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CHAPTER: 1 1.

1 MEANING AND DEFINITION


The term Financial Service in a broad sense means mobilising and a llocating savings. Thus, it includes all activities involved in the transformation of saving into investment. The financial service can also be called financial intermediation. Financial intermediation is a process by which funds are mob ilised from a large number of savers and make them available to all those who are in need of it and particularly to corporate customers. Thus, financial services sector is a key area and it is very vital for industrial developments. A service is an equivalent of an economic good that is intangible. The person or firm offering the service boosts the ability, resources skills and or experience to offer a balanced satisfaction of client need while at the same time remaining relevant and functional in an economy. Financial services therefore are those services that are offered by the institutions, which deal with the management of money and other factors that relate to the flow of money in an economy. To clarify on this, a service and the financial service provider possess various characteristics that make the service distinct. For instance, the concept of intangibility also referred to as insubstantiality, perishability as regards to time and reversal of a service, inseparability, simultaneity and variability which refers to the distinctiveness or uniqueness of a given financial service. The basic objectives of management in financial services are cost effectiveness, efficiency in service quality and profitability. In this service sector

quality counts more than the quantity. Management of financial services requires a combination of talents in marketing area, finance area and in HRD capital market deals with raising of finance, arranging for loans, dealing in capital and securities etc. But being a service sector market management a human component is vital for its operation. It can be correctly put that a financial service refers to those facilities such as savings accounts, leasing, money transfers, checking accounts, confirming among others that are offered by players or organizations in the finance industry. These players include banks, credit unions, stock brokerage firms, insurance firms, and foreign exchange among others. Financial services are many, wide and varied hence many institutions or organizations are involved in offering them. Other well known financial services include debt resolution, private equity, intermediation venture capital conglomerates as well as both private and public equity. The above directly implies that financial services in general relate to all those issues which affect the circulation of money and how they interrelate. Definition Facilities such as saving accounts, checking accounts, confirming, leasing, and money transfer, provided generally by banks, credit unions, and finance companies. Classification of Financial Services Industry: The financial intermediaries are classified into two: 1. Capital market intermediaries 2. Money market intermediaries. Capital market intermediaries: The capital market intermediaries consist of term lending Institutions and investing institutions which mainly provide long term funds. Money market intermediaries: It consists of commercial banks, co-operative banks and other agencies which supply only short term funds.

1.2 SCOPE OF FINANCIAL SERVICES


Financial services cover a wide range of activities. They can be broadly classified into two namely: 1. Traditional activities: Traditionally, the financial intermediaries have been rendering a wide range of services encompassing both capital and money market activities. They can be grouped under two heads. (a) Fund based activities: The fund based activities are as follows: (i) (ii) Dealing in foreign exchange market activities Involving in equipment leasing, hire purchase, venture capital, seed capital etc. (iii) Underwriting of or investing on shares, debentures, bonds etc. Of new issues (primary market activities) (iv) (v) Dealing in secondary market activities. Participating in money market instruments like commercial paper, certificate of deposits, treasury bills, discounting of bills etc.

(b) Non- fund based activities: Financial services provide services on the basis of non- fund activities. This can also be called fee based activity. Today, customers whether individual or corporate are not satisfied with mere provision of finance. They expect more from financial service companies. Hence, a variety of services are being provided they are as follows:

(i)

Arrangement of funds from financial institutions for the clients project cost or his working capital requirements.

(ii)

Assisting in the process of getting all government and other clearances.

(iii)

Managing the capital issues- i.e., management of pre- issues and post-issues activities relating to the capital issues in accordance with the SEBI guideline and thus, enabling the promoters to market their issues.

(iv)

Making arrangements for the placement of capital and debt instruments with investment institutions.

2. Morden activities: Morden services are as follows: (a) Managing the portfolio of large public sector corporation. (b) Guiding corporate customer in capital restructuring. (c) Undertaking risk management services like insurance services, buy-back options, etc. (d) Rendering project advisory services right from the preparation of the project with necessary government approval. (e) Acting as Trustee to the debentureholders. (f) Structuring the financial collaboration/ Joint Ventures by identifying suitable joint venture partner and preparing joint venture agreement. (g) Undertaking services relating to the capital market such as: Clearing services Safe custody of securities. Collection of income on securities. Registration and transfers. (h) Planning for mergers and acquisitions and assisting for their smooth carryout.

(i) Promoting credit rating agencies for the purpose of rating companies which want to go public by the issue of debt instruments. (j) Hedging of risks due to exchange rate risk, interest rate risk, economic risk and political risk by using swaps and other derivative product.

The Indian financial services industry has undergone a metamorphosis since 1990. During the late seventies and eighties, the Indian financial service industry was dominated by commercial banks and other financial institutions which cater to the requirements of the Indian industry. In fact the capital market played a secondary role only. The economic liberalization has brought in a complete transformation in the Indian financial services industry. Prior to the economic liberalization, the Indian financial service sector was characterized by so many factors which retarded the growth of this sector. Some of the significant factors were: 1. Excessive controls in the form of regulations of interest rates, money rates etc. 2. Too many controls over the prices of securities under the erstwhile controller of capital issues. 3. Non availability of financial instrument on a large scale as well as on different varieties. 4. Absence of independent credit rating and credit research agencies. 5. Strict regulation of the foreign market with too many restrictions of foreign investment and foreign equity holding in Indian companies. 6. Lack of information about international and developments in the financial sector. 7. Absence of a developed government securities market and the existence of stagnant capital market without any reformation.

8. Non availability of debt instrument on large scale. However, after the economic liberalization, the financial sector has undergone a sea-saw change and now we are witnessing the emergence of new financial products and services almost every day. Thus, the present scenario is characterized by financial creativity and before going deep into it, it is imperative that one should understand the managing and scope of financial services. In general all type of activities which are of a financial nature could be brought under the term `financial services`. The term financial service in broad sense means mobilizing and allocating savings. Thus, it includes all activities involves in the transformation of saving into investment. The financial services can also be called as financial intermediation. Financial intermediation is a process by which funds are mobilized from a large no of savers and make them available to all those who are in need of it and particularly to corporate customers. Thus, financial services sector is a key area and it is very vital for industrial developments. A well developed financial services industry is absolutely necessary to mobilize the savings and to allocate them to various investable channels to thereby to promote industrial developments in a country.

1.3 FUNCTIONS OF FINANCIAL SERVICES/ INSTITUTIONS


These companies help to raise the funds from public as well as from the market. They also assure the efficient allocation and utilization of funds collected by them in the from of savings as well as other firms like IPO etc. They provide assistance in financing mix decision They provide services like Bills discounting, factoring, parking of funds for short term in money market etc. These companies provide consultancy and assistance in the areas venture capital financing, lease financing, mutual funds, merchant banking, credit cards, housing financing etc. This services are generally providing by Banking companies, insurance companies, stock exchanges and non-banking financial companies etc. Monitoring managers (so that the funds allocated will be spent as envisaged).

1.4 CHARACTERISTICS AND FEATURES OF FINANCIAL SERVICES


i) Customer-Specific: Financial services are usually customer focused. The firms providing these services, study the needs of their customers in detail before deciding their financial strategy, giving due regard to costs, liquidity and maturity consideration. Financial services firms continuously remain in touch with their customers, so that they can design products which can cater to the specific needs of their customers. The providers of financial services constantly carry out market surveys, so they can offer new products much ahead of need and impending legislation. Newer technologies are being used to introduce innovative, customer friendly products and services which clearly indicate that the concentration of the providers of financial services is on generating firm/customer specific services.

ii) Intangibility: In a highly competitive global environment brand image is very crucial. Unless the financial institutions providing financial products and services have good image, enjoying the confidence of their clients, they may not be successful. Thus institutions have to focus on the quality and innovativeness of their services to build up their credibility.

iii) Concomitant: Production of financial services and supply of these services have to be concomitant. Both these functions i.e. production of new and innovative financial services and supplying of these services are to be performed simultaneously.

iv)Tendency to Perish: Unlike Any other service, financial services do tend to perish and hence cannot be stored. They have to be supplied as required by the customers. Hence financial institutions have to ensure a proper synchronization of demand and supply.

v) People based services: Marketing of financial services has to be people intensive and hence its subjected to variability of performance or quality of service. The personnel in financial services organisation need to be selected on the basis of their suitability and trained properly, so that they can perform their activities efficiently and effectively.

vi) Market Dynamics: The market dynamics depends to a great extent, on socioeconomic changes such as disposable income, standard of living and educational changes related to the various classes of customers. Therefore financial services have to be constantly redefined and refined taking into consideration the market dynamics. The institutions providing financial services, while evolving new services could be proactive in visualising in advance what the market wants, or being reactive to the needs and wants of their customers.

Hence, Financial services providing must be able accurate as per the customer requirement and introduce the new financial services be visualizing, expectation of market.

1.5 ROLES PERFORMED BY BANK FOR FINANCIAL SERVICES:


The primary operations of banks include:

Keeping money safe while also allowing withdrawals when needed Issuance of check books so that bills can be paid and other kinds of payments can be delivered by post

Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, property or business)

Issuance of credit cards and processing of credit card transactions and billing

Issuance of debit cards for use as a substitute for checks Allow financial transactions at branches or by using Automatic Teller Machines (ATMs)

Provide wire transfers of funds and Electronic fund transfers between banks

Facilitation of standing orders and direct debits, so payments for bills can be made automatically

Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account.

Provide internet banking system to facilitate the customers to view and operate their respective accounts through internet.

Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly.

Provide a check guaranteed by the Bank itself and prepaid by the customer, such as a cashier's check or certified check.

Notary service for financial and other documents Accepting the deposits from customer and provide the credit facilities to them.

Other types of bank services

Private banking - Private banks provide banking services exclusively to high net worth individuals. Many financial services firms require a person or family to have a certain minimum net worth to qualify for private banking services.[3] Private banks often provide more personal services, such as wealth management and tax planning, than normal retail banks.[4]

Capital market bank - bank that underwrite debt and equity, assist company deals (advisory services, underwriting and advisory fees), and restructure debt into structured finance products.

Bank cards - include both credit cards and debit cards. Bank Of America is the largest issuer of bank cards.[citation needed]

Credit card machine services and networks - Companies which provide credit card machine and payment networks call themselves "merchant card providers".

Foreign exchange services Foreign exchange services are provided by many banks around the world. Foreign exchange services include:

Currency exchange - where clients can purchase and sell foreign currency banknotes.

Foreign Currency Banking - banking transactions are done in foreign currency.

Wire transfer - where clients can send funds to international banks abroad.

Investment services

Asset management - the term usually given to describe companies which run collective investment funds. Also refers to services provided by others, generally registered with the Securities and Exchange Commission as Registered Investment Advisors.

Hedge fund management - Hedge funds often employ the services of "prime brokerage" divisions at major investment banks to execute their trades.

Custody services - the safe-keeping and processing of the world's securities trades and servicing the associated portfolios. Assets under custody in the world are approximately US$100 trillion.[5]

Insurance

Insurance brokerage - Insurance brokers shop for insurance (generally corporate property and casualty insurance) on behalf of customers. Recently a number of websites have been created to give consumers basic price comparisons for services such as insurance, causing controversy within the industry.[6]

Insurance underwriting - Personal lines insurance underwriters actually underwrite insurance for individuals, a service still offered primarily through agents, insurance brokers, and stock brokers. Underwriters may also offer similar commercial lines of coverage for businesses. Activities include insurance and annuities, life insurance, retirement insurance, health insurance, and property & casualty insurance.

Reinsurance - Reinsurance is insurance sold to insurers themselves, to protect them from catastrophic losses.

Other financial services

Intermediation or advisory services - These services involve stock brokers (private client services) and discount brokers. Stock brokers assist investors in buying or selling shares. Primarily internet-based companies are often referred to as discount brokerages, although many now have branch

offices to assist clients. These brokerages primarily target individual investors. Full service and private client firms primarily assist and execute trades for clients with large amounts of capital to invest, such as large companies, wealthy individuals, and investment management funds.

Private equity - Private equity funds are typically closed-end funds, which usually take controlling equity stakes in businesses that are either private, or taken private once acquired. Private equity funds often use leveraged buyouts (LBOs) to acquire the firms in which they invest. The most successful private equity funds can generate returns significantly higher than provided by the equity markets

Venture capital is a type of private equity capital typically provided by professional, outside investors to new, high-potential-growth companies in the interest of taking the company to an IPO or trade sale of the business.

Conglomerates - A financial services conglomerate is a financial services firm that is active in more than one sector of the financial services market e.g. life insurance, general insurance, health insurance, asset management, retail banking, wholesale banking, investment banking, etc. A key rationale for the existence of such businesses is the existence of diversification benefits that are present when different types of businesses are aggregated i.e. bad things don't always happen at the same time. As a consequence, economic capital for a conglomerate is usually substantially less than economic capital is for the sum of its parts.

Debt resolution is a consumer service that assists individuals that have too much debt to pay off as requested, but do not want to file bankruptcy and wish to pay off their debts owed. This debt can be accrued in various ways including but not limited to personal loans, credit cards or in some cases merchant accounts. There are many services/companies that can assist with this. These can include debt consolidation, debt settlement and refinancing.

2.1 DEVELOPMENT IN FINANCIAL SERVICES SECTOR


The financial services sector has gone through a period of significant changes over the last few decades. These changes have been due to the interplay of a number of factors, such as: Financial sector reform Technological developments Consolidation Internationalization of financial services Changing role of financial services providers Competition and outsourcing.

Financial sector reform After decades of financial repression, most countries in the world underw ent significant financial sector reform over the last two decades in an attempt to reduce or eliminate distortions in financial markets, deepen the financial sector and strengthen financial institutions. Trade liberalization i.e. market opening and the elimination of discrimination against foreign services and institutions was a crucial part of those endeavours. Technological developments Technology developments are changing the nature of the financial system, modifying the organization of financial activities, and challenging the dominance of traditional. Consolidation Consolidation in the financial services sector, both domestically and crossborder, is one of the key trends affecting the sector, as a consequence of a perceived need for firms to secure economies of scale and scope in an environment

characterized by more open and less fragmented markets. This is reflected in the decline in the number of financial institutions, and the rise of mergers and acquisitions, both in developed and emerging economies. This process has also had the effect of increasing concentration levels in some national markets, and is also changing the ownership structure. Internationalization of financial services Financial services have become increasingly internationalized over the years. The presence of foreign financial services providers in national markets has grown significantly in the last two decades. As shown by recent studies, market shares of majority foreign-owned banks increased dramatically in East Asia, Eastern Europe and Latin America, sometimes exceeding 50 per cent of the market. Cross-border trade in financial services is also an important component of services exports worldwide. In 2005, financial services and insurance accounted for 18 per cent of world exports of other commercial services. Financial services trade has experienced rapid growth in recent years. For example, between 2000 and 2005, insurance was among the top three fastest growing sectors, with a rate of 14 per cent(WTO International Trade Statistics 2007). Changing role of financial services providers With falling barriers to entry in the financial services industry, the differences between financial institutions have been eroded, and an increasing number of competitive services and products are being offered by different types of institutions. For example, commercial banks have been allowed to enter into investment banking, finance companies provide banking products, and insurance companies also provide different forms of financing. Competition and outsourcing Cost reduction has become a priority for institutions in the new competitive environment, and one of the responses to cost pressures within the sector has been the outsourcing of specific functions to other countries, a process usually re-

ferred to as offshoring. Outsourcing/offshoring has become a significant fe ature of the international financial services sector.

2.2 NEW FINANCIAL PRODUCT AND SERVICES IN INDIA


Today, the important of financial services is gaining momentum all over the world. As a result of innovation, new instruments and new production are emerging in market. The market includes capital and money market; which are getting widened and deepened. As a result, sophistication and innovation have appeared in the area of financial intermediation. Some are briefly discussed. 1. Merchant banking 2. Loan syndication 3. Leasing 4. Hire purchase 5. Mutual funds 6. Factoring 7. Venture capital 8. Securitization 9. Derivation 10.Forfeiting

1. Merchant banking: It is new financial service covered wide range of services towards corporation. It provides debt equity, capital structure management, post issue and pre issue

and pre issue management, merger, acquisition, advice etc. So, they render a host of services to corporate and promoters industrial development in country.

2. Loan syndication: It is loan arranged by bank called lead manager for a borrower who is usually a large corporate customers or a government debt. The other banks who are willing to their own lending policies. Since, a single bank can`t provide such a huge sun as loan, no. of banks join together and form a syndicate. 3. Leasing: A lease is an arrangement under which a company or a firm acquires a right to make use of capital asset, on a payment of prescribed fees called rental charges. New a day, commercial banks have also been permitted to carry on this business. 4. Hire Purchase: It is a method of selling good on hire basis by a finance company to the customer. The ownership of property remain with creditor and passes on to pay an agreed amount in periodical installments during a given period. 5. Mutual Funds: It is an investment SIP by SIP i.e. Systematic Investment Plan. Here, small investor, invest money which are pooled in savings of public. It ensures low risk, steady returns, high liquidity, and better capital appreciation in the long run. 6. Factoring:

It refer to the process of managing sales ledger of a client by Financial Service Company. It is an arrangement under which credit risk is assumed. It is an agent who provides immediate financial assistance to the client against bills.

7. Venture capital: It is a method of financing in the form of equity participation. It finances a project based on potentialities of new innovative project. 8. Securitization: It is a technique by a financial co. coverts its ill-liquid, non-negotiable and value financial assets into securities of small value whish are tradable and transferable. It is only answer to convert these ill-liquid assets such as real estate, machinery etc. 9. Derivatives: It is basically used as a risk management tool. It is resorted to cover the risk due to price fluctuations. It helps to break credit risk, interest rate risk and exchange rate risk and so on. 10. Forfeiting: It is a technique by which a financial agency discounts and export bill and pay ready cash to the exporter. The exporter is protected against risk of non-payment of debts by the importers.

2.3PROBLEMS OF FINANCIAL SERVICES


Financial service sector has to face many challenges in its attempt to fulfill the ever growing financial demands of the economy. Some of the important challenges are briefly mentioned here under: Lack of qualified personnel The financial services sector is fully geared to the task of financial creativity. However, this sector has to face many challenges. In fact, the dearth of qualified and trained personnel is an important impediment in its growth. Hence, it is very vital that a proper and a comprehensive training must be given to the various financial intermediaries. Lack of investor awareness The introduction of new financial products and instruments will be of no use unless the investor is aware of the advantages and uses of the new and innovative products and instruments. Hence, the financial intermediaries should educate prospective investors/ users of the advantages of the innovative instruments through literature, seminars, workshops, advertisements and even through audio-visual aids. Lack of transparency The whole financial system is undergoing a phenomenal change in accordance with the requirements of the national and global environments. It is high time that this sector gives up its orthodox attitude of keeping accounts in a highly secret manner. Hence, this sector should opt for better

levels of transparency. In other words, the disclosure requirements and the accounting practices have to be in line with the international standards.

Lack of specialization In the Indian scene, each financial intermediary seems to deal in different financial service lines without specializing in one or two areas. In other words, each intermediary is acting as a financial super market delivering so many financial products and dealing in different varieties of instruments. In other countries, financial intermediaries specialize in one or two areas only. This helps them to achieve high levels of efficiency and excellence. Hence, in India also, financial intermediaries can go for specialization. Lack of recent data Most of the intermediaries do not spend more on research. It is very vital that one should build up a proper data base on the basis of which one could embark upon `financial creativity. Moreover, a proper data base would keep oneself abreast of the recent developments in other parts of the whole world and above all, it would enable the fund managers to take sound financial decisions. Lack of efficient risk management system With the opening of the economy to multinational and the exposure of Indian companies to international competition, much importance is given to foreign profits flows. It involves the utilization of multi currency transactions which exposes the client to exchange rate risk, interest risk and economic and political risk. Process of liberalization The interest rates have been deregulated. The private sector has been per-

mitted to participate in banking and mutual funds and the public sector undertakings are being privatized.

CHAPTER: 3
3.1 OVERVIEW OF HDFC BANK
HDFC Bank's Private Banking division is an award-winning service offering a range of financial investment advisory services. They aim to successfully adapt to the ever-evolving economic landscape while providing customised solutions to create and manage wealth for our clients. As pioneers in private sector financial services in India, HDFC back there offerings with stringent processes and due diligence that are powered by superior research and deep domain knowledge. Key Strengths: Coverage of 29 main locations and 62 spoke locations Network of skilled professionals including research analysts, portfolio managers, and product specialists A team of committed Private Banking Advisors, where an advisor helps a client to realize wealth opportunities through a range of investment options and financial instruments Tailor-made solutions backed by regular inputs from the in-house research team and augmented further by periodic analysis of your investments Quality Control at every step. Portfolios are tracked through client relationship files and concurrent quality checks are done on the sales process and on the advice provided to clients Motto:

Their motto is, "We understand your world" reflects customers belief in personalized client experiences. Over a decade, they introduced Private Banking, bringing the Bank's wealth management services to HNW and Ultra HNW individuals, groups and establishments. Backed by some of the leading money managers and financial products in the industry, they offer holistic wealth management advice that is customized to foster and expand our clients' portfolios. These premium services also come with our Imperia Premium Banking Programme in order to cater to the banking needs of their clients. It is a royal decree that enhances the exclusivity their clients are accustomed to, with wealth management and advisory services that go beyond the obvious.

3.2 HISTORY AND ORGANIZATION PROFILE


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. 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.

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 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.

TECHNOLOGY 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. The Bank has prioritized its engagement in technology and the internet as one of its key goal sand 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.

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, t h e c o mp a n y h a s a r a n g e 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 The company has a host of customized solutions that range from Funded services, Non funded service, value addition services, Mutual funds etc. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company.

3.3 SWOT ANALYSIS OF HDFC


Strengths

HDFC bank is the second largest private banking sector in India having 2,201 branches and 7,110 ATMs

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

Weakness

HDFC bank doesnt 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 banks product categories lack in performance and doesnt have reach in the market

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

Opportunities

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 its 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

Threats

HDFCs nonperforming assets (NPA) increased from 0.18 % to 0.20%. Though it is a slight variation its 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.

3.4 FINANCIAL SERVICES OFFER BY HDFC BANK

The some Financial Service offer by HDFC bank are categorized into various sections which are as follows: Accounts and deposits. Mutual funds Insurance Loans. Equity and Derivatives Direct Equity Estate Planning Forex and payment services. ATM and Credit Cards. Accounts and deposits:

Savings Accounts Rural Accounts Accounts and deposits. Salary Accounts

Safe Deposit Locker

Current Accounts

Demat Account

Deposits

Mutual Funds: HDFC bank offer a complete range of Equity, Debt and Ultra-Short term Income funds to meet individual risk-return objectives. The selection of mutual funds is based on a range of parameters built on Qualitative due-diligence and Quantitative tools like FAMA Ratio, Performance Consistency Ratio, standard deviation, volatility, rolling returns, expense ratio, Credit Rating and more. The funds are distributed to clients across AMCs and are built on the principles of conservative approach and focused advice. MAAG (mutual fund analysis tool) is used to analyze the holdings across Equity and Balanced mutual Funds as the tool provides a snapshot to assess the asset allocation, market capitalization, sectoral holdings and company holdings. Insurance : Insurance solutions offer an advanced means of managing wealth, offering succession planning tools for UHNW individuals. They offer customized insurance

solutions to meet the lifecycle needs of the client through their partner HDFC Life.

Life Insurance General Insurance (General insurance products are provided through their partner HDFC ERGO covering customers entire risk spectrum)

Business Insurance wherever there is an insurable interest of the business Realty

They also offer investments in realty through their referral partner HDFC Realty. HDFC Realty, a subsidiary of HDFC Ltd, has assisted over 2 million homebuyers in the last 30 years to help fulfill their dreams to own a property. HDFC Realty helps to search properties in all major cities in India and has transacted in properties worth over Rs. 500 crore. The main objective of the firm is to provide the buyer all the services from property search to visits at the property site, along with the legal documentation assistance under one roof. Private Equity Funds

In terms of asset class, private equity focuses on generating superior returns whilst improving portfolio diversification. However, these funds are illiquid and recommended for aggressive investors. There in house research team carefully evaluates and selects private equity funds that will help customer to achieve their long-term investment goals. HDFC suggest a large range of funds managed by some of the leading and trusted names in the industry. Structured Products

A Structured Product is non-convertible debenture (NCDs) where the coupon or return on the bond depends on the movement of either an equity market index or stock. The coupon on these bonds are not fixed or assured.

There can be two types of structures (a) Principal protected structures (b) Non-Principal Protected structures. They have fixed tenure and the

issuers are largely NBFCs. HDFC Bank Private Banking Group has only offered principal protected structured products. HDB Financial service is one of the group company of HDFC bank HDB Financial Services is a young and dynamic organisation, with an enthusiastic team determined to accomplish the vision of becoming India's most admired NBFC. Loans: Secured Loans While most secured loans in the market need demanding collaterals, our extensive range gives you the choice to declare a variety of assets. Long and short term investments, equities, bonds, ESOPs, commercial vehicles, property, gold, and jewellery they accept almost all your prized possessions as guarantee.

o o o o o

Loan against Securities Loan against ESOPs and Shares Loan against Property Loan against Gold Commercial Vehicle Loans

Unsecured Loans

HDB Financial Services offers unsecured loans for personal and business needs. With just a few documents that you need to submit, basic eligibility criteria that customers need to meet, customers could get a loan without collateral or a guarantor.0020
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Personal Loans Business Loans

Equity and Derivatives:

HDFC bank also providing Demat a/c facilities to there customers:


Create, view and maintain up to 5 different portfolios Monitor the real-time movement of up to 30 of your favorite stocks

Customer can apply IPO Application through ASBA


Invest in IPOs without moving funds from your Savings Account No more writing cheques or preparing demand drafts

They also providing product like Gold ETF (Euity traded fund)

24 Carat gold bars available in 2.5g, 5g, 8g, 10g, 20g and 50g Assay Certification and tamper-proof certicard packs Silver bars available in 50g & 100g Assay Certification and tamper-proof certicard packs

Equities service like Savings Bonds100% risk free investment option & Minimum investment of Rs. 1,000 and no maximum limit on investment Direct Equity HDFC bank equity research desk provides recommendations based on strong company fundamental analyses. This is supported by a network of analysts with expertise in key sectors across industries. There equity desk tracks various sectors and uses a mix of top down and bottom-up approach to identify stocks. Exposure to these is recommended on the basis of customers risk profile - be it conservative, aggressive or moderate. The direct equity product offering include:

Model Portfolio (Aggressive & Conservative) Stock Flash Regular company/result updates Regular company updates

Thematic Notes: These notes are largely sent to discuss important events/themes that are impacting the markets and desk views on the same

Market Impact: These are notes on quarterly analysis of the companies of the model portfolios

Sector report/ Sector Update: These are notes on a specific sector, explaining the basic business model and subsequent updates on the current scenario in the sector Estate Planning : Estate Planning permits there customer to protect their wealth and transfer it to future generations. HDFC bank offer a wide range of products and well-thought approach to transfer their assets to the next generation according to customer objectives and wishes. Estate planning services are provided through their partner Warmond Trustees & Executors Pvt. Ltd. Warmond's estate planning services provide clients peace of mind by ensuring their estate is in order and their loved ones will always be taken care of. The professional team comprises of investment, banking and legal experts who provide clients specialized advice in all areas of estate planning. Client needs are met through:

Prudent Succession & Estate Planning Efficient tax planning Smooth distribution & transfer of assets to identified beneficiaries Dependable Trustees / Escrow agents / Managers to handle and preserve family fortune

Uninterrupted management of assets Trust management & Wills Confidentiality Forex and payment services: HDFC bank providing the services the their customer like:
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Travel Solutions

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Remittance Products Other Forex Services Forex Help

ATM and Credit Cards: The recently launched 'Solitaire' range of premium credit cards for women and its partnership with Vodafone India to launch MobileBank Account and Vodafone m-paisaTM for financial inclusion are another path-breaking initiatives by HDFC Bank, made possible by its history of stability and adaptability.

HDFC Bank joined the Cirrus interbank network so that MasterCard holders worldwide could use its ATMS. In 2001, it became the first bank in India to launch an international Debit Card, in association with Visa. It also introduced various credit card innovations, including a card specifically for farmers. HDFC [Bank] moved early and built from initial success in other new markets as well, including telebanking, mobile banking, and foreign exchange services.

The recently launched 'Solitaire' range of premium credit cards for women and its partnership with Vodafone India to launch MobileBank Account and Vodafone m-paisaTM for financial inclusion are another path-breaking initiatives by HDFC Bank, made possible by its history of stability and adaptability. ATMs are back in the ads now but with a shift from the largest ATM network to the fastest ATM. HDFC ATMs allow the customers to store their favorite transaction and then give quick access to that transaction with a favorite button rather than going thru multiple screens every time and thus helps in 40% faster cash withdrawal. HDFC is communicating this benefit to the customers thru the 40% Faster ATM TVC series.

QUESTIONNAIRE
What is your perception about different products and services offered by HDFC Bank? Are there is any terms and condition to which is essential to open the any account with your bank? What are the recruitment policies for employees in your bank? Whether HDFC Bank provides services like Demat account? Yes/ NO. If Yes, what the facilities HDFC banks are providing to customer What is advantage to open the Demat a/c your bank to your existing customers? What are the precautions taken by HDFC bank for giving s loan to individuals and companies? If any person who declared as fraud by your bank than also your bank will give loan again to that person?

Are you giving the advances to other private or co-operatives banks? HDFC bank is having the competitions? What are the steps taken by your bank for competition? Are you providing any value added services to your customers? Are you providing the Insurance facilities to your customers? What are the various Insurance you have? What kind of the Forex services offered by HDFC bank? Are you providing and additional facilities like Third Party transaction? What are the various types of ATM cards in your bank? What are the benefits of your ATM for your customers?

CONCLUSIONS AND SUGGESTIONS

HDFC Bank, the banking arm of HDFC is expected to go on stream. The bank already has good number of employees on board and is recruiting Sales Executives heavily to take the headcount to many more. It is on the brim of increasing its customers through its attractive schemes and offer. The project opportunities provided was market segmentation and identifying prospective customers in potential geographical location and convincing them to open an account so that new Business Opportunities and financial services of the bank can be explored. Through this project, it could be concluded that people are not much aware about the various products and financial services of the bank and many of them not interested to opt of the various services because of lack of knowledge. services was considered as unsought good which require hard core selling, but in changing trend in income and people becoming financially literate, the demand for banking sector is increasing day by day. According to my findings Compa-

nys promotional activities for recruiting sales executives knowledge are also very less. So, at last the conclusion is that there is tough competition ahead for the company fromits major competitors in the banking sector.

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