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SUMMER INTERNSHIP PROJECT REPORT
A Study on
“DIGITALIZATION IMPROVED BANKING SERVICES WITH SPECIAL
REFERENCE TO HDFC BANK”
Submitted in partial fulfillment of the requirement for the award
Of
“MASTER OF BUSINESS ADMINISTRATION”
(Session 2018-2020)
SUBMITTED BY:- UNDER THE GUIDANCE OF:-
Karan Shahdeo Md. Saifullah Khalid
MBA 2
nd
Semester USHA MARTIN UNIVERSITY
ROLL NO- 18MBA
DECLARATION CERTIFICATE
This is to certify that the work presented in the training report entitled “DIGITALIZATION” in partial fulfillment of the requirement for the award of Degree of Master of Business Administration of Usha Martin University, Jharkhand is an authentic work carried out under my supervision and guidance. To the best of my knowledge, the content of this training report does not form a basis for the award of any previous Degree to anyone else. Date :- (Signature) Mr. Saifullah Khalid Department of Management Usha Martin University, Jharkhand Head of Department of Management Usha Martin University, Jharkhand
CERTIFICATE OF APPROVAL
I am using this opportunity to express my gratitude to everyone who supported me throughout the course of this project. I am thankful for their aspiring guidance and friendly advice during the project work. I am sincerely grateful to them for sharing their truthful and illuminating views on several issues related to the project. I express my warm thanks to Mr. Manitesh Kumar who not only acted as a mentor to me but also supported as a guardian at HDFC Bank Ltd without him, the project would not have been completed in such a graceful manner. I would also like to express my gratitude to Head of Department and my faculty guide Mr. Saifullah Khalid for providing their valuable reviews on my project and guiding me throughout the course of this internship. My thanks and appreciation also goes to my collegues in developing this project and providing a helping hand with their abilities. I am grateful to all the people who provided me with the facilities being required and conductive conditions for this project. Thank you.
EXECUTIVE SUMMARY
With the growing demands of customers, bank could not address each and every customer personally, hence introduce the digital platform to cater each and every customer query. So, the role of digital platform became pivotal. Now the main problem faced by customers was lack of customers on digital side of banking. So, making the customers aware of the functions and process of digital banking became of paramount importance. Wherein the major task assigned to me in the digital platform. As the banking industry is moving towards digitalization, HDFC bank made its customers mandatory to seed Aadhar card in bank accounts of customers by different means, took the credit card holders who do not have accounts with the bank on digital base. After the GST act was passed in July and the bank has enabled its customers to make the GST payment through net banking by updating their GSN numbers. Helped the customers to renew their KYC and assisting with the documentation while opening new accounts. Understood the workflow of the bank as to how the bank operates its day to day functions. I got an insight into the digital banking by making the people aware on digital base and making them friendly with the banking transactions. Also got to learn different kind of forms and its usage.
INTRODUCTION
1.1 HDFC’s Profile and Background :-
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 RBI’s liberalization 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. HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It has 104, permanent employees as of 30 June 2019. HDFC Bank is India’s largest private sector lender by assets. It is the largest bank in India by market capitalization as of February 2016. It was ranked 60th in 2019 Brands Top 100 Most Valuable Global Brands. 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. billion INR in one of the largest mergers in the financial sector in India. PROMOTERS HDFC is India’s premier housing financing 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 loan to different market segment and also has a large corporate client base for its housing related credit facilities. With its experience in the financial market, strong market reputation, large shareholder base, and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment. We Understand Your World Type Private Organization Industry Banking, financial services Founded August, 1994 Headquaters Mumbai, Maharashtra Area Service India Key People Shyamala Gopinath (Non-exe chairperson) Aditya Puri (Managing Director) Revenue 116,597 crore Number Of Employees 104,154 (June 30,
Website www.hdfcbank.com
BUSINESS FOCUS
HDFC Bank’s mission is to be a World Class Indian Bank. The objective is to build sound customer franchises across distinct business so as to be the preferred provider for 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 five core values : Operational excellence Customer focus Product leadership People Sustainability
1.2 CORPORATE POLICIES AND STRATEGIES at HDFC :-
In good times and bad, HDFC Bank sticks to its 30 per cent profit growth. Delivering such growth, quarter after quarter, is a carefully crafted strategy. It’s a well known fact that the bank increases its provision cover for its loans, such that it can deliver 30 per cent growth in more challenging years. This strategy is evidently paying off this year. Though the net interest income has grown at 22.3 per cent in the first quarter compared to the corresponding one last year, the bank has managed to deliver a 30 per cent net profit growth. The bank is nimble-footed enough to change its loan mix in different scenarios. With corporate India going through a difficult phase, the bank has increased the share of retail loans to 52 per cent now from under 50 per cent last year. Analysts say the bank is growing ahead of the sector across most retail segments. According to Emkay Global, the 33 per cent growth in retail loans year-on-year (YoY) and 4.4 per cent quarter-on-quarter was predominantly led by automobile loans (up 19 per cent YoY), commercial vehicles (60 per cent YoY), business banking (27 per cent YoY), home loans (up 23 per cent YoY) and personal loans (34 per cent YoY). These segments cumulatively account for 80 per cent of the retail loans. Even as the rest of the industry is faced with deceleration in deposits, the bank has managed to grow its deposits by 22 per cent YoY and 4.4 per cent sequentially. The bank’s loan/deposit ratio has moved up by 360 basis points sequentially to 82.8 per cent. The low-cost current account-savings account deposits have also grown by 14 per cent YoY. Though the bank’s net NPAs are up 24 per cent annually and 12 per cent sequentially, Vaibhav Agarwal of Angel Broking says it has enough fire power to sustain a bottom line growth of 30 per cent even after provisions and a net interest income growth of 22 per cent.
1.3 ORGANIZATIONAL STRUCTURE AT HDFC :-
1.4 PRODUCTS AND SERVICES OFFERED AT HDFC :-
MobileBanking & a network of branches and ATMs “Open a savings account with HDFC Bank today and transform the way you bank” Current Accounts A current account is a type of deposit account that caters to professionals and businessmen alike. Dealing largely with liquid deposits, this product allows for withdrawal of funds and cheques being written against the balance and does not limit the number of transactions in a day. At HDFC Bank, we offer a number of customized current account options that can ideally serve the needs of different businesses. DEPOSITS Dream deposits :- Open your customized online Dream Deposit account any time via NetBanking. Get interest rates equal to that of regular Fixed Deposits for a much smaller investment per month. Anytime 'Top-up' option available so you can achieve your dream faster. Make investments as small as Rs. 1000 (and in multiples of Rs. 100 thereafter) or as large as Rs. 14,99,900 per month. Minimum Top-up value is Rs. 1000 and maximum is twice the monthly installment. A minimum tenure of 6 months (and in multiples of 3 months thereafter) up to a maximum tenure of 10 years. Ease to submit 15G/H form through NetBanking. Standing Instruction, if failed on installment due date, can be funded through Top- up anytime. Premature closure facility without any extra charge. Recurring Deposit :- For a much smaller investment per month, get interest rates equal to that of regular Fixed Deposits. An investment as small as Rs. 1000 (and in multiples of Rs. 100 thereafter) or as large as Rs. 14,99,900 per month. A minimum tenure of 6 months (and in multiples of 3 months thereafter) up to a maximum tenure of 10 years. Ease to submit 15G/H form through Netbanking. Set instructions to convert your RD into an FD at maturity. Availing nomination facility while booking deposit online.
Regular Fixed Deposit :- If you are seeking assured and safe returns on your savings, an HDFC Bank Regular Fixed Deposit is an ideal choice. Our Fixed Deposits are among the most popular investment options in the market today, offering a high degree of security, competitive interest rates, operational flexibility and a host of other benefits. Link your HDFC Bank Savings Account to your Fixed Deposit Account (FD) and benefit from unique features like the Sweep-in facility (move funds seamlessly from your savings to FD account and vice versa) and the Super Saver facility (get an overdraft on your account for short-term cash needs without breaking your deposits) You can open or liquidate a Fixed Deposit account in minutes, with as little as Rs
- Earn compound interest on your deposits by choosing the reinvestment option or get regular income by opting for monthly pay-outs. A HDFC Bank Regular Fixed Deposit also gives you the flexibility to change your period of deposit, maturity, payment instructions etc in just a few clicks online. Open a Fixed Deposit account today and start earning returns on your savings. INVESTMENTS Mutual Funds :- Invest in a wide range of Mutual Funds with a complete control over your Mutual Fund investments though HDFC Bank's NetBanking. HDFC Bank customers can now invest in Mutual Funds through two platforms InvestNow is a mutual fund investment platform for HDFC Bank customers where the customers get expert recommendations basis their financial goals & risk appetite. There are no registration charges for InvestNow account and it involves smooth on boarding & hassle free payments for the customers. You can register for InvestNow by Login to : “NetBanking -> Mutual Fund Tab -> Click on InvestNow Banner” LIFE INSURANCE Term insurance is a life insurance product offered by an insurance company which offers financial coverage to the policy holder for a specific time period. In case of death of the insured individual during the policy term, the death benefit is paid by the company to the beneficiary. Among life insurance plans, term insurance provides the highest life insurance coverage for the lowest premiums during the period of the plan. In your absence, not only does your family remains financially independent, but also is able to fulfill its future needs like a young child’s higher education.
1.5 COMPETITOR’S AND CAPITAL STRUCTURE OF HDFC :-
Karnataka Bank (^) 83. -1.65% 2,352. Karur Vysya (^) 61. -1.28% 4,947. Kotak Mahindra 1,507. 0.77% 287,873. Lakshmi Vilas (^) 43. -4.95% 1,456. RBL Bank (^) 407. 2.98% 17,488. South Ind Bk (^) 11. -1.16% 2,155. StanChart PLC 52. -1.78%
Yes Bank (^) 88. -0.11% 20,477.
Capital Structure of HDFC Bank :- As on 30 - June-2019 the authorized share capital of the Bank is Rs. 650 crore. The paid-up share capital of the Bank as on the said date is Rs 546,56,24,542 /- which is comprising of 273,28,12,271 equity shares of the face value of Rs 2/- each. The HDFC Group holds 21.31 % of the Bank's equity and about 18.81 % of the equity is held by the ADS / GDR Depositories (in respect of the bank's American Depository Shares (ADS) and Global Depository Receipts (GDR) Issues). 31.37 % of the equity is held by Foreign Institutional Investors (FIIs) and the Bank has 6,53,843 shareholders. The shares are listed on the BSE Limited and The National Stock Exchange of India Limited. The Bank's American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002.
Guidance provide that liquidity management by the RBI would ensure adequate credit flows to the productive sectors of the economy and appropriate responses to shocks brought on by external developments. 2.1.3 Social Factors :- HDFC announced its plan to make an entry into education sector. The group plans to focus on small towns wherein it would either set up schools or take over weak performing boarding schools. According to McKinsey Global Institute’s Bird of Gold report, the discretionary spending on education is set to increase from 5% in 2005 to 6% in 2015. HDFC will foray into this sector though a separate subsidiary. It is widely believed that many schools are planning to set up model, which is profitable and scalable, as operating under trusts makes it difficult to segregate profits. As a result, HDFC could look to adopt those schools that are opened to the ‘takeover model’. HDFC already has educational loan unit – Credila Financial Services – in which it owns 62.3% stake. Credila plans to boost the distribution network and customer base of HDFC Bank in order to expand and also lower the cost of funds. The group’s likely entry into education sector could be beneficial in the long run. HDFC Bank, is partnering with the city’s municipal authorities to educate people about the danger posed by plastic bags to the environment, and to offer recycle paper bags instead. The bank reinforced the Kolkata Municipal Corporation (KMC) initiated anti-plastic awareness drive by distributing recycled and eco-friendly paper bags to retailers and customers across nine markets in the city. “Encourage citizens to use environment friendly and cost effective paper bags as the best substitute”. 2.1.4 Technological Factor :- Productivity ratio of HDFC is increasing significantly over the years. Number of employees of the group increased to 1,607 in FY2011, as compared to 797 in FY2010 and 727 in FY2009. While, profit per employee increased significantly in $491,900, as compared to $117,500 and $7,500 in FY2010 and FY2009 respectively. Administration cost per asset ratio declined to 0.30% in FY2011, as compared to 0.49 in FY2010 and 0.76 in FY 2009. Similarly, costs to income ratio improved to 7.7% in FY2011 from 13.8% and 30.9% in FY2010 and FY2009 respectively. Improving productivity would likely enhance the group’s profit margin. ATM- The latest development in terms of technology in computer and telecommunication have encouraged the banker to change the concept of branch banking to anywhere banking. Credit card facility has encouraged an era of cashless society. Today MasterCard and Visa Card are the two most popular cards used world over. Smartcards or debit cards to be used for making payments. These are also called as electronic purse.
Today banks are also using SMS and Internet as major tool of promotions and giving great utility to its customers. For example- SMS functions though simple text messages sent from your mobile. CORE BANKING SOLUTIONS- It is the buzzword today and every bank is trying to adopt it is the centralize banking platform though which a bank can control its entire operation the adoption of core banking solution will help bank to roll out new product and services.
2.2 INTERNAL ENIRONMENT ANALYSIS :-
Internal Environment consists of factors which are within the control of organization Business ethics, Objective of the firm, Value system, Management structure, Physical assets, Technological resources, financial resources, Stakeholders, Human resources etc. are part of the internal environment of business.
