INTRODUCTION OF BANKING

MEANING AND DEFINITION:

Bank is an institution that deals in money and its substitutes and provides crucial financial
services. The principal type of baking in the modern industrial world is commercial banking
& central banking.

Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits of
money from the public, repayable on demand or otherwise and withdraw by cheque, draft or
otherwise."

Banking Companies (Regulation) Act,1949

The concise oxford dictionary has defined a bank as "Establishment for custody of money
which it pays out on customers order." In fact this is the function which the bank performed
when banking originated.

"Banking in the most general sense, is meant the business of receiving, conserving &utilizing
the funds of community or of any special section of it."

-By H.Wills & J.Bogan

"A banker of bank is a person, a firm, or a company having a place of business where credits
are opened by deposits or collection of money or currency or where money is advanced and
waned.

ORIGIN OF WORD BANK:

The origin of the word bank is shrouded in mystery. According to one view point the Italian
business house carrying on crude from of banking were called banchi bancheri" According to
another viewpoint banking is derived from German word "Branck" which mean heap or
mound. In England, the issue of paper money by the government was referred to as a raising
a bank.
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1. CHAPTER

1.1 INTRODUCTION

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.

HDFC Bank Ltd. is an Indian banking and financial services company headquartered
in Mumbai, Maharashtra. It has a base of 111,208 permanent employees as of 30 September
2019. HDFC Bank is India’s largest private sector lender by assets. It is the largest bank
in India by market capitalisation as of February 2016. It was ranked 60th in 2019 Brand Top
100 Most Valuable Global Brands.

HDFC Bank was incorporated in 1994, with its registered office

in Mumbai, Maharashtra, India. Its first corporate office and a full service branch at Sandoz
House, Worli were inaugurated by the then Union Finance Minister, Manmohan Singh.

As of June 30, 2019, the Bank's distribution network was at 5,130 branches across 2,764 cities.
The bank also installed 4.30 Lakhs POS terminals and issued 235.7 Lakhs debit cards and
85.4 Lakhs credit cards in FY 2017.

HDFC Bank merged with Times Bank in February 2000. This was the first merger of two
private banks in the New Generation private sector banks category. In 2008, Centurion Bank
was acquired by HDFC Bank. HDFC Bank Board approved the acquisition of CBoP for 95.1
billion INR in one of the largest mergers in the financial sector in India.

HDFC Bank 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 from Housing Development
Finance Corporation Limited (HDFC), in 1994 during the period of liberalisation of the
banking sector in India. HDFC India was incorporated in August 1994 in the name of ‘HDFC
Bank Limited’. HDFC India commenced operations as a Scheduled Commercial Bank in
January1995.

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HDFC India deals in varieties of products like home loan, standard life insurance, mutual fund,
securities, credit cards, etc. HDFC has branch offices in all major cities in India like Calcutta,
Chennai, Delhi, Bangalore, Hyderabad, Ahmedabad apart from HDFC Mumbai.

The banking industry has experienced mixed results in the post-crisis period from 2008 to

2010. Industry growth has slowed considerably; the growth rate of assets of the top 1000

banks globally1 in the post-crisis period remained 3.7%, compared to the double digit rise in

Rates shown during the pre-crisis years of 2005 to 2007. On the other hand, when looking at

Risk management and profitability, there has been great recovery. Profits have returned to
pre-

Crisis levels and the solvency of the industry has witnessed great result with growth of 3.8%

Registered in capital adequacy ratio during 2005 to 2010.

The industry has also entered era of advance regulation. More capital adequacy and risk

Management standards are now being utilized with banks, along with a related rise in strain

On their traditional business models and operating margins. Looking forward, certain key

Priorities have appeared for the banking industry, classification among them are: restoration

Of customer confidence; showing problem such as low efficiency of existing channels;

ageing

Technology; high operating costs and the existence of complex processes. Technology,

Including the development of consumer related solutions, is rising being seen as a key to

Meeting these standards.

The global banking industry has experienced healthy growth in recent years, registering a

Compound annual growth rate (CAGR) of 4.7% between 2012 and 2016 to reach a value of

$134.1 trillion, according to data from research firm Market Line.

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1.1.1 History of HDFC Bank

The housing development Finance Corporation Limited (HDFC) was amongst the first to
receive as in principal 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.

The bank was incorporated in August 1994 in the name of HDFC Bank Limited, with its
registered office in Mumbai, India. The Bank commenced operation as a scheduled
Commercial Bank in January 1995.

The mission of HDFC is to become “a world class Indian bank”, benchmarking themselves
against international standards and best practices in terms of product offerings, technology,
service levels, risk management and audit and compliance. The objective is to build sound
customer franchises across distinct business so as to be a preferred provider of banking
services for target retail and wholesale customer segments and to achieve a healthy growth in
profitability, consistence with the Bank’s risk appetite.

The bank is committed to maintain the highest level of ethical standards, professional
integrity, corporate governance and regulatory compliance. HDFC Bank’s business
philosophy is based on five core values: Operational Excellence, Customer Focus,

Product Leadership, People and Sustainability.

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HDFC Bank’s business objectives emphasize the following:

Increase their market share in India’s expanding banking and financial services industry by
following a disciplined growth strategy and delivering high quality customer service.

Leverage their technology platform and open, scale able systems to deliver more products
to more customers and to control operating costs.

Maintain their current high standards for asset quality through disciplined credit risk
management.

Develop innovative products and services that attract our targeted customers and address
inefficiencies in the Indian financial sector.

Continue to develop product and services that reduce our cost of funds.

Focus on high earning growth with low volatility.

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.

The Bank has made substantial efforts and investments in acquiring the best technology
available internationally, to build the infrastructure for a world class bank. In terms of core
banking software, the Corporate Banking business is supported by Flex cube, while the Retail
Banking business by Fin ware, both from I-flex Solutions Ltd. The systems are

Open, saleable and web-enabled.

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

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Excellence, Customer Focus, Product Leadership and People. MISSION STATEMENT OF
HDFC BANK World Class Indian Bank. Benchmarking against international standards. To
build sound customer franchises across distinct businesses Best practices in terms of product
offerings, technology, service levels, risk management and audit & compliance.

The objective of the HDFC Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-step window for all his/her
requirements. The HDFC Bank plus and the investment advisory services programs have been
designed keeping in mind needs of customers who seeks distinct financial solutions,
information and advice on various investment avenues.

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over
1229 branches spread over 444 cities across India. All branches are linked on an online real-
time basis. Customers in over 120 locations are also serviced through Telephone Banking. The
Bank's expansion plans take into account the need to have a presence in all major industrial
and commercial centres where its corporate customers are located as well as the need to build
a strong retail customer base for both deposits and loan products. Being a clearing/settlement
bank to various leading stock exchanges, the Bank has branches in the centres where the
NSE/BSE has a strong and active member base. The Bank also has a network of about over
2526 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be
accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro,
Plus/Cirrus and American Express Credit/Charge cardholders.

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 a 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.

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 liberalisation of the Indian Banking Industry in 1994. The
bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered

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office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank
in January 1995. HDFC Bank comprises of a dynamic and enthusiastic team determined to
accomplish the vision of becoming a World-class Indian bank. HDFC bank‟ s business
philosophy is based on our four core values - Customer Focus, Operational Excellence, Product
Leadership and People. They believe that the ultimate identity and success of their bank will
reside in the exceptional quality of people and their extraordinary efforts. They are committed
to hiring, developing, motivating and retaining the best people in the industry.

So does HDFC bank meet these heightened expectations? What are the customers‟ perceptions
of service quality of the banks? Which dimension of service quality of HDFC bank is
performing well? To find out answers to these questions I undertook a survey of 2 branches of
HDFC bank. A lot of surveys have been done in the past to understand the aspect of customer
satisfaction and to find out the customer friendly banks. My research is conducted to find out
“SERVICE QUALITY OF HDFC BANK”.

Banking in India has a long and elaborate history of more than 200 years. The beginning of
this industry can be traced back to 1786, when the country’s first bank, Bank of Bengal, was
established. But the industry changed rapidly and drastically, after the nationalization of banks
in 1969.

Indian Banking sector is dominated by Public sector banks (PSBs) which accounted for 72.6%
of total advances for all SCBs as on 31st March 2008. PSBs have rapidly expanded their foot
prints after nationalisation of banks in India in 1969 and further in 1980. Although there is a
restrictive entry/expansion for private and foreign banks in

India, these banks have increased their presence and business over last 5 years.

Peculiar characteristic of Indian banks unlike their western counterparts such as high share of
household savings in deposits (57.4% of total deposits), adequate capitalization, stricter
regulations and lower leverage makes them less prone to financial crisis, as was seen in the
western world in mid FY09.

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1.1.2 FUNCTIONS OF BANKS

Primary Functions

 Acceptance of Deposits
 Making loans & advances
 Loans
 Overdraft
 Cash Credit
 Discounting of bills of exchange

Secondary Functions

 Agency functions
 Collection of cheques & Bills etc.
 Collection of interest and dividends.
 Making payment on behalf of customers
 Purchase & sale of securities
 Facility of transfer of funds
 To act as trustee & executor.

Utility Functions

 Safe custody of customer’s valuable articles & securities.

 Underwriting facility
 Issuing of travellers cheque letter of credit.
 Facility of foreign exchanges
 Providing trade information
 Provide information regarding credit worthiness of their customer.

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1.1.3 STRUCTURE OF HDFC BANK

The Indian banking system can be classified into nationalized banks, private banks and
specialized banking institutions. The industry is highly fragmented with 30 banking units
contributing to almost 50% of deposits and 60% of advances. The Reserve Bank of India is the
foremost monitoring g body in the Indian Financial sector. It is a Centralized body that
monitors discrepancies and shortcomings in the system.

Banking segment in India functions under the umbrella of Reserve Bank of India (RBI) –

The regulatory, central bank.

This segment broadly consists of:

1. Commercial Banks

2. Co-operative Banks

The commercial banking structure in India consists of:

1. Schedule Commercial Banks

2. Unscheduled Banks

Schedule Commercial Banks constitute of those banks, which have included second Schedule
of Reserve Bank of India (RBI) act 1934. RBI in turn includes only those banks in this schedule
that satisfy the criteria laid down vide section 42 (60 of the act) this sub sector can broadly
classified into:

1. Public Sector

2. Private Sector

3. Foreign Sector

Public sector banks have either government of India Reserve Bank of India (RBI) as the
Majority shareholder.

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This segment comprises of:

1. State Bank of India (SBI) and its subsidiaries

2. Other Nationalized Banks

Industry estimates indicate that out of 274 commercial banks operating in the Country, 223
banks are in the public sector and 51 are in the private sector. These private sector banks include
24 foreign banks that have begun their operations here. The specialized banking institutions
that include cooperatives, rural banks, etc. form a part of the nationalized banks category.

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1.1.4 GROWTH OF BANKING INDUSTRY IN INDIA

Investments/developments:

Key investments and developments in India’s banking industry include:

The bank recapitalization plan by Government of India is expected to push credit growth in
the country to 15 per cent and as a result help the GDP grow by 7 percent in FY19.

Public sector banks are lining up to raise funds via qualified institutional placements (QIP),
backed by better investor sentiment after the Government of India's bank recapitalization plan
and an upgrade in India's sovereign rating by Moody's Investor Service.

In May 2018, total equity funding's of microfinance sector grew at the rate of 39.88 to Rs96.31
billion (Rs4.49 billion) in 2017-18 from Rs68.85 billion (US$ 1.03 billion).

Government Initiatives:

A new portal named 'Udyami Mitra' has been launched by the Small Industries Development
Bank of India (SIDBI) with the aim of improving credit availability to Micro, Small and
Medium Enterprises' (MSMEs) in the country.

Mr Arun Jaitley, Minister of Finance, Government of India, introduced The Banking

Regulation (Amendment) Bill, 2017', which will replace the Banking Regulation (Amendment)
Ordinance, 2017, to allow the Reserve Bank of India (RBI) to guide banks for resolving the
problems of stressed assets.

As on January 4, 2018, the Lok Sabha has approved recapitalization bonds worth Rs80,000
crore (US$ 12.62 billion) for public sector banks, which will be accompanied by a series of
reforms.

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The government and the regulator have undertaken several measures to strengthen the Indian
banking sector:

A two-year plan to strengthen the public sector banks through reforms and capital infusion of
US$ 32.5 billion, has been unveiled by the Government of India that will enable these banks
to play a much larger role in the financial system and give a boost to the MSME sector. In this
regard, the Lok Sabha has approved recapitalization bonds worth US$ 12.62 billion for public
sector banks, which will be accompanied by a series of reforms, according to Mr Arun Jaitley,
Minister of Finance, and Government of India.

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed by
Rajya Sabha and is expected to strengthen the banking sector.

Further initiatives:

The advancements in technology have brought the mobile and internet banking services to the
fore. The banking sector is laying greater emphasis on providing improved services to their
clients and also upgrading their technology infrastructure, in order to enhance the customer’s
overall experience as well as give banks a competitive edge.

Many banks, including HDFC, ICICI and AXIS are exploring the option to launch contact-less
credit and debit cards in the market shortly. The cards, which use near field communication
(NFC) mechanism, will allow customers to transact without having to insert or swipe.

Exchange Rate Used: INR 1 = US$ 0.016 as on FY2018.

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1.2 OBJECTIVES OF HDFC BANK

1. To know which service quality dimension of bank is performing well.

2. To examine the essential dimension of service quality like reliability, assurance,
tangibility, empathy and responsiveness of hdfc bank and its effect on customer
satisfaction.
3. To evaluate and analyse various facts of the performance of company.
4. To determine the liquidity, profitability and efficiecy of the project.
5. To study the financial system position of the hdfc bank.
6. To study the organizational structure of the hdfc bank.

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1.3 IMPORTANCE AND SIGNIFICANCE

1. To develop close relationship with individuals households.

2. To maintain its position as premiere housing finance institution in the country.
3. To provide consistently high returns to the shareholders.
4. To transforms ideas into variable and creative situation.
5. To know customer view points and expectation about the product and services of bank.

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1.4 SCOPE OF RESEARCH STUDY

The scope of this research is to identify the service quality of HDFC bank. This research
is based on primary data and secondary data. This study only focuses on the dimensions
of service quality i.e. RATER. It aims to understand the skill of the company in the area
of service quality that are performing well and shows those areas which require
improvement. The study was done taking two branches of HDFC bank into
consideration. The survey was restricted to the bank customers in Delhi only.

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1.5 HYPOTHESIS:

Ho: There is no significant difference among return on assert ratio of HDFC &

ICICI.

Ha: There is significant difference among return on assert ratio of HDFC &

ICICI

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2. CHAPTER

2.1 REVIEW OF LITERATURE

A literature review is a description of the literature relevant to a particular field or topic. It

gives an overview of what has been said, who the key writers are, what are the prevailing
theories and hypotheses, what questions are being asked and what methods and methodologies
are appropriate and useful. As such, it is not in itself primary research, but rather it reports on
other findings.

Article 1
Title: Kotler Philip marketing management, (Pearson Education, 12th edition)
Author: Baldinger and Rubinson
About the Research:
In their article, perceived that customer loyalty was concerned with the likelihood of a customer
returning, making business referrals, providing strong word-of-mouth references and publicity.
Loyal customers were less likely to switch to a competitor due to price inducement, and these
customers made more purchases compared to less loyal customers. However, customers who
were retained may not always be satisfied and satisfied customers may not always be retained.
Customers may be loyal due to high switching barriers or the lack of real alternatives;
customers may also be loyal because they were satisfied, thus wishing to continue with the
relationship.

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Article 2
Title: Marketing Strategies (Apllied Orientation, 5th Edition)
Author: Royne Mercurio.
About the Research:
In his article, provided the initial direction in determining the proper SQ attributes to focus on
promotional efforts when banks have a target market at least partially defined by gender and
age. Further, gender and age were not the only characteristics on which marketing efforts
should be based. Therefore, other segmentation variables, such as psychographics, geographies
and benefits sought must be considered when developing marketing and advertising strategies.

Article 3
Title: Customer Loyality is Powerful Tool (Integrated Customer, 6th edition)
Author: Kandampully
About the Research:
In his article, focused that the customers at the time of service delivery interact closely with
the service providers and got an inside knowledge of the service organization. This knowledge
gave them an opportunity to critically assess the services provided and the service provider.
Thus service quality plays an important role in adding value to the overall service experience.
Also customers seek organizations that were service loyal i.e. aim to provide consistent and
superior quality of service for present and long term and organizations aiming for this are bound
to get customers' loyalty.

Article 4
Title: Customer Seek Organization for Service Loyality, 4th Edition
Author: M.K. Rampal
About the Research:
Acknowledged that the internet banking was an innovative distribution channel that offered
less waiting time and a higher spatial convenience than traditional branch banking with
significantly lower cost structure than traditional delivery channels. Internet banking reduced
not only operational cost to the bank but also led to higher levels of customers’ satisfaction and
retention. As a result internet banking was very attractive to banks and consumers’, who had
higher acceptance to new technology.

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Article 5
Title: Consumer Expectation of Service Provider (Integrated Customer, 5th edition)
Author: Natarajan, R. Balaram, A. and Venkata Ramana, S.
About the Research:

In their article, reported on the development and application of a service template as a

diagnostic tool for identifying opportunities for improvements in the service package. The
operations in the branch of a bank in Bangalore, India, provide the context. For twenty one
service attributes, the gap between the expectations of a target customer group and the actual
service experience was assessed through a customer survey. A service template graphically
displaying the mean values of the responses for the expectations and the perceived service was
constructed.

Article 6
Title: Service Marketing Strategies (Integrated Customer, 4th edition)
Author: Clinton O. Longenecker, Joseph A. Scazzero
About the Research:

In their article, indicated that a successful facility exhibited greater attention to the human
aspects of the quality process than the unsuccessful facility. For example, a greater degree of
management support for TQM, communication and teamwork between managers and workers,
effective corrective action procedures and follow-up of quality problems. While this study was
limited in scope to two operations within the same organization, lessons for the successful
implementation of service quality could be drawn from this case study.

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3. CHAPTER

3.1 RESEARCH METHODOLOGY:

Research methodology is a process used to collect information and data for the purpose of
making business decisions. The methodology may include publication research, interviews,
surveys and other research techniques, and could include both present and historical
information.

RESEARCH DESIGN

A research design is a systematic approach that a researcher uses to conduct a scientific

study. It is the overall synchronization of identified components and data resulting in a
plausible outcome. To conclusively come up with an authentic and accurate result, the
research design should follow a strategic methodology, in line with the type of research
chosen.

In this report I have used descriptive research technique. Descriptive research is used to
describe characteristics of a population or phenomenon being studied. This research includes
survey and fact-finding inquiries of different kind.

SOURCE OF DATA

Primary data is the data which is collected through personal contact. Through questionnaire-
The questionnaire is written set of questions through personal contact- in personal interaction
ask question in face-to-face contact to other person Secondary data is the data which are
available in the form of fact and figures. The source of secondary data are:

Websites

Magazines

Articles

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3.2 Data collection

1. Primary data sources

 Through interaction with banking care consultant.
 Through questionnaire filled from the banking care consultant.

2. Secondary data sources

 Through internet, various official sites of the companies.
 Through pamphlets and brochures of the companies.
 Through books which cover the banking factors.

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1. Primary data
The primary data are the first hand information gathered for research to solve the need by
surveying the sampling units and collection of feedback from them involves the primary data
with structured queries will be prepared for the customers. There will be survey within the
customers giving the questionnaire. The questionnaire were structured non disguised
questionnaire which the questionnaire contained, were arranged in a specific order besides the
questions asked were logical for the study, no questions can be termed as irrelevant.

Sources of primary data:

 Personal interview
 Questionnaire

Personal interview

This method was the most appropriate way of survey, because by personal interview I came to
know about how the respondents feel about the banking companies. The personal interview is
conducting mainly for collecting information for fulfill of the questionnaire.

Questionnaire

This method proved to be even better because it was not possible to interview every one and it
was less time consuming to fill up the questionnaire rather than answering the interviewer’s
questions. The questionnaire is to prepare to know the awareness level. The questionnaire is
fully focused for collecting the brand awareness information and findings the market potential
of Banking Company.

In this method questionnaire were distributed to the respondence and they were asked to answer
the questions in the questionnaire. The questionnaire were structured non disguised
questionnaire because the questions which the questionnaire contained, were arranged in a
specific order every besides every questions asked were logical for the study, no questions can
be termed as irrelevant.

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2. Secondary data

The secondary data is collected from the company websites and other websites, through listing
by personal observation. The secondary data are collected by some other people for their work
and it is already exit. The researcher started investigation by first examining the secondary data
to see whether the problem can be partly or fully solved by without collecting primary data.
Since the secondary data were not sufficient to solve the entire problem, so primary data were
not sufficient were collected to fill the gap.

Sources of secondary data:

 Through internet, various officials sites of the companies and other search engines.
 Through pamphlets and brochures of the companies.
 Journals and magazine.

Data collection instruments

Questionnaire were designed as a main instrument to conduct survey. A questionnaire

constraint of 9 set of questions presented to respondents for their answers. The questionnaire
was non-disguised because the questionnaire was constructed so that the objective is clear to
the respondent. The respondents were aware of the objectives. They knew why they were asked
to fill the questionnaire. The questionnaire is used for the purpose is used for the purpose of
knowing the brand awareness among Banking Company and changing investment pattern of
people of Mumbai city.

Field work

Field work is done in this project individually with no biasness. The field work comprises of
filling of questionnaire by different sector individuals. The framed questionnaire was presented
for approval for to college internal guide and company external guide. The study involved a
fieldwork where the consumer contacted individually and were persuaded to discharge the
information through the questionnaire.

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3.3 TESTING OF DATA & INTERPRETATION:

1) Since how many year you are dealing with HDFC BANK?

Years Response
Less than 1 year 7
1 to 2 year 9
3 to 5 year 13
More than 5 year 6
Total 35

Response

17% 20% Less than 1 year

1 to 2 year

26% 3 to 5 year
37%
More than 5 year

Interpretation:

 26% Respondents have their account in HDFC bank for more than 5
years.
 17% Respondents are new account holders in bank.

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2) What kind of facility are you using at HDFC bank?

Services Response
Saving ac 11
Current ac 15
Salary ac 6
Other Demat 3
ac

Response

9%

17% 31%
Saving ac
Current ac
Salary ac

Other(D-
mate
43%

Interpretation:

 From above chart it is clear that 31% respondents

are saving account holder.
 Major respondents are current account holder.
 9% respondents are other account holders which
includes D-mat account and others.
 17% are salary account holders

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 3) Are you aware of other services provided by HDFC bank?

Option Response
Yes 21
No 14
Total 35

Response

No
40%

Yes 60%

Interpretation:

 This chart shows that 60% Respondents are aware

of other different facilities provided by HDFC
bank while other are unknown.

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4) What kind of additional service would like to have?

Services Response
Mobile 7
banking
ATM 8
Net banking 14
Bill payment 6
Total 35

Response

Bill payment

17% Mobile banking

20%

ATM 23%
Net banking 40%

Interpretation:
o Chart shows that most of respondents are interested in banking
with 40% strength.
o 17% interested in ATM service.
o 20% like to use mobile banking.
o 23% have to like bill payment.

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5) Are you aware of any other extra services?

Services Response
Loan 16
Insurance 8
FD 4
Mutual
funds 7
Total 35

Response

Mutual funds
20%
Loan
46%
FD 11%

Insurance
23%

Interpretation:
 46% respondent selected loans which show highest level of awareness
 Few respondent are aware about fixed deposit with 11% strength.
 23% respondent selected insurance while 20% has selected mutual fund.

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6) What is your perception regarding service of HDFC bank?

Ratings Response
Very satisfactory 10
Satisfactory 18
Good 5
Poor 2
Total 35

Response

Poo
r
Good 6% Very
15%
satisfacory
26%

Satisfactory 53%

Interpretation:

 53% respondent are satisfy with HDFC bank while 6%

say that services are poor
 15%,26% respondents says that services are good and
satisfactory

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7) Any problem you are facing regarding HDFC bank?
Issue Response
Employee 5
Behavior
Facility 12
Time issue 13
Others 5
Total 35

Response

Others Employe
14% e
Behavior
15%

Facility
Time issue 34%
37%

Interpretation:

 37% respondents has issue regarding

time spend on waiting
 34% has says facility is poor
 15%and 14% respondent are facing
problem with employees and other
issues

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8) How likely you will recommended HDFC bank Services?

Rating Sales
Very likely 11
likely 13
Somewhat 8
Unlikely 3
Total 35

Sales

Unlik
ely

9%
Very
Somewhat likely
23% 31%

likely 37%

Interpretation:

 37% respondents are willing to suggest their

friend to join HDFC bank.
 8% are unwilling to recommend.

31 | P a g e
9) What is your overall satisfaction rating with bank?

Rating Response
Very 11
satisfactory
Satisfactory 13
Good 8
Poor 3
Total 35

Response

Poo
r
9%
Very satisfactory
Good 31%

23%

Satisfactory
37%

Interpretation:

 37% respondent says that they are satisfy with services

while 31% are very satisfy with HDFC bank’s facility.
 9% respondents provide poor rating.

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3.4TABULATION OF DATA:

BALANCE SHEET OF HDFC BANK

BALANCE SHEET MAR 19 MAR 19 MAR 18 MAR 18 MAR 17
OF HDFC
BANK (in Rs. Cr.)
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'
S FUNDS
Equity Share 544.66 544.66 519.02 519.02 512.51
Capital

TOTAL SHARE 544.66 544.66 519.02 519.02 512.51

CAPITAL

Revaluation 0.00 0.00 0.00 0.00 0.00

Reserve

Reserves and 148,661.69 148,661.66 105,775.98 105,775.98 88,949.84

Surplus

Total Reserves 148,661.69 148,661.66 105,775.98 105,775.98 88,949.84

and Surplus

TOTAL 149,206.35 149,206.32 106,295.00 106,295.00 89,462.35

SHAREHOLDERS
FUNDS

Deposits 923,140.93 923,140.93 788,770.64 788,770.64 643,639.6

6

Borrowings 117,085.12 117,085.13 123,104.97 123,104.97 74,028.87

Other Liabilities 55,108.29 55,108.33 45,763.72 45,763.72 56,709.32

and Provisions

TOTAL CAPITAL 1,244,540.6 1,244,540.7 1,063,934.3 1,063,934.3 863,840.1

AND LIABILITIES 9 1 2 2 9

ASSETS
Cash and 46,763.62 46,763.62 104,670.47 104,670.47 37,896.88
Balances with
Reserve Bank of
India
Balances with 34,584.02 34,584.01 18,244.61 18,244.61 11,055.22
Banks Money at
Call and Short
Notice

33 | P a g e
Investments 290,587.88 290,587.88 242,200.24 242,200.24 214,463.3
4

Advances 819,401.22 819,401.22 658,333.09 658,333.09 554,568.2

0

Fixed Assets 4,030.00 4,030.01 3,607.20 3,607.20 3,626.74

Other Assets 49,173.95 49,173.97 36,878.70 36,878.70 42,229.82

TOTAL ASSETS 1,244,540.6 1,244,540.7 1,063,934.3 1,063,934.3 863,840.1

9 1 2 2 9
OTHER
ADDITIONAL
INFORMATION
Number of 5,103.00 0.00 4,787.00 4,787.00 4,715.00
Branches

Number of 98,061.00 0.00 88,253.00 88,253.00 84,325.00

Employees

Capital Adequacy 17.00 17.00 15.00 15.00 15.00

Ratios (%)

KEY
PERFORMANCE
INDICATORS
Tier 1 (%) 16.00 0.00 13.00 13.00 13.00

Tier 2 (%) 1.00 0.00 2.00 2.00 2.00

ASSETS
QUALITY
Gross NPA 11,224.16 11,224.16 8,606.97 8,606.97 5,885.66

Gross NPA % 1.00 1.00 1.00 1.00 1.00

NET NPA % 0.00 0.00 0.00 0.00 0.00

Net NPA to 0.00 2.00 0.00 0.00 0.00

advance payment
%
CONTINGENT
LIABILITIES
Bills for Collection 49,952.80 0.00 42,753.83 42,753.83 30,848.04

Contingent 1,024,715.12 0.00 875,488.23 875,488.23 817,869.59

Liabilities

34 | P a g e
 PROFIT AND LOSS ACCOUNT OF HDFC BANK

PROFIT & LOSS MAR 18 MAR 17 MAR 16 MAR 15 MAR 14

ACCOUNT OF
HDFC BANK (in
Rs. Cr.
12 Months 12 Months 12 Months 12 Months 12 Months

Interest / Discount 77,544.19 62,661.79 525,055.26 44,827.86 37,180.79

on Advances / Bills
Income from 19,997.46 16,222.37 15,944.34 14,120.03 10,705.61
Investments
Interest on Balance 635.70 523.88 532.02 361.61 517.10
with RBI and Other
Inter-Bank funds
Others 794.70 833.31 774.34 911.95 66.41
TOTAL INTEREST 98,972.05 80,241.36 69,305.96 60,221.45 48,469.90
EARNED
Other Income 17,625.88 15,220.30 12,296.50 10,751.72 8,996.35
TOTAL INCOME 116,597.94 95,461.66 81,602.46 70,973.17 57,466.26
EXPENDITURE
Interest Expended 50,728.83 40,146.49 36,166.73 32,629.93 26,074.24
Payments to and 7,761.76 6,805.74 6,483.66 5,702.20 7,750.96
Provisions for
Employees
Depreciation 1,140.10 906.34 833.12 705.84 656.30
Operating 17,217.51 14,978.30 12,386.55 10,571.66 8,580.29
Expenses (excludes
Employee Cost &
Depreciation)
TOTAL 26,119.37 22,690.38 19,703.34 16,979.70 13,987.54
OPERATING
EXPENSES
Provision Towards 12,129.61 10,107.25 7,916.97 6,507.59 5,204.03
Income Tax
Provision Towards -1,008.12 -896.68 -327.54 -165.88 -91.23
Deferred Tax
Depreciation 7,550.08 5,927.49 3,593.31 2,725.61 2,075.01

35 | P a g e
TOTAL 18,671.57 15,138.06 11,182.74 9,067.32 7,188.56
PROVISIONS AND
CONTINGENCIES
TOTAL 95,519.77 77,974.93 67,052.82 58,676.96 47,250.34
EXPENDITURE
NET PROFIT / 21,078.17 17,486.73 14,549.64 12,296.21 10,215.92
LOSS FOR THE
YEAR
Profit / Loss 40,453.42 32,668.94 23,527.69 18,627.79 14,654.15
Brought Forward
TOTAL PROFIT / 61,531.58 50,155.67 38,077.33 30,924.01 24,870.07
LOSS AVAILABLE
FOR
APPROPRIATIONS

APPROPRIATIONS
Transfer To / From 5,269.54 4,371.68 3,637.41 3,074.05 2,553.98
Statutory Reserve

Transfer To / From 105.34 235.52 313.41 222.15 224.92

Capital Reserve

Transfer To / From 0.00 0.00 0.00 0.00 0.00

Revenue And Other
Reserves

Dividend and 0.00 3,390.58 -1.69 -11.71 0.84

Dividend Tax for
The Previous Year

Equity Share 4,052.59 0.00 0.00 2,401.78 2,005.20

Dividend

Tax On Dividend 0.00 0.00 0.00 488.95 408.21

Balance Carried 49,223.30 40,453.42 32,668.94 23,527.69 18,627.79

Over To Balance
Sheet

TOTAL 61,531.58 50,155.67 38,077.33 30,924.01 24,870.07

APPROPRIATIONS

OTHER
INFORMATION

EARNINGS PER
SHARE
Basic EPS (Rs.) 78.65 67.76 57.18 48.84 42.00
Diluted EPS (Rs.) 77.87 66.84 56.43 48.26 42.00

DIVIDEND
PERCENTAGE

36 | P a g e
Equity Dividend 750.00 650.00 550.00 475.00 400.00
Rate (%)

COMMENTS ;

1. The total income of the company can be seen increasing for each and every year from
FY 2014-19.
2. Operating profit of the company can be seen increasing for each year with a greater
margin.
3. The net profit of the company has seen a growth for every FY with every slight
increase.
4. The EPS rate has seen a growth from FY 2015 and increasing till FY 2019 .

37 | P a g e
Auditor’s Report

Report on the Audit of the Standalone Financial Statements

Opinion
We have audited the accompanying standalone financial statements of HDFC Bank Limited
(“the Bank”), which comprise the Balance sheet as at March 31, 2019, the Profit and Loss
Account, the Cash Flow Statement for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information.

In our opinion and to the best of our information and according to the explanations given to us,
the aforesaid standalone financial statements give the information required by the Banking
Regulation Act, 1949 as well as the Companies Act, 2013 (“the Act”) in the manner so required
for banking companies and give a true and fair view in conformity with the accounting
principles generally accepted in India, of the state of affairs of the Bank as at March 31, 2019,
its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards
on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under
those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements’ section of our report. We are independent of the Bank in
accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India
together with the ethical requirements that are relevant to our audit of the standalone financial
statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements for the financial year ended
March 31, 2019. These matters were addressed in the context of our audit of the standalone
financial statements as a whole, and in forming our opinion thereon, and we do not provide a

38 | P a g e
separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be
communicated in our report. We have fulfilled the responsibilities described in the “Auditor’s
Responsibilities for the Audit of the Standalone Financial Statements” section of our report,
including in relation to these matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risks of material misstatement of the
standalone financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the
accompanying standalone financial statements.

Information Other than the Standalone Financial Statements and Auditor’s

Report Thereon
The Bank’s Board of Directors is responsible for the other information. The other information
received by us comprises the information included in the Basel III - Pillar 3 disclosures and
graphical representation of financial highlights (but does not include the financial statements
and our auditor’s reports thereon), which we obtained prior to the date of this auditor’s report,
and Annual Report, which is expected to be made available to us after that date.

Our opinion on the standalone financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read
the other information identified above and, in doing so, consider whether such other
information is materially inconsistent with the standalone financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on
the work we have performed on the other information that we have obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

When we read the Annual Report, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to those Charged with Governance.

39 | P a g e
Responsibilities of Management and those Charged with Governance for the
Standalone Financial Statements
The Bank’s Board of Directors is responsible for the matters stated in section 134(5) of the Act
with respect to the preparation of these standalone financial statements that give a true and fair
view of the financial position, financial performance, cash flows of the Bank in accordance
with the provisions of Section 29 of the Banking Regulation Act, 1949, accounting principles
generally accepted in India, including the Accounting Standards specified under section 133 of
the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to
the Bank and guidelines and directions issued by Reserve Bank of India from time to time.

This responsibility also includes maintenance of adequate accounting records in accordance

with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and
detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to
the preparation and presentation of the standalone financial statements that give a true and fair
view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the
Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Bank’s financial
reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial

Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and

40 | P a g e
are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these standalone financial
statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we
are also responsible for expressing our opinion on whether the Bank has adequate internal
financial controls system in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Bank’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the standalone financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Bank to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone financial
statements, including the disclosures, and whether the standalone financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

41 | P a g e
We communicate with those Charged with Governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those Charged with Governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.

From the matters communicated with those Charged with Governance, we determine those
matters that were of most significance in the audit of the standalone financial statements for
the financial year ended March 31, 2019 and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication

42 | P a g e
Director’s Report

The Directors take great pleasure in presenting the 25th Annual Report on the business and
operations of your Bank, together with the audited accounts for the year ended March 31,
2019. A journey of a thousand miles begins with a single step. Ours began a quarter of a
century back with the launch of the first branch in Mumbai on February 18, 1995. On the
same day in 2019, your Bank entered its silver jubilee year by opening its 5,000th branch
again at Mumbai. Along the way it has metamorphosed from a wholesale bank into one with
an equally strong retail presence and is well underway in its journey of offering an omni
channel customer experience. In the semi urban and rural areas, where your Bank has over
half its banking outlets, it is acting as a change agent not only through its banking services
but social initiatives as well under the umbrella brand Parivartan. As it enters its silver jubilee
year, your Bank has impacted the lives of about 10 crore Indians directly or indirectly ie over
4.9 crore customers, the 5 crore plus people through its social initiatives and families of its
over 1.9 lakh employees (including that of its two subsidiaries).

In the year ended March 31, 2019 your Bank continued on this path. This came in an
economic environment where the Indian economy stood out as an outlier despite facing
various challenges both externally and internally. Externally, it was buffeted by volatile crude
prices, rising interest rates in the developed world particularly in the US, heightened trade
tensions and geopolitical uncertainties in some parts of the world. Internally, the economy
was affected by serious concerns regarding the financial health of the NBFC sector, the
continuing high NPA levels in the banking space, slowing consumption demand and some
concerns on the fiscal side. Not to mention the uncertainty caused by the imminent general
elections. The Indian economy however continued to be the fastest growing in the world
thanks to the reforms of the past few years.

In the year under review, your Bank delivered a strong financial performance on the back of
an improvement in a majority of its key parameters.

43 | P a g e
Financial Parameters
Your Bank recorded an improvement in a majority of its key financial parameters. At Rs.
48,243.2 crore, Net Interest Income rose by 20.3 per cent. Core Net Interest Margin remained
stable at 4.3 per cent. Gross Non-Performing Assets (NPAs) at 1.36 per cent is among the
lowest in the industry. This was largely due to the Bank’s prudent credit evaluation of the
targeted customer profile and having a diversified loan book spread across customer
segments, products, and sectors plus managing risk-return decisions with discipline. Your
Bank’s Net Profit at Rs. 21,078.1 crore went up by 20.5 per cent.

In addition, the year stood out for one of the largest fund raising in your Bank’s history. It
also continued to transform lives through Parivartan and securing recognition.

1) Fund Raising
Your Bank raised Rs. 23,715.9 crore in the year under review. This comprises a preferential
allotment to Housing Development Finance Corporation Ltd of Rs. 8,500 crore, a Qualified
Institutional Placement of Rs. 2,775.0 crore and an ADR offering of $ 1,820 million (Rs.
12,440.9 crore). Consequent to the above issuances, share capital increased by Rs. 20.89
crore and share premium increased by Rs. 23,568.7 crore. This is net of share issue expenses
of Rs. 126.3 crore. The issuances were made pursuant to the shareholder and regulatory
approvals. This has resulted in a strengthening of its capital structure, increasing solvency
and shoring up of its Capital Adequacy Ratio.

2) Parivartan
The Bank in the year under review has continued its journey of social commitment through
Parivartan which means change. Your Bank firmly believes that businesses cannot prosper if
the communities in which they operate don’t. This is what has been inspiring its social
initiatives. This change has been brought about principally by about 10 per cent of the Bank’s
workforce which works on the Sustainable Livelihood Initiative (SLI) which helps people
improve their lives by upgrading their skillsets and, thus, enabling them to break out of the
cycle of poverty. And through its ‘Teaching-The-Teacher’ (3T) initiative which has
potentially impacted 1.6 crore students as well as the Holistic Rural Development Programme
which has already touched another possible 14.4 lakh people spread across more than 1,100
villages. We are also happy to report that in the year under review, your Bank has met the
mandatory CSR expenditure through a spend of Rs. 443.8 crore.

44 | P a g e
3) Awards and Recognition
The Bank continued to win awards and laurels. Notably, it was named India’s most valuable
brand for the fourth year in a row in the BrandZ survey of Top 50 Most Valuable Indian
Brands. HDFC Bank was also ranked No 1 in India by customers in the first edition of the
‘World’s Best Banks’ survey by Forbes magazine. The publication partnered with market
research firm Statista to measure the best banks in 23 countries and customers were asked to
rate banks on overall recommendation and satisfaction, as well as on the 5 key attributes
namely: Trust; Terms and Conditions; Customer Service; Digital Device; Financial Advice.

Summary
To sum up, your Bank is geared up for the next phase of growth given the looming market
opportunities and its strong positioning in each of its major franchises. And also make a
greater contribution to bridge the divide between India and Bharat be it through its business
or social initiatives. This, of course, would not have been possible without the contribution of
our over 98,000 employees.

Mission and Strategic Focus

Your Bank’s mission is to be a ‘World-Class Indian Bank.’ Its business philosophy is based
on five core values: Customer Focus, Operational Excellence, Product Leadership, People and
Sustainability. The last value Sustainability should be viewed in consonance with
Environmental, Social and Governance criteria. As a part of this, HDFC Bank through its
umbrella brand Parivartan seeks to bring about change in the lives of communities mainly in
Rural India.

The business objective has been to continue building sound customer franchises across distinct
businesses so as to be a preferred banking services provider to achieve healthy growth in
profitability consistent with the Bank’s risk appetite.

In line with the above, your Bank’s business strategy was to take digitisation to the next level to
achieve the following:

- Deliver superior experience and greater convenience to customers

- Increase market share in India’s expanding banking and financial services industry

45 | P a g e
- Expand geographical reach

- Cross-sell the broad financial product portfolio

- Sustain strong asset quality through disciplined credit risk management

- Maintain low cost of funds

Your Bank is committed to do this while ensuring the highest levels of ethical standards,
professional integrity, corporate governance and regulatory compliance. This is articulated
through a well-documented Code of Conduct that every employee has to affirm annually that
he / she will abide by.

As on March 31, 2019, the issued, subscribed and paid up capital of your Bank stood at Rs.
5,446,613,220 comprising 272,33,06,610 equity shares of Rs. 2 each. During the year under
review, the Bank issued 3,90,96,817 equity shares to Housing Development Finance
Corporation Limited on a preferential basis, 1,28,47,222 equity shares on a qualified
institutions placement and 5,25,00,000 equity shares underlying 1,75,00,000 American
Depository Receipts (ADRs). Further, 2,37,72,304 equity shares of face value of Rs. 2 each
were issued pursuant to exercise of Employee Stock Option (ESOP) by the Bank. The
information pertaining to ESOPs is given in ANNEXURE 1 to this report.

The Board of Directors at its meeting held on May 22, 2019 considered and approved the
sub-division of one equity share of the Bank having face value of Rs. 2/- each into two equity
shares of face value of Re. 1/- each and consequential alteration in the relevant clauses
relating to capital of the Memorandum of Association of the Bank. The sub-division of equity
shares as above is subject to the approval of the members at the ensuing Annual General
Meeting of the Bank.

Further, the Bank had issued 1,14,30,383 underlying equity shares representing Global
Depository Receipts (GDRs) of the Bank, which are listed on the Luxembourg Stock
Exchange. The Depository for GDRs is represented in India by J.P Morgan Chase Bank N.A.
Due to low trading / conversion volume in GDR, the Board of Directors of the Bank at its
meeting held on April 20, 2019 has decided to terminate the GDR program. The requisite
notice of termination is being issued to the custodian and the depository.

46 | P a g e
Capital Adequacy Ratio (CAR)

As on March 31, 2019 your Bank’s total CAR, calculated in line with Basel III capital
regulations, stood at 17.1 per cent well above the regulatory minimum of 11.025 per cent
including the Capital Conservation Buffer of 1.875 per cent. Of this, Tier I CAR was 15.8 per
cent. The effect of the proposed dividend has been taken into account in computing these
ratios.

Other Statutory Disclosures

Number of Meetings of the Board, attendance, meetings and constitution of various

Committees

The details of Board meetings held during the year, attendance of Directors at the meetings
and constitution of various Committees of the Board are included separately in the Corporate
Governance Report.

Extract of Annual Return

Pursuant to Section 134 (2) (a) and Section 92 (3) of the Companies Act, 2013, the extract of
the Annual Return in the prescribed format (MGT-9) is annexed as ANNEXURE 3 to this
Report. Further, the Annual Return of the Bank in the prescribed Form MGT-7 is available
on the website of the Bank at the link www.hdfcbank.com
Requirement for maintenance of cost records:

The Bank is not required to maintain cost records as specified by the Central Government
under section 148(1) of the Companies Act, 2013 Directors’ Responsibility Statement

Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, the
Board of Directors hereby state that:

- In the preparation of the annual accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures, if any

- We have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of

47 | P a g e
the state of affairs of the Bank as on March 31, 2019 and of the profit of the Bank for the year
ended on that date.

- We have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013, for safeguarding the
assets of the Bank and for preventing and detecting fraud and other irregularities.

- We have prepared the annual accounts on a going concern basis.

- We have laid down internal financial controls to be followed by the Bank and ensure that
such internal financial controls were adequate and operating effectively.

- We have devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and were operating effectively.

Compliance with Secretarial Standards

The Bank is in compliance with all applicable Secretarial Standards as notified from time to
time.

Auditors

The Bank’s current Statutory Auditors are S. R. Batliboi & Co. LLP, Chartered Accountants.
S. R. Batliboi & Co. LLP were appointed as Statutory Auditor at the previous AGM of the
Bank, to hold office till the conclusion of the ensuing AGM. It is now proposed to appoint S.
R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditor of the Bank for period of
three years with effect from the conclusion of the ensuing AGM, such that their total
appointment does not exceed 4 years, which is the maximum permissible term as per Reserve
Bank of India, at such fees as detailed in the Notice of the 25th AGM of the Bank.

Directors and Key Managerial Personnel

In compliance with Section 152 of the Companies Act, 2013, Mr. Srikanth Nadhamuni will
retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

48 | P a g e
During the year, Mr. Partho Datta and Mr. Bobby Parikh ceased to be Directors of the Bank
from close of business hours on September 29, 2018 and January 26, 2019 respectively, on
completing the maximum permitted tenure of eight years as per Banking Regulation Act, 1949.
Your Directors place on record their sincere appreciation for the contribution made by Mr.
Partho Datta and Mr. Bobby Parikh during their tenure with the Bank and wishes them well in
their future endeavours.

Mr. Paresh Sukthankar, Deputy Managing Director, tendered his resignation from the Board
of the Bank on August 10, 2018 which came into effect from November 8, 2018. The Board
places on record their sincere appreciation for the contribution made by Mr. Paresh Sukthankar
during his tenure with the Bank and wishes him well in his future endeavours.

Mr. Sanjiv Sachar, Mr. Sandeep Parekh and Mr. M. D. Ranganath were appointed as Additional
Independent Directors on the Board of the Bank with effect from July 21, 2018, January 19,
2019 and January 31, 2019 respectively, subject to the approval of the shareholders.

The brief resume / details regarding the Directors proposed to be appointed / re-appointed as
above is furnished in the report on Corporate Governance. There have been no changes in the
Directors and Key Managerial Personnel of the Bank other than the above.

Particulars of Employees

The information in terms of Rule 5 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 is given in ANNEXURE 6 and ANNEXURE 7 to this
report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

(A) Conservation of Energy

Your Bank has undertaken several initiatives in this area such as:

- Installation of green locks and AC controllers in air conditioning machines in order to save
energy and support go-green initiative

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- Installation of energy capacitors at high consumption offices to control the power factor and
to reduce energy consumption

- All main signboards in branches switched off post 10 p.m.

- Put controls on usage of lifts, ACs, common passage lights and other electrical equipment

- Reduction of contract demand at Kanjurmarg Hub,

- Replacement of CFL Lamps with LED fixtures at Kanjurmarg Hub / WBO / Fort Mumbai /
Bank House Indore

- Provision of LED lamps at branches and offices

- Provision of solar panels for captive power generation at our offices in Pune and
Bhubaneswar, Noida (Sector 4)

Monitoring and energy saving initiative for 100 branches resulting in power saving of over 10
per cent. The Bank won an award in National Energy Efficiency Circle Competition 2017 -
Winner Best Energy Efficient Case study held by CII in May 2017. Considering the benefits
accrued, it further extended the monitoring programme to an additional 500 branches across
the country and the results have shown power savings over 10%.

(B) Technology Absorption

Your Bank has been at the forefront of using technology absorption and evaluates innovative
technology with multiple fintech partners. It has launched a formal Consumer Durable Loans
portfolio and product with on-line real-time Digital API based collaboration with third party
and fintech application sourcing platforms. Your Bank is leveraging API based Service
Oriented Architecture and Middleware for enabling digital initiatives and empowering
relationship managers at branches with digital products and services platforms. Your Bank has
also begun using robotics and artificial intelligence in digital commerce, corporate supply chain
and payment settlement systems to reduce time to market and turnaround time.

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(C) Foreign Exchange Earnings and Outgo

During the year, the total foreign exchange earned by the Bank was Rs. 1,720.4 crores (on
account of net gains arising on all exchange / derivative transactions) and the total foreign
exchange outgo was Rs. 2,130.5 crores towards the operating and capital expenditure
requirements.

Secretarial Audit

In terms of Section 204 of the Companies Act, 2013 and the Rules made thereunder, M/s. BNP
& Associates, Practicing Company Secretaries had been appointed as Secretarial Auditors of
the Bank for the financial year 2018-19. The report of the Secretarial Auditors is enclosed as
ANNEXURE 8 to this Report. There are no observations / qualifications / comments in the
Report of the Secretarial Auditor.

Corporate Governance

In compliance with Regulation 34 and other applicable provisions of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, a separate report on Corporate Governance along with a certificate of compliance from
the Secretarial Auditors, forms an integral part of this Report.

Business Responsibility Report

The Bank’s Business Responsibility Report containing a report on its Corporate Social
Responsibility Activities and Initiatives in the format adopted by companies in India as per the
guidelines of the Securities and Exchange Board of India in this regard is available on its web
site www.hdfcbank.com
Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013

The relevant information is included in the Corporate Governance Report

Acknowledgement

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Your Directors would like to place on record their gratitude for all the guidance and co-
operation received from the Reserve Bank of India and other government and regulatory
agencies. Your Directors would also like to take this opportunity to express their appreciation
for the hard work and dedicated efforts put in by the Bank’s employees and look forward to
their continued contribution in building a ‘World Class Indian Bank.’ Conclusion

It has been a challenging year for the Indian economy externally as well as internally. The
good news is that despite the challenges of volatile oil prices, trade wars, rising interest rates,
and domestic uncertainties due to the impending general elections in India and slowing
consumption demand, India remained the world’s fastest growing economy. Your Bank
which grew faster than the system in the year under review is well poised to tap the
opportunities of what is still an under penetrated market by leveraging its strong balance
sheet and franchise.

As always, your Bank will continue to be judicious. It will continue to leverage its
distribution strength and digital platforms to offer a similar experience to customers across
urban, semi-urban and rural India.

Needless to say, the Bank will continue to focus on its five core values, namely, Customer
Focus, Operational Excellence, Product Leadership, People and Sustainability. Its
commitment to the highest possible standards of corporate governance remains unwavering
even as it embarks on the next stage of its evolution to continue delivering sustainable growth
to all its stakeholders.

On behalf of the Board of Directors

Mrs. Shyamala Gopinath

Chairperson

Mumbai, May 22, 2019

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 4. CHAPTER

4.1 SWOT ANALYSIS

S-STRENGTH OF HDFC BANK:

HDFC bank is the second largest private banking sector in India having 2,201 branches and
7,110 ATM’s HDFC bank is located in 1,174 cities in India and has more than 800 locations
to serve customers through Telephone banking The bank’s ATM card is compatible with all
domestic and international Visa/Master card, Visa Electron/ Maestro, Plus/cirus and
American Express. This is one reason for HDFC cards to be the most preferred card for
shopping and online transactions HDFC bank has the high degree of customer satisfaction
when compared to other private banks The attrition rate in HDFC is low and it is one of the
best places to work in private banking sector HDFC has lots of awards and recognition, it has
received ‘Best Bank’ award from various financial rating institutions like Dun and Bradstreet,
Financial express, Euro money awards for excellence, Finance Asia country awards etc
HDFC has good financial advisors in terms of guiding customers towards right investments.

W-WEAKNES OF HDFC BANK

HDFC bank doesn’t have strong presence in rural areas, where as ICICI bank its direct
competitor is expanding in rural market HDFC cannot enjoy first mover advantage in rural
areas. Rural people are hard core loyal in terms of banking services. HDFC lacks in
aggressive marketing strategies like ICICI. The bank focuses mostly on high end clients
Some of the bank’s product categories lack in performance and doesn’t have reach in the
market the share prices of HDFC are often fluctuating causing uncertainty for the investors
36.

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O-OPPORTUNITIES OF HDFC BANK
HDFC bank has better asset quality parameters over government banks, hence the profit
growth is likely to increase the companies in large and SME are growing at very fast pace.
HDFC has good reputation in terms of maintaining corporate salary accounts HDFC bank has
improved it’s bad debts portfolio and the recovery of bad debts are high when compared to
government banks HDFC has very good opportunities in abroad Greater scope for
acquisitions and strategic alliances due to strong financial position

THREATS OF HDFC 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.

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4.2 SUGGESTION
 Majority of customer are satisfy with HDFC bank service and prefers to use HDFC
bank.
 Majority of customers are aware of services provided by HDFC bank.
 Majority of customers fined banking facility of HDFC bank satisfactory.
 Majority of customers are willing to recommended HDFC bank to their friends.
 Respondents says that they are facing issues regarding time and facility while few has
 Some issue with employee behaviour.
 The perception of customer regarding the bank is satisfactory because majority of the
customer are satisfy with the bank and they also recommend the product of the bank.
 The more prefers extra service is Net banking and less prefers service are bill
Payment, ATM and mobile banking.
 Majority of customer are satisfy with dealing of employees.
 Main factor that attracts customers towards banks are services of bank.

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4.3 CONCLUSION

At the end I would like to conclude that the Indian banking market is growing at an
astonishing rate. HDFC bank has distribution network of 4,715 branches and 12,260 ATMs
across 2,657 cities in India. The majority of customers are prefers HDFC bank but bank
should target rest of customer who are not satisfied. Customers are aware about bank services
but bank should try to create more awareness among people.
 More stress should given on the advertisement and promotion activities.
 The bank should make more effort in improving good relationship with customer.
 The bank should enhance their service according to customer.
 The bank should make its procedure less time consuming.
 The bank should make effort to aware the customer about all their extra services.

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4.4 LIMITATION OF THE STUDY

I am sure that in this project there would be few shortcomings sincere effort has been made to
eliminate errors as far as possible but few would remain due to limitation of study.
There are:
 Limited sample size
 The information given by respondents might be bias
 Some of respondent might not be interested to give correct information

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4.5 BIBLIOGRAPHY:
References
Kotler Philip marketing management, (Pearson Education, 12th edition)
Malhotara k. Naresh, Marketing Strategies (Apllied Orientation, 5th Edition)
Zetmal V.A, Service Marketing (Integrated Customer, 4th edition)
M.K. Rampal: Service Marketing

Websites:

www.en.wikipedia.org
www.hdfcbank.com
www.quora.com
www.moneycontrol.com
www.marketresearch.co
m

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