The Indian banking system consists of 27 public sector banks, 21 private

sector banks, 49 foreign banks, 56 regional rural banks, 1,562 urban

cooperative banks and 94,384 rural cooperative banks, in addition to
cooperative credit institutions..
1. As of Q1 FY19, total credit extended by commercial banks surged to Rs
86,976.2 billion (US$ 1,297.4 billion) and deposits grew to Rs 115,070.3 billion
(US$ 1,716.4 billion).
2. Credit off-take has been surging ahead over the past decade, aided by strong
economic growth, rising disposable incomes, increasing consumerism & easier
access to credit
3. Indian banks are increasingly focusing on adopting integrated approach to risk
management. Banks have already embraced the international banking
supervision accord of Basel II, and majority of the banks already meet capital
requirements of Basel III, which has a deadline of 31 March 2019.

 DEMAND:
Rising incomes are expected to enhance the need for banking services in rural
areas and therefore drive the growth of the sector. Demand has grown for both
corporate & retail loans; particularly the services, real estate, consumer durables
& agriculture allied sectors have led the growth in credit.

 SUPPLY:
Liquidity is controlled by the Reserve Bank of India (RBI).

KEY PLAYERS IN BANKING INDUSTRY:

 HDFC BANK
 STATE BANK OF INDIA
 ICICI BANK AXIS BANK
 KOTAK MAHINDRA BANK
 IndusInd BANK
 YES BANK
 PUNJAB NATIONAL BANK
 CANARA BANK
Growth drivers of the Indian Banking Industry:
 High growth of Indian Economy
 Rising per capita income
 New channel – Mobile banking is expected to become the second largest channel
for banking after ATMs
 Financial Inclusion Program

COMPANY OVERVIEW
 HDFC Bank happens to be one of the largest banks in India. Further, it is the
market leader in e-commerce. Definitely, such a pioneer would require
adequate infrastructure to cater to its customers. As a matter of fact, HDFC
Bank’s web of distribution is woven of 4,715 branches and 12,260 ATMs
across 2,657 cities.
 Moreover, it provides a number of products and services which includes
wholesale banking, Retail banking, Treasury, Auto (car) Loans, Two Wheeler
Loans, Personal loans, Loan against Property and Credit Cards. In 2017, HDFC
bank’s revenue amounted to ₹81,602 crore and gave employment to 84,325.

On February 2000, HDFC Bank merged with the Times Bank. Then again in 2008, it
acquired the Centurion Bank. Lastly, in 2016 it was awarded as the best-performing
branch in the microfinance among the private sector banks by NABARD.
 RISKS
The term operational risk is a recent phenomenon in the context of banking and
financial institutions. There are various risks associated with borrowing and
lending money.

CREDIT RISK:

Credit risk or default risk comprises incapability or indisposition of a customer or

counterparty to meet obligations in relation to lending, trading, evading, settlement
and other financial transactions. The Credit Risk is generally made up of
transaction risk or default risk and portfolio risk.

PORTFOLIO RISK:

The portfolio risk in turn includes intrinsic and application risk.

Even a small change in market variables causes considerable changes in income

and financial value of banks. Market risk takes the form of:

1. Liquidity Risk;
2. Interest Rate Risk;
3. Foreign Exchange Rate (Forex) Risk;
4. Commodity Price Risk; and
5. Equity Price Risk
 FUTURE STRATERGY
 Personalized view of finances: Rather than requiring the consumer to search for the
information they want, it will be either easy to find or proactively delivered without asking.
The ability to see a current real-time financial profile after each transaction and to be able to
build personalized budget scenarios is a foundational need.
 Access to financial and non-financial data: If a banking organization wants to be at the
center of a consumer’s life, it must be able to share all of the insights it has surrounding a
consumer’s life. This goes far beyond financial insights, to include e-Commerce history,
travel history, medical information, insurance and investment data, warranties and legal
documents, etc. Instead of being in multiple places, the financial institution will provide a
digital repository for everything in the consumer’s life (a lockbox of life).
 Advisor recommendations: Being the central repository of customer data comes with the
requirement that value is provided in return for this position in the consumer’s life. Beyond
simply providing basic financial services advisory capabilities, a banking organization of the
future will need to also provide purchase recommendations, health and dietary
recommendations, travel and hospitality advice, etc. Obviously not provided under one roof,
the importance of APIs and a strong ecosystem collaboration will be key to the relationship.
 Digital concierge: An outgrowth of being an advisor is being a life concierge. With
extensive insight into the way a customer conducts their life, it will be important for the bank
of the future to provide reminders that are based on historical trends. This can range from
arranging transportation to building a shopping list. It will include the morning ‘your
upcoming day at a glance’ delivered most likely by voice having the ability to answer
questions in real time.
 Digital beyond mobile: The marketplace is changing at hyper speed, with technology and
innovations coming faster than ever in the past. Developers need to move beyond mobile,
developing solutions that can be delivered across channels that may not exist today (AR,
VR, MS, etc.).