Roshan Final Project

8/3/2019 Roshan Final Project

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Project: Indian Banking System

IMT Enrollment No.: 0621000460 1

Project on

INDIANBANKING SYSTEM

Project Owner:

Roshan Ara

PGDBM 2006-09

Enrollment No.: 0621000460

Indian Institute of

Management Technology


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DECLARATION

I hereby, declare that my project work entitled Indian Banking

System, submitted in partial fulfillment to the Department of Business

administration, Institute of Management Technology, Ghaziabad, required for

the award of the Post Graduate Diploma in Business Administration (PGDBA),

has been carried out by my own individual effort.

I also declare that, any or all of the contents incorporated in this work,has not been submitted in any form for the award of any other degree of any

other institution or university.

Roshan Ara

Roll No. 0621000460



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ACKNOWLEDGEMENT

I express my heartiest gratitude to Mr. V.K SHARMA (SENIOR MANAGER-

PNB) for giving me an opportunity to prepare a report on the project

assigned to me. I am also thankful to Mrs. S. SAROJA (DEPUTY MANAGER)

under their guidance I undertook this project, for extending the advice and

direction that is required to carry on a study of this nature, and for helping

me with the intricate details of the project at every step. Without their

support and able guidance, it would have been very difficult to finish this

work in the way I have done it.

However, I accept the sole responsibility of any possible errors of omission.

(Roshan Ara )



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Table of Contents

Titles Page No.

Overview 5

Objectives of this project 6

Scope of study 7

Limitation of the study 8

Research Methodology 9

Scope of Banking Sector 10

Banking in India 11

Definition of Banks 13

Types of Banks 14

Banks, operating in India 15

Services providing by the banks 16

Reserve Bank Of India

- Guidelines Provided by the RBI 29

- Guidelines on Fair Practices Code 38

Study of Punjab National Bank 41

Study of HDFC Bank 50



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Overview

Banking in India originated in the first decade of 18th century with The

General Bank of India coming into existence in 1786. This was followed by

Bank of Hindustan. Both these banks are now defunct. The oldest bank in

existence in India is the State Bank of India being established as "The Bank

of Bengal" in Calcutta in June 1806.

The Reserve Bank of India formally took on the responsibility of regulating

the Indian banking sectorfrom1935. After India's independence 1947, the

Reserve Bank was nationalized and given broader powers.

Currently (2007), banking in India is generally fairly mature in terms of

supply, product range and reach-even though reach in rural India still

remains a challenge for the private sector and foreign banks. In terms of

quality of assets and capital adequacy, Indian banks are considered to have

clean, strong and transparent balance sheets relative to other banks in

comparable economies in its region. The Reserve Bank of India is anautonomous body, with minimal pressure from the government. The

stated policy of the Bank on the Indian Rupee is to manage volatility but

without any fixed exchange rate-and this has mostly been true.

The Modern Banking Functions are Fund based and Non-Fund based

functions. These functions of a bank are those in which banks extend various

services to their customers or add their commitments to certain transactions

undertaken by their clients and charge their fees/ commissions for the

services rendered by them / their commitments added to the transactions

undertaken by the clients. The activities popularly known as Non-fund

facilities provided by Banks.



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Objectives of this project

To study broad outlines of management of credit, market and

operational risks associated with banking sector.

Understanding the importance of

banking sector and it vital role in the

economy.

In depth knowledge of banking in

Indian Market by studying corporate

and commercial banks with their

challenging facing.

Overview of services being provided by the banks to corporate and

public.

Knowing all the techniques involved and method lies in banking.



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Scope of this study

A healthy banking system is essential for

any economy striving to achieve good

growth and yet remain stable in an

increasingly global business environment.

The Indian banking system, with one of the

largest banking networks in the world, has

witnessed a series of reforms over the past

few years like the deregulation of interest

rates, dilution of the government stake in public sector banks (PSBs), and

the increased participation of private sector banks. The growth of the retail

financial services sector has been a key development on the market front.

Indian banks (both public and private) have not only been keen to tap the

domestic market but also to compete in the global market place.

The corporate sector has stepped up its demand for credit to fund its

expansion plans; there has also been a growth in retail banking.

The report seeks to present a comprehensive picture of the various types of

bank. The banks can be broadly classified into two categories:-

Nationalise Bank

Private Bank

Within each of these broad groups, an attempt has been made to cover as

comprehensively as possible, under the various sub-groups.



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Limitation of the study

Every work has its own limitation. Limitations are extent to which the process

should not exceed. Limitations of this project are:-

1. The project was constrained by time limit of two months.

2. The major limitation of this study shall be data availability as the data

is proprietary and not readily shared for dissemination.

3. Due to the ongoing process of globalization and increasing

competition, no one model or method will suffice over a long period of

time and constant up gradation will be required. As such the project canbe considered as an overview of the various banks prevailing in Punjab

National Bank and in the Banking Industry.

4. Each bank, in conforming to the RBI guidelines, may develop its own

methods for measuring and managing risk.

5.The project study is restricted to banking sector used in India only.

6. The conclusion made is based on a sample study and does not apply toall the Individuals.

7. In India the banks are being segregated in different groups. Each

group has their own benefits and limitations in operating in India.

8.All banks are not included.



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Research Methodology

The first stage included the introduction of Indian Banks and how they work

in India. I choose five criteria Growth, Credit quality, Strength, Profitability,

Efficiency / Profitability. The next stage involved determining the objectives

of the study, drafting a questionnaire will be designed keeping in mind the

target audience and objectives of the study. It will non-disguised in nature

and will include a few open-ended questions.

DATA COLLECTIONS

The data from such organization has also been collected.

Primary data

The primary data will be collected through the questionnaire designed. In the

process of data collection we went to the respective bank to get the

questionnaire filled. The preparation of the project report required me to visit

the various other companies like Punjab National Bank, ICICI bank , State

Bank of India, Central Bank, IDBI bank, HDFC bank etc. in order to collect

data.

Secondary data

The Preparation of the project report also required data from various

journals, newspapers ( like The Economic Times, Times of India etc.) books (

like Working Capital Management written by Sarbesh Mishra and Financial

Service written by M Y Khan etc.)



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Scope of Banking Sector

Banking business has a history of over 200 years. From the times of the

Bank of Bengal (1806) the sector has been witnessing qualitative and

quantitative changes. Main players during the pre-independence period were

Credit Lyonnais, Allahabad Bank, Punjab National Bank and Bank of India.

With 1935 regulation the Reserve Bank of India was proclaimed the Central

Bank of India and was vested with controlling powers over the commercial

banks.

The drastic development taken place during the first 25 years since

independence was Nationalization of many private banks. With this, the

central government became major policy maker for these nationalized banks

With economic liberalization measures many private and foreign banking

companies were allowed to operate in the country. Favorable economic

climate and a variety of other factors such as demand for wide range of

financial products from various sections of the society led to mutually

beneficial growth to the banking sector and economic growth process. This

was coincided by technology development in the banking operations. Today

most of the Indian cities have networked banking facility as well as Internet

banking facility. A customer is empowered to operate his account from any

part of the country. UTI Bank, ICICI, HDFC Bank and Bank of Punjab are the

main winners of the race.

Banking in India



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Banking in India originated in the first decade of 18th century with The

General Bank of India coming into existence in 1786. This was followed by

Bank of Hindustan. Both these banks are now defunct. The oldest bank in

existence in India is the State

Bank of India being established as

"The Bank of Bengal" in Calcutta

in June 1806. A couple of decades

later, foreign banks like Credit

Lyonnais started their Calcutta

operations in the 1850s. At that

point of time, Calcutta was the

most active trading port, mainly

due to the trade of the British

Empire, and due to which banking

activity took roots there and

prospered. The first fully Indian

owned bank was the Allahabad Bank, which was established in 1865.

By the 1900s, the market expanded with the establishment of banks such as

Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, inMumbai - both of which were founded under private ownership. The Reserve

Bank of India formally took on the responsibility of regulating the Indian

banking sector from 1935. After India's independence in 1947, the Reserve

Bank was nationalized and given broader powers.

http://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/Credit_Lyonnaishttp://en.wikipedia.org/wiki/Credit_Lyonnaishttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/Credit_Lyonnaishttp://en.wikipedia.org/wiki/Credit_Lyonnaishttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_India


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Reserve Bank of India

Central Bank and superme monetary

authority

Co-Operative BanksCommercial Banks

Foreign

Banks(40)

Regional

RuralBank

(196)

Urban Co-operatives

(52)

State Co-

operatives(16)

Public Sector Banks (27) Private Sector Bank (30)

Old (22) New (8)

State Bank ofIndia & Associate

Banks (8)

OtherNationalised

Banks (19)


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Introduction

Definition of the Bank:-Financial institution whose primary activity is to

act as a payment agent for customers and to borrow and lend money. Banks

are important players of the market and offer services as loans and funds.

Banking was originated in 18th century

First bank were General Bank of India and Bank of Hindustan, now

defunct.

Punjab National Bank and Bank of India was the only private bank in

1906.

Allahabad bank first fully India owned bank in 1865.


State

Bank ofIndia

Bank ofBomba

y

Bank ofMadras

Bank of

Bengal

Imperia

l Bankof India


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Types of banking

1. Commercial banks

Commercial bank is the term used for a normal bank to distinguish it from

an investment bank. (After the great depression, the U.S. Congress required

that banks only engage in banking activities, whereas investment banks

were limited to capital markets activities. This separation is no longer

mandatory.)

Commercial bank can also refer to a bank or a division of a bank that mostly

deals with deposits and loans from corporations or large businesses, as

opposed to normal individual members of the public (retail banking). It is

the most successful department of banking.

2. Community development bank

The regulated banks who provide financial services and credit to

underserved markets or populations.

3. Private banks

Those manage the assets of high net worth individuals.

4. Offshore banks

Offshore banks locate in jurisdictions with low taxation and regulation. Many

offshore banks are essentially private banks.

5. Savings banks

Those banks accept saving deposits and pay interest in return.

6. Postal savings banks

http://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Commercial_bank


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Such kind of banks is associated with national postal systems.

Banks, operating in India

Below are few names of banks operating in India:

Private sector bank

HDFC, ICICI, Axis bank, IDBI Bank, Yes bank, Kotak Mahindra bank,Bank of Rajasthan

Rural bank

United bank of India, Syndicate bank, National Bank for Agriculture andRuralDevelopment (NABARD)

Commercial bank

State Bank of India, Central Bank, Punjab National Bank, HSBC, ICICI,

HDFC, Canara Bank

Retail bank

Bank of Baroda, Punjab National Bank

Universal bank

Deutsche bank



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Services provided by the bank

Banks provide two types of services:

1. Fund Based

2. Non- Based


Fund BasedServices

Non-FundBased Services

Banking Services


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Fund Based and Non-Fund Based Functions

The difference between fund-based and non-fund based credit assistance

lies mainly in the cash outflow. While the former involves all immediate cash

outflow, the latter may or may not involve cash outflow from a banker. In

other words, a fund based credit facility to a borrower would result in

depletion of actual liquidity of a banker immediately whereas grant of non-

fund based credit facilities to a borrower may or may not affect the bankers

liquidity. This is, of course, not to suggest that there is more risk in fund-

based lending than non-fund based lending, on the contrary, the experience

of bankers, in general, has been that the risk exposure in, non-fund based

credit facilities has been much higher than fund-based facilities. This is

found to be due to lack of proper appraisal on the part of the banker of an

application for non-fund facilities. It is therefore, to be appreciated that

proposals for both the fund-based and non-fund based limits deserve and

call for the same standard of scrutiny and appraisal. In next chapters I shall

be elaborating those services.



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FUND BASED FACILITY

Fund based functions of a bank are those in which banks make deployment

of their funds either by granting advances or by making investments formeeting gaps in funds requirements of their customers/ borrowers. Fund-

based functions of a bank may be classified into two parts:

Granting of Loans and Advances

Making Investments in shares/ debentures/ bonds.


Fund Based Services

Loans & Advances Leasing & Hire Purchase Investment

Commercial Loans Personal Loans

Capital Market

Investment

Debt MarketInvestment


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LOANS AND ADVANCES

1. Commercial Loans Segment

A. Working Capital

Working Capital is Current assets minus current liabilities. Working capital

measures how much in liquid assets a company has available to build its

business. The number can be positive or negative; depending on how much

debt the company is carrying. In general, companies that have a lot of

working capital will be more successful since they can expand and improve

their operations. Companies with negative working capital may lack the

fundsnecessary for growth, also called net current assets or current capital.

This is the loan whose purpose is to finance everyday operation of a

company. A working capital loan is not used to buy long-term assets or

investments. Instead it's used to clear up accounts payable, wages, etc.

I. Cash Credit

This is the facility given by the bankers to the customer by the way of a

certain amount of credit facility. Its limit is fixed on the basis of security of

the company`s current assets.

II. Overdraft

Banks allow selected customers to write cheques in excess of the balance in

their current account, ie, to overdraw. Overdrafts are arranged up to limits

which depend on the customer's credit standing and the bank manager's

humor. The arrangements allow flexibility in the amount spent and, equally,

allow flexibility in repayments (although technically a bank can demand

repayment of an overdraft within 24 hours). In that respect overdrafts are

unlike personal loans, which are structured with regular repayments.

Interest on overdrafts is charged on the fluctuating daily balance.

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III. Bills Finance There are three types of credit facilities under Bills

Finance They are.

1. Bills purchase

2. Bill discount

3. Advance against Bills for collection.

1. Bills Purchase: - When the bank negotiates bill payable on demand

when clean or documentary, the facility is known as Bills purchase. The

face value of the bill is immediately paid to the holder of the bill. After

purchasing the bill the bank becomes the holder in due course and value

and acquires all rights of ownership over the instrument.

2. Bills discounting: - When the bank credits value of the bill (less

discount) which is payable on a future date after acceptance by the

drawee it is said to be bill discount. It should be remembered that

demand bill is purchased and time bill is discounted.

3. Advance against Bills for collection: - When the bank advancesagainst the bill send for collection the facility is known as ABC Under this

type of facility, a prescribed margin is kept by the bank.

B. Tem LoansA bank loan to a company, with a fixed maturity and often featuring

amortization ofprincipal. If this loan is in the form of a line of credit, the

funds are drawn down shortly after the agreement is signed. Otherwise, theborrower usually uses the funds from the loan soon after they become

available. Bank term loans are very a common kind oflending.

I. Capital Expenditure

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Money spent to acquire or upgrade physical assets such as buildings and

machinery. Also called capital spending or capitalexpense.

II. Equipment Finance

Equipment finance gives business the equipment, software, and furniture it

needs in order to operate successfully and make a profit. One excellent way

to obtain equipment finance is through a lease. A lease is great for

businesses because it does not tie up cash, receivables, credit cards, or bank

lines. Equipment finance through a lease is appealing to businesses because

they do not need large amounts of collateral in order to get approved. The

other major positive is that with a lease the taxes can be expensed.

III. Project Finance

Financing arrangements where the funds are made available for a specific

purpose (the project), with the loan repayments geared to the project's cash

flow. Project finance is used in connection with raising large amounts of

money for big-ticket, energy-related facilities. The term has come to be

loosely applied to various forms of financing. 'A financing of a particular

economic unit in which a lender is satisfied to look initially to the cash flows

and earnings of that economic unit as the source of funds from which a loan

will be repaid and to the assets of the economic unit as collateral for the

loan.

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2. Personal Loans Segment

Loan granted for personal, family, or household use, as distinguished from a

loan financing a business. Though in some situations the lender may require

a co-signer or guarantor. If unsecured, the loan is made on the basis of the

borrower's integrity and ability to Pay. Generally, these loans are used for

debt consolidation, or to pay for vacations, education expenses, or medical

bills, and are amortized over a fixed term with regular payments of principal

and interest.

I. Consumer Loans Advance against Shares

II. Housing Loans

III. Education Loans.

Non-Fund based services

It is generally perceived that the non-fund based business is very

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remunerative to bank and the borrowers. The banks, besides getting

handsome commission or fee and some other service charges, also get the

low cost deposits in the shape of margin and ancillary business. The funds of

the borrower are not blocked in the advances to be given to the suppliers or

beneficiaries and this keeps his liquidity position comfortable, production

smooth and costs low.

Purpose For Non-Fund Based Facilities

The borrowers need such facilities not only for purchases of current assets

or financing there of or take benefit of certain services with the help of non-

fund based facilities. They also need the facilities for acquisition of fixed

assets including their financing.

FUNDS REMITTANCE/ TRANSFER FACILITIES

Issue of demand draft


Non-Fund Based

Services

Letter of Credit/Bank Guarantee

Merchant BankingFunctions

Agency FunctionsFunds

remittance/TransferFacilities


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Collection of bills and cheques

Letter of credit

Bank guarantee

AGENCY FUNCTIONS

Collecting of B/E, P-notes, cheques & securities

Selling of products of insurance co./ MF

Granting & issuing LC, traveler's cheque

Agent for any govt., local authority, etc

MERCHANT BANKING

Syndication of loans

Venture capital finance

Public issue management

Corporate counseling

Mergers & acquisitions

Portfolio management services

Investment counseling

E-BANKING

Electronic payment system

ATM

Tele-banking

Credit card and debit card

Online banking

MOBILE BANKING

Account services



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Credit card services

DEMAT account

Loan account services

Bill services

Other services

DEPOSIT SCHEMES FOR NRI's

Foreign Currency Nonresident (FCNR-B) Deposits :

Tax Exemption

Choice of Currency Remit in any Currency

Minimum & Maximum Amount

Joint account

Power of Attorney (P/A)

Nomination

Resident Foreign Currency (RFC)

Deposits Returning Indians for permanent settlement, after staying

abroad for not less than one year, can-

Retain their savings in foreign currency in a RFC account.

Get the proceeds of FCNR (B)/NRE Deposits credited to this account.

Non Resident external (NRE)

Deposits can be placed in

Savings Bank A/c

Fixed Deposit A/c



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Non Resident Ordinary (NRO) Deposits

Where an Indian citizen having a resident account leaves India and

becomes non-resident, his resident account should be designated as

NRO account.

Where non-resident Indian receives income in India, he can open a

NRO a/c with such funds.

RBI Norms

Prudential exposure norms as per extant guidelines of Reserve Bank of India



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provides that the maximum exposure of a bank for all its Fund based and

Non-fund based credit facilities, investments, underwriting, investments in

Bonds and commercial paper and any other commitment should not exceed

25 percent of its (bank's) net worth to an individual borrower and 50 percent

of its, net worth to a 'group'. It may however, be rioted that while calculating

exposure, the Non-fund based facilities are to be taken at 50 percent of

the sanctioned limit. To illustrate the point let us consider the following

example:-

Example1.

Particulars Rs. Rs. In

crores

Net worth of the bank

Maximum exposure permitted for an individualborrower (25% of net worth of the bank)Working Capital Control and Banking Policy

Maximum exposure permitted for all borrowers

under the same group (50% of net worth of thebank)

175

350

700

657

Example1.



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Particulars Rs.

Limits sanctioned to borrower

Fund Based

Non-Fund Based 100

Total 200

Total Exposure

For Fund Based limits@ 50% of limits

For Non-Fund based limits 50@ 50% of limits

100

100

200

100

50

Total 150

Total credit limits to the above borrower are Rs.200 crores which are in

excess of the maximum exposure norm of Rs. 175 crores. but for the

purpose of determining exposure we have taken non-fund based limits at 50

percent of its value and total exposure is taken at 150 crores which is well

within the norm.

Reserve Banks of India

The Reserve Bank of India was established on April



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1, 1935 in accordance with the provisions of the Reserve Bank of India

Act, 1934.

The Central Office of the Reserve Bank was initially established in Calcutta

but was permanently moved to Mumbai in 1937. The Central Office is where

the Governor sits and where policies are formulated.

Though originally privately owned, since nationalisation in 1949, the Reserve

Bank is fully owned by the Government of India.

Guidelines on Ownership and Governance in Private Sector

Banks

Banks are "special" as they not only accept and deploy large amount of

uncollateralized public funds in fiduciary capacity, but they also leverage such

funds through credit creation. The banks are also important for smooth

functioning of the payment system. In view of the above, legal prescriptions

for ownership and governance of banks laid down in Banking Regulation Act,

1949 have been supplemented by regulatory prescriptions issued by RBIfrom time to time.

1. The existing legal framework and significant current practices in

particular cover the following aspects:

I. The composition of Board of Directors comprising members with

demonstrable professional and other experience in specific sectors like

agriculture, rural economy, co-operation, SSI, law, etc., approval of Reserve

Bank of India for appointment of CEO as well as terms and conditions

thereof, and powers for removal of managerial personnel, CEO and directors,

etc. in the interest of depositors are governed by various sections of the B.R.

Act, 1949.

http://www.rbi.org.in/scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Acthttp://www.rbi.org.in/scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Acthttp://www.rbi.org.in/scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Acthttp://www.rbi.org.in/scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Act


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II. Guidelines on corporate governance covering criteria for appointment of

directors, role and responsibilities of directors and the Board, signing of

declaration and undertaking by directors, etc., were issued by RBI on June

20, 2002 and June 25, 2004, based on the recommendations of Ganguly

Committee and a review by the BFS.

III. Guidelines for acknowledgement of transfer/allotment of shares in

private sector banks were issued in the interest of transparency by RBI on

February 3, 2004.

IV. Foreign investment in the banking sector is governed by Press Note

dated March 5, 2004 issued by the Government of India, Ministry of

Commerce and Industries.

V. The earlier practice of RBI nominating directors on the Boards of all

private sector banks has yielded place to such nomination in select private

sector banks.

2. Against this background, it is considered necessary to lay down a

comprehensive framework of policy of ownership and governance in

the Indian private sector banks with a transparency.

3. The broad principles underlying the framework of policy relating to

ownership and governance of private sector banks would have to

ensure that

(i) The ultimate ownership and control of private sector banks is well

diversified. While diversified ownership minimises the risk of misuse or

imprudent use of leveraged funds, it is no substitute for effective regulation.

Further, the fit and proper criteria, on a continuing basis, has to be the over-

riding consideration in the path of ensuring adequate investments,

appropriate restructuring and consolidation in the banking sector. The pursuit

of the goal of diversified ownership will take account of these basic



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objectives, in a systematic manner and the process will be spread over time

as appropriate.

(ii) Important Shareholders (i.e., shareholding of 5 per cent and above) are

fit and proper, as laid down in the guidelines dated February 3, 2004 on

acknowledgement for allotment and transfer of shares.

(iii) The directors and the CEO who manage the affairs of the bank are fit

and proper as indicated in circular dated June 25, 2004 and observe sound

corporate governance principles.

(iv) Private sector banks have minimum capital/net worth for optimal

operations and systemic stability.

(v) The policy and the processes are transparent and fair.

4. Minimum capital

The capital requirement of existing private sector banks should be on par

with the entry capital requirement for new private sector banks prescribed in

RBI guidelines of January 3, 2001, which is initially Rs.200 crore, with a

commitment to increase to Rs.300 crore within three years. In order to meet

with this requirement, all banks in private sector should have a net worth of

Rs.300 crore at all times. The banks which are yet to achieve the required

level of net worth will have to submit a time-bound programme for capital

augmentation to RBI. Where the net worth declines to a level below Rs.300

crore, it should be restored to Rs. 300 crore within a reasonable time.

5. Shareholding

I. The RBI guidelines on acknowledgement for acquisition or transfer of

shares issued on February 3, 2004 will be applicable for any acquisition of



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shares of 5 per cent and above of the paid up capital of the private sector

bank.

II. In the interest of diversified ownership of banks, the objective will be to

ensure that no single entity or group of related entities has shareholding or

control, directly or indirectly, in any bank in excess of 10 per cent of the paid

up capital of the private sector bank. Any higher level of acquisition will be

with the prior approval of RBI and in accordance with the guidelines of

February 3, 2004 for grant of acknowledgement for acquisition of shares.

III. Where ownership is that of a corporate entity, the objective will be to

ensure that no single individual/entity has ownership and control in excess of

10 per cent of that entity. Where the ownership is that of a financial entity

the objective will be to ensure that it is a well established regulated entity,

widely held, publicly listed and enjoys good standing in the financial

community.

IV. Banks (including foreign banks having branch presence in India)/FIs

should not acquire any fresh stake in a banks equity shares, if by such

acquisition, the investing banks/FIs holding exceeds 5 per cent of the

investee banks equity capital as indicated in RBI circular dated July 6, 2004.

V. As per existing policy, large industrial houses will be allowed to acquire,

by way of strategic investment, shares not exceeding 10 per cent of the paid

up capital of the bank subject to RBIs prior approval. Furthermore, such a

limitation will also be considered if appropriate, in regard to important

shareholders with other commercial affiliations.

VI. In case of restructuring of problem/weak banks or in the interest ofconsolidation in the banking sector, RBI may permit a higher level of

shareholding, including by a bank.

6. Directors and Corporate Governance



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I. The recommendations of the Ganguly Committee on corporate governance

in banks have highlighted the role envisaged for the Board of Directors. The

Board of Directors should ensure that the responsibilities of directors are well

defined and the banks should arrange need-based training for the directors in

this regard. While the respective entities should perform the roles envisaged

for them, private sector banks will be required to ensure that the directors on

their Boards representing specific sectors as provided under the B.R. Act, are

indeed representatives of those sectors in a demonstrable fashion, they fulfil

the criteria under corporate governance norms provided by the Ganguly

Committee and they also fulfil the criteria applicable for determining fit and

proper status of Important Shareholders (i.e., shareholding of 5 per cent and

above) as laid down in RBI Circular dated June 25, 2004.

II. As a matter of desirable practice, not more than one member of a family

or a close relative (as defined under Section 6 of the Companies Act, 1956)

or an associate (partner, employee, director, etc.) should be on the Board of

a bank.

III. Guidelines have been provided in respect of 'Fit and Proper' criteria for

directors of banks by RBI circular dated June 25, 2004 in accordance with the

recommendations of the Ganguly Committee on Corporate Governance. For

this purpose a declaration and undertaking is required to be obtained from

the proposed / existing directors

IV. Being a Director, the CEO should satisfy the requirements of the fit and

proper criteria applicable for directors. In addition, RBI may apply any

additional requirements for the Chairman and CEO. The banks will be

required to provide all information that may be required while making an

application to RBI for approval of appointment of Chairman/CEO.

7. Foreign investment in private sector banks

In terms of the Government of India press note the aggregate foreign



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investment in private banks from all sources (FDI, FII, NRI) cannot exceed

74 per cent. At all times, at least 26 per cent of the paid up capital of the

private sector banks will have to be held by resident Indians.

7.1 Foreign Direct Investment (FDI) (other than by foreign banks or

foreign bank group)

i. The policy already articulated in guidelines for determining fit and proper

status of shareholding of 5 per cent and above will be equally applicable for

FDI. Hence any FDI in private banks where shareholding reaches and

exceeds 5 per cent either individually or as a group will have to comply with

the criteria indicated in the aforesaid guidelines and get RBI

acknowledgement for transfer of shares.

ii. To enable assessment of fit and proper the information on

ownership/beneficial ownership as well as other relevant aspects will be

extensive.

7.2 Foreign Institutional Investors (FIIs)

i. Currently there is a limit of 10 per cent for individual FII investment with

the aggregate limit for all FIIs restricted to 24 per cent which can be raised

to 49 per cent with the approval of Board/General Body. This dispensation

will continue.

ii. The present policy requires RBIs acknowledgement for

acquisition/transfer of shares of 5 per cent and more of a private sector bank

by FIIs based upon the policy guidelines on acknowledgement of

acquisition/transfer of shares issued. For this purpose RBI may seek

certification from the concerned FII of all beneficial interest.

7.3 Non-Resident Indians (NRIs)

Currently there is a limit of 5 per cent for individual NRI portfolio investment



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with the aggregate limit for all NRIs restricted to 10 per cent which can be

raised to 24 per cent with the approval of Board/General Body. Further, the

policy guidelines on acknowledgement for acquisition/transfer will be applied.

8. Due diligence process

The process of due diligence in all cases of shareholders and directors as

above, will involve reference to the relevant regulator, revenue authorities,

investigation agencies and independent credit reference agencies as

considered appropriate.

9. Transition arrangements

I. The current minimum capital requirements for entry of new banks is

Rs.200 crore to be increased to Rs.300 crore within three years of

commencement of business. A few private sector banks which have been in

existence before these capital requirements were prescribed have less than

Rs.200 crore net worth. In the interest of having sufficient minimum size for

financial stability, all the existing private banks should also be able to fulfil

the minimum net worth requirement of Rs.300 crore required for a new

entry. Hence any bank with net worth below this level will be required tosubmit a time bound programme for capital augmentation to RBI for

approval.

II. Where any existing shareholding of any individual entity/group of entities

is 5 per cent and above, due diligence outlined in the guidelines will be

undertaken to ensure fulfillment of fit and proper criteria.

III. Where any existing shareholding by any individual entity/group of

related entities is in excess of 10 per cent, the bank will be required to

indicate a time table for reduction of holding to the permissible level. While

considering such cases, RBI will also take into account the terms and

conditions of the banking licenses.



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IV. Any bank having shareholding in excess of 5 per cent in any other bank

in India will be required to indicate a time bound plan for reduction in such

investments to the permissible limit. The parent of any foreign bank having

presence in India, having shareholding directly or indirectly through any

other entity in the banking group in excess of 5 per cent in any other bank in

India will be similarly required to indicate a time bound plan for reduction of

such holding to 5 per cent.

V. Banks will be required to undertake due diligence before appointment of

directors and Chairman/CEO on the basis of criteria that will be separately

indicated and provide all the necessary certifications/information to RBI.

VI. Banks having more than one member of a family, or close relatives or

associates on the Board will be required to ensure compliance with these

requirements at the time of considering any induction or renewal of terms of

such directors.

VII. Action plans submitted by private sector banks outlining the milestones

for compliance with the various requirements for ownership and governance

will be examined by RBI for consideration and approval.

10. Continuous monitoring arrangements

i. Where RBI acknowledgement has already been obtained for transfer of

shares of 5 per cent and above, it will be the banks responsibility to ensure

continuing compliance of the fit and proper criteria and provide an annual



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certificate to the RBI of having undertaken such continuing due diligence.

ii. Similar continuing due diligence on compliance with the fit and proper

criteria for directors/CEO of the bank will have to be undertaken by the bank

and certified to RBI annually.

iii. RBI may, when considered necessary, undertake independent verification

of fit and proper test conducted by banks through a process of due diligence

as described in paragraph 8

11. On the basis of such continuous monitoring, RBI will consider

appropriate measures to enforce compliance.

Guidelines on Fair Practices Code

Loan application forms shall be comprehensive to include information

about rate of interest (fixed/floating) and manner of charging

(monthly/quarterly/half yearly/ rest), process fees and other charges,



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penal interest rates, pre-payment options and any other matter which

affects the interest of the borrower, so that a meaningful comparison with

that of other banks can be made and informed decision can be taken by

the borrower.

Banks and Financial Institution should devise a system of giving

acknowledgement for receipt of all loans application. Banks/ Financial

Institutions should verify the loan application within a reasonable period

of time. If additional details / documents are required, they should

intimate the borrowers immediately. If all the requirements are complied

with the borrowers, banks/ Financial Institution should acknowledge for

the same and state the specific time period from the date of

acknowledgement within which a decision on the specific loan request will

be conveyed to the borrowers.

Acknowledgement should also state the amount of process fees paid or to

be paid and the extent to which such fees shall be refunded in the event

of rejection of any application for loan.

In the case of rejection of any loan application, lenders should convey in

writing the specific reasons thereof.

Terms and conditions and other caveats governing credit facilities given

by banks / Financial Institution arrived at after negotiation by the lending

institution and the borrower should be reduced in writing duly witnessed

and certified by the authorised sanctioning authority; in respect of



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advances sanctioned by the Board of Directors or its committee the

documents of understanding should be certified by the authorised

signatory preferably at company secretary level. A copy of such

agreement should be made available to the borrowers for their record.

Lenders should ensure that there is proper assessment of credit

requirement of borrowers. The credit limit, which may be sanctioned,

should be mutually settled.

Lenders should ensure timely disbursement of loans sanctioned.

Stipulation of margin and security should be based on due diligence and

credit worthiness of borrowers.

Lenders should keep the borrowers apprised of the state of their accounts

from time to time and shall give notice of any change in the terms and

conditions including interest rates and charges are effected only

prospectively. To ensure the above, Banks / Financial Institution should

create appropriate information dissemination mechanism.

The loan agreement should clearly specify the liability of lenders to

borrowers in regard to allowing drawings beyond the sanctioned limits,

honouring the cheques issued for the purpose other than agreed,

disallowing large cash withdrawals and obligation to meet further



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requirements of the borrowers on account of growth in business etc.

without proper revision and sanction in credit limits, and disallowing

drawings on a borrower account on its classification as a non-performing

assets or on account of non-compliance with the terms of sanction.

Lenders should give reasonable notice to borrowers before taking decision

to recall / accelerate payment or performance under the agreement or

seeking additional securities.

Lenders should release all securities on receiving payment of loan or

realisation of loan subject to any legitimate right of lien for any other

claim lenders may have against borrowers. If such right of set off is to be

exercised, borrowers shall be given notice about the same with full

particulars about the remaining claims and the documents under which

lenders are entitled to retain the securities till the relevant claims are

settled / paid.

PUNJAB NATIONAL BANK



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Registered Office: - 7, Bhikhaiji Cama Place, New Delhi-110 066

Website: - www.pnbindia.com

ORIGIN

Punjab national bank was established in 1895 at Lahore, undivided India,

Punjab National Bank (PNB) has the distinction of being the first Indian bank

to have been started solely with Indian capital. The bank was nationalized in

July 1969 along with 13 other banks. From its modest beginning, the bank

has grown in size and stature to become a front-line banking institution in

India at present.

PROFILE

With its presence virtually in all the important centers of the country, Punjab

National Bank offers a wide variety of banking services which include

corporate and personal banking, industrial finance, agricultural finance,

financing of trade and international banking. Among the clients of the Bank

are Indian conglomerates, medium and small industrial units, exporters, non-

resident Indians and multinational companies. The large presence and vast

resource base have helped the Bank to build strong links with trade and

industry.

Punjab National Bank is serving over 3.5 crore customers through 4540

Offices including 421 extension counters - largest amongst Nationalized

Banks.

Punjab National Bank with 112 year tradition of sound and prudent

banking is one among 300 global companies and seven Indian companies

which are expected to emerge as challengers to Worlds leading blue chip

companies. While among top 1000 world banks, The Banker, the leading

magazine in London, has placed PNB at the 248th position, the bank features

at 1308th position among Forbes Global 2000 list of global giants and fast

growing companies.

http://www.pnbindia.com/http://www.pnbindia.com/


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At the same time, the bank has been conscious of its social

responsibilities by financing agriculture and allied activities and small scale

industries (SSI). Considering the importance of small scale industries bank

has established 31 specialised branches to finance exclusively such

industries.

Strong correspondent banking relationship which Punjab National Bank

maintains with over 200 leading international banks all over the world

enhances its capabilities to handle transactions world-wide. Besides, bank

has Rupee Drawing Arrangements with 15 exchange companies in the Gulf

and one in Singapore. Bank is a member of the SWIFT and over 150

branches of the bank are connected through its computer-based terminal at

Mumbai. With its state-of-art dealing rooms and well-trained dealers, the

bank offers efficient forex dealing operations in India.

The bank has been focusing on expanding its operations outside India

and has identified some of the emerging economies which offer large

business potential. Bank has set up representative offices at Almaty:

Kazakhistan, Shanghai: China and in London. Besides, Bank has opened a

fully fledged Branch in Kabul, Afghanistan.

Keeping in tune with changing times and to provide its customers more

efficient and speedy service, the Bank has taken major initiative in the field

of computerization. All the Branches of the Bank have been computerized.

The Bank has also launched aggressively the concept of "Any Time, Any

Where Banking" through the introduction of Centralized Banking Solution

(CBS) and over 2409 offices have already been brought under its ambit.

PNB also offers Internet Banking services in the country for Corporates

as well as individuals. Internet Banking services are available through all

Branches of the Bank networked under CBS. Providing 24 hours, 365 days

banking right from the PC of the user, Internet Banking offers world class

banking facilities like anytime, anywhere access to account, complete details



43/74


of transactions, and statement of account, online information of deposits,

loans overdraft account etc. PNB has recently introduced Online Payment

Facility for railway reservation through IRCTC Payment Gateway Project and

Online Utility Bill Payment Services which allows Internet Banking account

holders to pay their telephone, mobile, electricity, insurance and other bills

anytime from anywhere from their desktop.

Another step taken by PNB in meeting the changing aspirations of its

clientele is the launch of its Debit card, which is also an ATM card. It enables

the card holder to buy goods and services at over 99270 merchant

establishments across the country. Besides, the card can be used to

withdraw cash at more than 25000 ATMs, where the 'Maestro' logo is

displayed, apart from the PNB's over 1094 ATMs and tie up arrangements

with other Banks.

VISION AND MISSION

VISION

To evolve and position the Bank as a world class progressive cost effective

and customer friendly institution providing comprehensive financial and

related services; integrating frontiers of technology and serving various

segments of society especially the weaker section; committed to excellence

in serving the public and also excellence in serving the public and also

excelling in corporate values.

MISSION

To provide excellent professional services and improve its position as a



44/74


leader in the field of financial and related services; build and maintain a team

of motivated and committed workforce with high work ethos; use latest

technology aimed at customer satisfaction and act as an effective catalyst for

socio-economic development

AWARDS & ACHIEVEMENTS OF PUNJAB NATIONAL

BANK

"Best IT Team of the Year Award" One of India's "Most Innovative

Companies".

Best IT User in Banking & Financial

Services Industry - 2004

by NASSCOM in partnership with Economic

Times

Golden Peacock Award for Excellence in Corporate Governance - 2005

by Institute of Directors

National Award for Excellence in SSI

Lending

Ranked 2nd for 4 consecutive years - 2002,

2003, 2004 & 2005

Money Outlook Award 2004 Runner up in 'Best Bank (public Sector) of the

year Award' -2005

THE DIRECORS OF PUNJAB NATIONAL BANK

BOARD FO DIRECTORS

Dr K.C. Chakrabarthy Chairman & Managing Director

Shri K.Raghuraman Executive Director

Shri .J.M.Gerg Exective Director

DIRECTOR

Shri .Ravneet Kaur Govt. of India Nominee Director

Shri .L.M.Fonseca Reserve bank of India Nominee Director

Shri .S.R.Khurana Director Rep.C.A.catagory

Shri P.K.Nayar Officer Employee Director

Shri.Mohan Lal Workmen Employee director Dr.Harsh Mahajan Share holder Director

Shri.Prakash Agrawal Shareholder Director

Shri Gautam P.Khandelwal Part-time non-official Director

Shri Mushtaq A Antulay Part-time non-official Director



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PNB`S KEY COMMITMENTS

We promise to:

1) Act fairly and reasonably in all our dealings with you by:

meeting the commitments and standards in this Code, for the products and

services we offer, and in the procedures and practices our staff follow

making sure our products and services meet relevant laws and regulations

our dealings with you will rest on ethical principles of integrity and

transparency.

2) Help you to understand how our financial products and services work by:

giving you information about them in plain Hindi and/or English and/or the

local language

explaining their financial implications and

helping you chooses the one that meets your needs.

3) Dealquickly and sympathetically with things that go wrong by:

correcting mistakes quickly

handling your complaints quickly

telling you how to take your complaint forward if you are still not satisfiedand

reversing any bank charges that we apply due to our mistake.

4) Publicise this Code, put it on our website and have copies available

for you on request.

SWOT ANALYSIS

STRENGTHS:

Strong growth in business

Good branch network

Highest CASA among PSU



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Highest NIMs compared to peers

Fine growth in fee income last year

De-risked investment portfolio

Adequate Capital

Proactive on technology front.

WEAKNESS:

Higher Delinquencies

Higher provisions deterring growth in net profits

No development on insurance venture

Slower growth on international front

Slow-down in treasury profits

Its subsidiaries PNB Housing Finance & PNB Gilts are not impressive

OPPORTUNITIES:

Expansion on international front

Ample opportunity to expand business, as the economy is doing well.

Growth in Insurance and Mutual Fund business

THREATS:

Entry of foreign banks

Sharp rise in interest rates can hamper economic growth

Regulatory amendments

Implementation of Basel II requires higher capital

Downturn in Agriculture growth

PRODUCTS AND SERVICES:

PRODUCTS:

Personal banking

Corporate banking

Home loans

About loan

ATM/DEBIT cards



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Deposit interest rates

SERVICES

Locker facilities

Depository services

Senior citizen scheme

RTGS/NEFT/SFMS:PNB

Merchant banking

Online tax accounting system

Electronic fund transfer

Electronic clearing service

Offshore banking

12 hours banking

Financial Results of Punjab National Bank

BALANCE SHEET

(Rs. in 000)

As on 31.03.2008 As on 31.03.2007Capital & Liabilities

Capital 3153025 3153025Reserves & Surplus 120030439 101201574Deposits 1664572260 1398596711Borrowings 54465596 19488566Other Liabilities and

Provisions

147982286 101785089



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Total 1990203606 1624224965

Assets

Cash & Balances with

Reserve Bank of India

152581517 123720292

Balances with Banks &

Money at call & short

notice

35725721 32734896

Investments 539917050 451898360Advances 1195015662 965965186Fixed Assets 23155219 10098255Other Assets 43808437 39807976Total 1990203606 1624224965

Profit & Loss Account

(Rs. in 000)

Year ended 31.03.2008 Year ended 31.03.2007

Income

Interest earned 142650176 112361434

Other Income 19975606 17303995

Total 162625782 129665429

Expenditure

Interest expended 87308619 60229067

Operating expenses 35254771 33262310

Provisions & Contingencies 19574761 20773210

Total 142138151 114264587

PROFIT - Net Profit for

the period

20487631 15400842

Add: Balance in Profit &

Loss A/c

155173 1834883

Profit Available for 20642804 17235725



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Appropriation

HDFC BANK

Registered office: - HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai 400

013, Maharashtra

Website: www.hdfcbank.com

ORGANIZATION PROFILE

FORMATION OF THE COMPANY

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

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

http://www.hdfcbank.com/http://www.hdfcbank.com/


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Scheduled Commercial Bank in January 1995.

PROMOTER

HDFC is India's 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.

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.

CAPITAL STRUCTURE

The authorized capital of HDFC Bank is Rs550 crore (Rs5.5 billion). The

paid-up capital is Rs424.6 crore (Rs.4.2 billion). The HDFC Group holds

19.4% of the bank's equity and about 17.6% of the equity is held by the

ADS Depository (in respect of the bank's American Depository Shares (ADS)

Issue). Roughly 28% of the equity is held by Foreign Institutional Investors



51/74


(FIIs) and the bank has about 570,000 shareholders. The shares are listed

on the Stock Exchange, Mumbai and the National Stock Exchange. The

bank's American Depository Shares are listed on the New York Stock

Exchange (NYSE) under the symbol 'HDB'.

TIMES BANK AMALGAMATION

In a milestone transaction in the Indian banking industry, Times Bank

Limited (another new private sector bank promoted by Bennett, Coleman &

Co./Times Group) was merged with HDFC Bank Ltd., effective February 26,

2000. As per the scheme of amalgamation approved by the shareholders of

both banks and the Reserve Bank of India, shareholders of Times Bank

received 1 share of HDFC Bank for every 5.75 shares of Times Bank. The

acquisition added significant value to HDFC Bank in terms of increased

branch network, expanded geographic reach, enhanced customer base,

skilled manpower and the opportunity to cross-sell and leverage alternative

delivery channels.

DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank at present has an

enviable network of over 1229 branches spread over 444 cities across India.

All branches are linked on an online real-time basis. Customers in over 120

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 centers 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 centers where the NSE/BSE has a

strong and active member base. The Bank also has a network of about over

2526 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



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cardholders.

TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms of

information technology and communication systems. All the bank's branches

have online connectivity, which enables the bank to offer speedy funds

transfer facilities to its customers. Multi-branch access is also provided to

retail customers through the branch network and Automated Teller Machines

(ATMs). The Bank has made substantial efforts and investments in acquiring

the best technology available internationally, to build the infrastructure for a

world class bank. The Bank's business is supported by scalable and robust

systems which ensure that our clients always get the finest services we offer.

The Bank has prioritized its engagement in technology and the internet as

one of its key goals and has already made significant progress in web-

enabling its core businesses. In each of its businesses, the Bank has

succeeded in leveraging its market position, expertise and technology to

create a competitive advantage and build market share.

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


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.

PRODUCT SCOPE



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HDFC Bank offers a bunch of products and services to meet the every need

of the people. The company cares for both, individuals as well as corporate

and small and medium enterprises. For individuals, the company has a

range accounts, investment, and pension scheme, different types of loans

and cards that assist the customers. The customers can choose the suitable

one from a range of products which will suit their life-stage and needs. For

organizations the company has a host of customized solutions that range

from Funded services, Non-funded services, and value addition services,

Mutual fund etc. These affordable plans apart from providing long term

value to the employees help in enhancing goodwill of the company. The

products of the company are categorized into various sections which are as

follows:

Accounts and deposits.

Loans.

Investments and Insurance.

Forex and payment services.

Cards.

Customer center.

BUSINESS STRETEGY

HDFC BANK mission is to be "a World Class Indian Bank",

benchmarking themselves 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


customer segments, and to achieve a healthy growth in profitability,



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consistent with the Bank's risk appetite. Bank is committed to do this

while ensuring the highest levels of ethical standards, professional

integrity, corporate governance and regulatory compliance. Continue

to develop new product and technology is the main business strategy

of the bank. Maintain good relation with the customers is the main

and prime objective of the bank

HDFC BANK 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 our 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 the

targeted customers and address inefficiencies in the Indian

financial sector.

Continue to develop products and services that reduce banks

cost of funds.



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Focus on high earnings growth with low volatility.

Rupee Earned- Rupee Spent

It is more important for every organization to know about from where

and where to spent money. And balanced between these two things

rupee earned and rupee spent are required for smooth running of

business and financial soundness. This type of watch can control

and eliminate the unnecessary spending of business. In this diagram

it include both things from where Bank earned Rupee and where to spent.



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HDFC BANK earned from the Interest from Advances 51.14 % ,

Interest from Investment 27.12 %, bank earned commission

exchange and brokerage of 15.25 %. These are the major earning

sources of the bank. Bank also earned from the Forex and

Derivatives and some other Interest Income.

Bank spent 39.75 % on Interest Expense, 30.27 % on Operating

Expense and 14.58 % on Provision. Bank also spent Dividend and

Tax on dividend, Loss on Investment , Tax.

As we discuss above that balancing is must between these two for

every organization especially in the era of globalization where there

are stiff competition among various market players.



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The Reserve Bank of India has approved the scheme of

amalgamation ofCenturion Bank of Punjab Ltd. with HDFC Bank

Ltd. with effect from May 23, 2008.

All the branches of Centurion Bank of Punjab will function as

branches of HDFC Bank with effect from May 23, 2008. With RBIs

approval, all requisite statutory and regulatory approvals for the

merger have been obtained.

The combined entity would have a nationwide network of 1167

branches; a strong deposit base of around Rs.1,22,000 crores and

net advances of around Rs.89,000 crores. The balance sheet size of

the combined entity would be over Rs.1,63,000 crores.

STRENGTH

Right strategy for the right

products.

WEAKNESSES

Some gaps in range for certain



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Superior customer service

vs. competitors.

Great Brand Image

Products have required

accreditations.

High degree of customer

satisfaction.

Good place to work

Lower response time with

efficient and effective

service.

Dedicated workforce aimingat making a long-term career inthe field.

sectors.

Customer service staff need

training.

Processes and systems, etc

Management cover insufficient.

Sectoral growth isconstrained by lowunemployment levels andcompetition for staff



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Opportunities

Profit margins will be good.

Could extend to overseas

broadly.

New specialist applications.

Could seek better customer

deals.

Fast-track career development

opportunities on an industry-

wide basis.

An applied research centre tocreate opportunities fordeveloping techniques toprovide added-value services.

Threats

Legislation could impact.

Great risk involved

Very high competition

prevailing in the industry.

Vulnerable to reactive

attack by major competitors

Lack of infrastructure in rural

areas could constrain

investment.

High volume/low cost marketis intensely competitive.



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PRODUCTS AND SERVICES AT A GLANCE

1. PERSONAL BANKING

A. Accounts & Deposits

Regular Savings Account

Savings Plus Account

Savings Max Account

Senior Citizens Account

No Frills Account

Institutional Savings Account

Payroll Salary Account

Classic Salary Account

Regular Salary Account

Premium Salary Account

Defense Salary Account

Kid's Advantage Account

Pension Saving Bank Account

Family Savings Account

Kisan No Frills Savings Account

Kisan Club Savings Account

Plus Current Account

Trade Current Account

Premium Current Account

Regular Current Account

Apex Current Account Max Current Account

Reimbursement Current Account

RFC - Domestic Account

Regular Fixed Deposit



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Super Saver Account

Sweep-in Account

HDFC Bank Preferred

Private Banking

B. Loans

- Personal Loans

- Home Loans

- Two Wheeler Loans

- New Car Loans

- Used Car Loans

- Overdraft against Car - Express Loans

- Loan against Securities

- Loan against Property

- Commercial Vehicle Finance

- Working Capital Finance

- Construction Equipment Finance

- Offers & Deals

- Customer Center

C. Investments & Insurance

- Mutual Funds

- Insurance

- Bonds

- Financial Planning

- Knowledge Centre - Equities & Derivatives

- Mudra Gold Bar



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D. Forex Services

- Trade Finance

- Travelers Cheques

- Foreign Currency Cash

- Foreign Currency Drafts

- Foreign Currency Cheque Deposits

- Foreign Currency Remittances

- Cash To Master

- Forex Plus Card

E. Payment Services

- Net Safe

- Prepaid Refill

- Bill Pay

- Direct Pay

- Visa Money Transfer

- E-Monies Electronic Funds Transfer

- Excise & Service Tax Payment

F. Access Your Bank

- One View

- Insta Alerts

- Mobile Banking

- ATM

- Phone Banking - Branch Network



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G. Cards

- Silver Credit Card

- Gold Credit Card

- Woman's Gold Credit Card

- Platinum plus Credit Card

- Titanium Credit Card

- Value plus Credit Card

- Health plus Credit Card

- HDFC Bank Idea Silver Card

- HDFC Bank Idea Gold Card

- Compare Cards - Transfer & Safe

- Track your Credit Card

H. Get More from Your Card

- Offers & Savings

- My Rewards

- Insta Wonderz

- Add-On Cards

- Credit Card Usage Guide

- Easy EMI

- Net safe

- Smart Pay

- Secure Plus

- My City Benefit Card

- Debit Cards - Easy ShopInternational Debit Card

- Easy Shop Gold Debit Card

- Easy ShopInternational Business Debit Card

- Easy ShopWoman's Advantage Debit Card



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- Prepaid Cards

- Forex Plus Card

- Kisan Card

I. Customer Centre

- Offers & Deals

- Winners of Contests & Promotions

2. Wholesale Banking

A. Corporate

Funded Services

Non Funded Services

Value Added Services

Internet Banking

B. Small & Medium Enterprises

Funded Services

Non-Funded Services

Specialized Services

Internet Banking

C. Financial Institutions & Trusts

Banks

Financial Institutions

Mutual Funds Stock Brokers

AWARDS & ACHIEVEMENTS of HDFC BANK



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Business Today-Monitor Group survey One of India's "Most Innovative

Companies".

Financial Express-Ernst & Young Award Best Bank Award in the Private Sector

Category

The Asian Banker Excellence in RetailFinancial Services Awards

Best Retail Bank in India.

Asian Banker Managing Director Aditya Puri won theLeadership achievement Award for

India

Outlook Money & NDTV Profit Best Bank Award in the Private sector

Category

Board of Directors

Name Designation

Mr. Jagdish Capoor Chairman

Mr. Keki Mistry Director

Mr. Vineet Jain Director Mrs. Renu Karnad Director

Mr. Arvind Pande Director

Mr. Ashim Samanta Director

Mr. C. M. Vasudev Director

Mr. Gautam Divan Director

Dr. Pandit Palande Director

Mr. Aditya Puri Managing Director

Mr. Harish Engineer Executive Director

Mr. Paresh S

Roshan Final Project

Documents

Transcript of Roshan Final Project