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Company Profile

General Introduction:-

The project was carried out for understanding the customer preference & attributes

towards saving Account of HDFC Bank and its market potential. HDFC Bank was

established in the year 1994, they are old player in banking sector, The bank has two

principle client segments customer and asset management. The bank follows values such

as Integrity, teamwork, respect, professionalism, & Mission. The se gment of bank we

are considering here is- Corporate banking. The product out of which have chosen for

research is Saving Accounts. This research helps us in finding out the customers view

regarding the product and Services offered by the HDFC bank and awar eness by

promotion and also identifying the market potential of the product offered by the HDFC


1.2 Industry Profile:-

a.) Origin and development of the industry:-

Banking in India originated in the first decade of 18th century. The first banks were The General

Bank of India, which started in 1786, and Bank of Hindustan, both of which are now defunct.

The oldest bank in existence in India is the State Bank of India, which originated in the "The

Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks, the other

two being the Bank of Bombay and the Bank of Madras. The presidency banks were established

under charters from the British East India Company. They merged in 1925 to form the Imperial

Bank of India, which, upon India's independence, became the State Bank of India. For many

years the Presidency banks acted as quasi-central banks, as did their successors. The Reserve

Bank of India formally took on the responsibility of regulating the Indian banking sector from

1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader


A couple of decades later, foreign banks such as Credit Lyonnais started their Calcutta

operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly

due to the trade of the British Empire, and due to which banking activity took roots there and

First of all we must note the fact that these institutions have changed very much in character

since their origin, and consequently nowadays perform many functions unknown to those of

former times. The first banks seem to have arisen in connection with the business of

exchanging money. In ancient times and especially in the Middle Ages the varieties of coins

were greater even than at the present day, and they were much less perfectly and honestly

minted. Specialists were, therefore, required to determine their exact value and equivalence and

to exchange coins of one mintage for those of another, and their BANK were in great demand at

fairs and other places where merchants of different nations met for purposes of trade. Inasmuch

as they kept their boxes or chests of coins on benches or "banked," the name bankers came to be

applied to them. On account of their technical knowledge and the fact that they were obliged

constantly to keep on hand considerable quantities of the precious metals, this business in the

early Middle Ages was usually carried on by goldsmiths, but later it was sometimes assumed by

the governments of large commercial cities, as, for example, by Amsterdam in 1609, by

Hamburg in 1619, and by Nurnberg in 1621. Of these latter the Bank of Amsterdam was the

most important and may be regarded as typical of these early institutions.

From the earliest times also, bankers have been the chief agents through which foreign

exchanges have been conducted. As dealers in coin and bullion they had international

connections and a knowledge of international affairs not possessed by other merchants, and

were, therefore, in a position to undertake the settlement of international accounts by means of

orders drawn on bankers in other countries or other cities with whom they had regular business

transactions. As keepers of other people's money they also promoted saving, and banks thus

became in time the chief savings institutions of the country.

b. Growth and present status of the industry:-

Currently (2009), banking in India is generally fairly mature in terms of supply, product range

and reach-even though reach in rural India still remains a challenge for the private sector and

foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to

have clean, strong and transparent balance sheets relative to other banks in comparable

economies in its region. The Reserve Bank of India is an autonomous body, with minimal

pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage

volatility but without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-especially in

its services sector-the demand for banking services, especially retail banking, mortgages and

investment services are expected to be strong. One may also expect M&As, takeovers, and asset


In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak

Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed

to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any

stake exceeding 5% in the private sector banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is

with the Government of India holding a stake)after merger of New Bank of India in Punjab

National Bank in 1993, 29 private banks (these do not have government stake; they may be

publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined

network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a
rating agency, the public sector banks hold over 75 percent of total assets of the banking

industry, with the private and foreign banks holding 18.2% and 6.5% respectively

Introduction of many more products and facilities in the banking sector in its reforms measure. In

1991, under the chairmanship of M Narasimham, a committee was set up by his name which

worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give

a satisfactory service to customers. Phone banking and net banking is introduced. The entire

system became more convenient and swift. Time is given more importance than money.

In 1995, the Brookings Institution published a paper entitled The Transformation of the U.S.

Banking Industry: What a Long, Strange Trip Its Been. Using a breathtaking array of facts and

figures, the paper described in great detail the dramatic changes that had occurred in the U.S.

commercial banking industry over the 15 years from 1979 to 1994. The banking industry was

transformed during that period, according to the paper (p. 127), by the massive reduction in the

number of banking organizations; the significant increase in the number of failures; the dramatic

rise in off-balance sheet activities; the major expansion in lending to U.S. corporations by

foreign banks; the widespread adoption of ATMs; . . . and the opening up of interstate banking

markets. The paper went on to explain that most of these major changes in banking could be

traced to two developments: (1) the extraordinary number of major regulatory changes during the

period, from deposit deregulation in the early 1980s to the relaxation of branching restrictions

later in the decade; and (2) clearly identifiable innovations in technology and applied finance,

including improvements in information processing and telecommunication technologies, the

securitization and sale of bank loans, and the development of derivatives markets. Other
research would later confirm the papers assessments and its explanation of the course of events

in the banking industry over the period 19791994.

Over the two decades 19842003, the structure of the U.S. banking industry indeed underwent

an almost unprecedented transformationone marked by a substantial decline in the number of

commercial banks and savings institutions and by a growing concentration of industry assets

among a few dozen extremely large financial institutions. This is not news. As mentioned

above, the decline in the number of banking organizations has been ongoing for more than two

decades and has been well documented in the literature.3 Nevertheless, a brief overview will

serve to clarify both the scope of the decline and the increasing concentration of assets among

the nations largest banking organizations

At year-end 1984, there were 15,084 banking and thrift organizations (defined as commercial

bank and thrift holding companies, independent banks, and independent thrifts). By year-end

2003, that number had fallen to 7,842a decline of almost 48 percent (figure 1). Distributed by

size, nearly all the decline occurred in the community bank sector (organizations with less than

$1 billion in assets in 2002 dollars), and especially among the smallest size group (less than $100

million in assets in 2002 dollars). Yet the community banking sector still accounts for 94 percent

of banking organizations

c. Future of the industry:-

The burden of reporting and other regulatory requirements will fall heavily and

disproportionately on small banks unless remedial action is taken. Further advances in

information technology will permit the development of new products, BANK, and risk-
management techniques but may also pose important competitive and supervisory issues.

Nonbank entities will continue to offer bank-like products in competition with banks, raising

anew the question of whether banks are still special and, more fundamentally, whether banks

are sufficiently different from nonblank firms to justify the maintenance of a safety net for banks.

It is useful, therefore, to try to chart the course of the banking industry in the next five to ten

years and to consider what policy issues the industry and regulators will face. The authors of this

study do not pretend to be clairvoyant. They are mindful of the many financial predictions that


once offered with confidence but turned out to be wrong or premature. This study is perhaps best

described as an exercise in strategic thinking. Its approach is to analyze what has happened in the

recent past, consider in detail reasons for expecting recent trends to continue or to change, and

draw the consequences for bank and regulatory policies. As always, uncertainties abound, and

events that may now appear fairly improbable may in fact shape the future. This paper closes

with a discussion of a number of such possible events. The future-of-banking study addresses

three broad questions:

1. What changes in the environment facing banking can be expected in the next five to ten years?

2. What are the prospects for different sectors of the banking industry in this anticipated

environment? Because the banking industry is not monolithic and different segments of the

industry have, to some degree, different opportunities and vulnerabilities, the study considers

separately the prospects for large, complex banking organizations; regional and other midsize

banks; community banks; and limited-purpose banks.

3. What policy issues are the industry and regulators likely to face in the years ahead? Separate

consideration is given to

Project Profile

2.1 Origin of the Organization:-

Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd,

was established in the year 1994,

as a part of the liberalization of the Indian Banking Industry by

Reserve Bank of India (RBI). It was one of the first banks to receive an 'in principle' approval

from RBI,

for setting up a bank in the private sector. The bank was incorporated with the name 'HDFC

Bank Limited', with its registered office in Mumbai. The following year, it started its operations

as a Scheduled Commercial Bank.

HDFC Bank Limited. The Group's principal activities are to provide banking and other financial

BANK. The Group operates through four segments: Treasury, Retail Banking, Wholesale

Banking and Other Banking Business. The Treasury BANK segment consists of net interest

earnings on investments portfolio of the bank and gains or losses on investment operations. The

Retail Banking segment serves retail customers through a branch network and other delivery

channels. This segment raises deposits from customers and makes loans and provides advisory

BANK to customers. The Wholesale Banking segment provides loans and transaction BANK to

corporate and institutional customers. The Other Banking Operations segment provides BANK

relating to credit cards, debit cards, third party product distribution and primary dealership

business and other associated costs. The Bank was Incorporated on 30th August 1994. A new private sector

Bank promoted by housing Development Corporation Ltd. (HDFC), a premier housing finance company. The bank

is the first of its kind to receive

an in-principle approval from the RBI for establishment of a bank in the private sector.

Certificate of Commencement of Business was received on 10th October 1994 from RBI. The
Bank transacts both traditional commercial banking as well as investment banking. HDFC, the

promoter of the bank has entered into an

agreement with National West minister Bank Pc. and its subsidiaries (Nat west Group) for

subscribing 20% of the banks issued capital and providing technical assistance in relation to the

banks proposed banking business.

2.2 Growth and Development of the Organization:-


On 16.1.1995, 90,79,930 No. of equity shares were allotted to Jarring ton Pte. Ltd. Another

400,00,000 equity shares were allotted on private placement basis to NatWest Group on

9.5.1995. 500,00,000 shares were allotted to the public on 9.5.95 The Bank opened its first

branch in Ramon House at Church gate, Mumbai on January 16th.

The Bank has created an efficient operating system using well tested state-of-the-art software.


70 No. of equity shares issued to subscribers to the Memorandum &Articles of Association on

30th August 1994. On the same date 500,00,000 equity shares were allotted to HDFC

promoters. 509,20,000 shares were allotted to HDFC Employees Welfare Trust and HDFC Bank

Employees Welfare Trust on 22nd December,


HDFC Bank has entered the banking consortia of over 50 corporate, including some leading

multinational companies, flagship companies of local business houses and strong public sector

HDFC Bank has set up a state-of-the-art dealing room to handle all transactions possible in

Indian financial markets.

The Certificates of Deposits were awarded a PP1+ rating which is the highest rating for short

term instruments indicating superior capacity for repayment.


- The Bank has opened its first branch in Aurangabad. HDFC Standard Life Insurance has

entered into a memorandum of understanding with the Chennai-based Indian Bank. The Bank

has launched the international Maestro debit card in association with Master Card. HDFC Bank

will launch its credit card in June through link-ups with MasterCard and Visa.LTtrade.com has

entered into a strategic tie-up with HDFC Bank to provide Net banking BANK to online

investors. Standard Chartered Bank, HDFC Bank and Bharat Petroleum Corporation have joined

the Cash Forum which has been set up by the Smart Card Forum of India. HDFC Bank has

launched a new campaign for its eage savings account. HDFC Bank entered into a strategic tie-

up with Tally Solutions Pvt. Ltd. to offer online real time accounting BANK to small and

Medium enterprises.

Today HDFC Bank has 1,412 branches and over 3,295 ATMs, in

528 cities in India, and all branches of the bank are linked on an online real-time basis. ] As of

September 30, 2008 the bank had total assets of INR 1006.82 billion. For the fiscal year 2008-09,

the bank has reported net profit of Rs.2,244.9 crore, up 41% from the previous fiscal. Total

annual earnings of the bank increased by 58% reaching at Rs.19,622.8 crore in 2008-09.
2.3 Present Status of the Organization:-

March 2007 March 2008 March 2009

Citied 228 316 452

Branches 535 684 1412

ATMs 1323 1605 3275

Housing Development Finance Corporation Limited, more popularly known as HDFC Bank Ltd,

was established in the year 1994, as a part of the liberalization of the Indian Banking Industry by

Reserve Bank of India (RBI). It was one of the first banks to receive an 'in principle' approval

from RBI, for setting up a bank in the private sector. The bank was incorporated with the name

'HDFC Bank Limited', with its registered office in Mumbai. The following year, it started its

operations as a Scheduled Commercial Bank. Today, the bank boasts of as many as 1412

branches and over 3275 ATMs across India. Amalgamation

In 2002, HDFC Bank witnessed its merger with Times Bank Limited (a private sector bank

promoted by Bennett, Coleman & Co. / Times Group). With this, HDFC and Times became the

first two private banks in the New Generation Private Sector Banks to have gone through a

merger. In 2008, RBI approved the amalgamation of Centurion Bank of Punjab with HDFC

Bank. With this, the Deposits of the merged entity became Rs. 1,22,000 crore, while the

Advances were Rs. 89,000 crore and Balance Sheet size was Rs. 1,63,000 crore.
Head Office


Ramon House, 169, Backbay Reclamation,

H T Parekh Marg, Churchgate

Mumbai - 400020

Phone: +91 (22) 66316000, 66636000, 66316060

Fax: +91 (22) 22048834

Website: www.hdfc.com


HDFC Bank has always prided itself on a highly automated environment, be it in terms of

information technology or communication systems. All the braches of the bank boast of online

connectivity with the other, ensuring speedy funds transfer for the clients. At the same time, the

bank's branch network and Automated Teller Machines (ATMs) allow multi-branch access to

retail clients. The bank makes use of its up-to-date technology, along with market position and

expertise, to create a competitive advantage and build market share.

Capital Structure

At present, HDFC Bank boasts of an authorized capital of Rs 550 crore (Rs5.5 billion), of this

the paid-up amount is Rs 424.6 crore (Rs.4.2 billion). In terms of equity share, the HDFC Group

holds 19.4%. Foreign Institutional Investors (FIIs) have around 28% of the equity and about

17.6% is held by the ADS Depository (in respect of the bank's American Depository Shares
(ADS) Issue). The bank has about 570,000 shareholders. Its shares find a listing on the Stock

Exchange, Mumbai and National Stock Exchange, while its American Depository Shares are

listed on the New York Stock Exchange (NYSE), under the symbol 'HDB'

2.4 Functional Departments of the Organization:-

The functional departments of the organization consist of the HR department, the administrative

department and the executive department. The HR department of the organization consists of the

people who employ the Persons who they think would be able to do justice with the job handled.

The administrative department of the organization consists of the director and the manager of the

organization. They preside the organization and control all the operations of the organization

such that the organization could run in a smooth and effective manner. The executive department

of the organization consists of the various employees Who execute the job undertaken by them.

The employees consists of the team leaders, the Corporate financial consultants,. the telesales,

various staffs and junior staffs who are the main structural framework of the organization. The

organization thus runs with the effective coordination of the HR department, the administrative

department and the executive department such that the supervisors of the organization preside

over the subordinate employees to give them directions about fulfilling their works most

efficiently and effectively. Technical Consultancy Department: The Technical Consultancy

Department is responsible for technical appraisal of industrial projects. The mission of the

division is aimed towards the verification of the technical viability of industrial projects and

assisting the Funds management in taking the decisions that require technical expertise.

Moreover, it is responsible for conducting technical studies and rendering technical consultancy
BANK to certain industrial sectors for the purposes of investigating modern technologies and

productivity levels for local manufacturing plants.

H R Department:

HDFC Human Resources department plans and direct for the employee population as well as

they are having the following functions as:-




Position classification and grading

Salary determination

Performance appraisal review and processing

Personnel data entry and records maintenance

Policy development

Work permitting immigration visa program

Workers compensation

Finance Department:

The Finance Manager is responsible for all aspects of the accounting and financial administration

of the HDFC, the supervision of the implementation of the HDFC financial policies, directives

and procedures and the initiation of the financial plans within the guidelines of HDFC The
department contains several distinct sections, each of which is responsible for a proportion of the

activities taking place within the finance department.

Marketing Consultancy Department:

The Marketing Consultancy Department plays and important role within the Fund as it studies

and analyzes marketing information in order to build solid base for management decisions. The

division also assists projects sponsors in formulating solid marketing strategies to improve their

industries and strengthen their position in the local and international markets.

Research Department:

The Research Department is having the capacity to act through four composing units i.e., the

market research unit, economic studies unit, and statistical studies unit. It is the mission of the

division to provide support BANK for information and consultancy to the senior management

and division in the areas of economic, statistical and marketing information and consultancy

through data analysis, processing of economic and statistical data, market research studies and

publishing related periodical reports.

2.5 Organization Structure and Organization Chart:-

The organization structure of the company HDFC is such that it comprises of the departments

and the employees in the hierarchical order so that they are able to perform their functions and

duties smoothly and effectively doing their job in a manner in which it should be done. The
organization is headed by the administrative department which coordinates and controls the

executive department. The executive department is a link from the top and the bottom

comprising of the lower level employees such that they work together to fulfill the common

objective of getting business from the persons who get in touch with them and see to it that they

are provided with the best of the BANK which constitute giving financial advise to providing

Account to the customers. The lower level employees and the corporate financial consultants

work together to see to it that the database for providing financial BANK to sufficient number of

people is made .They work together to see to it that this database is followed and worked upon

such that more and more number of people get themselves avail the financial BANK of the

organization. Team leaders who form the part of the administrative department of the

Organization make sure that the clients that turn up for the financial BANK are dealt with most

efficiently and effectively.

The organizational structure is well planned out and it follows a simple format which is follows:

Organization Chart:-
Each team lead has a team comprising only of both senior as well as junior market research

analyst who aid the team lead in the entire market research process as it has been discussed

previously. This is the basic organizational structure followed by HDFC BANK.

2.6 Product and service profile of the organization:-

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:

Personal Banking

Savings Accounts

Salary Accounts

Saving Accounts

Fixed Deposits

Demat Account
Safe Deposit Lockers


Credit Cards

Debit Cards

Prepaid Cards

Investments & Insurance

Forex Services

Payment Services

Net Banking


Mobile Banking

Insta Query


Phone Banking

NRI Banking

Rupee Savings Accounts

Rupee Saving Accounts

Rupee Fixed Deposits

Foreign Currency Deposits

Accounts for Returning Indians

Quick remit (North America, UK, Europe, Southeast Asia)

India Link (Middle East, Africa)

Coequal Lock Box

In todays world many companies have emerged who have taken a serious note on the

importance of market research and he advantages of using it for the better growth and

development of the company. Hence, our competitors are those companys who are in the market

research and development field as well as the consultancies, since they also make use of market

research and business developers.

The products and BANK of our competitors are as follows:

A. Customer Satisfaction Analysis:

Customer analysis involves gathering data about the customers and their characteristics. They

also conduct tailored customer satisfaction surveys to gauze customer satisfaction.

B. Risk

These BANK are used by the competitors in order to gather external information and research

the possible effect on the competitiveness of company.

C. Product Research BANK:

The conduction of extensive product research by this service helps the competitors to find out the

marketability of a product or service. The research can be utilized to leverage the major decisions

of a company on the marketing of its products.

D. Advertising Research BANK:

Advertising research strives to gain valuable information about the effects and reach of

advertising the products in different forms of media.

Given below are the steps we follow for every assignment we take up:

1. The timetable for the search is indicated and the search process commences.

2. Target companies are examined, using any prior information provided by business

development executives in conjunction with sources of information and prospective companies

already known to us, augmented with original study by our search team.

3. We maintain a regular channel of communication with the client to keep them apprised of the

results emerging.
Market profile of the organization:-

HDFC Bank Limited provides various financial products and services. It operates in three

segments: Retail Banking, Wholesale Banking, and Treasury. The Retail Banking segment

provides various deposit products, including savings accounts, current accounts, fixed deposits,

and demat accounts. It also offers auto, personal, commercial vehicle, home, gold, and

educational loans; loans against securities, property, and rental receivables; and health care

finance working capital finance, construction equipment finance, and warehouse receipt loans, as

well as credit cards, debit cards, depository, investment advisory, bill payments, and

transactional services. In addition, this segment sells third party financial products, such as

mutual funds and insurance, as well as distributes life and general insurance products through its

tie-ups with insurance companies and mutual fund houses. The wholesale banking segment

provides loans, non-fund facilities, and transaction services to large corporate, emerging

corporate, small and medium enterprise, supply chain, public sector undertaking, central and

state government departments, and institutional customers. It offers deposit and transaction

banking products, supply chain financing, working capital and term finance, agricultural loans,

and funded, non-funded treasury, and foreign exchange products. These segments services

include trade services, cash management, money market, custodial, tax collection, and electronic

banking. In addition, it provides correspondent bank services to co-operative banks, private

banks, foreign banks, and regional rural banks; and wealth management products for non-

resident Indians. The Treasury Services segment operates primarily in areas, such as foreign

exchange, money market, interest rate trading, and equities. As of March 31, 2009, HDFC Bank
had a network of 1,412 branches and 3,295 automated teller machines in 528 cities in India. The

company was founded in 1994 and is based in Mumbai, India.

In todays growing world everyone needs to diversify their business so as to keep in touch with

the rapid development. By analyzing the growing concerns of the market, HDFC has clients

varying from investment banking sector, retail, web designing companies, etc. Due to this rapid

development HDFC Group has many teams working for the above mentioned sectors.

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian Bank". We

realized 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.


Meaning of ratio analysis
Ratio is numerical relationship between two variables which are connected with
each other in some way or the other. Ratios may be expressed in any one of the
following manners:

As a number between 500 and 100 may be expressed as 5(500 divided by

As a fraction may be expressed as former being 5 times of the later.
As a percentage the relationship between 100 and 500 may be expressed as
20% of the later.
As a proportion relationship between 100 and 500 may be expressed as 1:5.

Ratio analysis facilitate the presentation of information of financial statements in

simplified and concise and summarized form.

In the words of Hund, William, Ratios are simply a means of highlighting in

arithmetical terms the relationship between figures drawn from financial

Ratio analysis is basically a technique of:

1. Establishing meaningful relationship between significant variables of

financial statement.
2. Interpreting the relationship to form judgment regarding the financial affairs
of the unit.

Usefulness of ratio analysis depends upon identifying

objective of analysis;
selection of relevant data;
deciding appropriate ratios to be calculated;
comparing the calculated ratios with norms of standards or forecasts;
Interpretation of ratios.


Ratios are interpreted in following different ways:

Individual ratio may be studied with reference to certain rule of thumb.
Group ratio may be interpreted by considering group of several related ratios.
Comparison with past.
Comparison with projections.
Inter-irm or inter-industry comparison.
Objective Of Ratio Analysis

To Management
1. Ratio analysis helps the management to assess the performance of the business concern and
improve the management functions such as planning, coordination and control.
2. Some ratios are calculated for a number of years. These are working as guide to the
management. Meaningful conclusions can be drawn from these ratios.

3. The financial strength and weakness of the business concern can be find out through
calculating some ratios. It means that communication is facilitated by ratios.

4. If financial position is very weak, better co-ordination is formulated by the top management
for improving efficiency.

5. Standard ratios can be used for finding variations or deviations. Such variations can be found
by comparing the actual with the standards so as to take a corrective action at the right time.

To Shareholders / Investors:
1. The safety of investment is find out by the shareholders.

2. Long term solvency ratios ensure the growth of the business concern and possibility of getting
back their investments.

3. Ratio analysis will be useful for deciding whether the present financial position warrants
further investments or not.

To Creditors:
1. The ratio analysis ensures the payment at a specified time or not.

2. If the short term solvency ratios are in satisfactory condition, the creditors can extent credit

To Employees:
1. If financial position is strong, then, the employees are getting wages, salaries and perquisites
in time.

2. They can get adequate financial increment and promotion in time.

3. There is a guarantee in employment.

To Government
1. The government can prepare the industrial policies on the basis of financial position
information available from various units.

2. Various loan scheme with subsidies can be chalked out by the government.

3. The government can assess the economic condition of the nation.

4. The contribution of each industrial sector to GDP is also identified by the government.

Limitations of Ratio Analysis:

The technique of ratio analysis is a very useful device for making a study of the financial health

of a firm. But it has some limitations which must not be lost sight of before undertaking such


Limitations of Financial Statements:

Ratios are calculated from the information recorded in the financial statements. But financial

statements suffer from a number of limitations and may, therefore, affect the quality of ratio


Historical Information:

Financial statements provide historical information. They do not reflect current conditions.

Hence, it is not useful in predicting the future.

Different Accounting Policies:

Different accounting policies regarding valuation of inventories, charging depreciation etc. make

the accounting data and accounting ratios of two firms non-comparable.

Lack of Standard of Comparison:

No fixed standards can be laid down for ideal ratios. For example, current ratio is said to be ideal

if current assets are twice the current liabilities. But this conclusion may not be justifiable in case

of those concerns which have adequate arrangements with their bankers for providing funds

when they require, it may be perfectly ideal if current assets are equal to or slightly more than

current liabilities.

Quantitative Analysis:

Ratios are tools of quantitative analysis only and qualitative factors are ignored while computing

the ratios. For example, a high current ratio may not necessarily mean sound liquid position

when current assets include a large inventory consisting of mostly obsolete items.


The term window-dressing means presenting the financial statements in such a way to show a

better position than what it actually is. If, for instance, low rate of depreciation is charged, an

item of revenue expense is treated as capital expenditure etc. the position of the concern may be

made to appear in the balance sheet much better than what it is. Ratios computed from such

balance sheet cannot be used for scanning the financial position of the business.

Changes in Price Level:

Fixed assets show the position statement at cost only. Hence, it does not reflect the changes in

price level. Thus, it makes comparison difficult.

Causal Relationship Must:

Proper care should be taken to study only such figures as have a cause-and-effect relationship;

otherwise ratios will only be misleading.

Ratios Account for one Variable:

Since ratios account for only one variable, they cannot always give correct picture since several

other variables such Government policy, economic conditions, availability of resources etc.

should be kept in mind while interpreting ratios.

Seasonal Factors Affect Financial Data:

Proper care must be taken when interpreting accounting ratios calculated for seasonal business.

For example, an umbrella company maintains high inventory during rainy season and for the rest

of year its inventory level becomes 25% of the seasonal inventory level. Hence, liquidity ratios

and inventory turnover ratio will give biased picture.



Current Ratio

Current ratio = Current assets

Current liabilities

Interpretation: -

An ideal current ratio is 2:1. The ratio 2:1 is considered as a safe margin of

solvency due to the fact that if the current assets are reduced to half i.e. 1 instead of

2 then the creditors will be able to get their payments in full. Here, it shows that the

bank has 1.36:1, 1.47:1 & 1.39:1 which is quite satisfactory but can be improved by

better turnover and profit and also by decreasing liabilities.

Quick ratio = quick asset
Current liability


If the ratio 1:1 then firm has enough cash on hand to meet all current liabilities. In

cash position ratio 1:1 is satisfactory result. In 2009-2010 years ratio is 0.55:1 &

2010-11 years ratio is0.60:1 & 2011-12 years ratio is 0.69. It means the good

position for the bank. In the cash position ratio cash is increase in 2010-11 compare

with 2009-10. And also marketable securities increase in 2012

Debt Equity Ratio

Debt Equity Ratio: = Long Term liability *100

Shareholders Fund


This ratio is continues increasing but the figures are not satisfactory. This ratio

indicates equity capital or owners capital is increasing. It should be 10 times higher

than the present position.

NAV Ratio

Net Assets Value(NAV) :- = Equity Shareholders Fund

No. Of Equity Share


In this ratio, total assets are far more than external liabilities. The banks treated solvent. In

solvency ratio in 2010 is 4.57:1 and increase in 2011 is 4.35, it means that outside liabilities

is always less than total assets.

Net profit ratio

Net profit ratio = Net profit 100



Generally this ratio is required 10 to 15%. If it is more than 15% than it

shows good position but if it under 15% it is not good but required

position is good. In 2010- 11the net profit ratio is 12.20%, & in 2011-12

the net profit ratio is 12.37% it is good for bank.

RAM ratio

Return on capital employed ratio =

Net profit X 100
Capital Employed


Return on capital employed is stable around 1.60%. This ratio also shows wrote position.

Because this is not satisfactory return on capital employed. In accordance to banking

industry it should be between 2% to 4%. So that it can be said that return on capital

employed is lower.

HDFC and standard life both enjoy good and trusted brand name so as the
With 175 years of experience of standard life HDFC SLIC also strengthen
by synergy of partners.
Financial rating of companies
Flexibility of plans
Highly co-operative & skilled staff.
Sales oriented organization.
Aggressiveness of sales force in selling products.
The company has expertise in managing big business.
Effective and wider distribution network.
Product designed for each age group & every area of personal.
HDFC std life insurance provide unique training program for FC called
The company enjoys a very high brand loyalty & recall value among its
The company has a presence in all metros as well as in most of the major
cities in country.


Less coverage in rural areas.

Less staff
Lack in making follow up.
Lack of corporate agent.
Lack of customer services.
Lack of promotional activities.

There is continuous growth in insurance sector.

People have started Turing towards private insurance sector as they know

that security and growth of money is better then another insurance company.

Government has also started investing in private insurance sector.

Market is fully to capture because the branch has recently set up its business.


Competition in insurance sector is increase sing with the entry of private

giants like ICICI prudential, Bajaj Allianz, Sahara, Gig, LIC etc.

Selling attitude the company always has to be maintained in order to

company other insurance company.

Continuous follow up of the client and customers.

As LIC has strong market position so it is little bit difficult to capture the


Customer are still find risky to in private insurance sector.



After completion of research, we conclude that: -

Segmentation of target market is best way to work in.

Womens are proving better FC.

Cut throat competition as new insurance companies are also opening branch.

Public accepts Ulip readily.

Private insurance sector making their place in insurance sector.

FC should be approach according to need.

In short can be said that HDFC SLIC has to do more for their good future as it

is on a good position as private insurance is concerned. According to survey

there are various player in market ( Kota) and really it is difficult for HDFC

SLIC to survive on the basis of brand name for different products.

So there is not much awareness in kota city of HDFC SLIC as it started working

from July 2004 what we think HDFC SLIC just need promotional activities.

During our promotional activities when we found that HDFC SLIC could

capture big market in kota. They would be on n0. One position in kota because

the benefits and flexibility which HDFC providing is not provide by any other
insurance company in kota. ICICI prudential is the only private player, which is

there in competition with HDFC SLIC. As ICICI prudential launch first so it

capture the market very soon

Andas LIC is concerned they have advantage of public mentality a very safe


At last we want to state that HDFC SLIC need promotional actives and the

benefits should be given to the customers. Customer satisfaction should be first



FC should be given more training to time to time to have better knowledge fo

change in market.
Mass insurance policy should be launched

Untapped areas should be cover.

There are more than 52 village in India a total population of nearly 75 cores. This
represents a vast potential.

FCs should be supervise regularly so that their work can be improved and made
effective and efficient.

The agent should be keep in constant touch with his policy holder to become aware
of the change in his situation including marriage. Death of relatives. Releases of

Any one of them may necessitation some changes like title to policy moneys or
more insurance. The contact conveys a message that agent and company cares for
the policy holder and the family mouth publicity it increase acceptability.

Private insurance companies should highlight that they are managed privately but
completely governed by IRDA.

To capture major chunk of business they need to open moor branches

in sub urban so they can fulfill all need of customer.
Aware should be created among the masses through advertising.

1. Chawla R. K., Juneja C. Mohan, Saksena K. K.

Financial Accounting
2. Kalyani Publication.

3. Swaroop Gopal, Varshnay P. N. ,

Banking Law & Practice

Sultan Publication.

4. Gupta Shashi. K. , Sharma R. K.

Accounting For Managerial Decisions
Kalyani Publication.