A

PROJECT REPORT
ON
PROFITABILITY & OPERATIONAL EFFICIENCY
OF

HDFC BANK LTD.

IN PARTIAL FULFILLMEN OF THE REQUIREMENT
FOR
THE AWARD OF THE DEGREE
OF
M.B.A
IN

FINANCE
SUBMITTED BY
RIJVANI BHARATKUMAR RAJKUMAR
ROLL NO. 521020889
SUBMITTED TO

JULY 2012

BONAFIDE CERTIFICATE

SMU
Directorate of Distance Education
Sikkim Manipal University
Manipal 576104
TO,
THE PRINCIPLE,
INNOVATIVE SCHOOL OF BUSINESS MANAGEMENT,
MEHSANA
This is to certify that RIJVANI BHARATKUMAR RAJKUMAR
SEM-4 MBA student of SIKKIM MANIPAL UNIVERSITY in this institute
for the year 2011-2012. As a part of the, the student has completed the project
report titled, PROFITABILITY AND OPERATIONAL EFFICIENCY OF
HDFC BANK LTD The project report is prepared by the student under the
guidance of Prof. ARCHNA RAISINGHANI

SIGNATURE
HEAD OF THE DEPARTMENT

SIGNATURE
FACULTY IN CHARGE

1.1 HISTORY OF HDFC BANK

1.2 SUBSIDIARY & ASSOCIATES COMPANIES
1.3 BUSINESS FOCUS
1.4 BOARD OF DIRECTORS
1.5 PROFILE
1.6 DISTRIBUTION NETWORK
1.7 BUSINESSES OF HDFC BANK LTD
1.8 PRODUCTS & SERVICES

1.1 HISTORY OF HDFC BANK

HDFC was incorporated in 1977 with the primary objective of meeting a social Need that
of promoting home ownership by providing long-term finance to households for their housing
needs. HDFC was promoted with an initial share capital of Rs. 100 million.

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 office in Mumbai, India. HDFC Bank commenced operations as a Scheduled
Commercial Bank in January 1995. In the year 1998 HDFC Bank had tied up with the
Ahmadabad Stock Exchange (ASE) to act as its clearing bank.

1.2 Subsidiary and Associate Companies

The subsidiaries of HDFC consists of
1. HDFC Bank

2. HDFC Mutual Fund

3. HDFC Standard Life Insurance Company
4. HDFC Realty
5. HDFC Chubb General Insurance Company Limited.
6. Intel net Global Services Limited
7. Credit Information Bureau (India) Limited
8. Other Companies Co Promoted by HDFC
i. HDFC Trustee Company Ltd.
ii. GRUH Finance Ltd.
iii. HDFC Developers Ltd.
iv. HDFC Venture Capital Ltd.
v. HDFC Venture Trustee Company Ltd
vi. HDFC Securities Ltd.
vii. HDFC Holding Ltd.
viii.Home Loan Services India Pvt. Ltd

1.3 Business Focus

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking
services for target retail and wholesale customer segments, and to achieve healthy growth in

profitability, consistent with the bank's risk appetite. The bank is committed to maintain the
highest level of ethical standards, professional integrity, corporate governance and regulatory
compliance. HDFC Bank's business philosophy is based on four core values - Operational
Excellence, Customer Focus, Product Leadership and People.

1.4BOARD OF DIRECTORS
Mr. C. M. Vasudev, Chairman
Mrs. Renu Karnad
Mr. Ashim Samanta

Dr. Pandit Palande

Mr. Partho Datta
Mr. Bobby Parikh
Mr. Anami N Roy
Mr. Keki Mistry (re-appointed on 19.01.2012)
Mr. Aditya Puri, Managing Director
Mr. Harish Engineer, Executive Director
Mr. Paresh Sukthankar, Executive Director.

1.5 PROFILE OF HDFC BANK LTD.

Type

: Public

Traded as

: BSE: 500180
NSE: HDFCBANK
NYSE: HDB
BSE SENSEX Constituent

Industry

: Banking Financial Services

Founded

: Augast 1994.

Headquarters

: Mumbai, India

Key People

: Aditya Puri ( M.D )

Products

: Credit cards, consumer banking,

corporate banking, finance and insurance,
mortgage loans, private banking,
private equity, wealth management

Revenue

: US$ 5.585 billion (2011)

Profit

: US$ 923.8 million (2011)

Total Assets

: US$ 65.483 billion (2011)

Total Equity

: US$ 7.769 million (2011)

Website

: HDFCBank.com

1.6 DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of
2,544 branches spread in 1,399 cities across India. All branches are linked on an online real-

time basis. Customers in over 500 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

have

strong

and

active

member

base.

The Bank also has 9,333 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.

1.7 BUSINESSES OF HDFC BANK LTD

HDFC Bank offers a wide range of commercial and transactional banking services and
treasury products to wholesale and retail customers. The bank has three key business
segments:

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian
corporate to small & mid-sized corporates and agri-based businesses. For these customers, the
Bank provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. The bank
is also a leading provider of structured solutions, which combine cash management services with
vendor and distributor finance for facilitating superior supply chain management for its
corporate customers. Based on its superior product delivery / service levels and strong customer
orientation, the Bank has made significant inroads into the banking consortia of a number of
leading Indian corporates including multinationals, companies from the domestic business
houses and prime public sector companies. It is recognised as a leading provider of cash
management and transactional banking solutions to corporate customers, mutual funds, stock
exchange members and banks.

Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all his/her
banking requirements. The products are backed by world-class service and delivered to
customers through the growing branch network, as well as through alternative delivery channels
like ATMs, Phone Banking, NetBanking and Mobile Banking.
The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the
Investment Advisory Services programs have been designed keeping in mind needs of customers
who seek distinct financial solutions, information and advice on various investment avenues. The
Bank also has a wide array of retail loan products including Auto Loans, Loans against
marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider
of Depository Participant (DP) services for retail customers, providing customers the facility to
hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in association with
VISA (VISA Electron) and issues the Mastercard Maestro debit card as well. The Bank launched
its credit card business in late 2001. By March 2010, the bank had a total card base (debit and
credit cards) of over 14 million. The Bank is also one of the leading players in the merchant
acquiring business with over 90,000 Point-of-sale (POS) terminals for debit / credit cards

acceptance at merchant establishments. The Bank is well positioned as a leader in various net
based B2C opportunities including a wide range of internet banking services for Fixed Deposits,
Loans, Bill Payments, etc.
Treasury
Within this business, the bank has three main product areas - Foreign Exchange and Derivatives,
Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the
financial markets in India, corporates need more sophisticated risk management information,
advice and product structures. These and fine pricing on various treasury products are provided
through the bank's Treasury team. To comply with statutory reserve requirements, the bank is
required to hold 25% of its deposits in government securities. The Treasury business is
responsible for managing the returns and market risk on this investment portfolio.

1.8 PRODUCTS & SERVICES

Product range: The following is the product range offered at HDFC: While various
Deposit products offered by the bank are assigned different names, the deposit products can be
categorized broadly into the following types. Definition of major deposit schemes are as under: -

1. Demand deposits:
"Demand Deposits" means a deposit received by the bank which is withdrawn able
on demand;

Savings Account:
"Savings Deposits" means a form of Demand Deposit which is subject to restrictions
as to the number of withdrawals as also the amounts of withdrawals permitted by the
bank during any specified period; HDFC provides with saving bank account with the
usual facilities, and one also gets a free ATM card, intrbranch banking, bill payment
facilities, phone banking and mobile banking.
some exclusive features and benefits with HDFC Bank Regular Saving Account are as follows:

Wide network of branches and over 7300 ATMs to meet all your banking needs, no
matter where you are located.

Bank conveniently with facilities like NetBanking and MobileBanking check your
account balance, pay utility bills or stop cheque payments all via SMS.

Never overspend shop using your International Debit Card that reflects the actual
balance in your savings account.

Personalisedcheques with your name printed on each cheque leaf for enhanced security.

Take advantage of BillPay an instant solution so you can pay all your frequent utility
bill payments. Instruct for payments over the phone or through the Internet.

Avail of facilities like Safe Deposit Lockers, Sweep-In and Super Saver facilities on your
account.

Free cash withdrawals at any other Bank's ATMs*

Free Payable-at-ParThis means you only have to pay the amount written on the cheque
and not the service charges that might otherwise be charged to you, especially when you
send a cheque to someone out of your city or country.chequebook, without any usage
charges.

Free InstaAlerts for all account holders for lifetime of the account.

Free passbook facility available at home branch for account holders (individuals).

Free Email Statement facility.

2. Term Deposits:
"Term Deposit" means a deposit received by the bank for a fixed period withdraw
able only after the expiry of the fixed period and includes deposits such as Recurring
/ Double Benefit Deposits / Short Deposits / Fixed Deposits / Monthly Income
Certificate / Quarterly Income Certificate.

3. Notice Deposit:
''Notice Deposit'' means Term Deposit for a specific period but which can be
withdrawn on giving at least one complete banking day's notice.

4. Current Account:
"Current Account" means a form of Demand Deposit wherefrom withdrawals are
allowed any number of times depending upon the balance in the account or up to a
particular agreed amount and will also include other deposit accounts which are
neither Savings Deposit nor Term Deposit; The account holder gets a personalized
cheque book, monthly account statements, and Inter-branch banking.

5. Corporate Account:These are more commonly known as Salary Accounts. These are account in HDFC
bank with zero balance. These are given to salaried people. These accounts are
opened by the employer for the employees to deposit the salary of the employee
directly to the account.

6. HDFC Bank Preferred:A preferential Savings Account where in, one is assigned with a dedicated
Relationship Manager, whos youre the one point contact. One also get privileges
like fee waivers, enhanced ATM withdrawal limit, priority locker allotment, free Demat
Account and lower interest rates on loans.

7. Sweep-In Account:A Fixed Deposit linked to ones Savings Account. So, even if ones Savings Account
runs a bit short, one can issue a cheque (or use ATM Card). The money is

automatically swept in to ones Savings Account from ones Fixed Deposit Account.
The excess funds in the account are directly transferred to the fixed deposit account
of the account holder.

8. Super Saver Account:

It gives one an overdraft facility up to 75% of ones fixed deposit. In an emergency,
you can access your funds while your fixed deposit continues to earn high interest.

9. HDFC Bank Plus:

Apart from Regular and Premium Current Accounts HDFC also has HDFC Bank
Plus, a Current Account and then something extra for the HDFC bank customers.
One can transfer up to Rs. 50 lakh every month at no extra charges, between the
four metros. One can also avail cheque clearing between the four metros, get cash
delivery/pick-up up to Rs. 25000/-, home delivery of demand drafts, at-par cheque,
outstation cheque clearing facility, etc.

10. Demat Account:

One can conduct hassle-free transactions on the stock market for ones shares. The
shares held by the customer are protected from damage, loss and theft, by maintaining
shares in electronic form. This account can be accessed through Internet too.

11. Loans:
There are a variety of loan schemes offered like personal loans, new car loans, used
car loans, loan against shares, consumer loans, two wheeler loans, and home loans.
These are available with easy payback in monthly instalments. Loans are sanctioned
with easy documentation and quick delivery.

Home Loan - Home loans for individuals to purchase (fresh / resale) or construct
houses. Application can be made individually or jointly. HDFC finances up to 85%
maximum of the cost of the property (Agreement value + Stamp duty + Registration
charges) based on the repayment capacity of the customer.

Home improvement loan

HIL facilitates internal and external repairs and other structural improvements like

these

painting, waterproofing, plumbing and electric works, tiling and flooring, grills and
Aluminum windows. HDFC finances up to 85% of the cost of renovation (100% for
Existing customers) subject to market value of the property.
Purpose
External repairs
Tiling and flooring
Internal and external painting
Plumbing and electrical work
Waterproofing and roofing
Grills and aluminum windows
Waterproofing on terrace
Construction of underground/overhead water tank
Paving of compound wall (with stone/tile/etc.)

Home extention loan

HEL facilitates the extension of an existing dwelling unit. All the terms are the same
as applicable to Home Loan.
Purpose
HDFC Home Extension Loan makes it convenient for you to extend or add space to
your home. Be it an additional room, a larger bathroom, or even enclosing an open
balcony.
Maximum loan
85% of the cost of extension
Maximum Term
20 years subject to your retirement age

Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of the
Property will have to be co-applicants. However, the co-applicants need not be co owners.

 Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate (RPLR).The rate on
your loan will be revised every three months from the date of first disbursement,

if there is a

change in RPLR, the interest rate on your loan may Change. However, the EMI on the home
loan disbursed will not change. If the interest rate increases, the interest component in an EMI
will increase and the Principal component will reduce resulting in an extension of term of the
loan, and vice versa.

12. MOBILE BANKING

13. INVESTMENT PRODUCTS

o
o

Life Insurance
Health Insurance

Motor Insurance

Travel Insurance

Home Insurance

2.1

OBJECTIVES OF THE REPORT

2.2 INTRODUCTION TO PROFITABILITY

2.3 CONCEPT OF PROFITABILITY
2.4 OPERATIONAL EFFICIENCY

2.1 OBJECTIVES OF THE REPORT

Achieving the objective of any study is possible after a systematic analysis of facts
and data associated with the study. This is the most important segment of the project. To
evaluate the profitibility & operational efficiency of HDFC Bank Ltd for the purpose of
commenting on the banks performance over duration of 5 years and a comparative analysis
with Axis Bank Ltd. This chapter basically involves application of various tools and
techniques on the data collected. Data for analysis are presented in a summarized manner in
the master sheet. I made an attempt to analysis both profitibility and operational efficiency of
HDFC Bank Ltd. It halps to summarize the large equations of financial and operational data
to make efficient judgement about the banks performance.
To check the Profitibility and Operational efficiency of HDFC Bank Limited.
To compare the Profitibility and Operational efficiency of HDFC Bank Limited with
its competitive Bank
To analyze that which type of services are most preferred and demanded by the
customers.

2.2 INTRODUCTION
Business is conducted primarily to earn profits. The amount of profit earned measures the
efficiency of a business. The greater the volume of profit, the higher is the efficiency of the
concern. The profit of a business may be measured and analyzed by studying the profitability
of investments attained by the business.

MEANING AND DEFINITION OF PROFIBILITY: The word 'profitability' is composed

of two words, namely; profit and ability. The term profit has already been discussed at length
in detail. The term ability indicates the power of a firm to earn profits. The ability of an
enterprise also denotes its earning power or operating performance. Also, that the business
ability points towards the financial and operational ability of the business. So, on this basis
profitability may be defined as the ability of a given instrument to earn a return from its
use"' Weston and Brigham defines profitability as "the net surplus of a large number of
policies and decisions." Profit being an absolute figure fails to indicate the adequacy of
income or changes in efficiency resulting from financial and operational performance of an
enterprise. Much difficulty and confusion comes home while interpreting the absolute figures
of profit i

3n case of historical or inter-firm comparisons due to variation in the size of investment or

volume of sales etc. Such problems are handled by relating figures of profit either with the
volume of sales or with the level of investment. A quantitative relationship is thereof
established either in the form of ratios or percentages. Such ratios are names as profitability
ratios. Thus, profitability may be regarded as a relative term measurable in terms of profit and
its relation with other elements that can directly influence the profit. No doubt, profit and
profitability are closely related and mutually interdependent, yet they are two different
concepts. "The accounting concept of profit measures what have been accumulated, the
analytical concept of profitability is concerned with future accumulation of wealth. Profit of
an enterprise, reports about the financial and operational efficiency of the business. Whereas,
profitability interprets the term profit in relation to other elements likely to affect these profits
in order to help in decision-making. Profit is regarded as an absolute connotation as against
profitability, which is regarded as a relative concept. Where profit is the residual income left
after meeting all manufacturing, administrative expenses; profitability is the profit making
ability of an enterprise. The profit figure indicates the amount of earning of a business during
a special period. While, profitability denotes whether these profits are constant or improved
or deteriorated, how and to what extent they can be improved. profit in two separate business
concerns may be identical, yet, at many times, it usually happens that their profitability varies
when measured in terms of size of investment* It has been aptly remarked that the role
played by profits and profitability in a business enterprises is identical to the function carried
out by blood and pulse in the human body. Profitability is the ability to earn profit from all
the activities of an enterprise. It indicates how well management of an enterprise generates
earnings by using the resources at its disposal. In the other words the ability to earn profit e.g.
profitability, it is composed of two words profit and ability. The word profit represents the
absolute figure of profit but an absolute figure alone does not give an exact ideas of the
adequacy or otherwise of increase or change in performance as shown in the financial
statement of the enterprise. The word ability reflects the power of an enterprise to earn
profits, it is called earning performance. Earnings are an essential requirement to continue the
business. So we can say that a healthy enterprise is that which has good profitability.
According to hermenson Edward and salmonson profitability is the relationship of income to
some balance sheet measure which indicates the relative ability to earn income on assets
employed.

2.3 CONCEPT OF PROFITABILITY

1.Accounting Profitability Profitability is a measure of evaluating the overall efficiency of
the business. The best possible course for evaluation of business efficiency may be inputoutput analysis. Profitability can be measured by relating output as a proportion of input or
matching it with the results of other firms of the same industry or results attained in the
different periods of operations. Profitability of a firm can be evaluated by comparing the
amount of capital employed i.e. the input with income earned i.e. the output. This is popularly
known as return on investment or return on capital employed. It is regarded as the overall
profitability ratio and has two components; net profit ratio and turnover ratio. That is: Return
on Investment = Net Profit Ratio x Turnover Ratio Or, Return on Investment =
Operating Profit x Sales
Sales Capital Employed Or, Return on Investment = Operating Profit Capital Employed
This method is increasingly accepted as an indicator of performance and capability. This is
the reason for viewing operational and financial performance in relation to the scale of
resources of funds required in production. That is, "a given amount of profit return should be
evaluated in terms of the percentage profit return on the investment of funds. Moreover, "the
return on capital used depicts the effectiveness of all the operating decisions from the routine
to the critical, made by the management at all levels of the organization from shop foreman to
President.
2. Social Profitability Along with the economic objective of earning profits, a business is
also required to perform a large number of social objectives. Besides providing better quality
of goods and services, it provides big employment opportunities to the people, better
condition of work, fulfill community needs, conserves resources etc. C. Mean Cardiner
rightly observed, "The darkness of avarice has been dispelled by the light of a new kind of
social responsibility. Social objectives may prove profitable as well as expensive lo a
concern. As some objectives aids in enhancing profitability by attracting customers like in
case of providing quality goods. Whilst other may be counteractive such as elimination of
pollution may cost the company and reduce its profitability, but it creates social profitability.
In other words of Earnest Dale, these social objectives "appear lo urge the executive to
assume an infinitely broad-gauge burden of responsibilities to all the various public with
whom he clears. That makes it an obligation on the part of the company to disclose its

financial, marketing, personnel and social objectives in a simple and concise form to all the
members of the concern so that they can judge the influence of these objectives on their jobs.
3. Value Added Profitability Wealth generation is essential for every enterprise. Value added
profitability indicates the wealth generated (net value earned) as a result of manufacturing
process during a specified period. Wealth generation is the very essence for survival or
growth of a business. An enterprise may survive without making profit but would cease to do
so without adding value. "The enterprise, not making profit, is bound to become sick but not
adding value may cause its death over a period of lime."
Profit forms a part of value added. Thus, value added is a broader concept. "Value added at
particular level of operating capacity and claims should be determined as value added can
expose the efficiency and inefficiency of a business." The concept of value added can be
related to the concept of social profitability of an enterprise. The investment of an enterprise
comprises of the investment of shareholders, debenture holders, creditors, financial
institutions etc.If an enterprise fails to generate growth or add anything as value added, it
would simply mean that the enterprise is misusing public funds. This concept represents the
wealth distribution in a proper manner besides suggesting how productivity can be increased
when reducing the consumption of resources produces same or better outputs.

2.4 OPERATIONAL EFFICIENCY

Operational efficiency is the ability for an organization to execute its tactical plans while
maintaining a healthy balance between cost and productivity. In other words, it's your ability
to get things done without costing the company an arm and a leg.
Typically, this is affected by the productivity of the organization which is measured by
examining the amount of output (product or service) for a given amount of input (assets,
employee work hours, etc.) In order to increase operational efficiency, you strive to increase
the output without a change in input of a similar order of magnitude. Typically, this is done in
one of two ways:
1. Change the underlying processes to eliminate unnecessary steps. This is the aim of Six
Sigma and other process oriented frameworks.
2. Add capabilities to the underlying processes that increase output without increasing input,
esp. using IT assets such as SAP, Salesforce.com, etc.
It is nearly impossible to increase output without affecting the input requirements, so one
must realize that you are simply trying to get a higher ratio of output:input than simply higher
numbers.

3.1

RESEARCH METHODOLOGY.

3.2

RESEARCH METHODOLOGY CHART.

3.1 RESEARCH METHODOLOGY

Research Type: Exploratory Research
EXPLANATION: The study was regarding Profitability and operational efficiency of HDFC
Bank Limited and comparative analysis between others Bank.
Sample Design: A sample design is a definite plan for obtaining a sample for a given population.
It refers to a techniques or procedure adopted in selecting items for the sample.
Sampling: Further, the design that has been adopted for the study of the given topic is
Profitability and operational efficiency of HDFC Bank Limited.
Tools and techniques for Data Collection
I.

Primary Data: - The researchers collected primary data during the course of research
period with the help of the questionnaire that was designed for the bank employee to
collect the information that was required to carry out the research.

II.

Secondary Data: - Secondary data was collected from books, articles, Internet and
previous research papers that had been conducted by the company representatives and
officials.

Tools and techniques of Analysis

Simple statistical tools and techniques like average, ratios, pie charts, tables and graphs analysis
method are used to analyze the data.

3.2 RESEARCH METHODOLOGY CHART

RESEARCH HYPOTHESIS
After literature survey researcher should state in clear terms the working
hypothesis or hypothesis. As such the manner in which research hypothesis are
developed is particularly important s i n c e t h e y p r o v i d e t h e f o c a l p o i n t f o r
r e s e a r c h . T h e d e v e l o p m e n t o f working hypothesis plays an important role; it
should be very specific and limited to the piece of research in hand because it has to be
tested. It also indicates the type of data required and the type of methods of data
analysis to be used. How does one go about developing working hypothesis? The answer is
by using the following approaches.
I.
II.
III.

Discussion with colleagues and experts about the problem, its origin and
objectives in seeking a solution.
Examination of data and records, if available, concerning the problem for
possible trends, particularities and other clues.
Exploratory personal investigation which involves original field
interview on a limited scale with interested parties and individuals with a
view to secure greater insight in to the practical aspects of the problem.

Hypothesis testing
After analyzing the data as stated above the researcher is in a position to test the
hypothesis, i f a n y h e h a d f o r m u l a t e d e a r l i e r . D o t h e f a c t s s u p p o r t t h e
h y p o t h e s i s o r t h e y h a p p e n t o b e contrary? This is the usual question which
should be answered while testing hypothesis. Various t e s t s s u c h a s C h i square test, t-test, and f-test have been developed for the purpose.
T h e hypothesis may be tested by using one or more of such tests.

RESEARCH MODEL
The research model is exploratory till identification of services quality parameters. Later
it becomes descriptive when it comes to evaluating customer perception of service
quality of the banks.
Descriptive research, also known as statistical research, describes data and characteristics
about answer the questions who, what, where and how.
Although the data describes is factual, accurate and systematic, the research cannot
describe what caused a situation. Thus descriptive research cannot be used to create a
casual relationship, where one variable affects another. In other words, descriptive
research can be said to have a low requirements for internal validity.
The descriptive is used for frequencies, averages and other statistical calculations. Often
the best approach. Prior to wriring descriptive research, is to conduct a survey
investigation. Qualitative research often has to aim of description and researchers may
follow-up with examination of why the observation exits and what the implications of
the findings are.

(Rs In Lacs)

INVESTMENTS

Year
HDFC Bank Ltd
Axis Bank Ltd

2007-08
49393.5
33705.1

2008-09
58817.6
46330.4

2009-10
58607.6
55974.8

2010-11
70929.4
71991.6

2011-12
97482.9
93192.1

Interpretation
The Investment trend of HDFC Bank Ltd over the year says that the trand is increaseing. HDFC
Bank Ltd. invested there funds to various sectors of industry and they have done continuous
investment with increasing rate to various sectors means HDFC Bank Ltd have sufficient fund to
investment and they have a strong financial position. On the other hand AXIS Bank Ltd investment
trand is upword but not much as HDFC bank. In the year 2011-12, HDFC Bank Ltd. invested
97482.90 crore where as AXIS Bank Ltd only invested 93192.01 crore.

ANALYSIS & INTERPRETATION OF OPERATING EFFICIENCY

(Rs in Lacs)
Year
Operating Profit

2007-08

2008-09

2009-10

2010-11

2011-12

3803.73 3928.87 4863.44 7460.57 8850.41

Interpretation
Operating Revenue means Cash inflows or other enhancements of assets of an entity during a
period from delivering or producing goods, rendering services, or other activities that constitute
the entity's ongoing major operations. It is usually presented as sales minus sales discounts,
returns, and allowances. Every time a business sells a product or performs a service, it obtains
revenue. This often is referred to as gross revenue or sales revenue.

 Net profit: 5,167 crore. An increase of 31.6% compared to the previous year
Balance sheet size: 337,909 crore as at 31st March 2012
Total deposits: 246,706 crore. An increase of 18.3% compared to the previous year
Total advances: 195,420 crore. An increase of 22.2% compared to the previous year
Capital Adequacy Ratio: 16.5%. Regulatory minimum requirement is 9%
Tier I capital ratio: 11.6%
Non Performing Assets: 1,999 crore (gross); 1.0% of Gross Advances
Network: Branches: 2544 ATMs: 8913 Cities: 1399

1. HDFC Bank Limited should open many branch and ATMs in the urban and rural areas of our
country to give your service to all level of customers or account holders.
2. Reduces the bank charges .
3. If possible omit the drafting charges and monthly statement charges like some other banks.
4. HDFC Bank Limited should adopt innovative techniques and facilities, as consumers are highly
attracted towards new services of the banks.
5. HDFC Bank Limited should start a program for the loyal customers to reduce their complaints by
providing timely solving their problem or any confusion. This will help to enhance the profitibility
and efficiency.
6. Provide customer relation officer to solve all the complecative or any matter regarding customers
as well as any person who want to know about the facilities provided by the bank.
7. Provide sufficient employee for a smooth transaction and enhance the customer relation.

1. It is very difficult to give a accurate picture of the profitibility and operation efficiency of HDFC
Bank Ltd within a short span of time.
2. The analysis is done on the basis of past performance of the bank. But the past performance may
not be an indicator of future performance.
3. The profitibility and operational efficiency is flactuated due to market because market always
carried high risk like business risk, inflation risk, interest rate risk, etc.
4. It is very difficute to says that the imformation about the bank is accurate because we get this
information from the banks website. To assess their accuracy we need to know how the data were
collected.
5. As the nature of research was exploratory so it was difficult to cover each and every prospect of
business of HDFC Bank Ltd.
6. It is very difficult to analysis and interpretation with the others bank like AXIS bank Ltd. because
every bank should follow theire own policy and their own methodology.

After conducting the project on profitibility and operational efficiency of HDFC Bank Ltd., it is
found that there is a huge possibility for the bank to enhance there business. The Bank has reported
another successful performance, underpinned by healthy growth of both business and revenues. The
Bank continue to have a fairly well-diversified customer base that spans both the retail and
corporate banking space. In addition to creating infrastructural capabilities for the future. The bank
have launched several other initiatives to fulfill product and service needs of our customers
including the launch of an online-broking portal through our wholly-owned subsidiary. The
infrastructure business size has grown well, in line with our expectations and this augurs well for
the future, infrastructure being critical to the countrys growth.
The economic outlook for the country continues to be promising despite concerns around rising
inflation. I believe the Bank is truly well-positioned to capitalize on emerging opportunities across
the economy including infrastructure, SME, retail banking and capital markets and will, therefore,
continue to deliver value to its shareholders.
Banks network of over 2,500 branches and more than 8,900 ATMs has spread across the length and
breadth of the country. Over 70% of HDFC Bank branches are now outside metro areas.
Banking services through mobile phones was delivered to both smartphone as well as basic handset
users. The Bank launched Mobile Banking, enabling customers to use their internet banking facility
on their handset without compromising security.
Understanding customers across multiple segments and meeting their varied financial needs
efficiently is at the heart of what HDFC Bank do. The focus, however, will always be on helping
them meet their goals and realise their aspirations. Because, Bank believe that success in banking is
not just about providing great financial products and services; its about making a difference ... and
empowering lives.

In addition to providing various products and services to the financially excluded, the Bank believes

that imparting education and training to these target segments is equally essential to ensure
transparency and create awareness. To this effect the Bank has put in place various training
programs, these are conducted by Bank staff in local languages and cover not only the customers
but also various intermediaries such as the Banks business correspondents. Through these
programs the Bank provides credit counseling and information on parameters like savings habit,
better utilization of savings, features of savings products, credit utilization, asset creation,
insurance, income generation program etc. During the financial year ended March 31, 2012, over
5,400 financial awareness programs covering over 1,40,000 households were conducted. The bank
also facilitates need based capacity building and market place for the customers with the objective
of sustaining their livelihood in holistic manner.
The financial performance of HDFC Bank during the financial year ended March 31, 2012
remained healthy with total net revenues (net interest income plus other income) increasing by
17.9% to 17,540.5 crore from ` 14,878.3 crore in the previous financial year. Revenue growth was
driven by an increase in both, net interest income and other income. Net interest income grew by
16.6% due to acceleration in loan growth to 22.2% coupled with a net interest margin (NIM) of
4.2% for the year ending March 31, 2012.

HDFC Banks profit after tax increased by 31.6% from 3,926.4 crore in the previous
financial year to 5,167.1 crore in the year ended March 31, 2012. Return on average net
worth was 18.4% while the basic earnings per share increased from 17.00 to 22.11 per equity
share.
During this year HDFC Bank expanded its distribution network from 1,986 branches in 996
cities as on March 31, 2011 to 2,544 branches in 1,399 Indian cities on March 31, 2012. The
Banks ATMs increased from 5,471 to 8,913 during the same period. HDFC Banks branch
network is deeply entrenched across the country with significant density in areas conducive
to the growth of its businesses. The Banks focus on semi-urban and under-banked markets
continued, with over 75% of the Banks branches now outside the top nine Indian cities. The
Banks customer base grew in line with the growth in its network and increased product
penetration initiatives. This currently stands at 26 million customers. The Bank continues to
provide unique products and services with customer centricity as a key objective.
In order to provide its customers increased choices, flexibility and convenience the Bank
continued to make significant headway in its multi channel servicing strategy. HDFC Bank
offered its customers the use of ATMs, internet, phone and mobile banking in addition to its
expanded branch network to serve their banking needs.

Web Links:http://www.hdfcbank.com
http://www.axisbank.com

http://www.moneycontrol.com

http://www.businesslink.gov.uk/
http://www.marketresearchdata.org/index
Report :HDFC Bank Ltd Annual Report 2015-16.