrawal and Rs. 25000 at merchant

establishments for shopping

Access their bank account at over 8, 00,000 Visa/Maestro/Cirrus ATMs in India and

abroad.

0 % petrol surcharge at select BPCL Petrol pumps: As a Debit Card holder, any

surcharge levied on their Card at select BPCL petrol pumps would be reversed in the

subsequent month.

Shop at more than 3, 50,000 outlets in India and 13 million worldwide. The amount is

debited directly to their account.

Use their card overseas. HDFC bank account is debited in Rupees regardless of the

currency in which the customer spends.

Zero Liability on fraudulent Point Of Sale usage on lost or stolen cards. Cl now gets

an Alert on their mobile phone or email for every purchase transaction done using

their Debit Card at a merchant outlet. All the customer need to do is register for Insta

Alerts.

Worldwide assistance from Visa and MasterCard on their card.

Easy shop women’s advantage debit card:

HDFC Bank Easy Shop Woman's Advantage Debit Card is India's first Woman's Debit Card

of its kind. Not only does it replace their ATM card, it also opens a world of privileges that

match their status and lifestyle.

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http://www.hdfcbank.com/personal/cards/cc_smartpay.htm


Cash Back of Re. 1 for every Rs. 200 spent:

For every Rs. 200 that the customer will spend and will receive Re. 1 as cash back .This cash

back is valid on all purchases made through the card, at all times of the year.

Specialized Services:

A unique service number will be available for Woman's Debit Card customers to avail

information / booking for the services listed ahead. Just call, quote your card number and

use any of the services. These services are subject to availability and rendered on a best

effort basis.

Entertainment assistance :

Dining Referral and Reservation Assistance

Flower & Gift Delivery

Movie Tickets

Home assistance:

Financial Planning & Advisory Services Assistance

Electrical & Electronic Gadget Repair Assistance

Pest Control Assistance

Home Cleaning Assistance

Wellness :

Medical Checkup Packages

Nursing Care Arrangement

50% discount on locker fee:

The customer will be entitled to a 50% discount on locker fee for the 1st year. This waiver

would be applicable for only one locker per card. In order to avail of the discount, please

show their Woman's Advantage Debit Card at the branch.

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Special discount on purchase of Gold Bars:

Preferential pricing will be given to the customer on purchase of Gold Bars. In order to avail

of the special discount, pleas show their Woman's Advantage Debit Card at the branch.

Insurance cover:

The customer will be entitled to Personal Accident insurance cover of 2 lacks.

Zero Liability:

The customer will not have any liability to any fraudulent Point of Sale transactions on the

debit card, which take place up to 30 days prior to reporting the card loss.

Free Bill Pay: the customer will not be charged for Bill Pay Service, normally chargeable

at Rs. 100 p.a.

Daily Limits:

Rs. 20,000 at ATMs for Withdrawal and Rs. 30,000 at merchant establishments for shopping.

(Effective July 25, 2007)

Kisan card:

Agriculture is the main occupation of the people of India. Nearly 2/3rd of our

country's population is directly or indirectly engaged in agriculture. It contributes to 21% of

the bank GDP. Keeping this in mind, the bank has designed the Kisan Gold Card to envisage

a convenient and hassle-free loan to the farmer for meeting his production and investment

requirements. Banks have been giving these loans, but with technology edge bank conceives

a real plastic for the farmer for giving him the convenience to bank anywhere, anytime and

not being restricted to a 10am-2pm banking culture. The card, launched in association with

Visa International, can also be used at POS terminals globally.


The Kisan Gold Card is aimed at meeting the production and investment needs of the

farming community. Production needs broadly cover crop production requirements,

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including funds for all related inputs to grow a crop. Bank also meets Post Harvest and

Domestic consumption requirements.

The Card caters to investment needs such as purchase of agricultural related

equipment/implements, irrigation requirements, construction of farm related buildings, and

investment in agriculture related activities such as Dairy, Piggery, Beekeeping and the like

The credit limit on the card, sanctioned for three years, is based on the production

requirements of the farmer. The limit will be renewed every three years.

24-hour Banking Facility

The Card can be used at any HDFC Bank ATM across the country and all Visa

establishments worldwide.

Personal Accident Insurance Cover of Rs. 2 Lakh, free to all cardholders.

Daily withdrawal limit through the card is Rs. 15,000 at ATMs and Rs. 25,000 for

usage at merchant outlets.

The return on investments is the best in the industry.

The Debit Card is backed by line of credit.

Prepaid cards:

It is a unique card wherein, the customer pay first and spend later. HDFC bank offers prepaid

cards also. Like the name suggests, a prepaid credit card requires the customer to pay first

and use later.

Forex plus card:

When you travel abroad, leave your worries behind

HDFC Bank brings the customer Forex plus Travel Card - a pre-paid traveler’s card designed

to give the customer a secure and hassle-free travel experience.

No more chasing moneychangers. Or paying transaction charges for shopping abroad. The

Forex plus Travel Card is ideal for travelers since it can be blocked if stolen and reloaded,

while the customers are still abroad. In fact, it is the perfect answer to all their foreign

exchange needs.

The Forex Plus Travel Card is:

Accepted at all Visa Merchant outlets worldwide

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Can be used to withdraw cash at all VISA ATMs worldwide.

Reloadable anytime, anyplace

Available in Australian Dollar, Canadian Dollar, Euro, GBP, US Dollar and Japanese

Yen Currencies

Comes with Personal Accident Insurance Cover of Rs 2 lacks.

Includes Loss of Checked Baggage & Passport reconstruction insurance cover


Protection against Foreign Exchange fluctuation

The basic denomination of this card is in AUD / CAD/ Euro / GBP / US Dollars / Japanese

Yen. But the customer can withdraw cash or use the card at POS in any currency, anywhere

in the world. For withdrawals, which are in the card currency i.e. AUD / CAD/ Euro / GBP /

US Dollars / Japanese Yen, the customer don't lose out on foreign exchange due to

fluctuating market rates.

Safer and more secure

This card is accepted at all Visa Merchant outlets and 24 hour VISA ATMs worldwide. So no

more carrying the bulk of cash or travelers’ cheques. And no more hassle of chasing money

changers, paying commissions and tracking expenses. Their Card is protected against misuse

at ATMs with a PIN. In case their card gets lost or stolen, all the customer have to do is call

HDFC Bank Phone Banking number at Mumbai (91-22-28561818) immediately and report

the loss of their card.

Reloadable anytime, anyplace

HDFC Forex plus card is valid up to the last day of the month indicated on their card. Within

this period the customer can use their card as often as the customer like. In case their money

gets exhausted, this card offers the facility to reload even in the middle of their journey.

Available in Australian Dollar, Canadian Dollar, Euro, GBP, US Dollar and

Japanese Yen Currencies

Each of these currencies are accepted worldwide and can be changed into the currency of the

country that the customer are in.

Ease of tracking

Get online access to their card account and track their spends, check their balance, Change

their IPIN and log an online request for PIN change. What more, we'll also send the customer

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a statement of account to their mailing address at the end of every month during which any

card transaction takes place.

Insurance Cover

Enjoy a travel experience free of financial worries with card insurance covers such as

Personal Accident Insurance (Death cover only) of Rs.2,00,000, loss of checked baggage

cover up to Rs.20,000 and passport reconstruction cover (actual cost of passport

reconstruction only).

Gift plus card:

Gift the freedom to choose - Gift an HDFC Bank Gift plus card - the perfect gift for every

occasion.

Walk into any HDFC bank branch and walk away with a loaded Gift card, ready to be gifted

and used

The card has been packaged to suit any gifting occasion and is available for any

denomination of their choice. It gives gifting the personal touch that we all desire and also

gives the beneficiary the freedom to choose the way they want to use it.

So go ahead, visit any bank branch and gift this unique gift to their relatives, friends, and

colleagues...anybody that the customer ever gift.


More personal than cash

Most often than not, we run short of time or ideas to gift - we then make do with gifting

cash. This card with its occasion-based packaging is more personal than cash, as it reflects

the thought and effort that has gone behind the gift.

Freedom of choice

While the card is more personal than cash, it also allows the cardholder (the beneficiary) the

freedom to choose their own gift. Shop, dine, party - the cardholder can use the card just the

way he/she wants. This is the freedom this card gifts the user.

Ease of usage

Gift plus card is a Visa card and can hence be used at any Visa affiliated merchant outlet,

both in India and abroad. This gives worldwide usage access to over more than 13 million

merchant establishments.

Ease of tracking

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Gift plus card has an ATM PIN and also an IPIN in the card kit. The ATM PIN allows the

card holder the access to any HDFC Bank ATM for balance enquiry on the card. The

IPIN gives further access even to the transaction history. The card holder can use this

option and even download the usage statements. Also, the cardholder can call up the local

Phone Banking number for any further query

Food plus card:

HDFC Bank brings the customer most convenient way of giving regular meal allowances to

their employees.


Personalized Visa Card

Card can be reloaded as per the corporeity’s instruction

Card can be used at all Visa "Food & Beverage" merchant outlets in India

If lost, the Card can be hot listed to protect the value on the Card

Balance Inquiry is allowed at all HDFC Bank ATMs

Net Banking access to every Card account

24 X 7 accesses to Phone Banking

Card Statement for tracking the usage

INVESTMENT AND INSURANCE:

Mutual funds:

Mutual funds are funds that pool the money of several investors to invest in equity or debt

markets. Mutual Funds could be Equity funds, Debt funds or balanced funds.

Funds are selected on quantitative parameters like volatility, FAMA Model, risk adjusted

returns, and rolling return coupled with a qualitative analysis of fund performance and

investment styles through regular interactions / due diligence processes with fund managers.

Advantages of investing into a mutual fund:

The reason that mutual funds are so popular is that they offer the ability to easily invest in

increasingly more complicated financial markets. A large part of the success of mutual funds

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is also the advantages they offer in terms of diversification, professional management and

liquidity

Flexibility

Mutual Fund investments also offer the customer a lot of flexibility with features such as

systematic investment plans, systematic withdrawal plans & dividend reinvestment

Affordability

They are available in units so this makes it very affordable. Because of the large corpus, even

a small investor can benefit from its investment strategy.

Liquidity

In open ended schemes, you have the option of withdrawing or redeeming their money at any

point of time at the current NAV

Diversification

Risk is lowered with Mutual Funds as they invest across different industries & stocks.

Professional Management

Expert Fund Managers of the Mutual Fund analyse all options based on experience &

research

Potential of return

The fund managers who take care of their Mutual Fund have access to information and

statistics from leading economists and analysts around the world. Because of this, they are in

a better position than individual investors to identify opportunities for their investments to

flourish.

Low Costs

The benefits of scale in brokerage, custodial and other fees translate into lower costs for

investors.

Regulated for investor protection

The Mutual Funds sector is regulated to safeguard the investor's interests. Their relationship

managers will help the customer to determine their investment profile, which will be based

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on their needs, possibilities and expectations. Their investment profile will help the customer

choose the type of investments that suits the customer best.

Bonds:

Just as people need money, so do companies and governments. A company needs funds to

expand into new markets, while governments need money for everything from infrastructure

to social programs. The problem large organizations run into is that they typically need far

more money than the average bank can provide. The solution is to raise money by issuing

bonds (or other debt instruments) to a public market. Thousands of investors then each lend a

portion of the capital needed. A bond is nothing more than a loan for which the customers are

the lender. The organization that sells a bond is known as the issuer. The customer can think

of a bond as an IOU given by a borrower (the issuer) to a lender (the investor).

For example, say an investor buys a bond with a face value of Rs 1,000, a coupon of 8%, and

a maturity of 10 years. This means the investor receives a total of Rs 80 (Rs 1,000 * 8%) of

interest per year for the next 10 years. Actually, because most bonds pay interest semi-

annually, the investor receives two payments of Rs 40 a year for 10 years. When the bond

matures after a decade, the investor gets their Rs 1,000 back.

The different types of bonds include government securities, corporate bonds, commercial

paper, treasury bills, strips etc. These bonds are either fixed interest bonds or floating rate

bonds. In fixed interest bonds, the interest component remains the same throughout the tenure

of the security. Say a 10-year bond issued today bears 8% interest. Even if 5 years hence, the

interest rate in the economy goes down to 5%, this 8% bond will continue to earn the investor

8% interest. In a floating rate bond, the interest rate varies depending on the interest rate of a

security that the bond chooses to benchmark its interest rate to.

Equities & derivatives:

In financial markets, the only constant thing is change. At such

times, HDFC Securities offers the customer a unique gamut of services designed to put the

customer in charge of their finances and lets the customer trade in the comfort of their home

or office. Finally, the customer can trade with complete ease.

Empower yourself today:

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Making things simple the customer has always been the bank foremost Endeavour. The latest

effort includes a unique setup which allows the customer to trade seamlessly either through

the Internet model or the Dial-a-Share model.

Online Trading

Simplified trading is just a few clicks away. To trade online, all the customers have to do is

Confirm the order placed .Check their mail for an email confirmation of their order.

Once the customers have completed these simple steps, the customer can sit back and watch

their shares and money being credited and debited online.

Now the customer can quickly and seamlessly apply to the latest public offerings.

Dial-a-share

The dial-a-share facility gives the customer convenience to trade in shares over the telephone

and the ease of settlement of traders as an electronic process.

Invest right with the 3-in-1 advantage:

The HDFC securities trading account has a unique 3-in-1 feature that integrates their HDFC

securities trading account with their existing HDFC bank savings account and existing demat

account. At their instructions, funds/shares can be seamlessly moved from their linked

Demat/Bank account to execute their transactions.

Get the extra advantage:

When the customers choose to trade through HDFC securities, the customer can be assured of

the following benefits:

Seamless transactions:

By integrating their accounts, we ensure minimal waste of time during movement of their

funds and shares.

Speed

Orders are placed electronically, so proceeds are available instantly.

No manipulation

To prevent any mismanagement, we will send the customer an email confirmation, the

minute their order is executed.

Safety and Security

HDFC Securities offer the highest level of security such as 128-bit encryption technology.

Dedicated and Separate contact numbers

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For trading over the phone as well as for customer care.

Forex services:

Foreign currency travelers cheques:

Travelers Cheques are a safe and easy way to protect their money when the customer travel.

The customer can encase them only when the customer need to, and only against their

signature, unlike cash which can be stolen and misused by anybody, immediately. Loss of

Travelers Cheque can be reported anywhere in the world by making a single phone and the

pre-fixed amount on the cheques are made refundable.

Travelers Cheques are offered in major currencies like USD, GBP, Euro, CAD, AUD and

JPY. These are available in various denominations to suit their needs. At present HDFC Bank

offers American Express Travelers Cheques which are widely accepted at Merchant

Establishments and Financial Institutions across more than 200 countries

Foreign currency cash:

Foreign Currency Cash is a convenient way of meeting personal expenses along their

journey, paying for taxis / internal travel, food expenses etc. The customer could avail of

Foreign Currency Cash in USD, GBP, EURO, AUD and CAD from the HDFC bank branches

offering Foreign Exchange facilities.

Foreign currency demand draft:

The customer can now avail of the customer FCY DD facility to make payments for various

purposes like:

Payment of University fees abroad

Making a gift remittance to a friend or relative

Payment of application fees for various exams like TOEFL, GMAT etc.

Payment for medical treatment abroad

And all other permitted purposes as per the RBI guidelines.

FCY Demand Drafts are issued in seven currencies like United States Dollars (USD), Great

Britain Pounds (GBP), EURO, Japanese Yen (JPY), Australian Dollars (AUD), Canadian

dollars (CAD) and New Zealand Dollars (NZD).

Foreign currency cheque deposits:

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The customer can directly deposit their foreign currency cheques in to their saving or current

account. HDFC Bank will then have the cheques sent for collection and the funds will be

credited to their account in Indian Rupees. We accept cheques of various currencies like

USD, GBP, Euro, JPY, Australian Dollars, Canadian Dollars, UAE Dirham’s, Hong Kong

Dollars and Swiss Francs.

Clearing Timings for cheques payable in US Dollars: 6 International working days for cheque

payable in New York and 16 international working days for Non-New York from the date of

lodgment at clearing house.

Clearing Timings for cheques payable in Euro: 8 International working days for cheque

payable in Germany and 18 international working days for Non-Germany from the date of

lodgment at clearing house.

DESIGN OF THE STUDY

INTRODUCTION:

Finance is the life-blood of business. It is rightly termed as the science of money.

Finance is very essential for the smooth running of the business. Finance controls the

policies, activities and decision of every business.

“Finance is that business activity which is concerned with the organization and conversation

of capital funds in meeting financial needs and overall objectives of a business enterprise.”-

Wheeler

Financial management is that managerial activity which is concerned with the planning and

controlling of a firm financial reserve. Financial management as an academic discipline has

undergone fundamental changes as regards its scope and coverage. In the early years of its

evolution it was treated synonymously with the raising of funds. In the current literature

pertaining to this growing academic discipline, a broader scope so as to include in addition to

procurement of funds, efficient use of resources is universally recognized.

R.Y.M.E.C

Financial analysis can be defined as a study of relationship between many factors as

disclosed by the statement and the study of the trend of these factors.

The objective of financial analysis is the pinpointing of strength and weakness of a business

undertaking by regrouping and analyzing of figures obtained from financial statement and

balance sheet by the tools and techniques of management accounting. Financial analysis is as

the final step of accounting that result in the presentation of final and the exact data that helps

the business managers, creditors and investors.

Based on this reasoning, this project is an attempt to “comparative study of ratio analysis

of HDFC bank with selected private banks”.

Accounting ratios are relationships expressed in the mathematical terms between

figures that are connected with each other in the same manner. The information contained in

the balance sheet, profit and loss account or the income statements are used by the

management, creditors investors and others to form judgment about the operating

performance and the financial strengths and weaknesses of the firm if we properly analysis

the information reported in the statement.

B.STATEMENT OF THE PROBLEM:

“The project deals with the comparative study of ratio analysis of HDFC BANK with

selected private banks”.

In the financial analysis a ratio is used as an index for evaluating the financial position

and performance of the firm. The absolute accounting figures reported in the financial

statement do not provide a meaningful understanding of the performance and the financial

position of a firm. A relative study with the peer group reveals the bank’s strength, weakness,

competitive position and the overall performance.

C.OBJECTIVES OF THE STUDY:

Based on the information furnished in the financial statements, the various objectives of

the ratio analysis are:

To identify the bank’s relative strengths and weaknesses.

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To analyse the financial performance of the bank.

To analyse and compare various ratios in comparison with selected private banks viz.

ICICI BANK, ING VYSYA, CITI BANK, KOTAK MAHENDRA.

To suggest appropriate measures for enhancing financial performance of the bank.

D. NEED OF THE STUDY:

The comparative study of ratio analysis of HDFC BANK with selected private banks

will enable us to know the liquidity position, financial leverage, solvency position of HDFC

BANK with that of their peers. The study reveals the financial performance of the bank and

also its future prospects.

E.SCOPE OF THE STUDY:

The scope is limited to published information received from various bank website.

The study was limited to few important ratios of the bank.

It covers the comparative study of ratio analysis of HDFC BANK with ICICI, ING

VYSYA, KOTAK MAHINDRA and CITI BANKS only.

The study covers 2006-07 P&L a/c and balance sheet items only.

The study limits to 5 major private banks only.

F. LIMITATIONS OF THE STUDY:

The study was limited to select financial parameters of HDFC BANK, ICICI, ING

VYSYA, KOTAK MAHINDRA and CITI BANKS.

The study covers previous one year of balance sheet only (2006-07). It may not

adequately represent fail picture of the bank performance.

Time duration for the study was very short as it was restricted to just six weeks.

The study was limited to analysis of selected ratios only.

G. RESEARCH DESIGN:

R.Y.M.E.C

Research design means a search of facts, answers to question and solution to the problems. It

is a prospective investigation. Research is a systematic logical study of an issue or problem

through scientific method. It is a systematic and objective analysis and recording of

controlled observation that may lead to the development of generalization, principles,

resulting in prediction and possibly ultimate control of events.

Research design is the arrangement of conditions for the collection and analysis of

data in manner that aims to combine relevance to the research purpose with relevance to

economy. There are various designs, which are descriptive and helpful for analytical

research.

Research design used in the specific study includes the following:

Identifying the statement of the problem.

Collection of the company’s specific literature i.e., annual reports for the study period

and the profile of the company.

Scanning through standard books to understand the theory behind the financial

performance evaluation.

Collection of information from various journals to understand the industrial

background of the study

Decision regarding study period in this case it was decided to be one year’s i.e., from

2006-2007.

Identification of financial ratios likely to reflect the capital adequacy, resources

deployed, assets quality, management quality, earning quality and liquidity of the

organization. In this case it was decided to be:

Profitability Ratio

Liquidity Ratio

Activity Ratio

Calculation of the above ratios over the study period and analyzing it.

Forwarding certain recommendation and conclusion to the bank.

H.THE THEORETICAL CONCEPT

Ratio Analysis:

R.Y.M.E.C

A ratio is defined as ‘the indicated quotient of two mathematical expressions’ and as ‘the

relationship between two quantitative terms between figures which have a cause and effect

relationship or which are connected with each other in some manner or the other. A

noticeable point is that a ratio reflecting a quantitative relationship helps to perform a

qualitative judgment. Such is the nature of all financial ratios.

Ratio analysis is a widely used technique in financial analysis. It is defined as systematic use

of ratio to interpret the financial statements so that the strengths and weaknesses of the

organization, its historical performance and current financial condition, can be determined.

TYPES OF RATIO

1. Current Ratio

It may be defined as the relationship between the current assets and current liabilities.

The ratio is a measure of general Liquidity of the firm for a short period of time. A ratio of 2:

1 is considered satisfactory as a rule of thumb

Current Assets (CA)

Current Ratio =

Current Liabilities (CL)

2. Proprietary Ratio

This ratio establishes the relationship between the shareholders funds and the total

assets of the firm. It establishes the claims of the shareholders on the firm’s assets. It usually

is expressed as a pure ratio.

Shareholder’s Fund

Proprietary Ratio = X 100

Total Assets

3. Solvency Ratio

It can be defined as the relationship between total liabilities and total assets.

Total Liabilities

R.Y.M.E.C

Solvency Ratio = X 100

Total Assets

Generally lower the solvency ratio, more satisfactory or stable is the long-term

solvency position of a firm.

4. Return on Total Resource

Return on total resource or total assets ratio is the ratio of net profit to total resources

or total assets. Return here means net profit after taxes and total resources mean all realizable

assets including intangible assets, if they are realizable. This ratio measures the productivity

of the total resources of a concern.

Formulae

Net Profit

Return On Total Resource = ______________ X 100

Total Asset

5. Earnings per Share

The ratio establishes the relationship between profits after tax to number of equity shares.

Profit after Tax

Earnings per Share = ___________________

Number of Equity Shares

6. Fixed Asset to Net worth Ratio

This ratio establishes the relationship between fixed asset and shareholders fund. This

ratio indicates the extent to which shareholder’s funds are sunk in the fixed asset. Generally,

R.Y.M.E.C

the purchase of fixed assets should be financed by the shareholders equity, which includes

reserve, surpluses and retained earnings.

Fixed Asset (After Dep)

Fixed Assets Ratio = X 100

Net Worth

7. Return on equity:

It indicates how the firm has used the resources of owners. This ratio is one of the most

important ratios in financial analysis. The earnings of a satisfactory return are one of the most

desirable objectives of a business. The ratio of the net profit to owner’s equity reflects the

extent to which the objective has been accomplished.

Profit after tax

Return on Equity = X 100

Equity share capital

LIMITATIONS OF THE RATIO:

Limited use of a single ratio:

A single ratio, usually, does not convey much of a sense. To make a better interpretation a

number of ratios have to be calculated which is likely to confuse the analyst than help him in

making any meaningful conclusion.

Lack of adequate standards:

There are no well-accepted standards or rules of thumb for all ratios, which can be accepted

as norms. It renders interpretation of the ratios difficult.

Inherent limitation of accounting:

R.Y.M.E.C

Like financial statements, ratios also suffer from the inherent weakness of accounting records

such as theirs historical nature.

Window Dressing:

Financial statements can easily be window dressed to present a better picture of its financial

and profitability position to outsiders. Hence, one has to be very careful in making a decision

from ratios, calculated from such financial statements. But it may be very difficult for an

outsider to know about the window dressing made from a firm.

Personal Bias:

Ratios are only means of financial analysis and not an end of itself. Ratios have to be

interpreted and different people may interpret the same ratio in different ways.

Incomparable:

Not only industries differ in their nature but also the firms of the similar business widely

differ in their size and accounting procedures, etc. it makes comparison of ratios difficult and

misleading. Moreover comparisons are difficult due to differences in definitions of various

financial terms used in the ratio analysis.

Absolute Figures Distortive:

Ratios devoid of absolute figures may prove distortive, as ratio analysis is primarily a

quantitative analysis and not a qualitative analysis.

Price Level Changes:

While making ratio analysis, no consideration is made to the changes in price levels and this

makes the interpretation of ratios invalid.

R.Y.M.E.C

METHODOLOGY OF DATA COLLECTION:

SOURCES OF DATA

Data is defined as group of non-random symbols in the form of text, image, or voice

representing quantities, actions as objects. Data is processed into a form that is meaningful to

the recipient and is of real and perceived value in the current or prospective actions or

decisions of the recipient.

Data are mainly classified into two groups:

Primary data

Secondary data

Primary data

Primary data has been collected from the books of accounts of the bank i.e trading

and profit and loss account, balance sheet, cash flow statement. Direct information was also

collected by the interaction with executive of various levels.

Secondary data

Secondary data was collected from magazines, relative’s books, website and in IBA

(INDIAN BANK ASSOCIATION), newspapers, economics times, mint, business

line.

R.Y.M.E.C

ANALYSIS & INTERPRETATION OF DATA

Financial Analysis:

Financial analysis is the analysis of financial statement of a Company to assess its financial

health and soundness of its management. ‘Financial Statement Analysis’ involves a study of

the financial statements of a company to ascertain its prevailing state of affairs and the

reasons thereof. Such a study would enable the public and the investors to ascertain whether

one company is more profitable than the other and also to state the causes and factors that are

probably responsible.

Ratio Analysis:

Ratio analysis is a technique of analysis and interpretation of financial statements. It

is the process of establishing and interpreting various ratios for helping in making certain

decisions.

A ratio indicates a quantitative relationship, which can be in term used to make a

judgment

.

1. Current Ratio:

Current Assets (CA)

Current Ratio =

Current Liabilities (CL)

R.Y.M.E.C

BANKSCURRENT ASSETS

(Rupees in crores))

CURRENT LIABILITIES

(Rupees in crores)RATIO

IOB 3605.48 13689.13 0 .26

ICICI 23551.85 38228.64 0.61

KOTAK

MAHINDRA692.33 2135.65 0 .32

ING VYSYA 794.65 1920.87 0.41

CITI 3911.92 5447.64 0.71

Interpretation

Current ratio establishes the relationship between current assets and current liabilities. The

analysis reveals that the HDFC BANK is current ratio is not satisfactory. The table reveals

the current assets are very low in comparison with ICICI bank. The HDFC’s current asset is

Rs.3605.48 crores as against ICICI’s Rs.23551.68 crores.

The current liability position of HDFC is quite satisfactory but ICICI’s position is too

high.

R.Y.M.E.C

GRAPH SHOWING CURRENT RATIO

2. Proprietary Ratio

Shareholder’s Fund

Proprietary Ratio = X 100

Total Assets

R.Y.M.E.C

BANKS

SHAREHOLDER’S

FUND (Rs. In crores)

TOTAL ASSETS

(Rs. in crores)

RATIO IN

PERCENTAGE

IOB319.39 21447.82 1.49

ICICI899.34 80694.15 1.11

KOTAK

MAHINDRA

326,16 5541.73 5.88

ING VYSYA90.90 3686.78 2.46

CITI454.39 87505.24 5.19

Interpretation

As inferred by the above ratios HDFC BANK has 1.49 ratios and it is higher than the

standard level i.e., 0.5:1. Compared to HDFC BANK with CITI BANK, CITI has higher ratio

i.e., 5.19. KOTAK MAHINDRA BANK has a comfortable proprietary ratio of 5.88. The

asset size of KOTAK MAHINDRA is one fourth of the asset sizes of HDFC BANK.

Shareholders fund can be increased if the proprietary ratio has to increases.

GRAPH SHOWING PROPRIETARY RATIO

R.Y.M.E.C

3. Solvency Ratio

Total Liabilities

Solvency Ratio = X 100

R.Y.M.E.C

Total Assets

BANKS

TOTAL

LIABILITIES

(Rs. in crores)

TOTAL ASSETS

(Rs. in crores)

RATIO IN

PERCENTAGE

HDFC74731.09 21447.82 3.48

ICICI255173.45 80694.15 3.16

KOTAK

MAHINDRA

12662.02 5541.73 2.28

ING VYSYA16411.09 3686.78 4.451

CITI82961.32 87505.24 0.94

Interpretation

As inferred by the above the ratio HDFC BANK has 3.48 ratios it is not satisfactory for long

term solvency position for the banks. Compared to above banks CITI BANK has lower

solvency ratio and it is good symbol for long term solvency position and maintain stability in

the firm. HDFC BANK and ICICI BANK’s are same in size of operation. HDFC has 3.48

ratio of liabilities on total assets, where as ICICI has 3.16 ratio of liabilities.

To reduce the solvency ratio of HDFC BANK it has to decrease its deposits

and increase loans in the form of Home loans, Land loans, loan on phone, Home

improvement loan, Home equity loans etc.,

Liabilities can be reduced by giving less interest rates on the deposits and

increase the service charges.

GRAPH SHOWING SOLVENCY RATIO

R.Y.M.E.C

4. Return on Total Resource

Net Profit

Return On Total Resource = ______________ X 100

Total Asset

R.Y.M.E.C

BANKS

NET PROFIT

(Rs. in crores)

TOTAL ASSETS

(Rs. in crores)

RATIO IN

PERCENTAGE

HDFC2334.55 21447.82 10.88

ICICI2349.39 80694.15 2.91

KOTAK

MAHINDRA

617.74 5541.73 11.14

ING VYSYA88.91 3686.78 2.41

CITI1446.80 87505.24 1.65

Interpretation

This ratio indicates the return on fixed assets and current assets. As HDFC BANK is

getting 10.88 ratio of return on total resource and it is earning more returns compared to other

banks.

This ratio indicates the return on fixed assets and current assets. As HDFC BANK has

10.88 ratio and it is earning more returns compared to other banks. As HDFC invested less

amount in purchasing assets and hence it has good returns on investment. Compared to above

banks CITI BANK has less return on investment.

GRAPH SHOWING RETURN ON TOTAL RESOURCE

R.Y.M.E.C

5. Earnings per Share

R.Y.M.E.C

Profit after Tax

Earnings Per Share = ___________________

Number of Equity Shares

BANKS

NET PROFIT

(Rs. In crores)

NUMBER OF EQUITY SHARES

(Rs. in crores)

EARNING

PER SHARE

HDFC1142.50 31.939 35.77

ICICI2995.00 89.934 33.30

KOTAK

MAHINDRA

140.82 32.616 4.32

ING VYSYA83.92 9.090 9.23

CITI1560.80 45.43 34.35

R.Y.M.E.C

Interpretation

The earnings per share of HDFC bank are highest among other 5 banks. Though the

net profit of ICICI is higher than HDFC bank its EPS is lower because outstanding equity

shares are higher. KOTAK MAHINDRA as the lowest EPS.

Graph Showing Earning Per Share

R.Y.M.E.C

6. Fixed Asset to Net worth Ratio

Fixed Asset (After Dep)

Fixed Assets Ratio = X 100

Net Worth

BANK FIXED ASSETS

AFTER DEP(RS in

Crores)

NET WORTH

(Rs. in crores)

RATIOIN

PERCENTAG

E

HDFC 966.67 6433.15 15.02

ICICI 2375.14 24313.26 9.77

KOTAK

MAHINDRA

141.09 1661.93 8.48

ING VYSYA176.69 2008.73 8.79

CITI4313.99 82961.32 5.20

Interpretation

Fixed assets ratio establishes the relation between how much the shareholders fund were

invested in fixed assets. HDFC BANK has utilized its fund in purchasing fixed assets more

compare to other banks and HDFC’s net worth is Rs.6433 as against ICICI’s net worth of

R.Y.M.E.C

Rs.24313.26. CITI bank fixed asset ratio is the lowest. This ratio CITI bank has utilized only

5.2% of net worth in fixed asset.

Graph Showing Fixed Asset to Net worth Ratio

R.Y.M.E.C

7. Return on Equity

Profit after tax

Return on Equity = X 100

Equity share capital

BANKS

NET PROFIT

(Rs. in crores)

SHAREHOLDERS

FUND

(Rs. in crores)

RATIO IN

PERCENTAGE

HDFC2372.55 6433.15 36.88

ICICI2502.49 24313.26 10.29

KOTAK

MAHINDRA

621.63 1661.93 37.40

ING VYSYA218.74 2008.73 10.89

CITI190.20 454.39 41.85

Interpretation

Return on equity ratio establishes the relationship between how effectively the funds were

utilized in resources to get more profits to achieve its objective. HDFC BANK is getting good

returns on its funds invested it creates good image in public to invest in bank and it is safety

to investors. Compare to other banks ING VYSYA BANK is giving least returns.

R.Y.M.E.C

Graph Showing return on equity

R.Y.M.E.C

SUMMARY OF FINDINGS

The research project was done about Five Private Banks and the data collected for the project

was or a period of forty days i.e. from 24th Dec 2007 to 2nd Feb 2008. And on the collected,

study was done and the followings:

Name of the

banks

Current

ratio

Proprietary

ratio

Solvency

Ratio

Return

on total

resources

ratio

Earnings

per share

ratio

Fixed

asset to

net

worth

ratio

Return

on

equity

ratio

HDFC 0 .261.49 3.48 10.88 35.77 15.02 36.88

ICICI 0.611.11 3.16 2.91 33.30 9.77 10.29

KOTAK

MAHINDRA0 .32

5.88 2.28 11.14 4.32 8.48 37.40

ING VYSYA 0.412.46 4.451 2.41 9.23 8.79 10.89

CITI 0.715.19 0.94 1.65 34.35 5.20 41.85


i.e., Rs.3605.48 as against ICICI’S Rs.23551.85. The current liability position of ICICI’S is

too high compared to HDFC BANK. Hence ICICI BANK has to reduce the exposure in

current liabilities.

As inferred by the above ratios HDFC BANK has 1.49 ratios and it is higher than the

standard level i.e., 0.5:1. Compared to HDFC BANK with CITI BANK, CITI has higher ratio

i.e., 5.19. KOTAK MAHINDRA BANK has a comfortable proprietary ratio of 5.88. The

R.Y.M.E.C

asset size of KOTAK MAHINDRA is one fourth of the asset sizes of HDFC BANK.

Shareholders fund can be increased if the proprietary ratio has to increases.

As inferred by the above the HDFC BANK has 3.48 ratios it is not satisfactory. To maintain

stability in the firm for the long term the solvency position should be lowered. To reduce the

solvency ratio of HDFC BANK it has to decrease its deposits and increase loans in the form

of Home loans, Land loans, loan on phone, Home improvement loan, Home equity loans etc.

Liabilities can be reduced by giving less interest rates on the deposits and increase the service

charges.

As HDFC BANK is getting 10.88 ratio of return on total resources. And it is satisfactory.

When compared to all other bank ICICI bank is very low ratio of return on total resources.

It can reduce the Non performing assets like taking actions against customer who have not

repaid loans or getting into settlement that if the customer pays the entire loan at a time they

will get some subsidy and sanction new loan.

It can increase the Net profit by reducing the interest on deposits of products like Internet

Banking, Mobile Banking, Standing Institutions, Debit- Cum-ATM Cards etc., It can also

reduce the salaries of the employees.

As inferred by the above table HDFC BANK‘s EPS is highest among other five banks.

Though the net profit of ICICI is higher than HDFC bank its EPS is lower because

outstanding equity shares are higher. KOTAK MAHINDRA as the lowest EPS.

HDFC BANK has utilized its fund in purchasing fixed assets more compare to other banks.

HDFC BANK net worth is Rs.6433.15 as against ICICI BANK net worth Rs.24313.26. And

CITI BANK has utilized its net worth only 5.2 ratios for fixed assets. As more fixed assets

purchased through net worth it’s less exposed to risk.

HDFC BANK is giving different services to its customers through its different products like

accounts and deposits, loans, cards, demat account, investment services and for-ex services.

R.Y.M.E.C

SUGGESTIONS

The short-term solvency position of the bank is not satisfactory. Bank has to increase current

assets or reduce current liabilities to strengthen its liquidity position and bring current ratio

nearer to the standards.

Bank has to provide effective services to customers for maintaining and building the brand

image that helps the banks to have a competitive edge over the other banks. The bank can

enter into Mobile Banking aggressively in order to capture young customers.

The bank has to enter into the rural markets by opening branches and extension counters. It

also needs to open ATM facilities in educational institutions, government offices, theaters

etc. It has to concentrate in Micro finance lending using NGOs, cooperative societies.

The bank has to reduce its solvency ratio in order to maintain stability in long term period. To

reduce the solvency ratio of HDFC BANK it has to decrease its deposits and increase loans in

the form of Home loans, Land loans, loan on phone, Home improvement loan, Home equity

loans etc.,

The bank has lower returns on fixed assets. The bank has to increase the profitability by (i)

reduce the NPAs (ii) improve recovery mechanism (iii) increase treasury profits (iv) decrease

administrative expenses –salary, overhead etc.

The bank has less ratio of return on equity funds. The bank has to concentrate on Asset

Liability Management (ALM) aspect effectively to increase the return on equity.

CONCLUSIONS

R.Y.M.E.C


i.e., Rs.3605.48 as against ICICI’S Rs.23551.85. The current liability position of ICICI’S is

too high compared to HDFC BANK. Hence ICICI BANK has to reduce the exposure in

current liabilities.

As inferred by the above the HDFC BANK has 3.48 ratios it is not satisfactory. To maintain

stability in the firm for the long term the solvency position should be lowered.

As HDFC BANK is getting 10.88 ratio of return on total resources. And it is satisfactory.

When compared to all other bank ICICI bank is very low ratio of return on total resources.

It can increase the Net profit by reducing the interest on deposits of products like Internet

Banking, Mobile Banking, Standing Institutions, Debit- Cum-ATM Cards etc., It can also

reduce the salaries of the employees.

Bank has to provide effective services to customers for maintaining and building the brand

image that helps the banks to have a competitive edge over the other banks. The bank can

enter into Mobile Banking aggressively in order to capture young customers.

The bank has to enter into the rural markets by opening branches and extension counters. It

also needs to open ATM facilities in educational institutions, government offices, theaters

etc. It has to concentrate in Micro finance lending using NGOs, cooperative societies.

The bank has lower returns on fixed assets. The bank has to increase the profitability by (i)

reduce the NPAs (ii) improve recovery mechanism (iii) increase treasury profits (iv) decrease

administrative expenses –salary, overhead etc.

The bank has less ratio of return on equity funds. The bank has to concentrate on Asset

Liability Management (ALM) aspect effectively to increase the return on equity.

R.Y.M.E.C

MBA HDFC bank Porject

Education

Transcript of MBA HDFC bank Porject