A synopsis on

A Study On Retail Banking at HDFC Bank

( With special reference to Indore city)
For the partial fulfillment of the requirement of degree of
Master of Business Administration
Session- 2011-2013
Submitted to

DEVI AHILYA VISHWAVIDYALAYA, INDORE

GUIDED BY:

SUBMITTED BY:

Ms. Ruchi Tiwari

Asst. Prof.
MDIM, Indore

Pranjal Jain
MBA III Sem
Roll No:
Specialization:
Finance &Marketing

Mathuradevi Institute of Management, Indore

CONTENTS
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PARTICULARS

PAGE NO.

1) Introduction

2) Rationale Of Study

3) Literature Review

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4) Objectives Of Study

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5) Research Methodology

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6) Bibliography

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INTRODUTION

INTRODUCTION
ORIGIN OF BANKING
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Banks are among the main participants of the financial system in India. Banking offers several
facilities and opportunities.
Banks in India were started on the British pattern in the beginning of the 19 th century. The
first half of the 19th century, The East India Company established 3 banks The Bank of
Bengal, The Bank of Bombay and The Bank of Madras. These three banks were known as
Presidency Banks. In 1920 these three banks were amalgamated and The Imperial Bank of
India was formed. In those days, all the banks were joint stock banks and a large number of
them were small and weak. At the time of the 2 nd world war about 1500 joint stock banks
were operating in India out of which 1400 were non- scheduled banks. Bad and dishonest
management managed quiet a quiet a few of them and there were a number of bank failures.
Hence the government had to step in and the Banking Companys Act (subsequently named as
the Banking Regulation Act) was enacted which led to the elimination of the weak banks that
were not in a position to fulfil the various requirements of the Act. In order to strengthen their
weak units and review public confidence in the banking system, a new section 45 was enacted
in the Banking Regulation Act in the year 1960, empowering the Government of India to
compulsory amalgamate weak units with the stronger ones on the recommendation of the
RBI. Today banks are broadly classified into 2 groups namely
(a) Scheduled banks.
(b) Non-Scheduled banks.

RETAIL BANKING
Retail banking is a banking service that is geared primarily toward individual consumers.
Retail banking is usually made available by commercial banks, as well as smaller community
banks. Unlike wholesale banking, retail banking focuses strictly on consumer markets. Retail
banking entities provide a wide range of personal banking services, including offering savings
and checking accounts, bill paying services, as well as debit and credit cards. Through retail
banking, consumers may also obtain mortgages and personal loans. Although retail banking
is, for the most part, mass-market driven, many retail banking products may also extend to
small and medium sized businesses. Today much of retail banking is streamlined
electronically via Automated Teller Machines (ATMs), or through virtual retail banking
known as online banking.
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RETAIL BANKING PRODUCTS & SERVICES

1. RETAIL DEPOSIT PRODUCTS There are many products in retail banking like
Savings A/c, Current A/c, Recurring A/c, Fixed Deposit A/c, NRI A/c, Corporate
Salary A/c, Free Demat A/c, Kids A/c, Senior Citizen Scheme, Cheque Facilities,
Overdraft Facilities, Free Demand Draft Facilities, Locker Facilities, Cash Credit
Facilities, etc
2. RETAIL LOAN PRODUCTS Banks grant loans for different periods like short term,
medium term, and long term and also for different purpose. Personal Loans, Housing
Loans, Education Loans, Vehicle Loans, Professional Loans, Consumer Durable
Loans, Loans against Shares and Securities.
3. RETAIL SERVICES This includes: Lockers, DepositoryServices, Credit Cards,
Debit Cards, Net Banking, Mobile Banking, Phone Banking, Anytime, Anywhere and
Anyhow banking, Automated Teller Machines, Gift Cards etc

INTRODUCTION OF HDFC BANK

HDFC Bank Ltd. is a major Indian financial services company based in India, incorporated
in August 1994, after the Reserve Bank of India allowed establishing private sector banks.
The Bank was promoted by the Housing Development Finance Corporation, a premier
housing finance company (set up in 1977) of India.
HDFC Bank has put in place state-of-the-art technology to provide quality service to all their
customers. This system has cross-branch functionalities which enable on on-line transfer of
funds across all HDFC Bank locations. Other Co-Operative, private and foreign banks could
avail of their network and other products and services which have engineered to suit the needs
of the banking sector.
Financial service providers
Their service offerings are customized to your needs, they are well-equipped to respond to
your constantly changing and unique environment, and can provide a comprehensive banking

solution, whatever your line of business. Select the category to which your organization
belongs to know more about their services;
Financial Institutions
Institutions need a bank that uses its financial skills to streamline performance and build
business. In the rapidly changing investment and regulatory climate, your needs can change
suddenly and dramatically. While many banks continue to be product sellers, they focus on
responding to the unique environments of each and every client, configuring our core
capabilities to satisfy those needs within locations or sectors, they are committed to devoting
the time, energy to expertise to help you achieve your changing requirements.
Collection Services
HDFC Bank's Collection services is aimed at ensuring quick realization of local and
outstation cheques and providing the funds in a central collection account. This enables us to
manage our funds flow position most effectively from a central location. This service can be
availed with/without a current account with HDFC Bank. HDFC Bank's comprehensive MIS
includes :
Daily report of deposits made at various locations.
Location wise report
Credit Forecast report
Monthly cumulative report - date wise / location wise
Monthly charging statement
Monthly cheque return statement
Customised reports as per mutual agreement.

PRODUCT SCOPE
HDFC Bank offers a bunch of products and services to meet the every need of the people. The
company cares for both, individuals as well as corporate and small and medium enterprises.
For individuals, the company has a range accounts, investment, and pension scheme, different
types of loans and cards that assist the customers. The customers can choose the suitable one
from a range of products which will suit their life-stage and needs.

For organizations the company has a host of customized solutions that range from Funded
services, Non-funded services, Value addition services, Mutual fund etc. These affordable
plans apart from providing long term value to the employees help in enhancing goodwill of
the company.
The products of the company are categorized into various section which are follows:

Accounts & Deposits.

Loans.
Investment and Insurance
Forex and Payment services.
Cards.
Customer Center.

RATIONALE OF
THE STUDY

RATIONALE OF THE STUDY

At HDFC Bank, I am assigning with the topic as Retail Finance of Bank for my project
work. The reason of selecting this topic is that to know how the Bank provides the financial
services to customers.

Retail Finance facilitates our investments via rental financing. This means that a customer
can, in a smooth and smart way, implementing his/her investment plans without expensive
loans being negatively debited to the balance sheet and the liquidity. A rental fee is paid per
month and is fully tax- deductible.
Purpose of the research really wide enough to provide important information for each and
every sector of the society and by creating and enthusiasm in general public towards
financing. It plays an important role in socio-economic development of the country. In this
way its area is not limited of finance field only but it wide enough to cover the whole
countrys development.

Reserach Scholars:
This study will help other research scholars and acamedicians of varied interest for further
studies in the related topic.

Students:
This project will help the students to gain insights into Retail Financing of banks. It will help
them to know how the banks provides financial services to their customers. Thus it helps them
to develop practical skills for financial service sector.

Customers:
The Study of this project lies the fact that it provides a frame work of guidance to the people,
who are interested in finance as it covers the information regarding the financing process,
mitigants and filed investigation. By this project work the people can know the small points of
the retail finance which are provided by HDFC Bank.

LITERATURE
REVIEW

LITERATURE REVIEW:
Frances X. Frei, Patrick T. Harker, Larry W. Hunter: Reviews about, how does a retail
bank innovate? Traditional innovation literature would suggest that organizations innovate by
getting new and/or improved products to market. However, in a service, the product is the
process. Thus, innovation in banking lies more in process and organizational changes than in
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new product development in a traditional sense. This paper reviews a multi-year research
effort on innovation and efficiency in retail banking, and discusses both the means by which
innovation occurs along with the factors that make one institution better than another in
innovation. Implications of these results to the study of the broader service sector will be
drawn as well.
Keynote address by Ms Shyamala Gopinath, Deputy Governor of the Reserve Bank of
India, at the IBA- Banking Frontiers International Conference on Retail Banking
Directions: Opportunities &Challenges, Mumbai, 28May 2005: The issue of retail banking
is extremely important and topical. Across the globe, retail lending has been a spectacular
innovation in the commercial banking sector in recent years. The growth of retail lending,
especially, in emerging economies, is attributable to the rapid advances ininformation
technology, the evolving macroeconomic environment, financial market reform,and several
micro-level demand and supply side factors. India too experienced a surge in retail banking.
There are various pointers towards this. Retail loan is estimated to have accounted fornearly
one-fifth of all bank credit. Housing sector is experiencing a boom in its credit. The retail loan
market has decisively got transformed from a sellers market to a buyers market. Gone are the
days where getting a retail loan was somewhat cumbersome. All these emphasize the
momentum that retail banking is experiencing in the Indian economy in recent years.There is
a need of constant innovation in retail banking. In bracing for tomorrow, a paradigmshift in
bank financing through innovative products and mechanisms involving constant upgradation
and revalidation of the banks internal systems and processes is called for. Banks now need to
use retail as a growth trigger. This requires product development and differentiation,
innovation and business process reengineering, micro-planning, marketing,prudent pricing,
customisation, technological upgradation, home / electronic / mobile banking,cost reduction
and cross-selling. While retail banking offers phenomenal opportunities forgrowth, the
challenges are equally daunting. How far the retail banking is able to lead growth of the
banking industry in future would depend upon the capacity building of the banks to meetthe
challenges and make use of the opportunities profitably. However, the kind of technologyused
and the efficiency of operations would provide the much needed competitive edge for success
in retail banking business. Furthermore, in all these customers interest is of paramount
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importance. The banking sector in India is demonstrating this and I do hope they would
continue to chart in this traded path.
Pat Russ, Global Practice Leader, Customer relationship management in retail banking
from eds.com, Financial Services Industry EDS Business Transformation Outsourcing,
CRM Services: Retail banks are facing greater challenges than ever before in executing their
customer management strategies. Intensifying competition, proliferating customer contact
channels,escalating attacks on customer information, rising customer expectations and
capitalizing onnew market opportunities are at the top of every bank executives agenda.
In looking for ways to drive growth, banks need to evaluate their customer management
strategy.Do they currently have a CRM solution that is capable of delivering? Consistent and
cost-effective customer service? Customer-aligned products and services? Enhanced customer
loyalty and long-term value?
Rajeshwari Adappa Thakur Banking on Growth :With the Indian economy growing at a
brisk clip of nine-plus percent per annum, there isgrowing global and domestic interest in the
nations banking industry. Experts have alsoprojected that India would emerge as the third
largest banking hub in the world by 2040.Rajeshwari Adappa Thakur writes about the buoyant
sector. He also has a highlight on the Retail Banking sector as a new buzzword in the Indian
bankingsector. He says, If retail banking is a buzzword in India today, the reason is not far to
see. Afterall, margins in retail banking are higher than corporate banking and the growth too is
faster.Several banks that were not very active in retail banking are now eyeing this sector.
Looking at the above mentioned reviews, there is a clear understanding on the main aspects
of retail banking and also the importance of this sector. In my report A study on retail finance
of HDFC Bank, I would try to use these studies to understand whether or not HDFC bank has
taken consideration of such aspects in retail banking, and to what extent is it going to tap this
upcoming sector whether it is technology wise, service wise or any other form.

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OBJECTIVES

OBJECTIVES
1. To know about the concept of retail banking and its types.

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2. To study the issues and challenges in retail banking.

3. To study the recent trends in retail banking.
4. To analyze the transforming retail banking processes & know the bank formalities
required by the customers at the time of finance.
5. To study the various products being offered in Retail Banking portfolio .
6. To find the solutions to problems that are faced by customers in Retail Finance.
7. To verify the existing facilities and give suggestions to improve them so as to provide
better benefits to customers.
8. To study the strategies to increase the Retail Banking business .
9. To emphasize on the trends of customer relationship management in retail banking.
10. To estimate the future growth of Indian retail banking.

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RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY
Meaning of Research
Research methodology is a way to systematically solve the research problem. It May be
understood as a science of studying now research is done systematically. In that various steps,
those are generally adopted by a researcher in studying his problem along with the logic
behind them.

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The procedures by which researcher go about their work of describing, explaining and
predicting phenomenon are called methodology.

Research Design
This project A Study on Retail Finance of HDFC Bank is considered as an Exploratory
research.
Research will be initiated by examining the secondary data to gain insight into the problem.
By analyzing the secondary data, the study aim is to explore the short comings to the present
system and primary data will help to validate the analysis of secondary data besides on
unrevealing the areas which calls for improvement. I will used mainly secondary data for
implementing the project work like information from various newspapers, magazines,
websites etc. It is an informal way of completing the dissertation work.
Besides this, Primary data for this research project will be collected through self
administration. Due to time limitation and other constraints direct personal interview method
will be used. A structured questionnaire will be framed as it less time consuming, generates
specific and to the point information, easier to tabulate and interpret. Moreover respondents
prefer to give direct answers. In questionnaire open ended and closed ended both the type of
questions will be used.

Collection of Data:
The mode of collection of data will be based on Survey Method and field activity. Primary
data collection will base on personal interview. I will prepare the questionnaire according to
the necessary of the data to be collected.
1) Primary Data: All the people from different profession were personally visited and
interviewed. They were the main source of Primary Data. Data will also be collected from
the Managers/Employees of the bank through structured interview.
2) Secondary Data: It was collected from internal sources. The secondary data was
collected on the basis of organizational file, official records, news papers, magazines,
management books, preserved information in the companys database and website of the
company.

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Sampling Plan:
Since it is not possible to study whole universe, it becomes necessary to take sample from the
universe to know its characteristics.
Sampling Units: Different professional Charted Accountants, Tax Consultant,
Lawyers, Business man, Professionals and House wives, Bank employees.
Sample Technique: Simple Random Sampling
Research Instrument: Questionnaire & Structured Interviews.s
Contact Method: Personal Interview

Sample Size:
My Sample size for this project will 100 respondents(Banking customers) and 10
Managers/Employees at HDFC Bank as it will not be possible to cover the whole universe in
the available time period.

Tools for data analysis:

1. Pie Chart Analysis
2. Bar Graph Analysis
3. Percentage Analysis

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BIBLIOGRAPHY

BIBLIOGRAPHY
Books

C. R. Kothari, Research Methodology: Methods & Techniques, New Age International

Publishers, Second revised edition, 2004

R Paneerselvam, Research Methodology, PHI Learning Pvt. Ltd, Third Edition, 2006
Dr. C. Rajendra Kumar, Research Methodology, ABH Publications, New Delhi, 2008
Timothy W. Koch, S. Scott MacDonald, Bank Management, Mason, Ohio:

Thomson Higher Education, 6th Edition, 2006

Keith Pond, Retail Banking, London: Financial World Publishing, 2007
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Joseph DiVanna , The Future of Retail Banking, New York: Palgrave Macmillan,
2003

Websites

www.hdfcbank.com
www.google.com
www.finance.india.mart.com
www.banknetindia.com

Journals

Frei , Frances X., Harker, Patrick T. and Hunter, Larry W., Innovation in Retail

Banking Social Science Research Networks, (November 1997),.

Nishith Nagar; Dr. Enid Masih; Dr. Devaraj Badugu, Retail Banking: The New
Buzzword Of Todays World Of Banking, Journal On Banking Financial Services &
Insurance Research, Volume 1, Issue 8 (November, 2011)

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