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SUMMER TRAINING PROJECT
REPORT
On
“DIGITALIZATION IMPROVED THE BANKING
SERVICES WITH SPECIAL REFERENCE TO HDFC
BANK”
Towards partial fulfillment of
Integrated Master of Business Administration (IMBA)
School of Management, Babu Banarasi Das University, Lucknow
Submitted by
Tasneem Subhan
VIIth Semester
Roll No-
Under Supervision of
Vishnu Pratap Singh Chauhan
Assistant Vice President
Session 2016-
School of Management
Babu Banarasi Das University
Sector I, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (U.P.) India
CERTIFICATE FROM THE ORGANIZATION
ACKNOWLEDGEMENT No project report ever reflects the efforts of a single individual. The report owes its existence to the constant support and guidance of a number of people. I am grateful to all of them. I owe a never-ending debt of gratitude to Dr. Nidhi Agarwal and Mr. Vishnu Pratap Singh Chauhan for their expert guidance and support. I would like to thank all the respondents for giving their valuable time and providing useful information. I am also grateful to all those who have either directly or indirectly contributed towards the completion of the project, for their support and encouragement.
Tasneem Subhan
DECLARATION I do hereby declare that the Summer Internship Project Report titled “Digital Products and Initiatives in HDFC Bank Limited” submitted by me towards the partial fulfilment of the requirement of Integrated Master of Business Administration, exclusively prepared and conceptualized by me and is not submitted to any other Institution or University or published anywhere before for the reward of any Degree/Diploma/Certificate. It is the Original work of mine and has not been obtained from any other part.
Tasneem Subhan
IMBA (
th
SEM)
TABLE OF CONTENT Chapters Content Page No. Part I
- Introduction of Banking a. Meaning and Definition b. Indian Banking Industry c. Indian Banking System d. Major Players in India
- Introduction to Digitalization a. Meaning and Definition b. Digital Banking
- Company Profile a. History of HDFC Bank b. Mission, Vision and Objectives c. Management at HDFC Bank d. Business Profile e. Ratings/Awards f. Products of HDFC Bank g. Digital Services of HDFC Bank h. Digital Initiatives i. Departments at HDFC Bank g. Swot Analysis of HDFC Bank Part II
- Objectives of the study
- Literature Review
- Research Methodology a. Research Design b. Research Type c. Sampling Design d. Sources of Data Collection e. Data Collection Tools f. Methods of Data Collection Part III
- Data Analysis & Interpretations
- Findings
- Conclusion
- Suggestions
- Limitations
- Bibliography
- Appendix
Allow the money deposited to be withdrawn by cheque or draft. 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. ORIGIN OF BANKING: Its origin in the simplest form can be traced to the origin of authentic history. After recognizing the benefit of money as a medium of exchange, the importance of banking was developed as it provides the safer place to store the money. This safe place ultimately evolved in to financial institutions that accepts deposits and make loans i.e., modern commercial banks. 2
INDIAN BANKING INDUSTRY
BANKING INDUSTRY AT GLANCE
Banking is nearly as old as civilization. The history of banking could be said to have started with the appearance of money. The first record of minted metal coins was in Mesopotamia in about 2500B.C. the first European banknotes, which was handwritten appeared in1661, in Sweden. Cheque and printed paper money appeared in the 1700’s and 1800’s, with many banks created to deal with increasing trade. The history of banking in each country runs in lines with the development of trade and industry, and with the level of political confidence and stability. The ancient Romans developed an advanced banking system to serve their vast trade network, which extended throughout Europe, Asia and Africa. Modern banking began in Venice. The word bank comes from the Italian word “ ban co”, meaning bench, because moneylenders worked on benches in market places. The bank of Venice was established in 1171 to help the government raise finance for a war. At the same time, in England merchant started to ask goldsmiths to hold gold and silver in their safes in return for a fee. Receipts given to the Merchant were sometimes used to buy or sell, with the metal itself staying under lock and key. The goldsmith realized that they could lend out some of the gold and silver that they had and charge interest, as not all of the merchants would ask for the gold and silver back at the same time. Eventually, instead of charging the merchants, the goldsmiths paid them to deposit their gold and silver. The bank of England was formed in 1694 to borrow money from the public for the government to finance the war of Augsburg against France. By 1709, goldsmith were using bank of England notes of their own receipts. New technology transformed the banking industry in the 1900’s round the world, banks merged into larger and fewer groups and expanded into other country. 3
With in the group of banks, foreign and private sector banks grew at higher rate than the industry from FY03 to FY08 primarily because of lower base effect and rapid expansion undertaken by these banks. In FY09, overall growth in credit and deposits was led by PSBs. However, growth of private and foreign banks was significantly lower in FY due to their high exposure to stressed sectors and problems at parent level for foreign banks. Unsecured bank credit has risen over the years and stood at 23.3% of bank credit in FY as compared to just 10.9% in FY2000. Lending to sensitive sector has also grown at CAGR of 46.1% from FY05 to FY08. In the backdrop of the economic downturn, we feel that the excellent performance seen in last five years ended FY08 will be difficult to repeat in coming years. We expect that with the downturn in the economy, credit and deposit growth will moderate in coming years. Credit growth will be led by spending on the infrastructure while retail credit will show a moderate growth. Margin pressures due to lag effect of rate cuts between interest rate on deposits and advances, lower treasury gains and core fee income and increasing in provisions for NPAs is likely to put pressure in the bottom line of the banks. Going forward, PSBs’ which are close to the required lower level of government stake and have concentrated presence in particular region are likely to consider its merger with other PSB as an important option if they want to sustain the growth seen in past. FUNCTIONS OF BANKS Primary Functions Acceptance of Deposits Making loans & advances Loans Overdraft Cash Credit 5
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 customers valuable articles & securities. Underwriting facility Issuing of traveller's cheque letter of credit. Facility of foreign exchanges Providing trade information Provide information regarding credit worthiness of their customer. STRUCTURE 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. 6
INDIAN BANKING SYSTEM
8
Non-Schedule Banks
State co-op
Banks
Commercial
Banks
Central co-op
Banks and
Primary Cr.
Societies
Commercial Banks
Indian Foreign
Public Sector
Banks
Private Sector
Banks
HDFC,
ICICI, etc
State Bank of
India and its
Subsidiaries
Other Nationalized
Banks
Regional
Rural Banks
Reserve Bank of India
Schedule Banks
CLASSIFICATION ON THE BASIS OF OWNERSHIP
On the basis of ownership banks are of the following types : PUBLIC SECTOR BANKS Public sector banks are those banks which are owned by the Government. The Govt. runs these Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6 banks were also nationalized. Therefore in 1980 the number of nationalized bank 20. But at present there are 9 banks are nationalized. All these banks are belonging to public sector category. Welfare is their principle objective. PRIVATE SECTOR BANKS These banks are owned and run by the private sector. Various banks in the country such as ICICI Bank, HDFC Bank etc. An individual has control over there banks in preparation to the share of the banks held by him. CO-OPERATIVE BANKS Co-operative banks are those financial institutions. They provide short term & medium term loans to their members. Co-operative banks are in every state in India. Its branches at district level are known as the central co-operative bank. The central Co-operative bank in turn has its branches both in the urban & rural areas. Every state Co-operative bank is an apex bank which provides credit facilities to the central co operative bank. It mobilized financial resources from richer section of urban population by accepting deposit and creating the credit like commercial bank and borrowing from the money mkt. It also gets funds from RBI. 9
FOREIGN EXCHANGE BANKS These are special types of banks which specialize in financing foreign trade. Their main function is to make international payments through purchase & sale of exchange bills. As it well known, the exporters of a country prefer to receive the payments for exports in their own currency. Thus these banks convert home currency into foreign currency and vice versa. It is on this account that these banks have to keep with themselves stock of the currency of various countries. Along with that, they have to open branches in foreign countries to carry on their business INDUSTIRAL BANKS The industrial banks extends long term loans to industries. In fact, they also help industrials firms to sell their debentures and shares. Some times, they even underwrite the debentures & shares of big industrial concerns. These banks found their origin in India. These banks made a significant contribution to the development of agricultural and industries before independence. Mahajans, rural moneylenders and jweelers have been the forerunner of these banks in India. INDIGENIOUS BANKS These banks found their origin in India. These banks made a significant contribution to the development of agricultural and industries before independence. Mahajans, rural moneylenders and jweelers have been the forerunner of these banks in India. CENTRAL BANK The central bank occupies a pivotal position in the monetary and banking structure of the country. The central bank is the undisputed leader of the money market. As such it supervises controls and regulates the activities of commercial banks affiliated with it. The central bank is also the higher monetary institution in the country charged with the duty & responsibility of carrying out the monetary policy formulated by the government. India's central bank known as the reserve bank of India was set up in 1935. 11
AGRICULTURAL BANK The commercial and the industrial banks are not in a position to meet the credit requirements of agriculture. Hence, there arises the need for setting up special type of banks of finance agriculture. The credit requirement of the farmers are two types. Firstly the farmers require short term loans to buy seeds, fertilizers, ploughs and other inputs. Secondly, the farmers require long-term loans to purchase land, to effect permanent improvements on the land to buy equipment and to provide for irrigation works. There are two types of agriculture banks.
- Agriculture co-operative banks, and
- Land mortgage banks. The farmer provide short-term credit, while the letter extend long-term loans to the farmers. OPPORTUNITIES The Banking sector is considered the most lucrative option in today’s job market. In the industry, a position in Treasury or Forex is considered right on top and this is followed by careers in Private Banking, Investment Banking and Retail Banking. One could work in a variety of areas in banking industry including Recurring Deposit account, banking officer, probationary officer, loan officer, assessor, personal loan officer, home loan officer, home loan agent, loan manager, mortgage loan underwriter, loan processing officer, accountant, product marketing and sales executive, and customer service executive among others. In the Financial Services, some of the important jobs include that of a stockbroker who is essentially a person who buys and sells securities on behalf of individuals and institutions for some commission. While some brokers like to practice with individual clients others work for institutions. Brokers who work for institutional investors are often called securities traders. Many prefer to work as dealers, advisors and securities analysts. Security analysts are those who advise companies on floatation’s of shares as they are expected to have sound knowledge of capital markets. 12
