CHAPTER 1 INTRODUCTION

A banker or bank is a financal institution whose primary activity is to act as a payment agent for customers to borrow and lend.The first modern bank was founded in Italy in Genoa in 1406, its name was Banco di San Giorgio(Bank of St. George). Many other financial activities were added over time. For example banks are important players in financial markets and offer financial services such as investment funds. In some countries such as Germany banks are the primary owners of industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies. In Japan, banks are usually the nexus of cross share holding entity known as zaibatsu In FranceBancassurance is highly present, as most banks offer insurance services (and now real estate services) to their clients Indias financial service industry is dominated by the banking sector that contributes significantly to the revenue of this industry. To be sure, the industry has generated tremendous employment opportunities for the large sector of the strength and flexibility of its banking structure. In the Indian context; banking is verily the proxy and indeed the cornerstone of the overall economic growth of the country. Before liberalization, the Indian banking

structure was largely controlled and parameters like branch size and location were given paramount importance. The Indian banking industry has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The banking industry in India is highly fragmented with 30 banking units contributing to almost 50% of deposit and 60% of advances. Indian nationalized banks (bank owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. The Indian banking industry can be broadly categorized into nationalized, private banks and the specialized banking institutions. The Reserve Bank of India acts as a centralized body monitoring any discrepancies and shortcomings in the system. It is foremost monitoring body in the Indian financial sector. The nationalized banks (i.e. government owned banks) continue to dominate Indian banking arena. Industries estimates indicate that out of 274 commercial banks operating in India, 223 banks are in public sector 51 are in private sector. The private sector grid also includes 24 foreign banks that have started their operations here. Under the ambit of the nationalized banks comes the

specialized banking institution. These institutions (i.e. co-operatives, rural development, imports and exports etc. these banks nimble footed in approach and armed with efficient branch networks focus primarily on high revenue, rich retail segments. Unlike the commercial banks the co-operative do not lend on the basis of a prime-lending structure and hence have lower overheads. This enables them to give a marginally higher percentage on saving deposits. Many of these cooperative banks diversified in specialized areas (catering to the vast retail audience) like car finance, housing loans, truck finance etc. In order to banks too have invested heavily in information technology to offer high-end computerized services to its clients.
Figure: An application of Porters Five Forces model to the banking industry
NEW ENTRANTS

Threat of new entrants- HIGH Bargaining power Suppliers-LOW

INDUSTRY COMPETITORS LOW

SUPPLIERS

Bargaining power buyers- HIGH

BUYERS

Threat of substitutes- LOW

SUBSTITUTES

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks : Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991: It is discussed in three phases Phase I, Phase II and Phase III. o Phase I: The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were

amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostlyEuropeansshareholders.In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also

experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. o Phase II: Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State

Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried

out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: 1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crores. After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposit 1,000% Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

o Phase III: This phase has introduced many more products and facilities in the banking sector in its reforms measureThe country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure. CUSTOMER AND CUSTOMER SATISFACTION Customer is defined as anyone who receives that which is produced by the individual or organization that has value. Customer expectations are continuously increasing. Brand loyalty is a thing of the past. Customers seek out products and producers that are best able to satisfy their requirements. A product does not need to be rated highest by customers on all dimensions, only on those they think are important. Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It

is seen as a key performance indicator within business. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms. It is 5 times more expensive to acquire a new customer than to retain an old one. Good customer support is crucial when it comes to retaining customers and driving more sales, but how do operations deliver exceptional service to ensure 100% satisfaction and loyalty. This Ziff Davis white paper explores the relationship between customer retention and the quality of technical support and reveals 12 crucial remote-support tools that enable your team to boost customer satisfaction. Customer Satisfaction is a Critical Component of Profitability. Exceptional customer service results in greater customer retention, which in turn results in higher profitability. Sadly, mature companies often forget or forsake the thing that made them successful in the first place: a customer-centric business model. They lose focus on the customer and start focusing on the bottom line and quarterly results. They look for ways to cut costs or increase revenues, often at the expense of the customer. They forget that satisfying customer needs and continuous value innovation is the only path to sustainable growth. This creates opportunities for new, smaller companies to emulate and improve

upon what made their bigger competitors successful in the first place and steal their customers. Measuring customer satisfaction To execute a successful client satisfaction survey, build one that your customers have the time and inclination to respond to, and that delves into the types of information that will truly help enhance your performance. By carefully constructing a brief, yet strong, survey, you can discover what your customers believe your strengths and weaknesses are and what makes your customers loyal to your company Organizations are increasingly interested in retaining existing customers while targeting non-customers; measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products.

Because satisfaction is basically a psychological state, care should be taken in the effort of quantitative measurement, although a large quantity of research in this area has recently been developed. Work done by Berry (Bart Allen) and Brodeur between 1990 and 1998 defined ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment to the Customer Innovation.

These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model. Work done by Parasuraman, Zeithaml and Berry (Leonard L) between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. According to Garbrand, customer satisfaction equals perception of performance divided by expectation of performance. The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured. Customer satisfaction with a company's products or services is often seen as the key to a company's success and long-term competitiveness. In the context of relationship marketing, customer satisfaction is often viewed as a central

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determinant of customer retention. However, the few empirical investigations in this area indicate that a direct relationship between these constructs is weak or even nonexistent. Customer satisfaction models

American Customer Satisfaction Index (ACSI) is a scientific standard of customer satisfaction. Academic research has shown that the national ACSI score is a strong predictor of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal Consumption Expenditure (PCE) growth. On the microeconomic level, research has shown that ACSI data predicts stock market performance, both for market indices and for individually traded companies. Increasing ACSI scores has been shown to predict loyalty, word-of-mouth recommendations, and purchase behavior. The ACSI measures customer satisfaction annually for more than 200 companies in 43 industries and 10 economic sectors. In addition to quarterly reports, the ACSI methodology can be applied to private sector companies and government agencies in order to improve loyalty and purchase intent. Two companies have been licensed to apply the methodology of the ACSI for both the private and public sector: CFI Group, Inc.applies the methodology of the ACSI offline, and Foresee Results applies the ACSI to websites and other online initiatives

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 The Kano model is a theory of product development and customer satisfaction developed in the 1980s by Professor Noriaki Kano that classifies customer preferences into five categories: Attractive, OneDimensional, Must-Be, Indifferent, Reverse. The Kano model offers some insight into the product attributes which are perceived to be important to customers. Kano also produced a methodology for mapping consumer responses to questionnaires onto his model. SERVQUAL or RATER is a service-quality framework that has been incorporated into customer-satisfaction surveys (e.g., the revised Norwegian Customer Satisfaction Barometer [5]) to indicate the gap between customer expectations and experience.

J.D. Power and Associates provides another measure of customer satisfaction, known for its top-box approach and automotive industry rankings. J.D. Power and Associates' marketing research consists primarily of consumer surveys and is publicly known for the value of its product awards.

Other research and consulting firms have customer satisfaction solutions as well. These include A.T. Kearney's Customer Satisfaction Audit process[6], which incorporates the Stages of Excellence framework and which helps define a companys status against eight critically identified dimensions.
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Improving customer satisfaction Published standards exist to help organizations develop their current levels of customer satisfaction. The International Customer Service Institute (TICSI) has released The International Customer Service Standard (TICSS). TICSS enables organizations to focus their attention on delivering excellence in the management of customer service, whilst at the same time providing recognition of success through a 3rd Party registration scheme. TICSS focuses an organizations attention on delivering increased customer satisfaction by helping the organization through a Service Quality Model. TICSS Service Quality Model uses the 5 P's - Policy, Processes, People, Premises, Product/Services, as well as performance measurement. The implementation of a customer service standard should lead to higher levels of customer satisfaction, which in turn influences customer retention and customer loyalty ( http://en.wikipedia.org/wiki/Customer_satisfaction). However, the researches have proved that satisfaction is best specified as a function of perceived quality and "disconfirmation"-the extent to which perceived quality fails to match prepurchase expectations. Surprisingly, expectations do not directly affect satisfaction, as is often suggested in the satisfaction literature. In addition, quality which falls short of expectations has a greater impact on satisfaction and repurchase intentions than quality which exceeds expectations. Moreover, disconfirmation is more likely to occur when

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quality is easy to evaluate. Finally, in terms of systematic variation across firms, the elasticity of repurchase intentions with respect to satisfaction to be lower for firms that provide high satisfaction. This implies a long-run reputation effect insulating firms which consistently provide high satisfaction. Seven steps to customer satisfaction1 It's a well known fact that no business can exist without customers. In the business of Website design, it's important to work closely with your customers to make sure the site or system you create for them is as close to their requirements as you can manage. Because it's critical that you form a close working relationship with your client, customer service is of vital importance. What follows are a selection of tips that will make your clients feel valued, wanted and loved. 1. Encourage Face-to-Face Dealings This is the most daunting and downright scary part of interacting with a customer. If you're not used to this sort of thing it can be a pretty nerve-wracking experience. Rest assured, though, it does get easier over time. It's important to meet your customers face to face at least once or even twice during the course of a project. My experience has shown that a client finds it easier to relate to and work with someone they've actually met in person, rather than a voice on the phone or
1

Adrian Thompson posted on February 11th, 2002

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someone typing into an email or messenger program. When you do meet them, be calm, confident and above all, take time to ask them what they need. I believe that if a potential client spends over half the meeting doing the talking, you're well on your way to a sale. 2. Respond to Messages Promptly & Keep Your Clients Informed This goes without saying really. We all know how annoying it is to wait days for a response to an email or phone call. It might not always be practical to deal with all customers' queries within the space of a few hours, but at least email or call them back and let them know you've received their message and you'll contact them about it as soon as possible. Even if you're not able to solve a problem right away, let the customer know you're working on it. A good example of this is my Web host. They've had some trouble with server hardware which has caused a fair bit of downtime lately. At every step along the way I was emailed and told exactly what was going on, why things were going wrong, and how long it would be before they were working again. They also apologised repeatedly, which was nice. Now if they server had just gone down with no explanation I think I'd have been pretty annoyed and may have moved my business elsewhere. But because they took time to keep me informed, it didn't seem so bad, and I at least knew they were doing something about the problems. That to me is a prime example of customer service.

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3.

Be Friendly and Approachable It's very important to be friendly, courteous and to make your clients feel

like you're their friend and you're there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt object it happens to all of us. It's vital that you keep a clear head, respond to your clients' wishes as best you can, and at all times remain polite and courteous. 4. Have a Clearly-Defined Customer Service Policy This may not be too important when you're just starting out, but a clearly defined customer service policy is going to save you a lot of time and effort in the long run. If a customer has a problem, what should they do? If the first option doesn't work, then what? Should they contact different people for billing and technical enquiries? If they're not satisfied with any aspect of your customer service, who should they tell? There's nothing more annoying for a client than being passed from person to person, or not knowing who to turn to. Making sure they know exactly what to do at each stage of their enquiry should be of utmost importance. So make sure your customer service policy is present on your site -- and anywhere else it may be useful. 5. Attention to Detail Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had a personalised sign-up confirmation

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email for a service that you could tell was typed from scratch? These little niceties can be time consuming and aren't always cost effective, but remember to do them. Even if it's as small as sending a Happy Holidays email to all your customers, it's something. It shows you care; it shows there are real people on the other end of that screen or telephone; and most importantly, it makes the customer feel welcomed, wanted and valued. 6. Anticipate Your Client's Needs & Go Out Of Your Way to Help

Them Out Sometimes this is easier said than done! However, achieving this supreme level of understanding with your clients will do wonders for your working relationship. Your client is heartily impressed, and remarks to his colleagues and friends how very helpful and considerate his Web designers are. Meanwhile, in your office, you lay back in your chair drinking your 7th cup of coffee that morning, safe in the knowledge this happy customer will send several referrals your way. 7. Honour Your Promises It's possible this is the most important point in this article. The simple message: when you promise something, deliver. The most common example here is project delivery dates.

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Clients don't like to be disappointed. Sometimes, something may not get done, or you might miss a deadline through no fault of your own. Projects can be late, technology can fail and sub-contractors don't always deliver on time. In this case a quick apology and assurance it'll be ready ASAP wouldn't go amiss.

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CHAPTER 2 PROFILE OF HDFC BANK

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 RBIs liberalization of the Indian Banking Industry in 1994. HDFC Bank was incorporated in August 1994 in the name of HDFC Bank Limited, with its registered office in Mumbai, India. The Bank commenced operations as a Scheduled Commercial Bank in January 1995. Headquartered in Mumbai, HDFC Bank has a network of over 531 branches spread over 228 cities across India. HDFC Banks ATM network can be accessed by all domestic and international Visa / MasterCard, Visa Electron / Maestro, Plus / Cirrus and American Express Credit / Charge cardholders. HDFC Bank has won many awards for its excellent service. Major among them are Best Bank in India by Hong Kong-based Finance Asia magazine in 2005 and Company of the Year Award for Corporate Excellence 2004-05. Currently HDFC Bank has 758 branches, 1,716 ATMs, in 325 cities in India, and all branches of the bank are linked on an online real-time basis. The bank offers many innovative products & services to individuals, corporates, trusts,

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governments, partnerships, financial institutions, mutual funds, insurance companies. It is a path breaker in the Indian banking sector. In 2007 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. Though, the official license was given to Centurion Bank of Punjab branches, to continue working as HDFC Bank branches, on May 23, 2008. GROWTH HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team determined to accomplish the vision of becoming a world class Indian bank. Our business philosophy is based on four core values - Customer Focus, Operational Excellence, Product Leadership and Respondents. We believe that the ultimate identity and success of our bank will reside in the exceptional quality of our respondents and their extraordinary efforts. For this reason, we are committed to hiring, developing, motivating and retaining the best respondents in the industry. Our mission is to be a World Class Indian Bank, benchmarking ourselves against international standards and best practices in terms of product offerings, technology, service levels, risk management and audit & compliance. The objective is to build sound customer franchises across distinct businesses 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, consistent with the Banks risk appetite. The bank is committed to do this while ensuring

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the highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance. Its business strategy emphasizes the following : Increase market share in Indias expanding banking and financial services industry by following a disciplined growth strategy focusing on quality and not on quantity and delivering high quality customer service. Leverage technology platform and open scaleable systems to deliver more products to more customers and to control operating costs. Maintain current high standards for asset quality through disciplined credit risk management. Develop innovative products and services that attract targeted customers and address inefficiencies in the Indian financial sector. Continue to develop products and services that reduce our cost of funds. Focus on high earnings growth with low volatility.

LANDMARKS It is becoming increasingly clear that the private banking (and perhaps the sector as a whole, barring a couple of public sector banks) arena is becoming a twobank play, at least as far as the stock market goes. The two in question are HDFC Bank and ICICI Bank. What is interesting is that even these two are taking a divergent path to growth. Divergent strategy: Even their parents have a completely different strategy. The entire gamut of their growth strategy was unveiled in clear terms in the past week. Both the banks are clear in one aspect: The need to become big through acquisition and organic growth.
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 Making a merger: While HDFC has confined itself to articulating its growth strategy, the ICICI Bank hit the deck running. It announced a merger with an old private sector bank -- Bank of Madura (BoM). Though the swap ratio is prima facie liberal for BoM shareholders, ICICI Bank is effectively buying the bank at book value. This is the first instance of an old and a new generation private sector bank coming together. PROMOTER HDFC is Indias 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 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.

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MISSION HDFC Banks began operations in 1995 with a simple mission to be a World Class Indian Bank. We realized that only a single-minded focus on product quality and service excellence would help us get there. Today, the bank is on the way towards that goal. It is extremely gratifying that its efforts towards providing customer convenience have been appreciated both nationally and internationally. The banks aim is to build a sound customer franchise across distinct businesses so as to be the preferred provider of banking services in the niche segments that the bank operates in and to achieve healthy growth in profitability, consistent with the banks risk appetite. The Bank aims to assure the highest level of ethical standards, professional integrity and regulatory compliance. BUSINESS 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: Whole Sale Banking Services: The Banks target market ranges from

large blue-chip manufacturing companies in the Indian corporate to small & mid-sized corporate 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

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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 the customers through the growing branch network, as well as through alternative delivery channels like ATMs, Phone Banking, Net Banking 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

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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 September 30, 2005, the bank had a total card base (debit and credit cards) of 5.2 million cards. The Bank is also one of the leading players in the merchant acquiring business with over 50,000 . HDFC-CBoP MERGER The merger of Centurion Bank of Punjab Ltd (CBoP) with HDFC Bank Limited became effective on May 23, 2008 as per the order of Reserve Bank of India (RBI) dated May 20, 2008. The shareholders of erstwhile CBoP have been allotted 6,98,83,956 equity shares of Rs.10/- each pursuant to the share swap ratio of one equity share of Rs.10/- each of HDFC Bank Limited for every twenty nine equity shares of Re.1/- each in Centurion Bank of Punjab Ltd. by them as on June 16, 2008. The merger has been accounted for as per the pooling of interest method of accounting in accordance with the scheme of amalgamation. Adjustment shave been made to the amalgamation reserve to harmonize accounting policies of CBoP with that of HDFC Bank principally

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relating top provisioning norms on impaired loans and depreciation policies on fixed assets. Merger related expenses have also been adjusted against the amalgamation reserve. HDFC Bank began operations in 1995 with a simple mission: to be a
Indian Bank. World-class

Realized that only a single-minded focus on product quality and

service excellence would help us get there. Today, proud to say that well on our way towards that goal. It is extremely gratifying that the efforts towards providing customer convenience have been appreciated both nationally and internationally.
Sponsor of the award Name of the award (2008)

Business Today-Monitor One of Indias Most Innovative Companies Group survey Financial Express-Ernst & Best Bank Award in the Private Sector category Young Award Business Today Best Bank Award Outlook Money & NDTV Best Bank Award in the Private sector category. Profit

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

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Accounts & Deposits Savings Accounts Regular Savings Account Savings Plus Account SavingsMax Account Senior Citizens Account No Frills Account Institutional Savings Account Salary Accounts Payroll Classic Regular Premium Defence No Frills Salary Account Reimbursement Current Account Kid's Advantage Account Pension Saving Bank Account Family Savings Group Kisan No Frills Savings Kisan Club Savings Current Accounts Plus Current Account Trade Current Account Premium Current Account Regular Current Account RFC - Domestic Account Flexi Current Account Apex Current Account Max Current Account Fixed Deposits Regular Fixed Deposit 5 Year Tax Saving Fixed Deposite Super Saver Facility Sweep-in Facility

Loans Personal Loans SmartDraft Home Loans Two Wheeler Loans New Car Loans Used Car Loans Express Loans Plus Gold Loan Educational Loan Loan Against Securities Loan Against Property Loans Against Rental Receivables Health Care Finance Tractor Loans Commercial Vehicle Finance Working Capital Finance Construction Equipment Finance Warehouse Receipt Loans

Investments & Insur Mutual Funds Tax Planning Insurance Bonds Knowledge Centre Mudra Gold Bar

General & Health In

Equities & Derivativ

Forex Services

Products & Services Trade Services

Forex Services Bran Locator RBI Guidelines Forex Limits

Payment Services NetSafe Merchant Services

Cards Credit Cards Silver Credit Card Value Plus Credit Card Gold Credit Card Titanium Credit Card Woman's Gold Credit Card Platinum Plus Credit Card Visa Signature Credit Card World MasterCard Credit Card Corporate Platinum Credit Card Corporate Credit Card Business Credit Card Debit Cards

Prepaid Refill ngpay BillPay Visa BillPay PayNow Register & Pay InstaPay DirectPay

Visa Money Transfe

RTGS Funds Transf

e-Monies Electronic Transfer

Excise & Service Ta Payment

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Recurring Deposit Demat Account Safe Deposit Lockers

EasyShop International Debit Card EasyShop Gold Debit Card EasyShop Pro Gold Debit Card EasyShop International Business Debit Card EasyShop Woman's Advantage Debit Card EasyShop NRO Debit Card Kisan Card Prepaid Cards ForexPlus Card GiftPlus Card FoodPlus Card MoneyPlus Card

Online Payment of D

Online payment of D Religious Offerings Donate to Charity

HDFC Bank Imperia / Preferred / Classic Banking Imperia Premium Banking Preferred Banking Classic Banking

Access Your Bank NetBanking Credit Cards Online OneView InstaAlerts MobileBanking InstaQuery ATM PhoneBanking Email Statements Branch Network

Private Banking

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S.W.O.T. ANALYSIS
STRENGTHS The biggest strength of Bank is Direct Banking channels. As Direct banking channels saves time and money both as a customer does not need to go to bank for any kind of transaction except cash withdrawal and cash deposits all other things are done sitting any where in the world. All services or products of HDFC Bank are available through direct banking channels. Free ATM, Net Banking, Mobile Banking, Phone Banking and 24 hours services. Very easy to access and use. A highly personalized services provided by the bank. HDFCs Direct Banking channels provide real time and accurate information. HDFCs Direct Banking is user friendly any one can easily operate it. Now International Debit Card is Free for one year. The Bank has strategic business alliance with Chase Manhattan Bank, largest bank of USA.

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WEAKNESSES Unawareness among customers about all Direct Banking Channels due to less advertisement. Other private banks have started direct banking channels it may put some competition to HDFC Bank in near future. Resistance to Change. One should have the knowledge of the operations of the computers and of course the Internet. OPPORTUNITIES As Nationalized Banks and Co-operative Banks do not provide Direct Banking services, so HDFC Bank can attract more customers. Centralized banking makes easy for HDFC Bank to provide services to customers. Huge market of shareholders. THREATS Competition from other private sector banks. Attacks of web hackers. Personalized attention i.e. relationship banking should be reduced, thus by creating a distance between the bank and its customers.

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CHAPTER 3 RESEARCH METHODOLOGY

Research means search for facts, answers to questions and solutions to problems and Methodology is a way of doing something and methodology is a set of methods used in a particular area of activity. The purpose of our study is to evaluate the customers response towards the study of the difference between the services given by the public bank and private bank. This is an informative survey as it evaluates the customers of the both banks. RESEARCH DESIGN Research design constitutes the blue print for the collection, measurement and analysis of data. The present study seeks to identify the extent of preference among customers for services of HDFC bank. The research has been conducted on users of the city Pathankot. For the selection of the sample, convenient sampling method was adopted and an attempt has been made to include all the age groups and gender DATA SOURCES Both primary and secondary data has been used to achieve the objectives of the study. All data sources are not created equal. Some reference material has more value than others do This does not mean that value equals a greater quantity of

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information. The actual value involves the quality of the information provided. Sources of data can be put into the two general categories of being either primary or secondary. A primary data source is something that originates from first-hand knowledge of the person referenced in the data or from a first-hand witness. I collect this type of data through questionnaires that were filled by the respondents. Secondary data is data that is neither collected directly by the user nor specifically for the user, often under conditions not known to the user. Secondary information has already been collected for some other purposes. Keeping in mind the objectives of the study, the primary data was collected from a sample of 100 respondents belonging to Pathankot who were HDFC bank customers by personally administering the questionnaire. A structured questionnaire was designed as per the objectives of the study. The questionnaire contained questions relating to different dimensions of banking services preferences among the users such as level of usage, benefits accruing to the users of the services and the benefits they get out of it. An attempt was also made to elicit reasons for its non usage. The questions included in the questionnaire offered multiple choices. The data so collected was analysed and interpreted. Analysis of Data and discussion Data so collected was tabulated, analysed and interpretation has been carried out with the help of tables.

33

LIMITATIONS OF THE STUDY The following were the limitations of the study: 1) The study was limited to one city only hence the findings of the study cannot be generalised. 2) The sample size was limited to 100 respondents. Hence, the findings may vary due to change in the size of the sample. 3) The reliability of the data depends upon the responses given by the respondents. 4) Sometimes, the respondents show casual attitude towards

questionnaires which may affect the findings of the study.

34

CHAPTER -4 DATA ANALYSIS AND INTERPRETATION

The data collected was in the raw form. Therefore, it had to be tabulated, analysed and then interpreted in order to get meaningful information from the study. 1) Preference for HDFC bank in opening an account. Reason No. of respondents Percentage Efficient service 66 66 Convenient location 16 16 Acquaintance 14 14 Others 4 4 Total 100 100
70 60 50 40 30 20 10 0 66

%age of respondents

16

14 4

Eff icient service

Convenient location

Acquaintance

Others

Reasons

The survey reveals that 66% respondents prefer HDFC bank for opening the account due to efficient service. 16% respondents prefer this bank because of its convenient location. 14% respondents open account because of acquaintance with the bank officers. 2) Whether the bank solves or replies to your queries quickly.

35

Response Yes No Total

No. of respondents Percentage 96 96 4 4 100 100

4%

96%

Yes

No

96% respondents say that the bank solve the queries of the customer quickly whereas 4% respondents say that the bank does not solve the queries quickly.

36

3)

Whether the bank provides better utility services. Response Yes No Total No. of respondents Percentage 86 86 14 14 100 100

14%

86%

Yes

No

86% respondents say that the bank provides better utility services as compare to other banks while the remaining 14% of the respondents feel that the bank does not provide better services.

37

4)

Whether the staff is cooperative in the bank Response Yes No Total No. of respondents Percentage 95 95 5 5 100 100

5%

95%

Yes

No

The survey reveals that 94% respondents believe that the staff of the bank is more co-operative as compare to other banks and the remaining 6% respondents do not feel that the bank staff is cooperative.

38

5)

Whether Loan is available at lower interest rate in the bank Response Yes No Total No. of respondents Percentage 79 79 21 21 100 100

21%

79%

Yes

No

the survey reveals that 79% respondents feel that the bank offer loans at lower interest rate as compared to other banks whereas 21% respondents feel that the loans are not cheaper in this bank.

39

6)

Rate the bank on the scale of your satisfaction level Rating Very good Good Average Poor Total No. of respondents Percentage 46 46 49 49 5 5 0 0 100 100

60
%age of respondents

50 40 30 20 10 0

46

49

5 Very good Good Average

0 Poor

Rating of Satisfaction Level

The survey reveals that 49% of the respondents are satisfied with the bank services and feel that the bank is good while 46% are highly satisfied and feel that the bank is very good. 5% respondents are not highly satisfied.

40

7)

Time taken by the bank to open the account Time taken Less than a day 1 to 3 days More than 3 days Total No. of respondents Percentage 77 77 23 23 0 0 100 100

90 80 70 60 50 40 30 20 10 0

77

%age of respondents

23 0 Less than a day 1 to 3 days More than 3 days

Time taken to open an account

The survey reveals that 77% respondents say that the bank takes less than 1 day to open the account. 23% respondents say that the bank takes 1 to 3 days to open the account.

41

8)

Time taken by bank to accept cash deposits or pay cash Time taken Less than 5 min 5 to 10 min More than 10 min Total No. of respondents Percentage 50 50 36 36 14 14 100 100

%age of respondents

60 50 40 30 20 10 0

50 36

14

Less than 5 min

5 to 10 min

More than 10 min

Time taken to deposit or pay cash

50% respondents say that the bank takes less than 5 min to deposit or pay cash 36% respondents say that the bank takes 5-10 min to deposit or pay cash whereas 14% respondents say that the bank takes more than 10 min for deposit or pay cash.

42

9)

Would you suggest this bank to others for banking services? Response Yes No Total No. of respondents Percentage 100 100 0 0 100 100

0%

100% Yes No

All the respondents (100%) say that they would suggest others to open account in the bank. None of the respondents said against the bank.

43

10)

Whether grievance-handling procedure in this bank is faster. Response Yes No Total No. of respondents Percentage 98 98 2 2 100 100

2%

98% Yes No

The survey reveals that 98% respondents say that grievance handling procedure is faster in the bank while 2% respondents say that the grievance handling procedure of other banks is good as compared to this bank.

11)

Whether the bank satisfies all your financial needs

44

Response Yes No Total

No. of respondents Percentage 93 93 7 7 100 100

7%

93% Yes No

The survey reveals that 93% respondents are in the favour that this bank satisfies all the financial needs of the customers while the remaining 7% respondents feel that the bank does not fulfil all the financial needs.

12)

Whether innovative services are given by the bank.

45

Response Yes No Total

No. of respondents Percentage 97 97 3 3 100 100

3%

97%

Yes

No

The survey reveals that 97% respondents are in favour that the bank provides the innovative services to the respondents whereas 3% respondents say that the bank gives less innovative services to the customers as compared to other banks.

46

CHAPTER -5 SUMMARY AND CONCLUSION

66% respondents prefer HDFC bank for opening the account due to efficient service. 16% respondents prefer this bank because of its convenient location. 14% respondents open account because of acquaintance with the bank officers. 96% respondents say that the bank solve the queries of the customer quickly whereas 4% respondents say that the bank does not solve the queries quickly. 86% respondents say that the bank provides better utility services as compare to other banks while the remaining 14% of the respondents feel that the bank does not provide better services. 94% respondents believe that the staff of the bank is more co-operative as compare to other banks and the remaining 6% respondents do not feel that the bank staff is cooperative. 79% respondents feel that the bank offer loans at lower interest rate as compared to other banks whereas 21% respondents feel that the loans are not cheaper in this bank. 49% of the respondents are satisfied with the bank services and feel that the bank is good while 46% are highly satisfied and feel that the bank is very good. 5% respondents are not highly satisfied. 77% respondents say that the bank takes less than 1 day to open the account. 50% respondents say that the bank takes less than 5 min to deposit or pay cash
47

36% respondents say that the bank takes 5-10 min to deposit or pay cash. All the respondents (100%) say that they would suggest others to open account in the bank. None of the respondents said against the bank. 98% respondents say that grievance handling procedure is faster in the bank while 2% respondents say that the grievance handling procedure of other banks is good as compared to this bank. 93% respondents are in the favour that this bank satisfies all the financial needs of the customers while the remaining 7% respondents feel that the bank does not fulfil all the financial needs. 97% respondents are in favour that the bank provides the innovative services to the respondents whereas 3% respondents say that the bank gives less innovative services to the customers as compared to other banks. From the above, it can be concluded that most of the respondents are aware of the services given by the both banks either public or private. Only the educated respondents are fully aware of the private banks services. Here, advertisement must play a major role in making both educated and uneducated customers aware of the services offered by the bank. Services given to the senior citizen must attract them.

48

CHAPTER 6 RECOMMENDATIONS AND SUGGESTIONS

The banks should come forward with meaningful advertisements and awareness campaigns to create awareness among customers regarding banking services and to make the banking sector popular among the uneducated masses. The automated systems should be simple to use, fast and user friendly. The services should be standardised so that wherever the solution is used the customer is familiar with the procedure followed. Customers should have ready sources of advice, whether this is through call centres, through publicity or through physical presence. Banking services must be designed to reduce the cost of transactions for the financial institution as much as to deliver value to the customer. However, banking services should give more and more benefits to the customers. Addedvalue services such as loyalty programmes, person-to-person transfers, airtime top up for mobile phones and government payments should be provided. Banks should offer banking services by the way of convenience and reach so that it should be popular among all the age groups.

49

QUESTIONNAIRE
Dear Respondent, I am a student of MBA 2 nd semester at IMT, Gurgaon and conducting a study on Satisfaction Level for Banking Services: A Study of HDFC Bank Customers. I need your cooperation in this regard by filling up the research schedule carefully. All the information provided by you will be kept confidential. 1) Why did you prefer to have account in this bank Efficient service in bank Convenient location [ ] [ ]

Acquaintance with bank officers [ ] Others [ ]

2)

Whether the bank solve queries quickly Yes [ ] No [ ]

3)

Whether Public utility services are good in the bank Yes [ ] No [ ]

4)

Whether the staff of the bank is co-operative Yes [ ] No [ ]

5)

Whether the bank provides loan at lower interest rate Yes [ ] No [ ]

6)

How do you rate the overall satisfaction level in the bank Very good Good Average Poor [ ] [ ] [ ] [ ]

7)

How much time is taken by the bank to open an account 1 to 3 days 3 to 7 days More than 1 week [ ] [ ] [ ]

8)

How much time is taken to deposit the cash? Less than 5 minutes 5 to 10 minutes more than 10 minutes [ ] [ ] [ ]

9)

Would you suggest this bank to others for banking services? Yes [ ] No [ ]

10)

Whether grievance handling procedure is faster in this bank? Yes [ ] No [ ]

11)

Whether this bank satisfies all your financial needs? Yes [ ] No [ ]

12)

Whether innovative services are given by the bank?

ii

Yes

[ ]

No

[ ]

Personal information Name: Age:... Sex: Occupation: Address:

Thanks for your cooperation Kanchan

iii

BIBLIOGRAPHY

BOOKS Jain, T.R (2006), Banking and Insurance, VK Publications, Ambala City. Jain.T.R (2008), Statistics for MBA, 2nd Edition, VK Publications, Ambala City. Kothari, C.R. (2005), Research Methodology, New Age Publishers Pvt. Ltd. Jaipur. Kotler, Philip (2001), Marketing Management, Prentice Hall India, New Delhi. Sontakki, C.N. (2005), Marketing Management, Kalyani Publishers, Ludhiana. Sontakki, C.N. (2005), Consumer Behaviour, Kalyani Publishers, Ludhiana. WEBSITES http://www.emeraldinsight.com/10.1108/eb055 http://www.emeraldinsight.com/10.1108/EUM0000000003126 http://www.joe.org/joe/1997october/iw1.html. www.collegeresearch.us/show_essay/11689.html www.emeraldinsight.com/10.1108/01437720510587307

www.emeraldinsight.com/10.1108/1463444971019547 www.emeraldinsight.com/10.1108/eb003472 www.hdfcbank.com www.smartmanager.us/eprise/main/web/us/

ii

ACKNOWLEDGEMENTS

This project has been made possible through the efforts, support and cooperation of various persons for whom I would like to express my appreciation and gratitude. First and foremost, I am highly indebted to Mr. ________, Branch Manager for allowing me to undergo the summer training in the HDFC Bank,__ Br. I am also thankful to the staff of the bank for their guidance and invaluable suggestions and encouraging attitude during the project work. My academic colleagues and friends deserve my appreciation for extending me their wholehearted cooperation and support. I am also thankful to Prof. S.S. Tagger who provided me technical help in doing the ratio analysis of the project. Last but not the least, I would like to thank my parents who gave me moral and emotional support during the course of study otherwise this project would have remained only and abstract idea.

(___________) Uni. Roll. No. __

A SUMMER TRAINING REPORT

Submitted to

ABC TECHNICAL UNIVERSITY, JALANDHAR

In partial fulfilment of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION (FINANCE)
(2008-2010)

Supervised By: Mr. __

Branch Manager, HDFC Bank Branch

Submitted By: Ms. Kanchan MBA 2nd Semester

Univ. Roll No. 80502317003

INSTITUTE OF ENGINEERING AND TECHNOLOGY

CONTENTS

S. No.

Chapter

Page

Certificate Acknowledgments 1. 2. 3. 4. 5. 6. Introduction Profile of HDFC Bank Research Methodology Data Analysis and Interpretation Summary and Conclusion Recommendations and Suggestions Appendix (Questionnaire) Bibliography 1 19 20 32 33 35 36 47 48 49 50 i iii i - ii

INTRODUCTION

PROFILE OF HDFC BANK

RESEARCH METHODOLOGY

DATA ANALYSIS AND INTERPRETATION

SUMMARY AND CONCLUSION

RECOMMENDATIONS AND SUGGESTIONS

QUESTIONNAIRE

BIBLIOGRAPHY