FINAL RESESRCH PROJECT

ON

“A RISE OF DIGITAL BANKING IN INDIA-

A CASE STUDY OF HDFC BANK”
Submitted in Partial Fulfilment of the Requirements
For the Degree of
BACHELOR OF COMMERCE (Hons.)
(2016-18)

SUBMITTED BY:
SHIVANGI GOYAL
B.COM (H) VITH SEM

SUBMITTED TO:
MRS. HIMANI UPRETI
FACULTY OF COMMERCE
GEU

DEPARTMENT OF COMMERCE
GRAPHIC ERA DEEMED TO BE UNIVERSITY
DEHRADUN

1
 CERTIFICATE
This is to certify that the report titled “A RISE OF DIGITAL BANKING IN INDIA- A CASE
STUDY OF HDFC BANK” is an independent work of SHIVANGI GOYAL of B.COM (H)
2016-19. The report has been prepared under my guidance and supervision. This report is
original and not submitted previously.

Date: MRS. HIMANI UPRETI

Place: Dehradun Faculty of Commerce

2
 DECLARATION
I hereby declare that the project entitled “A RISE OF DIGITAL BANKING IN INDIA- A
CASE STUDY OF HDFC BANK” submitted in partial fulfilment of the requirement for the
degree of B.COM (H) to GRAPHIC ERA DEEMED TO BE UNIVERSITY, at Dehradun is
my original work and not submitted for award of any other degree/ diploma or similar title or
prize.

DATE: SHIVANGI GOYAL

PLACE: DEHRADUN B.COM (H) (2016-19)

3
 ACKNOWLEDGEMENT
This report has been made possible with the cooperation of many persons whom I wish to
express my gratitude and appreciation. I am very grateful to the people who supported me to
transform the report in the materialistic form.

I am thankful to MRS. HIMANI UPRETI, faculty of Commerce at GRAPHIC ERA

DEEMED TO BE UNIVERSITY, Dehradun for her gratitude during my project and giving me
full co-operation and also valuable information and guidance, without which it would not be
possible for me to complete the manuscript.

I would also like to thanks the librarian and staff members of GRAPHIC ERA DEEMED TO
BE UNIVERSITY, Dehradun for providing me the required books in this field.

SHIVANGI GOYAL

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 TABLE OF CONTENTS

SR. TOPIC PAGE NO.

NO.
1. Introduction 9-14

2. Company’s Profile 16-49

3. Need, Scope & Objective of the Study 51

4.. Research Methodology 53-55

5. Review of Literature 57-61

6. Data Analysis & Interpretation 63-78

7. Findings of the Study 80

8. Conclusion 82

9. Recommendations & Suggestions 84

10. Limitations of the Study 86

11. Bibliography 88

12. Questionnaire 89-92

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 PREFACE
As a part of my B.COM (H) programme, I was asked to give the exposure to practical
management and to get familiar with the various activities taking place in the organization.

I got an opportunity to work on the project titled “A RISE OF DIGITAL BANKING IN

INDIA- A CASE STUDY OF HDFC BANK”.

The report focuses on net banking services provided by HDFC Bank and analyse the perception
of people towards the e-banking services comparing to traditional banking methods.
This report helps in understanding customer’s attitude towards such modern services provided
by banks.

6
 EXPRESSION OF GRATITUDE
I feel honoured to be here at a branch of Housing Development Finance Corporation Limited,
HDFC Bank, Saharanpur. I wish to express my sincere thanks to the HDFC management for
giving me this opportunity.
I express my deep sense of gratitude to MRS. HIMANI UPRETI for her guidance and keen
interest shown in carrying out this study. Their valuable suggestion and continuous support was
of great help to me. I am also grateful to all executives, who devoted their precious time with me
by providing me the feedback and the required information, which helped to study the existing
system.

I also wish to thank the authorities and faculties of B.COM (H), for their continuous guidance
and encouragement. At last but not least I express my heartfelt gratitude to my parents and my
friend for their encouragement and support for the successful completion of this analysis.

7
 ABSTRACT
The present report focuses on net banking services provided by HDFC Bank and analyse the
perception of people towards the e-banking services comparing to traditional banking methods.
This report helps in understanding customer’s attitude towards such modern services provided by
banks. The E-Banking is an application that has been developed for a well-established regional
bank operating primarily in south India. In the world of this competitive environment and
technological development, the bank has been totally computerized in the last 4 years, and to
increase its customer base has started planning, for a concept called as e-banking; with this
concept the bank wants to move very nearer to the customers and increase its basic operational
strategies. Through E-Banking the bank wants to introduce the core concept of IT based Enabled
Services (ITES). The E-Banking services are executed only upon the customer, and these e-
banking services would fully integrate with the core banking solution that is already in usage.
The major idea is to provide a series of services to the customer through the internet, and make
the customer feel flexible in calling out simple tasks faster instead of making visit to the bank
every time. The e-banking service is open only to savings bank customers and not for current
account holders. The customer is privileged to use most of the system only as a viewing phase,
the only online transactions the customer can do are cheque book requisition and fund transfer
among his personal accounts.

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CHAPTER-1

9
 INTRODUCTION TO DIGITALIZATION

1.1 MEANING OF DIGITALIZATION-

Digitalization is the process of converting information into a digital (i.e. computer-readable)
format, in which the information is organized into bits. The result is the representation of an
object, image, sound, document or signal (usually an analogue signal) by generating a series of
numbers that describe a discrete set of its points or samples. The result is called digital
representation or, more specifically, a digital image, for the object, and digital form, for the
signal. In modern practice, the digitized data is in the form of binary numbers, which facilitate
computer processing and other operations, but, strictly speaking, digitizing simply means the
conversion of analog source material into a numerical format; the decimal or any other number
system that can be used instead.

Digitalization is of crucial importance to data processing, storage and transmission, because it

"allows information of all kinds in all formats to be carried with the same efficiency and also
intermingled". Unlike analog data, which typically suffers some loss of quality each time it is
copied or transmitted, digital data can, in theory, be propagated indefinitely with absolutely no
degradation. This is why it is a favoured way of preserving information for many organisations
around the world.

Digital transformation leads the fusion of online and offline, disruptive technologies and the
radical change of entire industries. Automation, optimization, autonomy of processes as well as
more flexibility and individuality of products and services are just some of the benefits and
opportunities of digitalization. The process also leads to innovative business models and digital
products. The most common drivers of progress are increased customer expectations and
competition in the market.

1.2 REQUIREMENTS FOR DIGITALIZATION

In order to make digitalization successful, the appropriate prerequisites must be created.
Five important components of successful digitalization include:
1) Development of a digitalization strategy.
2) Building a digital business models.
3) Development of digital business models.
4) Establishing agile methods in product development.
5) Building a flexible IT infrastructure.

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1.3 DIGITAL BANKING-
Digital banking is the move to online banking where banking services are delivered over the
internet. Or, Digital Banking is the digitalization (or moving online) of all the traditional banking
activities and programs that historically were only available to customers when physically inside
of a bank branch. This includes activities like:
 Money Deposits, withdrawals, and transfers
 Checking/Saving account management
 Applying for financial products
 Loan management
 Bill pay
 Account services

The advantages for banks and customers are providing more convenient and faster banking
services. The shift from traditional to digital banking has been gradual and should be rather
described in degrees of service digitization than through a categorization into yes and no. It
involves high levels of process automation and web-based services and may include APIs
enabling cross-institutional service composition to deliver banking products and provide
transactions. It provides the ability for users to access financial data through
desktop, mobile and ATM services.

A digital bank represents a virtual process that includes online banking and beyond. As an end-
to-end platform, digital banking must encompass the front end that consumers see, the back end
that bankers see through their servers and admin control panels and the middleware that connects
these nodes. Ultimately, a digital bank should facilitate all functional levels of banking on all
service delivery platforms. In other words, it should have all the same functions as a head office,
branch office, online service, bank cards, ATM and point of sale machines.

The reason digital banking is more than just a mobile or online platform is that it includes
middleware solutions. Middleware is software that bridges operating systems or databases with
other applications. Financial industry departments such as risk management, product
development and marketing must also be included in the middle and back end to truly be

11
considered a complete digital bank. Financial institutions must be at the forefront of the latest
technology to ensure security and compliance with government regulations.

1.4 HISTORY OF DIGITAL BANKING-

The earliest forms of digital banking trace back to the advent of ATM machines and cards
launched in the 1960s. As the internet emerged in the 1980s with early broadband, digital
networks began to connect retailers with suppliers and consumers to develop needs for early
online catalogues and inventory software systems.

By the 1990s the Internet emerged and online banking started becoming the norm. The
improvement of broadband and ecommerce systems in the early 2000s led to what resembled the
modern digital banking world today. The proliferation of smartphones through the next decade
opened the door for transactions on the go beyond ATM machines. Over 60% of consumers now
use their smartphones as the preferred method for digital banking.

The challenge for banks is now to facilitate demands that connect vendors with money through
channels determined by the consumer. This dynamic shapes the basis of customer satisfaction,
which can be nurtured with Customer Relationship Management (CRM) software. Therefore,
CRM must be integrated into a digital banking system, since it provides means for banks to
directly communicate with their customers.

There is a demand for end–to-end consistency and for services, optimized

on convenience and user experience. The market provides cross platform front ends, enabling
purchase decisions based on available technology such as mobile devices, with a desktop or
Smart TV at home. In order for banks to meet consumer demands, they need to keep focusing on
improving digital technology that provides agility, scalability and efficiency.

1.5 ADVANTAGES OF NET BANKING-

Internet Banking also has its advantages and disadvantages. Below are mentioned the most
popular advantages of using Internet Banking along with some unavoidable disadvantages. The
advantages include
 Convenience - online banking sites never close; they're available 24 hours a day, seven
days a week, and they're only a mouse click away.
 Portability – you now have access to money whenever there is an emergency, whether or
not you are in the country.

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  Transaction speed - online bank sites generally execute and confirm transactions at the
same rate or quicker than, ATM processing speeds.
 Effectiveness – they offer sophisticated tools, including account aggregation, stock
quotes and rate alerts to help you manage all of your assets more effectively.
 Reduction in workload - No more standing in long lines at the bank, eliminating endless
paper based bank statements.
 To reduce costs: Banks are under pressure to reduce their costs to remain competitive.
For example, Lease plan bank has cut its operational costs by 60%. If you don’t make the
switch to digital banking, you must, for example, continue to invest in expensive legacy
hardware and software to keep these systems up to date.
 To increase revenue: established banks don’t have a 360-degree view of their customers.
They lack intelligent systems to gather customer intelligence and help them become more
customer-centric. Poor customer experience leads to a lower market share.
 To attract and retain customers and stay ahead of the competition: Fintechs and other
newcomers have shaken-up the banking landscape. As a result, the demand for improved
customer experience and personalized services grows, and the products and services of
established banks are more expensive. Digital Banking enables you to improve customer
experience and lower costs, which is needed to stay ahead of the pack.
 To explore benefits of new technologies: new technologies, such as data analytics, open
APIs, blockchain and cognitive banking are predicted to impact banking business models.
However, legacy systems limit the ability of banks to react quickly to these
developments. You need full digitalization to explore the benefits of these technologies
and future-proof your bank.

1.6 DISADVANTAGES OF NET BANKING

 Lack of Computerization - which relates to virtual banks, revolves around the lack of
ATMs.
 Start-up may take time - In order to register for your bank's online program, you will
probably have to provide ID and sign a form at a bank branch which can be time
consuming. And, it may take some time to get the internet account started as it requires a
lot of paperwork. Some people avoid using e-banking services because they find it
difficult to understand how it works. Also, the fact that a wrong click can cause monetary
losses may be deterrent, if the network is down in one’s area. This may cause difficulty, if
the person has to do an important transaction.
 Service- One very common disadvantage of online banking is when a person has some
problem or query. In a normal bank, if one faces some problem, one can go to some
employee of the bank to solve it. However, in the case of e-banking, one will find oneself
making endless calls to the customer service department. There have been cases, where
the person is put on hold or has been passed around from one person to another.

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  Distrust of the User/Lack of Trust – The reason that not many people have started using
e-banking is because they do not trust the services of the bank through the net. Some
human beings prefer to trust others like them and may have some difficulty in trusting a
machine, especially in the matters of money. They may always have a doubt about
whether their money is safe, while being processed through e-banking.
 Problem of Security – Various sites are not properly looked at to ensure whether
customer’s money is safe in cyber world or not. Most banks make sure that their websites
are secure, but no bank website is immune from cyber crime and hacking. Hackers target
bank websites to swipe account information. Not only can identity theft put you out f
hundreds, perhaps even thousands of dollars, but it can take time to correct the damage,
and it’s estimated that only 25% of cyber crimes are resolved. So even though your bank
may claim that its site is secure, you should always proceed with caution, especially if
you’re banking from your mobile phone.

1.7 TRADITIONAL BANKING VS NET BANKING

Net banking or internet banking works much like traditional banking. The primary difference is
that in net banking account and information is accessed, payments are made and statements
reconciled using computer rather than paper or the phone to complete transactions. Instead of
going down to local branch office when one bank online he/she can accomplish multiple tasks at
once with the click of a button. Online banking is rapidly becoming more and more popular as
consumers recognize the advantages online banking has to offer. For one most banks charge
fewer fees if you take advantage of their online banking services. You can also stop receiving
paper statements if you like in many cases and conduct 95% of your business over the Web when
you take advantage of Internet banking. What to Internet Banks do? The same things traditional
banks do. They hold onto our money and lend it out to others respectively. The manage loans and
help us keep track of our finances. Chances are if you own a bank account at a traditional bank
they offer some type of Internet banking or online services. The next time you stop into your
branch office you should ask them about online banking. You may find once you start you have
no desire to go back to traditional banking. For those that have a hard time keeping track of
paper statements, Internet banking is a life saver. Internet banking is also advantageous for
frequent travellers that need to keep a close eye on their finances from abroad.

In the traditional banking, it has perform the basic function such as depository institutions,
maintain deposits, make loans, and control the checkable deposits portion of the economy’s
money. Traditional bank is the original banks which was the original financial intermediaries in
offering checking accounts. It also plays an important role in the financial markets to manage the
circular flow of the fund. However, there are some limitations on the traditional banking and thus
lead to the innovation in modern banking. Traditional banking has a limited accessibility in
which people only can conduct business at their brick-and-mortar locations. It makes customers
inconvenience in doing their business. It also provides less efficient services to customers
because customers can only do their transactions in the bank. Therefore, customers would need
to spend more time to complete the transaction by heading to the banks.
In the comparison, modern banking has come out variety of services which fulfill the

14
unsatisfactory in traditional banking. Nowadays, deposits have become an important source of
funds for financial institution. Thus, the ways to attract depositing are important for the financial
institution in getting funds. So, many strategies has implied such as adjust saving’s interest rate
or providing different types of financial instruments to collect funds. In addition, with the
technology development, modern banking has brought a great positive impact to the customers.
With the development of Automatic Teller Machine (ATM), Credit and Debit Cards, Phone
Banking and Online Banking, it able to reduce cost, save time for payment and also increase the
competitive advantage in financial service industry.
In conclusion, traditional banking provides the basic functions to public. However, by further
improvement, modern banking has brought much of benefits to public which is unreachable in
traditional banking.

1.8 THE RISKS AND CHALLENGES OF A NET BANKING

Net Banking does not only create opportunities for improving efficiency and reducing costs and
creating high-value digital services; it also leads to major challenges and risks.
 Legacy Platform: For most banks, legacy infrastructure is the biggest challenge and
highest hurdle to digitalization. Having been built up piecemeal over time, they allow
banks to replicate certain parts of a given process online- but that is the limit to what
they can achieve. They are the source of siloed operations: the direct opposite of the
agile, nimble digital processes banks now require. Their complexity and old-fashioned
architecture is the reason for such immense maintenance spends. Legacy platforms reach
into almost every aspect of the businesses, and replacing them is not always the right
thing to do. Re-engineering core systems and processes to be built upon a digital core
foundation can be a smart solution.
 Finding the right people to transform: Digital transformation is a complex process,
and you need specialists to become a digital bank. Finding the right people, who can
guide you through this transformation, is a real challenge for many banks.
 Winning or retaining customers’ trust: Trust is the essential prerequisite for
widespread adoption of digital banking by customers; they must be sure that their
identity will not be stolen, that fraudulent payments will not be made from their
accounts, and that electronically-signed bank contracts retain the same legal value and
validity as hard-copy contracts.
 Meeting regulatory requirements: Banks must comply with increasingly stringent
legislation, like PSD2. They must also protect themselves from cyber-attacks, etc., to
fulfil risk management obligations.
 The challenge for banks to protect themselves against cyber-attacks and digital fraud is
also a risk. Threats have become extremely advanced, and the attackers are smart enough
to identify the kind of precautions that the banks can take, and they design their attacks
accordingly. It’s something banks need to be well aware of.

15
 You need customers' data to improve their customer experience, but it can also lead to
reputational damage as customers may feel that you have too much data. Privacy
becomes increasingly important, so trust is key.

CHAPTER-2

16
 COMPANY’S PROFILE

2.1 FORMATION OF THE COMPANY

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The
bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered
office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank
in January 1995.

2.2 PROMOTER

HDFC is India's premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1977, the Corporation has
maintained a consistent and healthy growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has
developed significant expertise in retail mortgage loans to different market segments and also has
a large corporate client base for its housing related credit facilities. With its experience in the
financial markets, a strong market reputation, large shareholder base and unique consumer
franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

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2.3 PROFILES OF DIRECTORS
MRS. SHYAMALA GOPINATH

Mrs. Shyamala Gopinath holds a Master’s Degree in Commerce and is a CAIIB. Mrs. Gopinath
has over 39 years of experience in financial sector policy formulation in different capacities at
RBI. As Deputy Governor of RBI for seven years and member of the Board, Mrs. Gopinath had
been guiding and influencing the national policies in the diverse areas of financial sector
regulation and supervision, development and regulation of financial markets, capital account
management, management of government borrowings, forex reserver management and payment
and settlement systems.

During 2001-03, Mrs. Gopinath worked as senior financial sector expert in the then Monetary
Affairs and Exchange Department of the International Monetary Fund (Financial Institutions
Division). She was responsible for preparing the accompanying document to the Guidelines on
Foreign Exchange Reserve Management detailing country practices.

Mrs. Gopinath was a member of the FSAP missions to Tanzania, Nigeria, Hungary and Poland
and the Foreign Exchange and Reserve Management team to Turkey and Kosovo.
Mrs. Gopinath was actively involved in managing India's balance of payments crisis in 1991, the
fall out of the Asian and the Russian crisis, nuclear sanctions against India, Kargil war with
Pakistan and the transmission of the recent financial crisis to Indian financial system and the
markets.
Mrs. Gopinath is a member of the following Committees of the Board of the Bank:

 Audit Committee

 Nomination and Remuneration Committee

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  Risk Policy and Monitoring Committee

 Customer Service Committee (Chairperson)

 Fraud Monitoring Committee (Chairperson)

 Review Committee for Wilful Defaulters' Identification (Chairperson)

 Review Committee for Non-Co-operative Borrowers (Chairperson) IT Strategy

Committee

Appointment Letter - Part Time Non Executive Chairperson

Email ID: chairperson.bod@hdfcbank.com

MR. MALAY PATEL

Mr. Malay Patel is a Major in Engineering (Mechanical) from Rutgers University, Livingston,
NJ, USA, and an A.A.B.A. in business from Bergen County College, Fairlawn, NJ, USA. He is
a director on the Board of Eewa Engineering Company Private Limited, a company in the
plastics / packaging industry with exports to more than 50 countries.

Mr. Malay Patel has been involved in varied roles such as export / import, procurement, sales
and marketing , etc in Eewa Engineering Company Private Limited. Mr Malay Patel

19
has special knowledge and practical experience in matter relating to small scale
industries in terms of Section 10-A (2 a) of the Banking Regulation Act, 1949.

Mr. Patel is a member on the following Committees of the Board of the Bank:

 Stakeholders' Relationship Committee

 Corporate Social Responsibility Committee

 Customer Service Committee

 Fraud Monitoring Committee

 Credit Approval Committee

 Premises Committee

 Digital Transactions Monitoring Committee

Email ID: Mpatel.bod@hdfcbank.com

Mr. Keki Mistry

Mr. Keki Mistry holds a Bachelor's Degree in Commerce from the Mumbai University. Mr.

20
Keki Mistry is a Fellow Member of the Institute of Chartered Accountants of India (ICAI).He
started his career with The Indian Hotels Company Limited.

In the year 1981, Mr. Mistry joined Housing Development Finance Corporation Limited (HDFC
Ltd). Mr. Mistry was inducted on to the Board of Directors of HDFC Ltd as an Executive
Director in the year 1993 and was elevated to the post of Managing Director in November 2000.
In October 2007, Mr. Mistry was appointed as Vice Chairman & Managing Director of HDFC
Ltd and became the Vice Chairman & Chief Executive Officer in January 2010.

Mr. Mistry is a member of the following Committees of the Board of the Bank:

 Fraud Monitoring Committee

 Customer Service Committee

 Credit Approval Committee (Chairman)

 Premises Committee (Chairman)

Email ID: Kmistry.bod@hdfcbank.com

Mr. Aditya Puri

Mr. Aditya Puri holds a Bachelor's degree in Commerce from Punjab University and is an

21
Associate Member of the Institute of Chartered Accountants of India.
Prior to joining the Bank, Mr. Puri was the Chief Executive Officer of Citibank, Malaysia from
1992 to 1994. Mr. Puri has been the Managing Director of the Bank since September 1994. Mr.
Puri has nearly 40 years of experience in the banking sector in India and abroad.

Mr. Puri has provided outstanding leadership as the Managing Director and has contributed
significantly to enable the Bank scale phenomenal heights under his stewardship. The
numerous awards won by Mr. Puri and the Bank are a testimony to the tremendous credibility
that Mr. Puri has built for himself and the Bank over the years.

The Bank has made good and consistent progress on key parameters like balance sheet size,
total deposits, net revenues, earnings per share and net profit during Mr. Puri's tenure.

The rankings achieved by the Bank amongst all Indian banks with regard to market
capitalization, profit after tax and balance sheet size remain amongst the top 10.

During his tenure Mr. Puri has led the Bank through two major mergers in the Indian banking
industry i.e. merger of Times Bank Limited and Centurion Bank of Punjab Limited with HDFC
Bank Limited. The subsequent integrations have been smooth and seamless under his inspired
leadership. Mr. Puri continues to be the Managing Director of the Bank.

Mr. Puri is a member of the following Committees of the Board of the Bank:

 Stakeholders' Relationship Committee

 Corporate Social Responsibility Committee

 Risk Policy and Monitoring Committee

 Credit Approval Committee

 Customer Service Committee

 Fraud Monitoring Committee

 Premises Committee

 Review Committee for Wilful Defaulters' Identification

 Review Committee for Non-Co-operative Borrowers

 Digital Transactions Monitoring Committee

 IT Strategy Committee

22
Email ID: Managingdirector@hdfcbank.com

Mr. Kaizad Bharucha

Mr. Kaizad Bharucha holds a Bachelor of Commerce degree from University of Mumbai. He
has been associated with the Bank since 1995. In his current position as Executive
Director, he is responsible for Wholesale Banking covering areas of Corporate Banking,
Emerging Corporate Group, Business Banking, Capital Markets & Commodities Business,
Agri Lending, Investment Banking, Financial Institutions & Government Business and
Department for Special Operations. In his previous position as Group Head - Credit & Market
Risk, he was responsible for the Risk Management activities in the Bank viz., Credit Risk,
Market Risk, Debt Management, Risk Intelligence and Control functions.

Mr. Bharucha has been a career banker with over 28 years of banking experience. Prior to
joining the Bank, he worked in SBI Commercial and International Bank in various areas
including Trade Finance and Corporate Banking. He has represented HDFC Bank as a member
of the working group constituted by the Reserve Bank of India to examine the role of Credit
Information Bureau and on the sub-committee with regard to adoption of the Basel II
guidelines.

Mr. Bharucha is a member on the following Committees of the Board of the Bank:

 Credit Approval Committee

23
Email ID: kbharucha.bod@hdfcbank.com

Mr. Umesh Chandra Sarangi

Mr. Umesh Chandra Sarangi has been appointed as an Independent Director on the Board of the
Bank with effect from 21st July, 2016 for a period of five (5) years.Mr. Sarangi holds a Master's
degree in Science (Botany) from Utkal University (gold medallist).

Mr. Sarangi has 35 years of experience in Indian Administrative Service and brought in
significant reforms in modernizing of agriculture, focus on agro processing and export. As the
erstwhile Chairman of National Bank for Agricultural and Rural Development (NABARD)
from December 2007 to December 2010, Mr. Sarangi focused on rural infrastructure,
accelerated initiatives such as microfinance, financial inclusion, watershed development and
tribal development.

Mr. Sarangi has been appointed as a Director having specialized knowledge and experience in
agriculture and rural economy pursuant to Section 10-A (2)(a) of the Banking Regulation Act,
1949.

Mr. Sarangi is a member on the following Committees of the Board of the Bank:

 Stakeholders' Relationship Committee (Chairman)

 Audit Committee

 Corporate Social Responsibility Committee (Chairman)

24
  Fraud Monitoring Committee

Email ID: Usarangi.BOD@hdfcbank.com

Mr. Srikanth Nadhamuni

Mr. Srikanth Nadhamuni is a Non-Executive Director on the Board of the Bank liable to retire
by rotation.Mr. Nadhamuni holds a Bachelor's degree in Electronics and Communications from
National Institute of Engineering and a Master's degree in Electrical Engineering from
Louisiana State University. Mr. Nadhamuni was the Chief Technology Officer of Aadhaar (UID
Authority of India) during 2009-2012 and is currently the Chairman of Novopay Solutions, a
company involved in the area of mobile payments and banking and is the CEO of Khosla Labs,
a start-up incubate. He has extensive experience in Information Technology, particularly in the
banking and financial services industry. He was instrumental in the development of Aadhaar
technology, and has contributed on several Aadhaar banking products and services. He has been
appointed as a Director having expertise in the field of Information Technology.

Mr. Nadhamuni is a member on the following Committees of the Board of the Bank:

 Risk Policy and Monitoring Committee (Chairman)

 Customer Service Committee

 Digital Transactions Monitoring Committee (Chairman)

25
  IT Strategy Committee (Chairman)

Email ID: Snadhamuni.BOD@hdfcbank.com

Mr. Sanjiv Sachar

Mr. Sanjiv Sachar is an Additional Director on the Board of the Bank and shall hold office till
the ensuing Annual General Meeting of the Bank. Mr. Sachar is a Fellow Associate of the
Institute of Chartered Accountants of India and has recently retired as the Senior Partner of
Egon Zehnder, the world’s largest privately held executive search firm. Mr. Sachar set up the
Egon Zehnder practice in India in 1995 and played a key role in establishing the firm as a
market leader in the executive search space across various country segments. Over the course of
his two decades at Egon Zehnder, Mr. Sachar has mentored senior executives across industry
sectors that today are either Board members, CEOs or CFOs of large corporates in India and
overseas. Mr. Sachar has also been the co-founder of the chartered accountancy and
management consulting firm, Sachar Vasudeva & Associates and co-founded executive search
firm, Direct Impact.

Email ID: Ssachar.bod@hdfcbank.com

Mr. Sandeep Parekh

26
 Mr. MD Ranganath

Mr. MD Ranganath is an Additional Independent Director of the Bank. He has over 26 years of
experience in the Global IT services and financial services industry. He was Chief Financial
Officer of Infosys Limited, a globally listed corporation, till November 2018. During his tenure
of 18 years at Infosys, he was an integral part of the growth and transformation of Infosys and
effectively played leadership roles in a wide spectrum of areas Strategy, Finance, M&A,
Consulting, Risk Management and Corporate Planning culminating in the role of Chief
Financial Officer and worked closely with the Board of Infosys and its Committees in
formulating and executing its strategic priorities. Prior to Infosys, he worked at ICICI Limited
for eight years and executed responsibilities in corporate credit, treasury, equity portfolio
management and corporate planning. In the years 2017 and 2018, Mr. Ranganath was the
recipient of the Best CFO Asia award in the technology sector, by Institutional Investor
publication, based on a poll of buy side and sell side investor community. Mr. Ranganath is a
PGDM from IIM Ahmedabad. He holds a Master’s degree in Technology from IIT Madras and
a Bachelor’s degree in Engineering from University of Mysore. He is a member of CPA,
Australia.

Email ID: Mranganath.bod@hdfcbank.com

2.4 BUSINESS FOCUS

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking

27
services for target retail and wholesale customer segments, and to achieve healthy growth in
profitability, consistent with the bank's risk appetite. The bank is committed to maintain the
highest level of ethical standards, professional integrity, corporate governance and regulatory
compliance. HDFC Bank's business philosophy is based on four core values – Operational
Excellence, Customer Focus, Product Leadership and People.

2.5 VISION STATEMENT OF HDFC BANK

HDFC Bank's mission is to be a World Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking
services for target retail and wholesale customer segments, and to achieve healthy growth in
profitability, consistent with the bank's risk appetite. The bank is committed to maintain the
highest level of ethical standards, professional integrity, corporate governance and regulatory
compliance. HDFC Bank’s business philosophy is based on five core values: Operational
Excellence, Customer Focus, Product Leadership, People and Sustainability.

2.6 MISSION STATEMENT OF HDFC BANK

1. To our shareholders, our mission is to optimize returns.

2. To our customers, our mission is to provide a caring service by anticipating their
requirements and innovatively satisfying them beyond their expectations.
3. To our staff, our mission is to identify their multi-faceted talents, develop, motivate,
recognize and reward them toward fulfillment of the institutional and national housing
vision.
4. To the national economy and the industry regulator, we are the key driver and thought
leader, shaping and financing the national housing policy.
5. To our natural environment, we enforce sustainable practices across all our activities.

2.7 BUSINESS STRATEGY

HDFC BANK mission is to be "a World Class Indian Bank", benchmarking themselves against
international standards and best practices in terms of product offerings, technology, service
levels, risk management and audit & compliance. The objective is to build sound customer
franchises across distinct businesses so as to be a preferred provider of banking services for
target retail and wholesale customer segments, and to achieve a healthy growth in profitability,
consistent with the Bank's risk appetite. Bank is committed to do this while ensuring the highest

28
levels of ethical standards, professional integrity, corporate governance and regulatory
compliance. Continue to develop new product and technology is the main business strategy of
the bank. Maintain good relation with the customers is the main and prime objective of the bank.
HDFC BANK business strategy emphasizes the following:

•Increase market share in India’s expanding banking and financial services industry by following
a disciplined growth strategy focusing on quality and not on quantity and delivering high quality
customer service.
• Leverage our technology platform and open sale able systems to deliver more products to more
customers and to control operating costs. Maintain current high standards for asset quality
through disciplined credit risk management.
•Develop innovative products and services that attract the targeted customers and address
inefficiencies in the Indian financial sector.
•Continue to develop products and services that reduce bank’s cost of funds.
•Focus on high earnings growth with low volatility.

2.8 CAPITAL STRUCTURE

As on 30 June 2018 the authorized share capital of the Bank is Rs. 650 crore. The paid-up share
capital of the Bank as on the said date is Rs 520,83,15,734 /- which is comprising of
260,41,57,867 equity shares of the face value of Rs 2/- each. The HDFC Group holds 20.86 % of
the Bank's equity and about 18.16% of the equity is held by the ADS / GDR Depositories (in
respect of the bank's American Depository Shares (ADS) and Global Depository Receipts (GDR)
Issues). 33.44% of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has
5,32,368 shareholders.

The shares are listed on the BSE Limited and The National Stock Exchange of India Limited.
The Bank’s American Depository Shares (ADS) are listed on the New York Stock Exchange
(NYSE) under the symbol ‘HDB’ and the Bank’s Global Depository Receipts (GDRs) are listed
on Luxembourg Stock Exchange under ISIN No US40415F2002.

29
2.9 CREDIT RATING
HDFC Bank has its deposit programmes rated by two rating agencies - Credit Analysis &
Research Limited. (CARE) and Fitch Ratings India Private Limited. The bank's Fixed Deposit
programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents instruments
considered to be "of the best quality, carrying negligible investment risk".

CARE has also rated the bank's Certificate of Deposit (CD) programme "PR 1+" which
represents "superior capacity for repayment of short term promissory obligations". Fitch Ratings
India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "tAAA ( ind )" rating to the
bank's deposit programme, with the outlook on the rating as "stable".
This rating indicates "highest credit quality" where "protection factors are very high".

HDFC Bank also has its long term unsecured, subordinated (Tier II) Bonds of Rs.4 billion rated
by CARE and Fitch Ratings India Private Limited. CARE has assigned the rating of "CARE
AAA" for the Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA
( ind )" with the outlook on the rating as "stable". In each of the cases referred to above, the
ratings awarded were the highest assigned by the rating agency for those instruments .

2.10 Corporate Governance Rating

The bank was among the first four companies, which subjected itself to a Corporate Governance
and Value Creation (GVC) rating by the rating agency, The Credit Rating Information Services
of India Limited (CRISIL).
The rating provides an independent assessment of an entity's current performance and an
expectation on its "balanced value creation and corporate governance practices" in future. The
bank has been assigned a 'CRISIL GVC Level 1' rating, which indicates that the bank's capability
with respect to wealth creation for all its stakeholders while adopting sound corporate
governance practices is the highest.
We are aware that all these awards are mere milestones in the continuing, never-ending journey
of providing excellent service to our customers. We are confident, however, that with your
feedback and support, we will be able to maintain and improve our services.

30
2.11 TIMES BANK AMALGAMATION

On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was
formally approved by Reserve Bank of India to complete the statutory and regulatory approval
process. As per the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC
Bank for every 29 shares of CBoP.

The amalgamation added significant value to HDFC Bank in terms of increased branch network,
geographic reach, and customer base, and a bigger pool of skilled manpower.

In a milestone transaction in the Indian banking industry, Times Bank Limited (another new
private sector bank promoted by Bennett, Coleman & Co./Times Group) was merged with HDFC
Bank Ltd., effective February 26, 2000. As per the scheme of amalgamation approved by the
shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received
1 share of HDFC Bank for every 5.75 shares of Times Bank. The acquisition added significant
value to HDFC Bank in terms of increased branch network, expanded geographic reach,
enhanced customer base, skilled manpower and the opportunity to cross-sell and leverage
alternative delivery channels.

2.12 DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. As of March 31, 2019, the Bank's distribution network
was at 5,103 branches across 2,748 cities. All branches are linked online on a real-time basis.
Customers across India are also serviced through multiple delivery channels such as Phone
Banking, Net Banking, Mobile Banking, and SMS based banking. The Bank's expansion plans
take into account the need to have a presence in all major industrial and commercial centers,
where its corporate customers are located, as well as the need to build a strong retail customer
base for both deposits and loan products. Being a clearing / settlement bank to various leading
stock exchanges, the Bank has branches in centres where the NSE / BSE have a strong and active
member base. The Bank also has a network of 13,160 ATMs across India. HDFC Bank's ATM
network can be accessed by all domestic and international Visa / MasterCard, Visa Electron /
Maestro, Plus / Cirrus and American Express Credit / Charge cardholders.

31
2.13 BOARD OF DIRECTORS

The composition of the Board of Directors of the Bank is governed by the provisions of the
Companies Act, 2013, the Banking Regulation Act, 1949, and the listing requirements of the
Indian Stock Exchanges where the securities issued by the Bank are listed. The composition of
the Board is as follows:

Sr.
Name of Director Designation
No.

Part Time Non- Executive Chairperson and Independent

1 Mrs. Shyamala Gopinath
Director

2 Mr. Partho Datta Independent Director

3 Mr. Bobby Parikh Independent Director

4 Mr. Malay Patel Independent Director

Mr. Umesh Chandra

5 Independent Director
Sarangi

6 Mr. Keki Mistry Non-Executive Director

7 Mr. Aditya Puri Managing Director

8 Mr. Paresh Sukthankar Deputy Managing Director

9 Mr. Kaizad Bharucha Executive Director

10 Mr. Srikanth Nadhamuni Non-Executive Director

2.14 TECHNOLOGY

32
HDFC Bank operates in a highly automated environment in terms of information technology and
communication systems. All the bank's branches have online connectivity, which enables the
bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also
provided to retail customers through the branch network and Automated Teller Machines
(ATMs).The Bank has made substantial efforts and investments in acquiring the best technology
available internationally, to build the infrastructure for a world class bank. The Bank's business is
supported by scalable and robust systems which ensure that our clients always get the finest
services we offer.

In terms of core banking software, the Corporate Banking business is supported by Flexcube,
while the Retail Banking business by Finware, both from i-flex Solutions Ltd. The systems are
open, scale able and web-enabled.

The Bank has prioritised its engagement in technology and the internet as one of its key goals
and has already made significant progress in web-enabling its core businesses. In each of its
businesses, the Bank has succeeded in leveraging its market position, expertise and technology to
create a competitive advantage and build market share.

2.15 PRODUCT SCOPE

HDFC Bank offers a bunch of products and services to meet the every need of the people. The
company cares for both, individuals as well as corporate and small and medium enterprises. For
individuals, the company has a range accounts, investment, and pension scheme, different types
of loans and cards that assist the customers. The customers can choose the suitable one from a
range of products which will suit their life-stage and needs. For organizations the company has a
host of customized solutions that range from Funded services, Non-funded services, Value
addition services, Mutual fund etc. These affordable plans apart from providing long term value
to the employees help in enhancing goodwill of the company. The products of the company are
categorized into various sections which are as follows:
•Accounts and deposits.
•Loans.
•Investments and Insurance.
•Forex and payment services.
•Cards.
•Customer centre.

33
2.16 AWARDS AND ACHIEVEMENTS-

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian Bank".
We realised that only a single-minded focus on product quality and service excellence would
help us get there. Today, we are proud to say that we are well on our way towards that goal. It is
extremely gratifying that our efforts towards providing customer convenience have been
appreciated both nationally and internationally.

2019

Express Computer Leadership Award for Outstanding Initiatives in Big Data /

BFSI Digital Analytics Artificial Intelligence Enterprise Applications
Innovation Awards
2019.
The Banker Bank of Bank of the Year - India
the Year Awards 2018
The Banker Global Best Private Bank in India
Private Banking
Awards 2018.
Mint - EY Emerging Winner - Robotic Process Automation (Software) category.
Technology Awards
Forbes' World's Best No. 1 Bank in India - HDFC Bank
Banks report
Euromoney Trade Best Service (Asian Banks only) - India

34
Finance Survey 2019 Market Leader (Asian Banks only) - India
The Financial Express Best Bank - New Private Sector category
India's Best Banks
Awards 2017-18
FE CFO Awards 2019 Best CFO / Newsmaker of the Year

Asiamoney Best Bank Best Digital Bank (India)

Awards 2019
AIMA-JRD Tata HDFC Bank MD Mr. Aditya Puri has been conferred the AIMA-
Corporate Leadership JRD Tata Corporate Leadership Award for the Year 2018
Award 2018
Outlook Money Best Private Sector Bank Award - Gold
Awards 2019
IDC Financial Asia's Most Secure Bank
Insights Innovation
Awards (FIIA) 2019
Dun & Bradstreet India's Leading Bank - Private Sector
BFSI Awards 2019
Euromoney Private No. 1 in Asset Management category
Banking and Wealth
Management Survey
2019
Business Today - - Bank of the Year - HDFC Bank and SBI
KPMG India's Best Best Large Bank - HDFC Bank
Bank Awards 2019
FE Best Bank Awards Best Bank: New Private Sector

2018

The Economic Times Company of the Year

Corporate Excellence Awards
2018
Aadhaar Excellence Awards • Best Performing Private Bank in Total
2018 Aadhaar Generation & Update
• Best Performing Private Bank in Total
Aadhaar Generation & Update - In House Model

35
 • Best Performing Branch of HDFC Bank in
Total Aadhaar Generation & Update for Kidwai
Nagar Branch, Kanpur, Uttar Pradesh.

NASSCOM AI Game Changer Innovative Application in AI - Virtual Agent

Awards 2018 Engine
Institutional Investor 2018 All- Ranked in four categories -
Asia Executive Team – Survey
• Best IR Professional: 2nd Rank among banks
in Asia (ex-Japan)
• Best CEO: 2nd Rank
• Best CFO: 1st Rank
• Best IR Company: 3rd Rank
BrandZ's Top 100 Global HDFC Bank featured for the fourth time in the
Brands List BrandZ's Top 100 Global Brands List
14th Visa Asia Pacific Security India and South Asia Champion Security Award
Summit 2018
National Payments Excellence HDFC Bank wins NPCI National Payments
Awards 2018 Excellence Awards
Barron's World's Top 30 CEOs Mr. Aditya Puri in Barron's Top 30 Global CEOs
for 4th year - Growth Leaders Category
Dun & Bradstreet Corporate Best Bank
Award 2018
Federation of Indian Export Best Bank : Export Finance - Non MSME
Organisation (FIEO)
Business Today Best Bank Bank of the Year
Awards Best in Innovation
Best Large Bank
Fastest Growing Large Bank
Dun & Bradstreet BFSI India's Leading Bank - Private sector
Awards 2018
Euromoney Private Banking - Net-worth-specific services (High Net Worth
and Wealth Management Clients US $ 5-30 MN)
survey 2018 - Asset Management
- SRI/Social Impact Investing
- International Clients
10th BW Businessworld-PwC - Fastest Growing Large Bank
Best Banks' (2017) Survey - Best Large Bank

36
 - Lifetime Achievement Award - Mr. Aditya Puri
2017

Business India 19th Best Bank survey Best Bank for the year 2017 - HDFC Bank
The Asset Triple A Country Awards
2017
Fortune
Forbes Asia's 13th Fab 50
Companies List
Forbes' List of 5 Companies That
Have Shaped Asia, And The World
IDRBT Banking Technology
Excellence Awards 2016-17
BrandZ Top 50 Most Valuable Indian
Brands
Dun & Bradstreet Banking Awards
2017
The Advertising Club Banking for
Marquees 2017
Greenwich Associates study
Businessworld Digital Leadership and - Best Analytics Implementation Award -
CIO Awards 2017
The Asian Banker Technology
Innovation Awards 2017
CNBC TV 18 Financial Advisor
Awards 2016-17
The Asset Triple A Asia Infrastructure
Best IPO, India
HDFC Bank MD Aditya Puri on Fortune
Businessperson of the year list
HDFC Bank in Forbes Asia's Top 50 List
HDFC Bank in Top 5 companies that
have shaped Asia, and the World
1) Best Bank - Use of Technology for
Fraud Prevention (Large Banks)
2) Best Bank - Cyber Security and
Defense (Large Banks)
3) Best Bank - Innovative Use of
Technology (Large Banks)
Ranked India's Most Valuable Brand for
4th year in a row
1. Best Private Sector Bank - Retail
2. Best Private Sector Bank - Digital
Banking (Mobility)
3. Best Private Sector Bank - Asset
Quality
4. Best Private Sector Bank - Overall
Best Marketer in Banking sector
HDFC Bank No. 1 in large corporate
relationships, mid-market penetration
HDFC Bank
- Best HR System Project
- Best Lending Systems Project
Best Performing Bank - Private Sector
Chemical Deal of the Year, India

37
Awards 2017
Euromoney Awards for Excellence
2017
Asiamoney Best Brands in Finance
Survey 2017
Businessworld India's Best Banks'
survey 2016
Dun & Bradstreet Corporate Award
2017
12th BML Munjal Awards 2017
The Financial Express India's Best
Banks 2016
Finance Asia poll on Asia's Best
Companies 2016
National Payments Excellence
Awards 2016
Asiamoney India Banking Awards
2017
Business Standard Annual Awards
2016
IBA Banking Technology Awards 2017 Best IT Risk and Cyber Security
Initiatives
Dun & Bradstreet - India's Leading
BFSI Companies & Awards 2017
Outlook Money Awards 2016
Business Today - KPMG India's Best
India's Best Bank
Best Banking Brand in India - HDFC
Bank
1. Best Bank - Overall
2. Fastest Growing Large Bank
India's Leading Bank - Private Sector
Sustained Excellence in Learning &
Development
- Profitability: Rank 1
- Strength & Soundness: Rank 1
Bank of the Year
Best CEO- Aditya Puri
Best at Investor Relations- Rank 1
Most Committed to Corporate
Governance- Rank 1
Best Managed Company - Rank 2
Best at CSR - Rank 8
Bank of the Year
Best Bank in Cheque Truncation System
(CTS)
Best Bank in National Automated
Clearing House (NACH)
Best Bank in National Financial Switch
(NFS)
Runner up in Rupay Cards
Best Domestic Bank - India
Banker of the year - Mr. Aditya Puri
India's Leading Banks - Private Sector
Bank of the year
Bank Of The Year (Private Sector)
38
Banks 2016
The Asset Triple A Country Awards
2016
2016
Institutional Investor All-Asia
Executive Team ranking 2016
Asiamoney FX Poll 2016
BrandZ Top 50 Most Valuable Indian HDFC Bank has been ranked India's most
Brands
CNBC-TV18 India Business Leader
Awards (IBLA) 2015-16
The Financial Express India's Best
Banks Awards
IDRBT Banking Technology
Excellence Awards 2016
Cisco-CNBC TV 18 Digitizing India
Awards
Dun & Bradstreet Corporate Awards
2016
The Financial Express India's Best
Banks Awards 2015
Outlook Money Awards 2015
Best Large Size Bank
Fastest Growing Large Bank
1. Best IPO, India
2. Best QIP, India
Mr. Aditya Puri ranked Best CEO
-HDFC Bank ranked Best Company in
Banks sector of Asia ex-Japan
-Ranked No. 1 in the Best Domestic
Provider for FX Products and Services in
India
-Ranked No.2 in the Best Domestic
Provider of FX Services and for FX
Research and Market Coverage
-Ranked No. 1 in the Best Local Cash
Management Bank in India
valuable brand for the 3rd consecutive
year
Outstanding Business Leader of the year
Lifetime Achievement Award to Mr. Aditya
Puri
Best Bank in Banking Technology
Excellence for the year 2015-16
Award for Innovations in the Financial
Industry & Digital Banking
HDFC Bank wins Dun & Bradstreet
Corporate Award 2016 in the Banking
sector
- Profitability: Rank 1
- Efficiency: Rank 1
- Strength & Soundness: Rank 1
- Best Bank of the year : Runner up
- Winner : Institutional Financial
39
 Distributor of the year
Pension Fund Regulatory and - Best Performing Bank - Maximum APY
Development Authority awards for Subscribers
Atal Pension Yojana - Best Performing Bank in the Private
sector Banks category
- Best Performing Bank : Atal Pension
Yojana Carnivals in Private Sector Banks
Business Today KPMG India's Best Banks 2015 Awards
Barron's World's Top 30 CEOs Mr. Aditya Puri in Barron's Top 30 Global
CEOs for 2nd year
IBA Awards HDFC Bank wins prestigious IBA Banking
Technology Awards
Business Today Best Companies to Work for in India
NABARD Award Best Bank in JLG-Bank Linkage
programme in Assam
Business Today - KPMG India's Best HDFC Bank wins Bank of the year and
Bank Best Digital Banking Initiative awards
NABARD Award - The Best Bank in HDFC Bank wins NABARD Award
SHG Credit Linkage in Tamil Nadu
2015

National Payments Excellence HDFC Bank wins NPCI National Payments

Awards 2015 Excellence Awards
Business Today Award Best CEO Award - Mr. Aditya Puri
Kerala's State Forum of Bankers' Best Bank Branch
Club Award
FinanceAsia Awards Best Equity Deal in Asia Award
IDC Insights Award 2015 Excellence in Customer Experience
QualTech Award HDFC Bank wins Award at 27th QIMPRO
Convention
Lean Sigma project competition Best Case Study Award
IDRBT Banking Technology Best Bank Award for Cyber Security Risk
Excellence Awards 2014-15 Management among Large Banks
FinanceAsia Country Awards 2015 - Best Asian Bank
- Best Domestic Bank - India

40
 Forbes Asia Fab 50 Companies List for the 9th year
AIMA Managing India Awards - Business Leader of the Year - Aditya Puri
2015
Barron's - World's 30 Best CEOs - Mr Aditya Puri
Finance Asia poll on Asia's Best - Best Managed Public Company - India'
Companies 2015 Best CEO- Aditya Puri
Best Corporate Governance- Rank 3
Best Investor Relations- Rank 3
J. P Morgan Quality Recognition - Best in class straight Through Processing
Award Rates

2.17 BUSINESS PROFILE

HDFC Bank caters to a wide range of banking services covering commercial and investment
banking on the wholesale side and transactional / branch banking on the retail side.

The bank has three key basic segments:

 Wholesale Banking

The Bank’s target market is primarily large, blue-chip manufacturing companies in the Indian
corporate sector and to a lesser extent, small & mid-sized corporates and agri-based businesses.
For these customers, the Bank provides a wide range of commercial and transactional banking
services, including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions, which combine
cash management services with vendor and distributor finance for facilitating superior supply
chain management for its corporate customers. Based on its superior product delivery / service
levels and strong customer orientation, the Bank has made significant inroads into the banking
consortia of a number of leading Indian corporates including multinationals, companies from the
domestic business houses and prime public sector companies. It is recognized as a leading
provider of cash management and transactional banking solutions to corporate customers, mutual
funds, stock exchange members and banks.

 Treasury

Within this business, the bank has three main product areas - Foreign Exchange and Derivatives,
Local Currency Money Market & Debt Securities, and Equities. With the liberalization of the
financial markets in India, corporates need more sophisticated risk management information,

41
 advice and product structures. These and fine pricing on various treasury products are provided
through the bank’s Treasury team. To comply with statutory reserve requirements, the bank is
required to hold 25% of its deposits in government securities. The Treasury business is
responsible for managing the returns and market risk on this investment portfolio.

 Retail Banking

The objective of the Retail Bank is to provide its target market customers a full range of financial
products and banking services, giving the customer a one-stop window for all his/her banking
requirements. The products are backed by world-class service and delivered to customers
through the growing branch network, as well as through alternative delivery channels like ATMs,
Phone Banking, Net-Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the
Investment Advisory Services programs have been designed keeping in mind needs of customers
who seek distinct financial solutions, information and advice on various investment avenues. The
Bank also has a wide array of retail loan products including Auto Loans, Loans against
marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider
of Depository Participant (DP) services for retail customers, providing customers the facility to
hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in association with
VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank launched
its credit card business in late 2001. By March 2015, the bank had a total card base (debit and
credit cards) of over 25 million. The Bank is also one of the leading players in the “merchant
acquiring” business with over 235,000 Point-of-sale (POS) terminals for debit / credit cards
acceptance at merchant establishments. The Bank is well positioned as a leader in various net
based B2C opportunities including a wide range of internet banking services for Fixed Deposits,
Loans, Bill Payments, etc.

42
2.18 SWOT ANALYSIS OF HDFC BANK

1. Strengths in the SWOT analysis of HDFC

 HDFC bank is the second largest private banking sector in India having 2,201 branches
and 7,110 ATM’s.

 HDFC bank is located in 1,174 cities in India and has more than 800 locations to serve
customers through Telephone banking.

 The bank’s ATM card is compatible with all domestic and international Visa/Master card,
Visa Electron/ Maestro, Plus/cirus and American Express. This is one reason for HDFC
cards to be the most preferred card for shopping and online transactions.

 HDFC bank has the high degree of customer satisfaction when compared to other private
banks.

 The attrition rate in HDFC is low and it is one of the best places to work in private
banking sector.

 HDFC has lots of awards and recognition, it has received ‘Best Bank’ award from various
financial rating institutions like Dun and Bradstreet, Financial express, Euromoney awards
for excellence, Finance Asia country awards etc.

 HDFC has good financial advisors in terms of guiding customers towards right
investments.

2. Weaknesses in the SWOT analysis of HDFC

43
 HDFC bank doesn’t have strong presence in Rural areas, where as ICICI bank its direct
competitor is expanding in rural market.

 HDFC cannot enjoy first mover advantage in rural areas. Rural people are hard core
loyals in terms of banking services.

 HDFC lacks in aggressive marketing strategies like ICICI.

 The bank focuses mostly on high end clients.

 Some of the bank’s product categories lack in performance and doesn’t have reach in the
market.

 The share prices of HDFC are often fluctuating causing uncertainty for the investors.

3. Opportunities in the SWOT analysis of HDFC

 HDFC bank has better asset quality parameters over government banks, hence the profit
growth is likely to increase.

 The companies in large and SME are growing at very fast pace. HDFC has good
reputation in terms of maintaining corporate salary accounts.

 HDFC bank has improved it’s bad debts portfolio and the recovery of bad debts are high
when compared to government banks.

 HDFC has very good opportunities in abroad.

 Greater scope for acquisitions and strategic alliances due to strong financial position.

4. Threats in the SWOT analysis of HDFC

 HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%. Though it is a

slight variation it’s not a good sign for the financial health of the bank.

 The non-banking financial companies and new age banks are increasing in India.

 The HDFC is not able to expand its market share as ICICI imposes major threat.

 The government banks are trying to modernize to compete with private banks.

 RBI has opened up to 74% for foreign banks to invest in Indian market.

44
2.19 NET BANKING SERVICE AT HDFC BANK
Net banking is HDFC Bank's Internet Banking service. It provides up-to-the-second account
information. Net banking lets the customer manage his/her account from the comfort of his/her
mouse - anytime, anywhere. Net Banking services provides access to account information,
products and other services (including transactions of non-financial and financial in nature) as
advised by the Bank from time to time to the customers through the website of the Bank. Net
Banking Services also include the services for Demat account, Credit Cards and loan on the
website of the Bank.
The HDFC Bank web site (www.hdfcbank.com) also features two versions of a demo facility -
one "interactive" and the other "guided" - making it possible for even Internet illiterates to get
comfortable with its services.
On the downside, however, 'registration' for the service involves downloading of a form that
needs to be posted/delivered to any of its branches - not exactly "web savvy" as we would call it.
Also, the form itself requires Adobe Acrobat Reader to be installed and the file size will exceed
5.5 MB, which translates roughly into an hour or more of on-line time. Its 3-question FAQ page
also assumes a high level of computer knowledge from users ... not consistent with the rest of the
website.
Net Banking service provides a host of features at the finger-tips:

 View Account Balances & Statements

 Transfer Funds between accounts

 Create Fixed Deposits Online

 Request a Demand Draft

 Pay Bills

 Order a Cheque Book

 Request Stop Payment on a Cheque

 And lots more.

2.2.20 SERVICES OFFERED UNDER NET BANKING SERVICE

PROVIDED BY HDFC BANK
HDFC Bank Savings and Current account holders can access their account through Net

45
Banking.

Currently, Net Banking service is offered to the HDFC Bank customers free with all
accounts. However, all minimum balance/deposit amount requirements of the relevant
accounts will need to be honored. No separate fee is charged to access this service.
Currently, one can do any of the following:
 Queries:
i. Check your balance.
ii. See your statement.
iii. Inquire about cheque status.
iv. Ask for a statement.
v. Ask for a cheque book.
vi. Inquire about your Fixed deposit.
vii. Inquire about your TDS details.
viii. See your Demat account.
ix. Update your profile.
x. View HDFC bank credit card bills.
xi. View your mutual funds portfolio.
 Transactions:
i. Stop a cheque.
ii. Pay your bills.
iii. Ask for a Demand Draft.
iv. Transfer funds between your accounts.
v. Transfer funds to a third party.
vi. Request for a new fixed deposit.
vii. Shop online.
viii. Pay HDFC Bank Credit Card Dues.
ix. Buy and sell mutual funds.

SECURITY AND SAFETY OF TRANSACTIONS ON NET BANKING

The customer can be assured of complete privacy when you use HDFC Bank's Net
Banking facility. The bank has built several checks to safeguard the Net Banking
transactions. Before the user gain access to his/her account, he/she will be asked to
enter his/her unique customer ID and IPIN (password) to verify the identity. To
maximize the security and confidentiality of the transactions, one’s password is not
accessible to anyone, not even bank employees.

46
To ensure the security of the transactions, the bank uses a technology called Secured
Socket Layer (SSL), which involves scrambling of the information between the
customer and the Bank. If an unauthorized user tries to access your account by keying
in various combinations while trying to guess your password, your account will
automatically get locked. Moreover, when the user log-in to Net Banking, the last date
and time of log-in will be displayed so that the user can make sure that nobody has
accessed his/her account.

In addition to these online security features, have been placed under the supervision of
a dedicated team to monitor the access to the web server and to prevent unauthorized
access. These features work together to maximize the security of your banking
transactions.
HDFC bank has implemented a new security solution for its customers - secure access
as security of the customer is bank’s top priority, the bank has initiated the secure
access solution to protect the customers from fraudsters and hackers.
Currently following transactions are covered under secure access

  Transfer from one HDFC bank account to other hdfc bank account

  Transfer from HDFC bank account to any other bank's account

  Visa money transfer

 Third party demand draft through netbanking.

Internet banking has been exploited by hackers and fraudsters to deceive the bank's
customer and commit frauds. While the bank has best-of-the-breed solutions, processes
and people deployed to extend secure banking to its customers, it is important for our
customers to know that "secUrity is incomplete without u". Customers need to follow
secure computing guidelines to avert any frauds or security breaches to their accounts,
as keys to the internet banking accounts are held by respective account owners in the
form of customer IDs and internet banking passwords (I PIN). Here are some internet
banking security tips provided by HDFC bank:
1. Keep your customer ID and IPIN confidential and do not disclose it to anybody.
2. Change your IPIN as soon as you receive it by logging into your net banking
account. Memorize your IPIN, do not write it down anywhere.
3. Refer "protect your computer accounts with strong passwords" section under

47
 computer security tips.
4. Avoid accessing internet banking from shared computer networks such as cyber
cafes.
5. Do not click on links in the emails or sites other than www.hdfcbank.com to
access your net banking webpage.
6. Always visit the HDFC bank's net banking site through HDFC bank's home
page by typing the bank's website address (www.hdfcbank.com) on to the
browser's address bar. Users are encouraged to add the bank's url to favorites or
bookmark in the user computer browser.
7. Always verify the authenticity of the bank's net banking webpage by checking
its url as "https://netbanking.hdfcbank.com" and the pad lock symbol at the
bottom corner of the browser before putting in your customer ID and IPIN.
8. If your customer id and IPIN appear automatically on the login page of net
banking webpage, you should disable "auto complete" feature on your browser.
To disable auto complete feature:
a. Open internet explorer, click on “tools”=> internet options=> content.
b. Click on "auto complete", under "personal information"
c. Uncheck "user names and passwords on forms", click on "clear
passwords"
d. Click "ok"
9. Use virtual keyboard feature while logging into your internet banking account.
10. Do cross check your last login information available in net banking upon every
login to ascertain your last login and monitor any unauthorized logins.
11. Always type your confidential account information. Do not copy paste it.
12. Monitor your transactions regularly.
13. Use HDFC bank's "InstaAlerts" service.
14. Always logout when you exit net banking. Do not directly close the browser.

2.21 HOW TO REGISTER FOR HDFC NETBANKING?

48
Net Banking Registration is given by default to all HDFC Bank Customers. In case you
are not registered for Net Banking, it is quick & easy. The many ways through which
you can register are:

1. Online
You can Register for Net Banking online by following the below steps:
 Online Resident Customers and NR Customers with Domestic Mobile Number
registered with the bank.
 Enter your Customer ID.
 Confirm your registered mobile number.
 Input the OTP (One Time Password) which you have received on your mobile.
 Select and input the Debit card details.
 Set your IPIN.
 Login to Net Banking using the newly set IPIN
 NR Customer with International Mobile Numbers registered with the bank need
to click here.
 Click here to know more about OTP.
 Click here to register online.

2. ATM
 Visit your nearest HDFC Bank ATM.
 Enter your HDFC Bank Debit Card number and your ATM PIN.
 Select 'Other Option' from the main screen.
 Select 'Net Banking Registration' and confirm.
 We will courier the IPIN to your mailing address.

3. Phone Banking
 Call the Phone Banking number in your city and give your Customer ID and
Telephone Identification Number (TIN) or Debit Card and PIN.
 Our Phone Banking agent will take your Net Banking registration request.
 We will courier the IPIN to your mailing address in our records within 5 days.

4. Branch
 Download the Net Banking registration form (individual or corporate).
 Fill in the form and submit it to your nearest HDFC Bank branch.
 We will courier the IPIN to your mailing address in our records.

There are no charges for Net Banking registration request.

49
Another step for activating HDFC Net Banking:
 First Method
◾Write an application requesting to activate Net Banking facility to your HDFC
Branch Head.
◾Submit 2 xerox copies of resident certificate and passbook.
◾Contact to branch officer and demand for Net Banking id and password.
◾The branch officer will give you id and password.

Now you are ready to use the service Net Banking.

 Second Method
i. To activate net banking in HDFC Call on Phone Banking number of HDFC and
tell detail as Customer Id, Address, Contact Number and request here to register
Net Banking facility for your account.
ii. You may get HDFC Banking number by this link: HDFC Phone Banking
Number.
iii. HDFC bank will send your IPIN to your address within 5 working days.

 Third Method
You can download a Net Banking Registration form from HDFC website. Fill the form
and submit it to your nearest HDFC bank. The bank will send the IPIN to you by post.

 Fourth Method
You can activate Net Banking in HDFC Bank with the help of any HDFC Bank ATM.
Go to your favourite HDFC bank ATM. enter your debit card here and write PIN at
given places by pressing digit buttons. After processing select “other option” on the
main screen. Now select the ‘Net Banking Registration‘ and press confirm. Now your
work is over. It’s bank duty to courier the IPIN to your address within 5 working days.

NOTE: you are requested to change the first password which you get from the bank.

After getting the IPIN, by any process given above, you will be able to use Net
Banking in HDFC Bank. For this, you have to go on HDFC site and select the Net

50
Banking. Feed your id and password and now you can make any transaction. For any
other information about Net Banking contact the HDFC customer care.

51
 CHAPTER-3

NEED, SCOPE AND OBJECTIVES OF THE STUDY

3.1 NEED OF THE STUDY

After conducting a review of researches done by various professionals a gap have been
identified. The researchers had studied the aspects of internet banking, its introduction, its
development, adoption by the customers, consumer’s perception about this service, its success
and security related issues. But a very few researchers had studied the net banking service with
respect to the HDFC Bank. This gap had been identified and it handled to the present research
being undertaken.

3.2 SCOPE OF THE STUDY

The area where the study has been conducted was Saharanpur.

3.3 OBJECTIVES OF THE STUDY

52
The current study was undertaken to achieve the following stated objectives:
1. To analyse awareness among customers using Net banking service.
2. To know about the Net Banking service provided by HDFC Bank.
3. To know the cause why customers are using or not using Net banking service.
4. To know the confidence of the customers of HDFC Bank in using these services.
5. To study the popularity of the Net banking service among the customers of HDFC Bank.

CHAPTER 4
53
 RESEARCH METHODOLOGY

Research is a common parlance which refers to search for knowledge. It is a procedure of logical
and systematic application of the fundamentals of science to the general and overall questions of
a study and scientific technique, which provide precise tools, specific procedures, and technical
rather philosophical means for getting and ordering the data prior to their logical analysis and
manipulating different type of research designs is available depending upon the nature of
research project, availability of manpower and circumstances.

4.1 RESEARCH DESIGN-

A research design is the arrangement of conditions for collection and analysis of data in a manner
that aims to combine relevance to the research purpose with economy in procedure. In fact, the
research design is the conceptual structure within which research is conducted. This research was
descriptive in nature.

Descriptive research: The research undertaken is a descriptive research as it was concerned

with specific predictions, with narration of facts and characteristics concerning net banking
service provided by HDFC Bank.

54
4.2. SAMPLING DESIGN-

The following factors have been decided within the scope of sample design:

4.2.1 Universe of study: Universe of the study means all the persons who are the customers of
HDFC Bank in the world.
Theoretical: It covered all the individuals who are the customers of HDFC Bank in the world.
Accessible: It covered all the individuals who are the customers of HDFC Bank in India who are
within our reach. In this study accessible population was customers of HDFC Bank in India.

4.2.2 Sample Size: A sample of minimum 100 respondents was selected from various areas of
Saharanpur. An effort was made to select respondents evenly. The survey was carried out on
respondents.
4.2.3 Sample Unit: In this project sampling unit consisted of the various individuals who had
their bank accounts with HDFC Bank.

4.2.4 Sampling Technique: For the purpose of research convenient sampling technique was
used.

4.2.5 Sampling Frame: It consisted of various sources from where information about the
respondent is extracted. Mainly personal links and employees of HDFC Bank, Saharanpur are
used for getting information about the respondents.

4.3 DATA COLLECTION AND ANALYSIS

4.3.1 DATA COLLECTION

There were two types of data sources used in this research. These were:
 Secondary Data
 Primary Data

55
4.3.1.1. Secondary data
Secondary data refers to data which is collected by someone who is someone other than the user.
Common sources of secondary data for social science include censuses, information collected by
government departments, organizational records and data that was originally collected for other
research purposes.

Secondary data analysis can save time that would otherwise be spent collecting data and,
particularly in the case of quantitative data, can provide larger and higher-quality databases that
would be unfeasible for any individual researcher to collect on their own. In addition, analysts of
social and economic change consider secondary data essential, since it is impossible to conduct a
new survey that can adequately capture past change and/or developments. However, secondary
data analysis can be less useful in marketing research, as data may be outdated or inaccurate.

Secondary data can be obtained from different sources:

 information collected through census or government departments like housing, social

security, electoral statistics, tax records

 internet searches or libraries

 progress reports

4.3.1.2. Primary data

It is the information taken first-hand by the researchers, who collects the data and completes the
study process without referring to any second-hand sources. Large companies with good funding
prospects can perform primary research such as surveys, face-to-face interviews, social media
surveys/polls/feedback, analysis of customer feedback, observations, questionnaire, getting
response via email etc.

56
In this project, an appropriate questionnaire was designed which was filled by
the customers of HDFC Bank to know their opinions regarding the Net
Banking service provided by HDFC Bank.

4.3.2 DATA ANALYSIS

4.3.2.1 Tools of Presentation: It means what all tools are used to present the data in a
meaningful way so that it becomes easily understandable. In this research tables and graphs were
used for presenting the data.

4.3.2.2 Tools of Analysis: In this research the tools of analysis used were percentages.

57
 CHAPTER-5

REVIEW OF LITERATURE

A number of researches have been conducted on net banking and its adoption, development
and its perils. Due to shortage of time and resources, a review of all the past researches
done could not be mentioned in this research project. So, a snapshot of some of the reviews
have been presented.

Mr. Vijay Prakash Gupta & Dr. P. K. Agarwal (2013) - In their research paper “Comparative
Study of Customer Satisfaction in Public Sector and Private Sector Banks in India”. This
paper gives with the introduction of liberalization policy and RBI's easy norms several private
and foreign banks have entered in Indian banking sector which has given birth to cut throat
competition amongst banks for acquiring large customer base and market share. Banks have to
deal with many customers and render various types of services to its customers and if the
customers are not satisfied with the services provided by the banks then they will defect which
will impact economy as a whole since banking system plays an important role in the economy of
a country, also it is very costly and difficult to recover a dissatisfied customer. Since the
competition has grown manifold in the recent times it has become a herculean task for
organizations to build loyalty, the reason being that the customer of today is spoilt for choice. It
58
has become imperative for both public and private sector banks to perform to the best of their
abilities to retain their customers by catering to their explicit as well as implicit needs. Many a
times it happens that the banks fail to satisfy their customer which can cause huge losses for
banks and there the need of this study arises. The purpose of this research article is to examine
the customer satisfaction among group of customer towards the public sector& private sector
banking industries in India. Study is cross-sectional and descriptive in nature. The researcher
tries to makes an effort to clarify the Customer Service satisfaction in Indian banking Sector.
Descriptive research design is used for this study, where the data is collected through the
questionnaire. The information is gathered from the different customers of the two banks, viz.,
PNB and HDFC Bank located in the Saharanpur Region, Uttar Pradesh. Hundred bank
respondents from each bank were contacted personally in order to seek fair and frank responses
on quality of service in banks. The service quality model developed by Zeithamal, Parsuraman
and Berry (1988) has been used in the present study. The analysis clearly shows that there exists
wide perceptual difference among Indian (public sector) banks regarding overall service quality
with their respective customers, when compared to Private sector banks. Whereas the said
perceptual difference in private banks is narrow.

Vijay M. Kumbhar (2011)- In his research paper “Factors Affecting the Customer
satisfaction In E-Banking: Some evidences Form Indian Banks”. This study evaluates major
factors (i.e. service quality, brand perception and perceived value) affecting on customers’
satisfaction in e-banking service settings. This study also evaluates influence of service quality
on brand perception, perceived value and satisfaction in e-banking. Required data was collected
through customers’ survey. For conducting customers’ survey liker scale based questionnaire was
developed after review of literature and discussions with bank managers as well as experts in
customer service and marketing. Collected data was analysed using principle component (PCA)
using SPSS 19.0. A result indicates that, Perceived Value, Brand Perception, Cost Effectiveness,
Easy to Use, Convenience, Problem Handling, Security/Assurance and Responsiveness are
important factors in customers satisfaction in e-banking it explains 48.30 per cent of variance.
Contact Facilities, System Availability, Fulfilment, Efficiency and Compensation are
comparatively less important because these dimensions explain 21.70 percent of variance in
customers’ satisfaction. Security/Assurance, Responsiveness, Easy to Use, Cost Effectiveness
and Compensation are predictors of brand perception in e-banking and Fulfilment, Efficiency,
Security/Assurance, Responsiveness, Convenience, Cost Effectiveness, Problem Handling and
Compensation are predictors of perceived value in e-banking.

Pooja Malhotra & Balwinder SINGH (2009) - In their research paper “The Impact of
Internet Banking on Bank Performance and Risk: The Indian Experience”. The paper
describes the current state of Internet banking in India and discusses its implications for the
Indian banking industry. Particularly, it seeks to examine the impact of Internet banking on
banks’ performance and risk. Using information drawn from the survey of 85 scheduled
commercial bank’s websites, during the period of June 2007, the results show that nearly 57

59
percent of the Indian commercial banks are providing transactional Internet banking services.
The univariate analysis indicates that Internet banks are larger banks and have efficiency ratios
and profitability as compared to non-Internet banks. Internet banks rely more heavily on core
deposits for funding than non-Internet banks do. However, the multiple regression results reveal
that the profitability and offering of Internet banking does not have any significant association,
on the other hand, Internet banking has a significant and negative association with risk profile of
the banks.

Rajesh Kumar Srivastava (2007) - In his research paper “Customer’s perception on usage of
internet banking”. This paper present to Internet banking is still at infancy stage in the world.
Many studies focused on usage of internet banking but many factors on non-usage were
overlooked. This research was carried out to validate the conceptual model of internet banking.
The causes were identified and researched through correcting the causative factors so that
internet banking can bused by more people. This will help the banking operations to be more cost
effective. The research is focused on what are the customer’s perceptions about internet banking
and what are the drivers that drive consumers. How consumers have accepted internet banking
and how to improve the usage rate were the focus of research area in this study. Qualitative
exploratory research using questionnaire was applied. 500 respondents were selected for study
after initial screening. They were all bank customers. The study revealed that education, gender,
income plays an important role in usage of internet banking. Not much researches been done on
these areas as they were focused more on the acceptance of technology rather than on people.
The research corroborated the conceptual framework stating that if skills can be upgraded there
will be greater will tousle internet banking by consumers. Inhibitory factors like trust, gender,
education, culture, religion, security, and price can have minimal effect on consumer mind-set
towards internet banking.

Amruth Raj Nippatlapalli (2013) - In his research paper “A Study on Customer Satisfaction
of Commercial Banks: Case Study on State Bank of India”. This paper present Customer
satisfaction, a term frequently used in marketing, is a measure of how products and services
supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as
"the number of customers, or percentage of total customers, whose reported experience with a
firm, its products, or its services (ratings) exceeds specified satisfaction goals. “Banking in
India” originated in the last decades of the 18th century. The first banks were The General Bank
of India, NOW which started in 1786, and Bank of Hindustan, which started in 1790; both are
now defunct. The oldest bank in existence in India is the State Bank of India, which originated in
the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This
was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East India Company.
For many years the Presidency banks acted as quasi-central banks, as did their successors. The
three banks merged in 1921 to form the Imperial Bank of India.

60
Ms. Nisha Malik & Mr. Chand Prakash Saini (Jul 2013)- In their research titled on “Private
Sector Banks Service Quality and Customer Satisfaction- A Empirical Study two Private
Sector Banks”. This research paper is an effort to examine the relationship between service
quality and customer satisfaction of two private sectors bank of India. Service quality has been
described as a form of attitude that results from the comparison of prospect with recital (Cronin
and Taylor, 1992, Parasuraman et al, 1985). Gronroos 1982) argued that customers, while
evaluating the quality of service, compare the service they expect with perceptions of the
services they actually receive. Since financial products offered by various banks are similar by
nature then why any particular bank of product of any bank is preferred than others a matter of
interest for academician as well as banking industry. They may be difference between customers
of public and private sector banks, but why are two banks of one sector being preferred
differently by customers. This research study is an effort to find out the answer of these
questions.

Shaza W. Ezzi (April 2014) - In their research paper titled “A Theoretical Model for Internet
Banking: Beyond Perceived Usefulness and Ease of Use” tried to inquired different types of
electronic banking like ATM’s, telephone banking, and electronic funds transfer, Internet banking
like has evolved from consumers’ needs to have superior access to banking services clear of most
banks teller-staffed, normal operating hours. Additionally, Internet banking has grown swiftly
from the recent and the span increases in ecommerce. Internet banking (IB) continues to govern
the landscape of electronic banking as consumers continue to use IB to complete schedule
banking transactions in addition to conducting on-line sales and purchasing. This study presents
a theoretical model considered to help researchers and practitioners better understand the
acceptance and adoption of Internet Banking. The proposed model maybe particularly useful in
developing nations where consumers are loath to use Internet Banking even when the services
are available. However, a review of several studies that have investigated consumers’ acceptance
of Internet banking services from a multiplicity of perspectives have not reached a clear
consensus of the factors that contribute to overall consumer acceptance and adoption. The paper
concludes with discussions of the managerial implications and avenues for future research.

Kartikeya Bolar (2014) - In their research paper “End-user Acceptance of Technology

Interface In Transaction Based Environment “This paper presents Creators and investors of
technology need information about the customers’ assessment of their technology interface based
on the features and various quality dimensions to make strategic decisions in improving
technology interfaces and compete on various quality dimensions. The research study identifies
the technology interface dimensions as perceived by the end-users in a transaction based
environment (viz. Internet banking) in India, using exploratory factor analysis. The influence of
these dimensions on the utility of technology interface and hence the usage is examined by

61
Structural Equation Modeling. The moderating role of user demographics and technology
comfort is also tested. Managerial implications are discussed.

Anil Kumar and Manoj Kumar Dash (2013) - In their research paper “Constructing a
Measurement in Service Quality for Indian Banks: Structural Equation Modeling
Approach”. The aim of this paper is to construct a measure in service quality for Indian banks
and establishes a causal relationship of service attributes performance with customer satisfaction.
The SERVQUAL model is used. The quantification of service quality led to the attempt to
construct an index. The index is constructed using Structural Equation Modeling (SEM) and
American Customer Satisfaction Index (ACSI) as the underlying frameworks. The analysis is
based on data of 200 bank customers from the DelhiNCR. An adapted ACSI is enhanced and
improved to accommodate two exogenous constructs. The results indicate that service quality
variables are important antecedents of customer satisfaction and retention. These antecedents of
service quality have a positive significantly relationship with customer satisfaction. The study
concludes with an analysis of how different dimensions of service quality performance attribute
impact on customer satisfaction and retention. Such a framework should provide valuable
insights to the bank manager to identify key service performance indicators and to design more
effective and efficient marketing and management strategies to satisfy their customer.

Ankit Kesharwani & Gajulapally Radhakrishna (2013) - In their research paper “Drivers
and Inhibitors of Internet Banking Adoption in India”. This paper research on different banks
is on condition that e-banking services, as this would revolutionize their profits. Since internet
banking in India is still in its nascent stage, it is essential for e-banking institutions to enhance
reception and usage of internet as a banking channel by their customers. This paper has reviewed
the most of seminal studies in the area of diffusion of innovation and makes an attempt to do an
experimental research that looked into the factors that drives and inhibits internet banking usage
in India. An investigative factor analysis followed by a positive factor analysis has been applied
on 362 internet banking users. Findings resulted in seven factors – perceived benefit, hacking
and fraud risk, performance risk, computer self-efficacy, technology intricacy, social influence,
and pricing concerns. The results suggest that acceptance and usage of internet banking services
can turn into a fundamental concern for future research, as the drivers overcoming the inhibitors
over time at an influencing rate. Moreover, this study also compares the findings with extant
diffusion of innovation literature and identified several additional factors that can affect internet
banking adoption in India.

62
63
 CHAPTER-6

DATA ANALYSIS AND INTERPRETATION

Demographic Profile of the Respondents

Demographic Profile of the Respondents

64
 Number of Percentage Of
Demographics
Respondents Respondents

Age:
Below 20 years 1 1%
20 – 35 years 33 33 %
35 – 50 years 40 40 %
50 – 65 years 17 17 %
65 years and above 9 9%
TOTAL 100 100 %
Qualification:
Undergraduate 5 5%
Graduate 65 65 %
Post Graduate 30 30 %
TOTAL 100 100 %
Occupation:
Businessman 32 32 %
Housewife 7 7%
Self Employed 17 17 %
Service 27 27 %
Student 4 4%
Professional 13 13 %
TOTAL 100 100 %
Annual Income:
Less than Rs 2 Lakhs 12 12 %
Rs. 2 – 6 Lakhs 27 27 %
Rs. 6 – 10 Lakhs 39 39 %
Rs. 10 – 15 Lakhs 17 17 %
Rs. 15 – 20 Lakhs 5 5%
Rs. 20 Lakhs and above 0 0%
TOTAL 100 100 %

65
Analysis and interpretation:
From the data collected it was found majority of respondents that is 40%
belonged to the age of 35 to 50 years, followed by the age group of 20 to 35 years.
It was found that the majority of the respondents were graduates. It was found
that the majority of the respondents were from the business class followed by the
service class and self- employed people. It was found that the majority of the
respondents fell between the income groups of Rs 6 to Rs 10 lakhs, followed by
income group between Rs 2 to Rs 6 lakhs.
Thus it can be concluded that the majority of the respondents were knowledgeable
and were well informed about the banking services.

Statement 1: Time period since the HDFC Bank’s services are being availed

Time period since the HDFC Bank’s services are being availed
Percentage of
Time Period Number of respondents
respondents
Less Than 2 years 9 9%
2 – 5 years 18 18 %
5 – 10 years 31 31 %
More Than 10 years 42 42 %
Total 100 100 %

Time period since the HDFC Bank’s services are being availed

66
 45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Less than 2 Years 2-5 Years 5-10 Years More than 10 years

Analysis and interpretation:

From the data collected, it can be concluded that the majority of the respondents that is
42% of the respondents have been HDFC Bank’s customer for more than 10 years,
followed by 5 to 10 years with 31% of respondents.
It can be concluded that the majority of the respondents have been HDFC Bank’s
customer for more than 10 years.

Statement 2: Products and services of HDFC Bank availed by the customers

Products and services of HDFC Bank availed by the customers

Products and services Number of respondents Percentage of respondents

Loans 49 22.58 %
Deposit Accounts 63 29.03 %
Credit Cards 27 12.44 %
Debit Cards 19 8.75 %
Forex Services 22 10.13 %

67
ATM 24 11.05 %
NRI Services 13 6.00 %
Total 217* 100 %

* The total is more than sample size because of multiple responses.

Products and services of HDFC Bank availed by the customers

Credit Cards; 27; 12.44% Loans

Debit Cards; 19; 8.76%
Deposit
Forex Services; 22; 10.14% Accounts
Deposit Accounts; 63; 29.03%
Credit Cards
ATM; 24; 11.06%Debit Cards
NRI Services; 13; 5.99%
Forex
Loans; 49; 22.58% Services

ATM

NRI Services

Analysis and interpretation

It was found that majority of the respondents that is 29% availed deposit accounts,
followed by loans, credit cards, ATM’s and forex services with 23%, 12%, 11% and 10%
respectively.
It can be inferred that that majority of the respondents availed the deposit accounts
among the various products and services offered by the HDFC Bank.

Statement 3: Perception about the products and services offered by HDFC Bank

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 Perception about the products and services offered by HDFC Bank

Perception Number of respondents Percentage of respondents

Lucrative (Profitable) 80 80 %
Non lucrative (Non-Profitable) 5 5%
Can’t say 15 15 %
Total 100 100 %

Perception about the products and services offered by HDFC Bank

80%

70%

60%

50%

40%

30%

20%

10%

0%
Lucrative Non lucrative Can't Say

Analysis and interpretation

From the data collected, it was found that the majority of the respondents that is 85% said
that the products and services offered by HDFC Bank were lucrative. While just 5% of the
respondents said that the products and services offered were non lucrative and the
remaining 15% were not able form any opinion.
It can be inferred that the majority of the felt that the products and services offered by
HDFC Bank were lucrative.

69
 Statement 4: Ways to access to HDFC Bank

Ways to access to HDFC Bank

Percentage of
Ways Number of Respondents
Respondents
Net Banking 53 23.05 %
Phone Banking 28 12.18 %
One View 7 3.05 %
ATM 29 12.60 %
Branch Network 76 33.04 %
Email Statement 34 14.78 %
Insta Alert* 3 1.30 %
Total 230** 100 %

*INSTA ALERT service sends instant SMS/E-mail alerts to the customer upon registration
for defined transaction denominations and while adding beneficiaries for carrying out
Third Party transactions.

** The total is more than sample size because of multiple responses.

Ways to access to HDFC Bank

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 5.73%

22.02%
14.12%
Net Banking
Phone Banking
One View
ATM
11.63% Branch Network
Email Statement
2.91% Insta ALERT
31.56%

12.03%

Analysis and interpretation:

It was found from the data collected that 33% of the respondents accessed the bank
through Branch network. About 23% of the respondents accessed the bank through net
banking followed by e-mail statements with about 15%. Marginally 1% and 3% of the
respondents used insta alert and one view to access the bank.
It was inferred that majority of the respondents accessed the bank through branch network.

Statement 5: Awareness regarding Net Banking Service provided by HDFC Bank

Awareness regarding Net Banking Service provided by HDFC Bank

Awareness Number of respondents Percentage of respondents
Yes 96 96 %
No 4 4%
Total 100 100 %

Awareness regarding Net Banking Service provided by HDFC Bank

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Analysis and interpretation:
From the data collected it was found that majority of the respondents that is 96% were
aware of the net banking service provided by HDFC Bank while just 4% of the
respondents were not aware of the same service.
It was concluded that majority of the respondents of the respondents were aware of the
net banking service.

Statement 6: Accessibility of Net Banking Facility provided by HDFC Bank

Accessibility of Net Banking Facility provided by HDFC Bank

Accessibility Number of respondents Percentage of respondents
Yes 81 81 %
No 19 19 %
Total 100 100 %

Accessibility of Net Banking Facility provided by HDFC Bank

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 No; 19; 19.00%

Yes
No

Yes; 81; 81.00%

Analysis and interpretation:

Of the data collected it was found that about 81% of the respondents had accessed the net
banking service provided by the HDFC Bank while 19% of the respondents said that they
had not accessed the same.
It can be inferred that the majority of the respondents had availed the net banking service.

Statement 7: Net Banking services of HDFC Bank availed

Net Banking services of HDFC Bank availed

Number of Percentage of
Services
respondents respondents
View accounts balances & statements 44 30.39 %
Transfer funds between accounts 32 22.07 %
Create Fixed Deposit online 8 5.51 %
Request a demand draft 5 3.44 %
Pay bills 29 20.00 %
Order a cheque book 16 11.03 %
Request stop payment on a cheque 11 7.56 %

73
 Total 145* 100 %

* The total is more than sample size because of multiple responses.

Net Banking services of HDFC Bank availed

11.03% 30.39% View accounts balances &

7.56% statements
Transfer funds between
accounts
Create fixed deposits online
20.00% 3.44% Request a demand draf
5.51% Pay bills
Order a cheque book
22.07% Request stop payment on a
cheque

Analysis and interpretation:

It was found that the majority of the respondents that is 30% of the respondents used the
net banking service for viewing accounts and balances, followed by 22% and 20% of the
respondents who availed the same for transferring the funds between accounts and for
paying the bills respectively. Marginally 3% of the respondents used the same service to
request a demand draft.
It can be inferred that the majority of the respondents used the net banking service
provided by HDFC Bank to view their accounts and balances.

Statement 8: Frequency of using the Net Banking service in a month

Frequency of using the Net Banking service in a month

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 Frequency Number of respondents Percentage of respondents
Less than once 35 35 %
1 to 3 times 48 48 %
3 to 8 times 12 12 %
8 to 15 times 5 5%
More than 15 times 0 0%
Total 81 100 %

Frequency of using the Net Banking service in a month

Analysis and interpretation:

It was found that the majority of the respondents that is 48 % used the Net Banking
service one to three times in a month while 35 % said that they used the same service less
than once in a month. None of the respondents said that they availed the same facility
more than 15 times in a month.
It can be inferred that the majority of the respondents availed the Net Banking service
one to three times in a month.

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Statement 9 : Difficulties faced while using the Net Banking service of HDFC Bank

Difficulties faced while using the Net Banking service of HDFC Bank
Number of Percentage of
Difficulties
respondents respondents
Logging in to your account 11 11%
Making transactions 33 33%
Safety issues 40 40%
Unable to understand webpages 7 7%
Regularly changing the IPIN and Password 9 9%
Total 100 100 %

Difficulties faced while using the Net Banking service of HDFC Bank

Analysis and interpretation:

It was found that the majority of the respondents that is 40% said that safety issues was
the major difficulty that they faced while using the Net Banking service, followed by
34% of the respondents who felt that making transactions with the bank through Net
Banking was difficult. However, 7% of the respondents faced difficulty in understanding

76
 the webpages and 9% of the respondents felt that changing the IPIN and Password
regularly was difficult.
It was inferred that the majority of the respondents regarded the safety issues as the major
difficulty that they faced while using the Net Banking service.

Statement 10: Frequency of visiting the HDFC Bank branch

Frequency of visiting the HDFC Bank branch

Frequency Number of respondents Percentage of respondents

Everyday 21 21 %
Alternate days 26 26 %
Once in a month 18 18 %
Twice in a month 9 9%
Thrice in a month 5 5%
Twice in a week 14 14 %
Once in a week 7 7%
Total 100 100 %

Frequency of visiting the HDFC Bank branch

77
 30%

25%

20%

15%

10%

5%

0%
y
da ay
s
ery d th
Ev te on th
a m on th
ek
ter
n a m on ek
Al n a m we
ei n a a we
c ei in n a
On ic e ei i n
Tw ri c ic ce
Th Tw On

Analysis and interpretation:

It was found that the majority of the respondents that is 26% said that they visited the bank
branch every alternate day, followed by 21% of the respondents who visited the bank everyday.
Only 5% of the respondents visited the bank branch thrice in a month.
It can be inferred that the majority of the respondents said that they visited the bank branch every
alternate day.

Statement 11: The main reason for which the bank branch is typically visited

The main reason for which the bank branch is typically visited
Number of Percentage of
Reasons
respondents respondents
To make a deposit 31 31 %
To get a advice for investment purpose 13 13 %
To inquire about a balance 7 7%
To withdraw a cheque 23 23 %

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 To order a cheque book 15 15 %
To transfer funds between accounts 11 11 %
Total 100 100 %

The main reason for which the bank branch is typically visited

Analysis and interpretation:

It was found that the majority of the respondents that is 31% said that the main reason of
visiting the bank is to make a deposit, followed by 23% who said that they visited the
bank branch typically to withdraw a cheque. Of the total only 7% and 11% of the
respondents visited the bank to inquire about a balance and to transfer funds between
accounts respectively.
It can be inferred that the majority of the respondents said that the main reason of visiting
the bank is to make a deposit.

Statement 12: Agreement regarding Net Banking service being better than traditional banking

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 Agreement regarding Net Banking service being better than traditional banking

Agreement Number of respondents Percentage of respondents

Yes 64 64 %
No 36 36 %
Total 100 100 %

Agreement regarding Net Banking service being better than traditional banking

No; 36; 36.00%

Yes No
Yes; 64; 64.00%

Analysis and interpretation:

Of the data collected it was found that the majority of the respondents that is 64%
respondents agreed that net banking is better than the traditional banking while 36% of
the respondents disagreed with the statement.
It can be inferred that the majority of the respondents felt that the net banking service was
better than traditional banking.

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 CHAPTER-8

FINDINGS OF THE STUDY

The findings of the study were as follows-

81
1. The majority of the respondents have been HDFC Bank’s customer for more than
10 years.
2. The majority of the respondents availed the deposit accounts among the various
products and services offered by the HDFC Bank.
3. The majority of the respondents felt that the products and services offered by
HDFC Bank were lucrative.
4. The majority of the respondents accessed the bank through branch network.
5. The majority of the respondents of the respondents were aware of the net banking
service.
6. The majority of the respondents have availed the net banking service.
7. The majority of the respondents used the net banking service provided by HDFC
Bank to view their accounts and balances.
8. The majority of the respondents availed the Net Banking service one to three
times in a month.
9. The majority of the respondents faced the safety issues was the major difficulty
that they faced while using the Net Banking service.
10. The majority of the respondents said that they visited the bank branch every
alternate day.
11. The majority of the respondents said that the main reason of visiting the bank is to
make a deposit.
12. The majority of the respondents felt that the net banking service was better than
traditional banking.

82
 CHAPTER-9

CONCLUSION

The introduction of new technology has been changing the attire of banking. The brick and
mortar banking is slowly giving place to click of the mouse banking. Technology is aiding

83
globalization and integration of financial markets across the globe. Customer’s expectations for
new products and alternatives delivery channels have been rising. Banks are under pressure to
offer today, what customers would be expecting tomorrow. Thanks to innovations and spread of
new technology, banks today offer the customer a choice to conduct his business across the
counter, over phone or via a computer.
The introduction of new instruments such as ATM, retail Electronic Funds Transfer (EFT) and
Electronic Clearing Services (ECS) have all helped in developing an effective, efficient and
speedy payment and settlement systems.

84
CHAPTER-10

RECOMMENDATIONS AND SUGGESTIONS

85
1. The bank should make some efforts to familiarize the customers to various services through
demonstrations.
2. The bank should adopt more upgraded techniques to make their customer feel more secure
while accessing their accounts.
3. Effective awareness campaigns should be undertaken by the banks to make their customers
more aware of net banking service
4. The bank should make effort to provide a platform from where the customers can access
different accounts at single time without extra charge.
5. The bank should take steps to create a trust in mind of customers towards security of their
accounts.
6. The HDFC bank should introduce more services which can be accessed through Net Banking
like advice on investment, TDS, etc.

86
CHAPTER-11

LIMITATIONS OF THE STUDY

87
The following were the limitations of the study:
1. Non representative sample: In this research project a sample survey was conducted. A
sample of 100 respondents was selected. So such sample size cannot be said to be the true
representative of the universe.
2. Shortage of time: The time period of study was very limited. It is very difficult to have in
detail study on project work due to limited time period. The period of 4 to 6 weeks is not enough
for the proper study of the project.
3. Inadequate data: The data provided was not up to the mark due to which I faced problems in
our research.
4. Lack of scientific method: The lack of scientific training in methodology of research was
great impediment in research program, which led to the delay of research.
5. Cost Factor: It was not possible to conduct extensive research due to paucity of funds.

88
CHAPTER-12

BIBLIOGRAPHY

89
  BOOKS:
Kothari, C.R.,(2017), “Research Methodology.
Rajesh Kumar Srivastava (2007). Customer's Perception on Usage of Internet Banking.
Innovative Marketing, 3(4)
 WEBSITES:-
www.hdfcbank.com
www.hdfcbank/products/finance
www.investopedia.com
www.scribd.com
www.wikipedia.org

QUESTIONNAIRE

90
 A. NAME: ___________________________
B. AGE:
i. Below 20 years
ii. 20-35 years
iii. 35-50 years
iv. 50-65 years
v. 65 years & above

C. Qualification:
i. Under Graduate
ii. Graduate
iii. Post Graduate

D. Occupation:
i. Businessman
ii. Housewife
iii. Self-employed
iv. Service
v. Student
vi. Professional

E. Annual Income:
i. Less than Rs. 2 lakh
ii. Rs. 2-6 lakhs
iii. Rs. 6-10 lakhs
iv. Rs. 10-15 lakhs
v. Rs. 15-20 lakhs
vi. Rs. 20 lakhs and above

1. From how much time period you are availing HDFC Bank’s Services?
a. Less than 2 years
b. 2-5 years
c. 5-10 years
d. More than 10 years

91
2. Which product or service of HDFC Bank you are using more?
a. Loans
b. Deposit Accounts
c. Credit Cards
d. Debit Cards
e. Forex Services
f. ATM
g. NRI Services

3. What is your perception about the products and services offered by HDFC Bank?
a. Lucrative(profitable)
b. Non-lucrative(non-profitable)
c. Can’t Say

4. How you access to the HDFC Bank?

a. Net Banking
b. Phone Banking
c. One View
d. ATM
e. Branch Network
f. E-Mail Statement
g. Insta Alert

5. Are you aware about the Net Banking Services which are provided by HDFC Bank?
a. Yes
b. No

6. Have you accessed to the Net Banking Facilities which are provided by HDFC Bank?
a. Yes
b. No

7. Which of the following Net Banking Services of HDFC Bank is more useful to you?
a. View accounts balances and statements
b. Transfer funds between accounts

c. Credit fixed deposit online

d. Request a demand draft.
e. Pay Bills

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 f. Order a Cheque Book
g. Request Stop Payment on a Cheque

8. How frequently do you use the Net Banking Service in a month?

a. Less than once
b. 1 to 3 times
c. 3 to 8 times
d. 8 to 15 times
e. More than 15 times

9. Which of the following difficulty you faced while using the Net Banking Service of HDFC
Bank?
a. Logging into your account
b. Making transactions
c. Safety issues
d. Unable to understand webpage
e. Regularly changing the IPIN and Password

10. How frequently do you visit the HDFC Bank branch?

a. Everyday
b. Alternate Days
c. Once in a month
d. Twice in a month
e. Thrice in a month
f. Twice in a week
g. Once in a week

11. Which of the following is the main reason for which you visit to the HDFC Bank Branch?
a. To make a deposit
b. To get a advice for investment purpose
c. To inquire about a balance
d. To withdraw a cheque
e. To order a cheque book
f. To transfer funds between accounts

12. Are you agree that Net Banking Services are better than Traditional Banking?
a. Yes
b. No

93
94