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A
PROJECT REPORT
ON
E-Banking Preference among people with special reference to HDFC Bank.
SUBMITTED TO:-
PUNJAB TECHNICAL UNIVERSITY
In the partial fulfillment of the requirements for the degree of
MASTERS OF BUSINESS ADMINISTRATION
SUBMITTED BY
Ms. Taruna Gupta
MBA 4TH semester
DEPARTMENT OF BUSINESS MANAGEMENT
DEVRAJ GROUPS TECHNICAL CAMPUS
AFFILATED TO
PUNJAB TECHNICAL UNIVERSITY, JALANDHAR
(2011-2013)
DECLARATION
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I TARUNA GUPTA hereby declare that the dissertation report entitled E-Banking
preferences among people submitted for the partial fulfilmentof the degree of Masters in
Business Administration from Punjab technical university is original document of mine and
data provided is authentic and to the best of way of my knowledge.
Taruna Gupta
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ACKNOWLEDGEMENT
Gratitude is not a thing of expression; it is more a matter of feeling.
I feel immense pleasure to give the credit of my project work not only to one individual as
this work is integrated effort of all those who are concerned with it. I want to thanks to all
those individuals who guided me to move on the track.
The research on E-Banking preferences among people in Chandigarh with special reference
to HDFC Bankhas been given to me as part of the curriculum in Two-Years Masters Degree
in Business Administration. I have tried my best to present this information as clearly as
possible using basic terms that I hope will be comprehended by the widest spectrum of
researchers, analysts and students for further studies.I have completed this study under the table guidance and supervision ofMrs. Parveen Bala
and Miss. Nitika Gupta. I will be failed in my duty if I do not acknowledge the esteemed
scholarly guidance, assistance and knowledge. I have received from them towards fruitful and
timely completion of this work.Mere acknowledgement may not redeem the debt I owe to
my parents for theirdirect/indirect support during the entire course of this project.
GUIDANCE IS THE BEST IN THE WAY PROGRESS.
I am also thankful to my friend who helped me a lot in the completion of this project.
Taruna Gupta
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PREFACE
With the rapid globalization of the Indian economy, enterprises are facing with ever changing
competitive environment. Enterprises are adopting strategies aimed at developing competitive
advantage based on enhanced customer value in terms of product differentiation, quality,speed, service and costs. In the post liberalization era, with the deregulation of Indian
economy, the financial service sector witnessing a complete metamorphosis and technology
is playing a very significant role in this record. Over the last decade India has been one of the
fastest adopters of information technology, particularly because of its capability to provide
software solution to organizations around the world. This capability has provided a
tremendous impetuous to the domestic banking industry in India to deploy the latest in
technology, particularly in the Internet banking and e-commerce arenas. Banks are growing
in size by mergers and acquisitions, which have been driven by communication and
technology. Technology is playing a major role in increasing the efficiency, courtesy and
speed of customer service. It is said to be the age of E-banking. An Online Banking user is
expected to perform at least one of the following transactions online:
1. Checking account balance and transaction history
2. Paying bills
3. Transferring funds between accounts
4. Requesting credit card advances
5. Ordering checks
6. Managing investments and stocks trading
From a banks perspective, using the Internet is more efficient than using other distribution
mediums because banks are looking for an increased customer base. From the customers
perspective, Online Banking provides a convenient and effective way to manage finances that
is easily accessible 24 hours a day, seven days a week.
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CONTENTS
CHAPTER NO. CONTENTS PAGE NO.
1 Introductions about Company 7-22
1.1 Organization chart 23-24
1.2 SWOT analysis 25-26
2 Introduction about project topic 27-43
2.1 Need of study 44-45
3 Objectives of study 46-47
4 Review of literature 48-53
5 Research Methodology 54-58
6 Data analysis & interpretation 59-706.1 Hypothesis testing 71-73
7 Results & findings 74-75
8 Suggestions & recommendations 76-77
9 Limitations 78-79
10 Conclusion 80-81
11 Annexure 82-85
12 Bibliography 86-88
CHAPTER -1
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INTRODUCTION
ABOUT
HDFC BANK
ABOUT HDFC BANK
HDFC Bank Ltd.
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Headquarters Mumbai, India
Key people C.M. Vasudev
Products
Investment Banking
Commercial Banking
Retail Banking
Private Banking
Asset Management
Mortgages
Credit Cards
Revenue 20,266 crore (US$4.5 billion) (2010)
Operating income4,419 crore (US$981.02 million)
(2010)
Profit 3,032 crore (US$673.1 million) (2010)
Total assets US$ 53.670 billion (2010)
Total equity 21,158 crore (US$4.7 billion) (2010)
Employees 51,888 (2010)
Website HDFCBank.com
HDFC Bank (NYSE: HDB), one amongst the firsts of the new generation, tech-savvycommercial banks of India, was incorporated in August 1994, after the Reserve Bank of Indiaallowed setting up of Banks in the private sector. The Bank was promoted by the HousingDevelopment Finance Corporation Limited, a premier housing finance company (set up in1977) of India. HDFC Bank has 1,725 branches and over 4,232 ATMs, in 779 cities in India,and all branches of the bank are linked on an online real-time basis. As of 30 September 2008the bank had total assets of Rs.1006.82 billion. For the fiscal year 2008-09, the bank hasreported net profit of 2,244.9 crore (US$498.37 million), up 41% from the previous fiscal.Total annual earnings of the bank increased by 58% reaching at 19,622.8 crore (US$4.36
billion) in 2008-09.
It is one of the Big Four banks of India, along with State Bank of India, ICICI Bank andPunjab National Bankits main competitors.
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History
HDFC Bank was incorporated in 1994 by Housing Development Finance CorporationLimited (HDFC), India's largest housing finance company. It was among the first companiesto receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in
the private sector. The Bank started operations as a scheduled commercial bank in January1995 under the RBI's liberalization policies.
Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged withHDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of TimesBank.
In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to morethan 1,000. The amalgamated bank emerged with a base of about Rs. 1, 22,000 crore and netadvances of about Rs.89, 000 crore. The balance sheet size of the combined entity is morethan Rs. 1, 63,000 crore.
Branch network
Currently HDFC Bank has 1416 branches, 3382 ATMs, in 550 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, 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.
BOARD OF DIRECTORS
Mr. Aditya Puri (Managing Director)
Mr. Keke Mistry
Dr. (Mrs.) Amla Samanta
Mr. Venkat Rao Gadwal
Mr. Anil Ahuja
Mr. Vineet Jain
Mr. Ranjan Kapoor
Mr. Bobby Parikh
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Mrs. Renu Karnal
VICE President (Legal ) & Co. Secretary
Mr. Sanjay Dongre
Auditor
P.C. Honsolia & Co. (Chartered Accountant)
Registered Office
HDFC Bank House
Senapati Bapat Marg
Loveer Parel Mumbai 400013
Tel. No. 56521000Fax No. 24960739
Web. Site www.hdfcbank.com
BUSINESS FOCUSHDFC Bank's mission is to be a World-Class Indian Bank. The Bank's aim is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking
services in the segments that the bank operates in 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 and regulatory compliance. HDFC
Bank's business philosophy is based on four core values: Operational Excellence, Customer
Focus, Product Leadership and People.BUSINESS PROFILE
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HDFC Bank caters to a wide range of banking services covering commercial and investment
banking on the wholesale side and transactional/branch banking on the retail side. The bank
has three key business areas:
(a) Wholesale Banking Services
The Bank's target market is primarily large, blue chip manufacturing companies in the Indian
corporate sector and to a lesser extent, emerging midsized corporate. For these corporate, the
Bank provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. The
bank is also a leading provider of structured solutions that combine cash' management
services with vendor and distributor finance for facilitating superior supply chain
management for its corporate customers.
(b) 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 products including Auto
Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. Its
also a leading provider of Depository Services to retail customers, offering 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 debit card allows the user to directly debit his
account at the point of purchase at a merchant establishment, in India and overseas. The Bank
launched its credit card in association with VISA in November 2001. The Bank is also one of
the leading players in the "merchant acquiring" business with over 25,000 Point-of-sale
(POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is
well positioned as a leader in various net-based B2C opportunities including a wide range of
Internet banking services for Fixed Deposits, Loans, Bill Payments., etc.
(c) Treasury Operations
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Within this business, the bank has three main products areas-Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on various
treasury products are provided through the bank's Treasury team. To comply with statutory
reserve requirements, the bank is required to hold 25% of its deposits in government
securities. The Treasury business is responsible for managing the returns and market risk on
this investment portfolio.
Strengths
Highest level of ethical standards
Professional integrity
Corporate governance
Regulatory compliance
Business Philosophy
The four values are the banks business philosophy,
Operational Excellence
Customer Focus
Product Leadership
People
Product Range
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Product rangeofHDFC Bank
Accounts&Deposits
Loans CardsInvestment &Insurance
ForexServices
Accessyour bank
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Accounts &Deposits
SavingsA/C
SalaryA/C
CurrentA/C
FixedDepositA/C
DematA/C
SafeDepositsLocker
Loans
Education-al loan
Two-wheelerLoan
Personalloan
Homeloan
GoldLoan
LoanagainstProperty
TractorLoan
Cards
DebitCard
PrepaidCard
CreditCard
Investment &Insurance
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MutualFund
Insuran-ce
Bonds General& healthInsurance
Knowledge Center
Equities &Derivativ--es
MudraGold Bar
ForexServices
Product&Services
ForexLimited
RBIGuidelines
ForexserviceBranch
Locator
TradeServices
AccessYour
Bank
E-MailStatement
BranchNetwork
Netbanking
PhoneBanking
MobileBanking
ATM
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ACHIEVEMENTS
2013
NASSCOM CNBC-TV18 IT InnovationAward
Best IT Driven Innovation in Banking (COMMERCIAL)
The NationalQuality ExcellenceAwards
Best Customer Service Result
FE Best BankAwards
HDFC Bank wins in 3 categories at FE Best Bank Awards
Skoch Financial
Inclusion Awards2013
Organisation of the Year
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2012
DSCI InformationTechnology Award2012
- Security in Bank (2nd time in a row)- Security Leader of the Year (Banking)
BusinessworldAwards for BankingExcellence 2012
- Most tech-friendly Bank- Deal of the year (Rupee Bonds)
HT-Mars Customersatisfaction survey
- Winner: Bank and Credit Card customer satisfaction Survey
CSO ForumInformationTechnology Award
2012
- Best Organisation for Information Security Practice (2nd time in arow)
Economic Times ET Awards for Corporate Excellence - Company of the Year 2012
CNBC TV18's IndiaBest Banks andFinancialInstitutions Awards2012
Best Private sector Bank
Mint-Aon Hewittstudy on India's
Best ManagedBoards 2012
Our Bank among India's six best managed Boards 2012
Forbes Asia Fab 50 Companies - Winning for the 6th year
IBA BankingTechnology Awards2011
- Best Online Bank- Best use of Business Intelligence- Best Customer Relationship Initiative- Best Risk Management & Security Initiative- Best use of Mobility Technology in Banking
Dun & Bradstreet
Banking Awards2012
- Overall Best Bank
- Best Private Sector Bank- Asset Quality - Private Sector- Retail Banking -Private Sector
IDRBT BankingTechnologyExcellence Awards2011-12
Best Bank in 'IT for Operational Effectiveness' category
Asia Money 2012 Best Domestic Bank in India
India's Top 500
Companies -Dun &Bradstreet
Best Bank in India
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Corporate Awards
Finance Asia - Best Managed Company- Best CEO - Mr. Aditya Puri
UTI Mutual FundCNBC TV 18Financial AdvisorAwards 2011
- Best Performing Bank - Private
Asian BankerInternationalExcellence in RetailFinancial ServicesAwards 2012
- Best Retail Bank in India- Best Bancassurance- Best Risk Management
5th Loyalty Summit
award
Customer and Brand Loyalty
Skoch foundation2012
SHG/JLG linkage programme
ICAI Awards 2011 Excellence in Financial Reporting
HDFC Bank has been considered as the best bank by Bloomberg UTV's Financial
Leadership Awards 2011.
HDFC Bank wins IDC FIIA Awards 2011 forExcellence in Customer Experience.
Business Worlds Best Bank Award
HDFC Bank wins the Asian Banker Best retail Bank in India Award 2008 for
outstanding performance.
Best Bank in Private Sector in 2010
Has been listed as worlds top 1000 banks in the Banker magazine.
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HDFC Bank wins IBA Banking Technology Awards 2010 for the winner of:
1) Technology Bank of the Year
2) Best Online Bank
3) Best Customer Initiative4) Best Use of Business Intelligence
5) Best Risk Management System
Runners Up -
Best Financial Inclusion
HDFC Progress Chart
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COMPETITORS
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Competitors and other players in the field:-
Top Performing Public Sector Banks
Andhra Bank
Allahabad Bank
Punjab National Bank
Dena Bank
Vijaya Bank
Top Performing Private Sector Banks
SBI Bank
ICICI Bank
AXIS Bank
Kotak Mahindra Bank
Centurion Bank of Punjab
Top Performing Foreign Banks
Citibank
Standard Chartered
HSBC Bank
ABN AMRO Bank
American Express
Capital adequacy as at December 31, 2012 (Standalone)
` lacs, except ratiosBasel II
Tier-1 capital 3,129,419
Tier-2 capital 1,750,600
Total capital funds of the Bank 4,880,019
Total capital required 2,584,560
Tier-1 capital adequacy ratio 10.9%
Total capital adequacy ratio 17.0%
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Balance sheet(Rs crore)
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Sources of funds
Owner's fund
Equity share capital 469.34 465.23 457.74 425.38 354.43
Share application money 0.30 - - 400.92 -
Preference share capital - - - - -
Reserves & surplus 29,455.04 24,914.04 21,064.75 14,226.4311,142.8
0
Loan funds
Secured loans - - - - -
Unsecured loans 2,46,706.45 2,08,586.41 1,67,404.44 1,42,811.581,00,768
.60
Total 2,76,631.12 2,33,965.67 1,88,926.93 1,57,864.311,12,265
.83
Uses of funds
Fixed assets
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Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Gross block 5,930.24 5,244.21 4,707.97 3,956.63 2,386.99
Less : revaluation reserve - - - - -
Less : accumulated depreciation 3,583.05 3,073.56 2,585.16 2,249.90 1,211.86
Net block 2,347.19 2,170.65 2,122.81 1,706.73 1,175.13
Capital work-in-progress - - - - -
Investments 97,482.91 70,929.37 58,607.62 58,817.5549,393.5
4
Net current assets
Current assets, loans & advances 21,721.64 14,601.08 5,955.15 6,356.83 4,402.69
Less : current liabilities & provisions 37,431.87 28,992.86 20,615.94 22,720.6216,431.9
1
Total net current assets -15,710.23 -14,391.78 -14,660.79 -16,363.79
-12,029.2
2
Miscellaneous expenses not written - - - - -
Total 84,119.87 58,708.23 46,069.63 44,160.49
38,539.4
5
Notes:
Book value of unquoted investments - - - - -
Market value of quoted investments - - - - -
Contingent liabilities 8,83,985.32 5,88,550.98 4,87,176.37 4,14,533.935,99,928
.79
Number of equity sharesoutstanding(Lacs) 23466.88 4652.26 4577.43 4253.84 3544.33
Profit loss account(Rs crore)
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Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Income
Operating income 32,539.11 24,393.60 19,958.76 19,770.72 12,354.41
Expenses
Material consumed - - - - -
Manufacturing expenses - - - - -
Personnel expenses 3,399.91 2,836.04 2,289.18 2,238.20 1,301.35
Selling expenses 152.48 158.95 83.12 108.68 114.73
Adminstrative expenses 5,146.73 4,552.96 4,936.73 4,583.86 2,247.48
Expenses capitalised - - - - -
Cost of sales 8,699.12 7,547.95 7,309.02 6,930.74 3,663.56
Operating profit 8,850.41 7,460.57 4,863.44 3,928.87 3,803.73
Other recurring income -103.98 - 17.72 - 43.04
Adjusted PBDIT 8,746.43 - 4,881.17 - 3,846.77
Financial expenses 14,989.58 9,385.08 7,786.30 8,911.10 4,887.12
Depreciation 542.52 497.41 394.39 359.91 271.72
Other write offs - - - - -
Adjusted PBT -6,785.66 -2,421.92 4,486.77 -5,342.14 -1,312.07
Tax charges 2,606.80 1,892.86 1,340.99 1,054.92 690.90
Adjusted PAT 5,165.58 3,927.22 2,944.68 2,240.75 1,589.48
Non recurring items 1.51 -0.82 4.02 4.19 0.70
Other non cash adjustments -2.12 -2.65 -0.93 -0.59 -0.06
Reported net profit 5,164.97 3,923.75 2,947.77 2,244.35 1,590.12
Earnigs before appropriation 11,339.21 8,456.55 6,403.33 4,818.98 3,522.15
Equity dividend 1,009.08 767.62 549.29 425.38 301.27
Preference dividend - - - - -
Dividend tax 163.70 124.53 91.23 72.29 51.20
Retained earnings 10,166.43 7,564.40 5,762.81 4,321.31 3,169.68
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Cash flow(Rs crore)
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08
Profit before tax 7,513.17 5,818.66 4,289.14 3,299.25 2,280.63
Net cashflow-operating activity -11,355.61 -375.83 9,389.89 -1,736.14 3,583.43
Net cash used in investing activity -686.85 -1,122.74 -551.51 -663.78 -619.82
Netcash used in fin. activity 3,286.19 1,227.99 3,598.91 2,964.66 3,628.34
Net inc/dec in cash and equivlnt -8,731.11 -273.56 12,435.78 564.74 6,591.95
Cash and equivalnt begin of year 29,668.83 29,942.40 17,506.62 14,778.34 8,074.54
Cash and equivalnt end of year 20,937.73 29,668.83 29,942.40 15,343.08 14,666.49
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1.1
ORGANISATIONAL CHART OF HDFC BANK
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ORGANISATIONAL CHART AS ON 31ST MARCH, 2013
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1.2
SWOT ANALYSIS
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SWOT ANALYSIS
STRENGTHS:
It has an extensive distribution network comprising of 535 branches in 312 cities &
one international office in Dubai this provides a competitive edge over thecompetitors.
The Bank has a strong retail depository base & has more than million customers.
Bank has strong brand equity.
ISO 9001 certification for its depository & custody operations & for its backend
processing of retail operations & direct banking operation.
The bank is a market leader in cash settlement service for the major stock exchanges
in its country.
HDFC Bank is one of the largest private sector banks working in India.
It has a highly automated environment in terms of information technology &
communication system.
Infrastructure is one of the best in the country.
It has many innovative products like kids Advantage scheme, NRI services.
WEAKNESSES Account opening and delivery of cheque book take more time. Lack of availability of
different credit products like CC Limit, Bill discounting facilities.
Complicated terms and conditions of products, which is not easily understandable by
the layman.
OPPORTUNITIES
Branch expansion
Door step services
Greater liberalization is foreign ownership via FDI in Indian Pvt. Sector banks.
Infrastructure movements & better systems for trading & settlement in the Govt.
Securities & foreign exchange markets.
THREATS
The bank has started facing competition from players like SBI, PNB in the finance
market itself. This may reduce the profit margins in the future.
Some Pvt. Banks have 7 days banking.
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CHAPTER -2
INTRODUCTION
ABOUT
E-BANKING
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WHAT IS E-BANKING?
Electronic banking is one of the truly widespread avatars of E-commerce the world over.
Various authors define E-Banking differently but the most definition depicting the meaning
and features of E-Banking are as follows:
1. Banking is a combination of two, Electronic technology and Banking.
2. Electronic Banking is a process by which a customer performs banking Transactions
electronically without visiting a brick-and-mortar institutions.
3. E-Banking denotes the provision of banking and related service through Extensive use of
information technology without direct recourse to the bank by the customer.
Electronic banking (or net banking) refers to an application of the Internet that allows
customers to dial into bank networks or their websites, using their own telephones and
computers, and to get a host of banking services directly on their home or office PCs. Net
banking offers you armchair convenience and access to your account information from
anywhere in the world, at any time of the day or night.
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INFORMATIONTECHNOLOGY
CUSTOMER
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Electronic banking, also known as electronic fund transfer (EFT), uses computer and
electronic technology as a substitute for checks and other paper transactions. EFTs are
initiated through devices like cards or codes that let you, or those you authorize, access your
account. Many financial institutions use ATM or debit cards and Personal Identification
Numbers (PINs) for this purpose. Some use other types of debit cards such as those that
require, at the most, your signature or a scan. For example, some use radio frequency
identification (RFID) or other forms of contactless technology that scan your information
without direct contact. The federal Electronic Fund Transfer Act (EFT Act) covers some
electronic consumer transactions.
Electronic Fund Transfers EFTs offer several services that you may find practical:
ATMs are electronic terminals that let you bank almost any time. To withdraw cash,
make deposits, or transfer funds between accounts, you generally insert an ATM card
and enter your PIN. Some financial institutions and ATM owners charge a fee,
particularly if you dont have accounts with them or if you engage in transactions at
remote locations. Generally, ATMs must tell you they charge a fee and its amount on
or at the terminal screen before you complete the transaction. Check the requirements
with your institution and at ATMs you use for more information about these fees. Direct Deposit lets you authorize specific deposits, (like paychecks and Social
Security checks and other benefits) to your account on a regular basis. You also may
pre-authorize direct withdrawals so that recurring bills (like insurance premiums,
mortgages, utility bills, and gym memberships) are paid automatically. Be cautious
before you pre-authorize direct recurring withdrawals to pay companies you arent
familiar with; funds from your bank account could be withdrawn improperly. Also
monitor your bank account to ensure that direct recurring payments from your account
to others are for the correct amount.
Pay-by-Phone Systems let you call your financial institution with instructions to pay
certain bills or to transfer funds between accounts. You must have an agreement with
the institution to make such transfers.
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Personal Computer Banking lets you handle many banking transactions via your
personal computer. For instance, you may use your computer to view your account
balance, request transfers between accounts, and pay bills electronically.
Debit Card Purchase or PaymentTransactionslet you make purchases or payments
with a debit card, which also may be your ATM card. This could occur at a store or
business, online, or by phone. The process is similar to using a redit card, with some
important exceptions. While the process is fast and easy, a debit card purchase or
payment transfers money fairly quickly from your bank account to the companys
account. So its important that you have funds in your account to cover your purchase.
This means you need to keep accurate records of the dates and amounts of your debit
card purchases, payments, and ATM withdrawals. Also be sure you know the store or
business before you provide your debit card information to avoid the possible loss of
funds through fraud. Your liability for unauthorized use, and your rights for error
resolution, may be different for a debit card than a credit card.
Electronic Check Conversion converts a paper check into an electronic payment in a
store or when a company receives your check in the mail.When you give your check
to a cashier in a store, the check is run through an electronic system that captures your
banking information and the amount of the check. Youre asked to sign a receipt and
you get a copy for your records. When your check is handed back to you, it should be
voided or marked by the merchant so that it cant be used again. The merchant
electronically sends information from the check (but not the check itself ) to your
bank or other financial institution, and the funds are transferred into the merchants
account. When you mail-in a check for payment to a merchant or other company, they
may electronically send information from your check (but not the check itself )through the system, and the funds are transferred from your account into their
account. For a mailed check, you should still receive advance notice from a company
that expects to send your check information through the system electronically. For
example, the merchant or other company might include the notice on your monthly
statement. The notice also should state if the merchant or company will electronically
collect from your account a fee like bounced check fee if you have insufficient
funds to cover the transaction.
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FEATURES OF E-BANKING
E-Banking provides exceptional rates on saving, CDs and IRAs.
Checking with no monthly fees, free bill payment and rebates on ATM surcharge.
Credit cards with low rates.
Easy online applications for all accounts, including personal loans and mortgage.
24 hours account access.
It provides quality customer service with personal attention.
It provides quick services to their customers.
Enables transfer of funds from one place to another (banks).
Exchange of statistical information amongst bank.
Enables foreign exchange operations.
Inter-bank applications like settlement of funds between banks.
Provide facilities like Demat operation, ATM operation, online banking.
Make payment of bills
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NEED FOR E-BANKING
One has to approach the branch in person, to withdraw cash or deposit a cheque or request a
statement of accounts. In true Internet banking, any inquiry or transaction is processed online
without any reference to the branch (anywhere banking) at any time. Providing Internetbanking is increasingly becoming a "need to have" than a "nice to have" service. The net
banking, thus, now is more of a norm rather than an exception in many developed countries
due to the fact that it is the cheapest way of providing banking services.
Banks have traditionally been in the forefront of harnessing technology to improve their
products, services and efficiency. They have, over a long time, been using electronic and
telecommunication networks for delivering a wide range of value added products and
services. The delivery channels include direct dial up connections, private networks, public
networks etc and the devices include telephone, Personal Computers including the Automated
Teller Machines, etc. With the popularity of PCs, easy access to Internet and World Wide
Web (WWW), Internet is increasingly used by banks as a channel for receiving instructions
and delivering their products and services to their customers. This form of banking is
generally referred to as Internet Banking, although the range of products and services offered
by different banks vary widely both in their content and sophistication.
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EVOLUTION OF E-BANKING
The story of technology in banking started with the use of punched card machines like
Accounting Machines or Ledger Posting Machines. The use of technology, at that time, was
limited to keeping books of the bank. It further developed with the birth of online real timesystem and vast improvement in telecommunications during late 1970s and 1980s.it
resulted in a revolution in the field of banking with convenience banking as a buzzword.
Through Convenience banking, the bank is carried to the doorstep of the customer.
The 1990s saw the birth of distributed computing technologies and Relational Data Base
Management System. The banking industry was simply waiting for these technologies. Now
with distribution technologies, one could configure dedicated machines called front-end
machines for customer service and risk control while communication in the batch mode
without hampering the response time on the front end machine.
Intense competition has forced banks to rethink the way they operated their business. They
had to reinvent and improve their products and services to make them more beneficial and
cost effective. Technology in the form of E-banking has made it possible to find alternate
banking practices at lower costs. More and more people are using electronic banking products
and services because large section of the banks future customer base will be made up of
computer literate customer, the banks must be able to offer these customer products and
services that allow them to do their banking by electronic means. If they fail to do this will,
simply, not survive. New products and services are emerging that are set to change the way
we look at money and the monetary system.
35
Traditional Banking
Gunpowder
Personalized service, time-consuming, limited access.
Virtual or E- Banking
Nuclear Charged
Real time transactions, integratedplatform, all time access.
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E-BANKING PRODUCTS
Automated Teller Machine (ATM )
These are cash dispensing machine, which are frequently seen at banks and other locations
such as shopping centres and building societies. Their main purpose is to allow customer to
draw cash at any time and to provide banking services where it would not have been viable to
open another branch e.g. on university campus. An automated teller machine or automatic
teller machine (ATM) is a computerized telecommunications device that provides a financial
institution's customers a method of financial\ transactions in a public space without the need
for a human clerk or bank teller. On most modern ATMs, the customer identifies him or
herself by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a
chip that contains his or her card number and some security information, such as an
expiration date or CVC (CVV). Security is provided by the customer entering a personal
identification number (PIN).
Using an ATM, customers can access their bank accounts in order to make cash withdrawals
(or credit card cash advances) and check their account balances. Many ATMs also allow
people to deposit cash or checks, transfer money between their bank accounts, pay bills, or
purchase goods and services.
ATMs are known by various casual terms including cash machine, hole-in-the wall, cash
point or Bancomat (in Europe and Russia). The occasionally-used ATM Machine is a
example of RAS syndrome.
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Some of the advantages of ATM to customers are:-
Ability to draw cash after normal banking hours
Quicker than normal cashier service
Complete security as only the card holder knows the PIN
Does not just operate as a medium of obtaining cash.
Customer can sometimes use the services of other bank ATMs.
Tele Banking or Phone Banking
Telephone banking is relatively new Electronic Banking Product. However it is fastly
becoming one of the most popular products. Customer can perform a number of transactions
from the convenience of their own home or office; in fact from anywhere they have access to
phone. Customers can do following:-
Check balances and statement information
Transfer funds from one account to another
Pay certain bills
Order statements or cheque books
Demand draft request
This facility is available with the help of Voice Response System (VRS). This system
basically, accepts only TONE dialed input. Like the ATM customer has to follow particular
process, initially account number and telephone PIN are fed for the process to start. Also the
VRS system provides the users within additional facilities such as changing existing
password with the new desired, information about new products, current interest rates etc.
Mobile Banking
Mobile banking comes in as a part of the banks initiative to offer multiple channel banking
providing convenience for its customer. A versatile multifunctional, free service that is
accessible and viewable on the monitor of mobile phone. Mobile phones are playing great
role in Indian banking- both directly and indirectly. They are being used both as banking and
other channels.
Internet banking
The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions have
used powerful computer networks to automate million of daily transactions; today, often the
only paper record is the customers receipt at the point of sale. Now that their customers are
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connected to the Internet via personal computers, banks envision similar advantages by
adopting those same internal electronic processes to home use. Banks view online banking as
a powerful value added tool to attract and retain new customers while helping to eliminate
costly paper handling and teller interactions in an increasingly competitive banking
environment. In India first one to move into this area was ICICI Bank. They started web
based banking as early as august 1997.
ADVANTAGES OF INTERNET BANKING
Convenience- Unlike your corner bank, online banking sites never close; theyre
available 24 hours a day, seven days a week, and theyre only a mouse click away.
Ubiquity- If youre out of state or even out of the country when a money problemarises, you can log on instantly to your online bank and take care of business, 24\7.
Transaction speed- Online bank sites generally execute and confirm transactions at
or quicker than ATM processing speeds.
Efficiency-You can access and manage all of your bank accounts, including IRAs,
CDs, even securities, from one secure site.
Effectiveness- Many online banking sites now offer sophisticated tools, including
account aggregation, stock quotes, rate alert and portfolio managing program to help
you manage all of your assets more effectively. Most are also compatible with money
managing programs such as quicken and Microsoft money.
DISADVANTAGES OF INTERNET BANKING
Start-up may take time-In order to register for your banks online program, you will
probably have to provide ID and sign a form at a bank branch. If you and your spouse
wish to view and manage their assets together online, one of you may have to sign a
durable power of attorney before the bank will display all of your holdings together.
Learning curves- Banking sites can be difficult to navigate at first. Plan to invest
some time and\or read the tutorials in order to become comfortable in your virtual
lobby.
Bank site changes- Even the largest banks periodically upgrade their online
programs, adding new features in unfamiliar places. In some cases you may have to
re-enter account information.
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E- BANKING SERVICES
1. Bill payment service
Each bank has tie-ups with various utility companies, service providers and insurance
companies, across the country. It facilitates the payment of electricity and telephone bills,
mobile phone, credit card and insurance premium bills. To pay bills, a simple one-time
registration for each biller is to be completed. Standing instructions can be set, online to pay
recurring bills, automatically. One-time standing instruction will ensure that bill payments do
not get delayed due to lack of time. Most interestingly, the bank does not charge customers
for online bill payment.2. Fund transfer
Any amount can be transferred from one account to another of the same or any another bank.
Customers can send money anywhere in India. Payees account number, his bank and the
branch is needed to be mentioned after logging in the account. The transfer will take place in
a day or so, whereas in a traditional method, it takes aboutthree working days. ICICI Bank
says that online bill payment service and fund transfer facility have been their most popular
online services.3. Credit card customers
Credit card users have a lot in store. With Internet banking, customers can not only pay their
credit card bills online but also get a loan on their cards. Not just this, they can also apply for
an additional card, request a credit line increase and God forbid if you lose your credit card,
you can report lost card online.
4. Railway pass
This is something that would interest all the common people. Indian Railways has tied up
with ICICI bank and you can now make your railway pass for local trains online. The pass
will be delivered to you at your doorstep. But the facility is limited to Mumbai, Thane, Nasik,
Surat and Pune. The bank would just charge Rs 10 + 12.24 percent of service tax.
5. Investing through Internet banking
Opening a fixed deposit account cannot get easier than this. An FD can be opened online
through funds transfer. Online banking can also be a great friend for lazy investors.
Now investors with interlinked demat account and bank account can easily trade in the stock
market and the amount will be automatically debited from their respective bank accounts and
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the shares will be credited in their demat account. Moreover, some banks even give the
facility to purchase mutual funds directly from the online banking system. So it removes the
worry about filling those big forms for mutual funds, they will now be just a few clicks away.
Nowadays, most leading banks offer both online banking and demat account. However if the
customer have there demat account with independent share brokers, then need to sign a
special form, which will link your two accounts.
6. Recharging your prepaid phone
Now there is no need to rush to the vendor to recharge the prepaid phone, every time the talk
time runs out. Just top-up the prepaid mobile cards by logging in to Internet banking. By just
selecting the operator's name, entering the mobile number and the amount for recharge, the
phone is again back in action within few minutes.
7. Shopping at your fingertips
Leading banks have tie ups with various shopping websites. With a range of all kind of
products, one can shop online and the payment is also made conveniently through the
account. One can also buy railway and air tickets through Internet banking.
List of Top 10 Banks operating E- Banking in India
1. State bank of India
2. HDFC Bank
3. ICICI Bank
4. Punjab National Bank
5. UTI Bank
6. Hongkong and shanghai banking corporations
7. Kotak Mahindra
8. Sundaram Bank
9. Oriental Bank of Commerce
10. IDBI Bank
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INTERNET BANKING VERSUS TRADITIONAL BANKING
In spite of so many facilities that Internet banking offers us, we still seem to trust our
traditional method of banking and are reluctant to use online banking. But here are few cases
where Internet banking will turn out to be a better option in terms of saving the money.
'Stop payment' done through Internet banking will not cost any extra fees but when
done through the branch, the bank may charge you Rs 50 per cheque plus the service
tax.
Through Internet banking, you can check your transactions at any time of the day, and
as many times as you want to.
On the other hand, in a traditional method, you get quarterly statements from the bank
and if you request for a statement at your required time, it may turn out to be an
expensive affair. The branch may charge you Rs 25 per page, which includes only 30
transactions. Moreover, the bank branch would take eight days to deliver it at your
doorstep.
If the fund transfer has to be made outstation, where the bank does not have a branch,
the bank would demand outstation charges. Whereas with the help of online banking,
it will be absolutely free for you.
As per the Internet and Mobile Association of India's report on online banking 2006,
"There are many advantages of online banking. It is convenient, it isn't bound by
operational timings, there are no geographical barriers and the services can be offered
at a miniscule cost."
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Traditional bankingGunpowderPersonalized services,timeconsuming, limitedaccess
Virtual or E-bankingNuclear chargedReal time transactions,integrated platform, alltimeaccess
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USAGE OF E-BANKING
The rise in the e-commerce and the use of internet in its facilitation along with the enhanced
online security of transactions and sensitive information has been the core reason for the
penetration of online banking in everyday life. According to the latest official figures from
the office of National Statistics ( ONS 2007) indicate that subscriptions to the internet has
grown more than 50% from 25 million in 2005 to 45 million in 2007 in India. It has also been
estimated that 60% of the population in India use internet in their daily lives. The
fundamental shift towards the involvement of the customer in the financial service provision
with the help of the technology especially internet has helped to reduce the costs of financial
institutions as well as helped client to use the service at anytime and from virtually anywhere
with access to an internet connection. The use of electronic banking has removed personnel
that facilitate the transactions and has placed additional responsibilities on the customers to
transact with the service. The computerization of the banking operations has made maximum
impact on:-
1) Internal Accounting System
2) Customer service
3) Diversification of system
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E-BANKING WORLD WIDE
Since its inception, Internet banking has experienced strong and sustained growth.
World Bank report on leapfrogging in e-finance pointed out that the three countries with
impressive progress in information technology in this sense are Estonia, Republic of Korea
and Brazil. Creation of the worlds leading electronic banking systems has been done at a
remarkably low cost compared to other world-class internet banks. In the European Union, 60
million people, representing 18 per cent of the adult population, use online banking In
France, the number of online banking accounts is recording an annual growth rate of 75 per
cent. However, Estonia is a country that has become a leader in Internet banking (which now
reaches 18 per cent of the population), not only among Eastern European countries but in
world rankings, through a combination of easy to-use software, free-of-charge transactions
and behaviour changes resulting from the influence of the Nordic countries IT culture onEstonia.
A sector in which Latin America is seems to be performing better than in other industries is
online retail banking. Growth in this area has been driven by traditional banks, which have
used the online channel to generate customer loyalty and improve their operating margins.
Two Brazilian banks, Bradesco and Banco do Brasil, have thus achieved more than 4 million
online customers each. Mexico is another leader of Internet banking in Latin America. It
adopted legislation providing for the development of both E-Commerce and e-finance.
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In Mexico, the number of online bank users more than tripled from 700,000 in 2000 to 2.4
million in 2001, and it could reach 4.5 million in 2005 (E-Marketer 2002b). One reason for
the success of Latin American banks online ventures seems to be the attention they have
paid to providing retail customers with multiple ways to access their accounts (Internet,
telephone, wireless). However, given that the share of the total population that actually has a
bank account is relatively small, the expansion of Latin American online banking may be
facing a bottleneck.
Compared with overall Internet usage estimated at 4.4 million in Australia, the major banks
together have attracted only 1.2 million to online banking. The Internet is a global
phenomenon and so is e-finance. Its deployment is not limited to developed countries, and
indeed some developing countries such as India and the Republic of Korea are
experiencing particularly strong growth in E-Banking. In Asia one of the most impressive
records has been achieved by the Republic of Korea. The Republic of Korea is leading in
online brokerage and in mobile banking. In South East Asia Internet banking is also
developing rapidly in Thailand, Malaysia, and Singapore and to a lesser extent, in the
Philippines.
In Bangladesh there is a large gap between the computerization of foreign banks and that of
local commercial banks and as regards the state of their intra- and inter branch online
networks. However, 75 per cent of local banks are planning to introduce E-Banking, which
implies very dynamic improvements.
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2.1
NEED FOR STUDY
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NEED FOR STUDY
To determining growth direction of online banking service.
Promoting E-banking services in banking industry.
Customer perception will be taken into consideration about the internet banking
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CHAPTER -3
OBJECTIVES OF THE STUDY
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OBJECTIVES OF THE RESEARCH
The main objectives of the study are:
To study the awareness level of service class people regarding E-Banking.
To find out the frequency and the factors that influences the adoption of E-Banking
services.
To measure the satisfaction level of people.
To know about the current and future prospects of E-Banking to the customers.
To understand the problems encountered in by service class people while using E-
Banking services(ATM, Phone banking, etc)
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CHAPTER -4
LITERATURE REVIEW
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Literature Review
1. Product and Technology group, ICICI Bank
In its paper Corporate banking using technology in transactions it was inferred that
Information Technology has revolutionized the services and mode of services offered by
the banks to their corporate clients. The emergence of E-Banking has enabled the banks
to offer real-time transactions and integrate all customers related functions. Indian Banks
are utilizing the new technology to provide better technology and convenient access to its
customers and India is thus poised to for a huge growth in the world of electronic
banking.
2. Malhotra, Pooja & Singh, B. (2010)
This study is an attempt to present the present status of Internet banking in India and the
extent of Internet banking services offered by Internet banks. In addition, it seeks to
examine the factors affecting the extent of Internet banking services. The data for this
study are based on a survey of bank websites explored during July 2008. The sample
consists of 82 banks operating in India at 31 March 2007. Multiple regression technique
is employed to explore the determinants of the extent of Internet banking services. The
results show that the private and foreign Internet banks have performed well in offering a
wider range and more advanced services of Internet banking in comparison with public
sector banks. Among the determinants affecting the extent of Internet banking services,
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size of the bank, experience of the bank in offering Internet banking, financing pattern
and ownership of the bank are found to be significant. The purpose of the study is to help
fill significant gaps in knowledge about the Internet banking landscape in India. The
findings are expected to be of great use to the government, regulators, commercial banks,
and other financial institutions, e.g. co-operative banks planning to offer Internet banking,
bank customers and researchers. The bankers as well as society at large will come to
know where the banks lag in terms of adoption of Internet banking and in providing
different products and services. An understanding of the factors affecting the extent of
Internet banking services is essential both for economists studying the determinants of
growth and for the creators and producers of such technologies. Moreover, this paper
contributes to the empirical literature on diffusion of financial innovations, particularly
Internet banking, in a developing country, i.e. India.
3. Azouzi, D. (2009)
This paper aims to check if the current and prompt technological revolution altering the
whole world has crucial impacts on the Tunisian banking sector. Particularly, this study
seeks some clues on which we can rely in order to understand the customers' behavior
regarding the adoption of electronic banking. To achieve this purpose, an empirical
research is carried out in Tunisia and it reveals that panoply of factors is affecting the
customers-attitude toward e-banking. For instance; age, gender and educational
qualifications seem to be important and they split up the group into electronic banking
adopters and traditional banking defenders and so, they have significant influence on the
customers' adoption of e-banking. Furthermore, this study shows that despite the
presidential incentives and in spite of being fully aware of the e-bakings benefits,
numerous respondents are still using the conventional banking. It is worthy to mention
that the fear of loss because of transactions errors or hackers plays a significant role in
alienating Tunisian customers from online banking.
4. Chandana R, Unnithan, Paula M.C., Swatman
In their research paper titled E-Banking Adaptions and Dot.Com viability: A
comparison of Australian and Indian experiences in the Banking sector a comparative
study of Australian and Indian experiences in E-Business was done, which seeks to
identify the effectiveness of dotcoms as indicators of e-Business uptake and success on a
sector-by-sector basis was undertaken. It was concluded that the banking industry is now
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a very mature one and banks are being forced to change rapidly as a result of open market
forces such as the threat of competition, customer demand, and technological innovations
such as the growth of the Internet. E-Banking is a successful strategic weapon for banks
to remain profitable in a volatile and competitive market place of today in both Indian and
Australian Economies despite the differences of IT usage.
5. Uppal, R.K. & Chawla, R. (2009)
This study highlights customer perceptions regarding e-banking services. A survey of
1,200 respondents was conducted in October 2008 in Ludhiana district, Punjab. The
respondents were equally divided among three bank groups namely, public sector, private
sector and foreign banks. The present study investigates the perceptions of the bank
customers regarding necessity of e-banking services, quality of e-banking services, bank
frauds, future of e-banking, preference of bank customers regarding banks, comparative
study of banking services in various bank groups, preferences regarding use of e-channels
and problems faced by e-bank customers. The major finding of this study is that
customers of all bank groups are interested in e-banking services, but at the same time are
facing problems like, inadequate knowledge, poor network, lack of infrastructure,
unsuitable location, misuse of ATM cards and difficulty to open an account. Keeping in
mind these problems faced by bank customers, this paper frames some strategies like
customer education, seminars/meetings, proper network and infrastructure facilities,
online shopping facilities, proper working and installation of ATM machines, etc., to
enhance e-banking services. Majority of professionals and business class customers as
well as highly educated and less educated customers also feel that e-banking has
improved the quality of customer services in banks.
6. G. Kannabiran and P.C. Narayan
They discuss in their article the experiences of a private-sector bank in deploying Internet
banking and eCommerce in India. Strategic alignment of business and IT strategies,
planning and implementation of e banking initiatives, and management of benefits have
been captured, along with key contributions to development.
7. Huggins
He points to the fact that traditional boundaries in banking are disappearing. Using E-
Business methods, major retailers and telecom providers are starting to offer financial
services to their clients. Extending the value chain and offering versatile services seems to
be the key to retaining competitiveness in the sector. Attitudes are also shifting from
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direct transactions to savings and investments, as the baby boomers reach their fortis and
fifties, and prepare for retirement.
8. Shah & Braganza (2007),
This survey indicates the Critical Success Factors in ebanking and the author suggest in
this article that the organizational factors, which are critical to the success of e-banking,
are investigated. Different pieces of literature report different factors as key to success
and generally based on subjective, perceptual data. A synthesis of existing literature is a
basis for survey questions. The data was collected from UK based financial sector
organizations who are offering their services on electronic channels, using postal
questionnaires. The top factors found to be most critical for the success in e-banking are:
quick responsive products/services, organizational flexibility, services expansion, systems
integration and enhanced customer service. An important lesson from this research is that
organizations need to view the e-banking initiative as a business critical area rather than
just a technical issue. They need to give attention to internal integration, which may
include channels, technology and business process integration, and improving the overall
services to their customers.
9. Veneeva (2006)
This article describes that world is changing at a staggering rate and technology is
considered to be the key driver for these changes around us. Many activities are handled
electronically due the acceptance of information technology at home as well as at
workplace. Internet can be seen as a truly global phenomenon that has made time and
distance irrelevant to many transactions. The evolution of electronic banking started from
the use of automatic teller machines (ATM) and has passed through telephone banking,
direct bill payment, electronic fund transfer and the revolutionary online banking (Alter,
2002). The future of electronic banking according to some is the acceptance of WAP
enabled banking and interactive-TV banking (Petrus & Nelson, 2006). But it has been
forecasted that among all the categories, online banking is the future of electronic
financial transaction. The rise in the e-commerce and the use of internet in its facilitation
along with the enhanced online security of transactions and sensitive information has
been the core reasons for the penetration of online banking in everyday life.
10. Mario Martinez Guerreroin
His paper titled Profiling the adoption of Online banking Services in the European
Union offers an empirical investigation on the adoption of online banking services
among European citizen. The use of E-banking services is explained on the basis of
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socio-demographic and Internet specific behavioural indicators. The performed analyses
provide support for the influence of country, age, profession and several Internet
behaviours on the use of E-banking.
11. Nitsure, R.R. (2003),
This article indicates the E-banking Challenges and opportunities lies in the banking
industry. E-banking has the potential to transform the banking business as it significantly
lowers transaction and delivery costs. This paper discusses some of the problems
developing countries, which have a low penetration of information and
telecommunication technology, face in realizing the advantages of e-banking initiatives.
Major concerns such as the 'digital divide' between the rich and poor, the different
operational environments for public and private sector banks, problems of security and
authentication, management and regulation, and inadequate financing of small and
medium scale enterprises (SMEs) are highlighted.
12. The Indian Internet Banking Journey
In 2001, a Reserve Bank of India survey revealed that of 46 major banks operating in
India, around 50% were either offering Internet banking services at various levels or
planned to in the near future. According to a research report,( India Research, Kotak
Securities, May 2000.) while in 2001, India's Internet user base was an estimated 9 lakh;
it was expected to reach 90 lakh by 2003. Also, while only 1% of these Internet users
utilized the Internet banking services in 1998, the Internet banking user base increased to
16.7% by mid- 2000.
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CHAPTER -5
RESEARCH METHODOLOGY
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RESEARCH: Research refers to the systematic method consisting of enumerating of
problem, formulating the hypothesis, collecting the facts or data, analyzing the facts and
reaching certain conclusions either in the form of solutions towards the concerned problem or
in certain generalizations for some theoretical formulation. Research is defined as human
activity based on intellectual application in the investigation of matter. The primary purpose
for applied research is discovering, interpreting, and the development of methods and systems
for the advancement of human knowledge on a wide variety of scientific matters of our world
and the universe.
NEED FOR RESEARCH
Every market has to be competitive in his operation to survive and also able to make more
profits. To achieve their objectives they must be careful about their customers. They must
know the satisfaction level of the customer and the usage of their products.
Customer is the king of the market. Todays market is directed by the customer, so it
is necessary for each and every type of business to know about the varying nature of their
customers, by which they can provide best services to them. By this they will be able to retain
the customer for a long period. All this results in increased demand , higher market share and
more profits.
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If a company knows about the needs and behavior of its customers, then it can
develop its strategies according to their need. It is also said that the cost of attracting a new
customer is five times more than as existing customer. So a company should try to satisfy its
customers.
So thats why Housing Development financial corporation has decided to do a
research to know the awareness level of service class people regarding E- Banking services
and to understand the problems encountered while using E-banking services.
RESEARCH METHODOLOGY
Meaning of Research Methodology;-
A research methodology defines what the activity of research is, how to proceed, how to
measure progress, and what constitutes success.
Methodology is defined as
1. "the analysis of the principles of methods, rules, and postulates employed by a
discipline" or
2. "the development of methods, to be applied within a discipline"
3. "a particular procedure or set of procedures".
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. It is necessary for
the researcher to know not only the research methods/ techniques but also the
methodology. Researcher not only need to know how to develop certain indices or tests,
how to calculate the mean, median, mode or the standard deviation or chi-square, how to
apply a particular research technique, but they also need to know which of these methods
or techniques, are relevant and which are not.
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Research methodology to be adopted for the study is as follows:-
Identification of the problem:-
The research project relates to know the E-Banking Preference among people with special
reference to HDFC Bank.. In it the problem proposed is to be researched is to find out the
frequency and the factors that influence the adoption of E-Banking services and the problemswhich are faced by service class people while opting E-Banking Services.
Planning the research design:-
A suitable design has to be planned for any market research. It is the market plan specifying
the procedure for collecting & analyzing the needed information. As per objective of the
study mainly there are four types of research design viz: experimental, diagnostic, descriptive
& exploratory.Here descriptive research design is proposed with focus on discovering of ideas & insight
about the particular problem.
Planning the sample design:-
The target for the study was consumers ofFerozepur and near by places. Survey has been
done using questionnaire method, open and close- ended questions being included in the
questionnaire. The secondary data for the research study has been collected from various
magazines, newspapers, journals, books and websites.
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Major market players in the products the relevant areas have also been consulted for the
research.
Sampling technique:-
The sampling technique used for judgment is convenience and Judgement Sampling.
Sample size:-
The sample size of the research project has been taken 100 of the customers of Chandigarh.
Data collection:-
The relevant data for the research project is hybrid of primary and secondary data.
Primary data:-
Using personal interview technique, survey, questionnaire & observation method the data has
been collected from targeted focus groups, which are customers. The primary data collection
for judgment sampling has done. This purpose has been formatted with both open & close
ended structured questions.
Secondary data:-
In addition to the reactions of the selected consumers segments, the factual information
historic background including the sales volume by various manufactures of the product has
been collected with the help of various trade/business journals, company magazines,
brochures, and company reports and concern trade association reports.
CONTRIBUTION EXPECTED OF THE STUDY
The study will be useful to identify the following things:
1. To study the awareness level of service class people regarding E-Banking.
2. To find out the frequency and the factors that influences the adoption of E-Banking
services.
3. To measure the satisfaction level of people.4. To understand the problems encountered in by service class people while using E-
Banking services(ATM, Phone banking, etc)
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CHAPTER-6
DATA ANALYSIS & INTERPRETATION
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1. In which bank do you have your account?
TABLE NO.1
BANKS NO. OF RESPONDENTS PERCENTAGE
SBI 24 24%
PNB 11 11%
ICICI 8 8%
HDFC 42 42%
SBP 2 2%
CANARA BANK 5 5%
BANK OF INDIA 3 3%
OBC 4 4%
OTHERS 1 1%
TOTAL 100 100%
CHART 1:
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Interpretation:
The above table shows that out of the 100 respondents 24 respondents have
account in SBI, 11 in PNB, 8 in ICICI, 42 in HDFC, 2 in SBP, 5 in CANARA,
3 in BANK OF INDIA, 4 in OBC and 1 in others such as corporation bank
etc.
2. While opening up the account, were you aware of E-banking services provided
by your bank?
TABLE NO.2
RESPONSE NO. OF RESPONDENTS PERCENTAGE
FULLY AWARE 37 37%HAD AN IDEA 46 46%
NO IDEA 17 17%
TOTAL 100 100%
CHART 2:
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Interpretation:
As seen from Table 2, overall percentage of service class people having complete
knowledge about e-banking services provided by the bank while opening an account
in it is 37%, those having some idea about it is 46% and the percentage of people
having no awareness of e-banking services provided by the bank is 17%. It can
reasonably, be concluded that nearly 85% of the population is having awareness about
e-banking services
3. How did you get to know about E-banking services of your bank?
TABLE NO.3
RESPONSE NO. OF RESPONDENTS PERCENTAGEPERSONAL VISIT 15 15%
EXECUTION FROMBANK
21 21%
ADVERTISEMENT 34 34%
FRIENDS/RELATIVES 26 26%
OTHERS 2 2%
TOTAL 100 100%
CHART 3:
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INTERPRETATION: The above table shows that out of the 100 respondents 15respondents get to know about E-Banking services through personal visit, 21 from executionfrom bank, 34 from advertisement,26 from friends/ relatives and 2 from others.
4. Which of the following E-Banking services are you aware of?
TABLE NO.4
RESPONSE NO. OF RESPONDENTS PERCENTAGE
ATM 34 34%
CREDIT CARD 16 16%
PHONE BANKING 12 12%
MOBILE BANKING 25 25%
INTERNET BANKING 13 13%
TOTAL 100 100
CHART 4:
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INTERPRETATION: E-banking constitutes services provided in terms of ATMs, Credit
Card, Phone Banking, Mobile Banking, Internet Banking etc, of which the first six have been
covered. Amongst these ATM scores the largest used service status (34%) as indicated by
table 4 figures. Close on the heels is Mobile banking (25%), Credit card (16%), while phone
banking lags behind by scoring the least ie.12%.
5. Do you use E-banking services?
TABLE NO.5
RESPONSE NO. OF RESPONDENTS PERCENTAGE
YES 100 100%
NO 0 0%
TOTAL 100 100%
CHART 5:
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INTERPRETATION: The above analysis shows that all the respondents are using E-
Banking services.
6. If answer to question no.5 is yes, how frequently do you use these services?
FACTORS Once in aDay
Once in aWeek
Once in aFortnight
Once in amonth
A ATM 12 23 17 48
C CREDIT CARD 23 12 15 50
D PHONE BANKING 34 43 13 10
E MOBILE BANKING 41 19 22 18
F INTERNET BANKING 18 19 31 32
CHART 6:
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INTERPRETATION: The above analysis show that out of 100 respondents mostly
respondents are using mobile banking services daily and then phone banking, credit card.
Mostly service class people use these services monthly and weekly.
7. Which of the following factors influence you the most to use E-banking services?
FACTORS STRONGLY MORETHANAVERAGE
AVERAGE LESSTHANAVERAGE
NOT ATALL
A All timeavailability
82 10 3 3 2
B Ease of use 77 13 7 3 0
C Nearness 68 12 10 9 1
D Security 54 12 20 14 0
E Direct access 35 24 27 12 2
F Friends/
Relatives
28 12 14 25 21
G Status symbol 43 7 12 28 10
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CHART 7:
INTERPRETATION: A study of the factors, table 7, influencing the usage was made by
listing out various factors such as all time availability, ease of use, nearness etc., and from
which it came to fore that amongst the various factors all time availability is ranked as the
major motivating factor, followed by ease of use, status symbol, nearness, security in
decreasing order of importance. Quite interestingly friends and relatives, direct access scored
the least motivating factors.
8. Which of the following benefits accrue to you, while using E-banking services?
TABLE NO.8
RESPONSE NO. OF RESPONDENTS PERCENTAGE
TIME SAVING 47 47%
INEXPENSIVE 20 20%
EASY PROCESSING 21 21%
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EASY FUNDTRANSFER
10 10%
OTHERS 2 2%
TOTAL 100 100%
CHART 8:
INTERPRETATION: When asked to list various benefits accruing from the usage of e-
banking, time saving received highest percentage score at 47% among different benefits such
as inexpensive (20%), easy processing (21%), easy fund transfer(10%). Quite interestingly,
easy processing feature scored more than the inexpensiveness of the e-banking services. The
other benefits accruing to the people include ready availability of funds, removal of
middlemen and no rude customer relation executives.
9. What are the problems identified while using E-banking services?
FACTORS NO. OFRESPONDENTS
PERCENTAGE
A Time consuming 17 17%
B Insecurity 10 10%
C ATM out of order 44 44%E Problem of 12 12%
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change inmobile number
F Passwordforgotten
7 7%
G Card misplaced 8 8%
H Misuse of card 2 2%TOTAL 100 100%
CHART 9:
INTERPRETATION: Most of the users face the problem of ATM out of order (45%),
followed by time consuming (18%), problem change in mobile number (12%) and then other
problems as insecurity, card misplaced, card misuse, etc
10. Kindly rate the following reasons enlisted for not using the E-banking services?
FACTORS HIGHLYIMPORTANT
MORE THANAVERAGE
AVERAGE LESS THANAVERAGE
A No need 18 28 43 11
B It seems like abotheration
23 17 32 28
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C Insecurity 45 15 11 29D No access to
internet/mobile24 21 37 18
E Lack of operationalKnowledge
28 31 26 15
F Hidden costs 23 14 35 28
CHART 10:
INTERPRETATION: From the above analysis out of 100 respondents mostly people do not
use E-Banking services due to Insecurity and lack of operational knowledge.
11. To what extent are you satisfied with your Banks E-banking services?
FACTORS NO. OF
RESPONDENTS
PERCENTAGE
A HIGHLY 58 58%
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SATISFIED
B SATISFIED 22 22%
C NEUTRAL 14 14%
E DISSATISFIED 4 4%
F HIGHLY
DISSATISFIED
2 2%
TOTAL 100 100%
CHART 11:
INTERPRETATION: From the above analysis we came to know that out of 100
respondents 58 respondents are highly satisfied while 22 are satisfied 14 are neutral and other
are dissatisfied and highly dissatisfied.
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6.1
HYPOTHESIS TESTING
CHI-SQUARE TESTS
Table 1) Finding Relationship between Age and usage of E-Banking Services:
NULL HYPOTHESIS: There exists a relationship between age and usage of E-BankingServices.
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AGE
GROUP
ATM CREDIT
CARD
PHONE
BANKING
MOBILE
BANKING
INTENET
BANKING
TOTAL
15-25 14