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Strategic Management Process 1

Chapter 1: THE BANKING INDUSTRY

1.1 INTRODUCTION

In today’s dynamic world banks are inevitable for the development of a country. Banks play a pivotal

role in enhancing each and every sector. They have helped bring a draw of development on the world’s

horizon and developing country like India is no exception.

Banks fulfill the role of a financial intermediary. This means that they act as a vehicle for moving

finance from those who have surplus money to (however temporarily those who have deficit. In

everyday branch terms! the banks channel funds from depositors whose accounts are in credit to

borrowers who are in debit. "ithout the intermediary of the banks! both their depositors and their

borrowers would have to contact each other directly. This can and does happen of course. This is what

has lead to the very foundation of financial institution like banks. The Banks have developed their roles

to such an extent that a direct contact between the depositors and borrowers in now known as

disintermediation. Banking industry has always revolved around the traditional function of taking

deposits! money transfer and making advances. These three are closely related to each other! the

ob#ective being to lend money! which is the profitable activity of the three. The Banks have introduced

progressively more sophisticated versions of these services and have diversified introduction in

numerable areas of activity not directly relating to this traditional trinity.

1.2 ABOUT THE BANKING INDUSTRY

1.2.1. History of Banking in Inia

"ithout a sound and effective banking system in India! there cannot be a healthy economy. $or the

past three decades India%s banking system has several outstanding achievements to its credit. The most

striking is its extensive reach. In fact! Indian banking system has reached even to the remote corners of

the country. This is one of the main reasons of India%s growth process.



2 Strategic Management Process

The government%s regular policy for Indian bank since &'' has paid rich dividends with the

nationalization of &) ma#or private banks of India. *oney has become the order of the day.

The first bank in India! though conservative! was established in &+,. $rom &+, till today! the #ourney

of Indian Banking -ystem can be segregated into three distinct phases. They are as mentioned below

• /arly phase from &+, to &'' of Indian Banks

• 0ationalization of Indian Banks and up to &''& prior to Indian Banking -ector 1eforms.

• 0ew phase of Indian Banking -ystem with the advent of Indian $inancial 2 Banking -ector

1eforms after &''&.

The banking industry has moved gradually from a regulated environment to a deregulated market

economy. The market developments kindled by liberalization and globalization have resulted in changes

in the intermediation role of banks. The pace of transformation has been more significant in recent times

with technology acting as a catalyst. "hile the banking system has done fairly well in ad#usting to the

new market dynamics! greater challenges lie ahead.

1.2.2. Inian Banking Syst!"

The banking scenario in India has been changing at fast pace from being #ust the borrowers and lenders

traditionally! the focus has shifted to more differentiated and customized product3service provider from

regulation to liberalization in the year &''&! from planned economy to market. 4olitical compulsion’s brought about nationalization of bank in &'' and lobbying by bank employees and their unions added

to the list of nationalized banks a few years later. -lowly the unions grew in strength! while bank

management stagnated. In the meantime! technology was becoming a global phenomenon lacking a

vision of the future and the banks erred badly in opposing the technology upgradation of banks.

The rules of the game under which banks operated changed in &''5. 0orms or income 1ecognition!

6ssets classification and loan loss provisioning were put in place and capital ade7uacy ratio become

mandatory.

The amendment of banking regulation act in &''5 saw the entry of new private sector banks and

foreign banks.




Figure 1 :- Structure of Banking System in India

6t present there are 8+ 4ublic -ector Banks! about 59 4rivate -ector Banks! )9 $oreign Banks and &'

11B’s! :8 ;rban <o=operative Banks! & -tate <o=operative Banks! &' 0ationalized Banks! , -tate

Bank of India 6ssociates and about ,!999 branches exist across the country.

1.2.#. Gro$t% an &r!s!nt stat's of t%! in'stry

<urrently (89&)! banking in India is 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

7uality of assets and capital ade7uacy! Indian banks are considered to have clean! strong and

transparent balance sheets relative to

other banks in comparable economies in its region. The 1eserve Bank of India is an autonomous body!

with minimal pressure from the government.




Figure 2 :-

Projected

growth rate

for banks

1.2.(.

)'t'r! of

t%! in'stry

The burden of

reporting and

other

regulatory re7uirements will fall heavily and disproportionately on small banks unless remedial action

is taken. $urther advances in information technology will permit the development of new products!

B60>! and risk=management techni7ues but may also pose important competitive and supervisory

issues. 0onbank entities will continue to offer bank=like products in competition with banks! raising

new the 7uestion of whether banks are still ?special@ and! more fundamentally! whether banks are

sufficiently different from nonblank firms to #ustify the maintenance of a safety net for banks. It is

useful! therefore! to try to chart the course of the banking industry in the next five to ten years and to

consider what policy issues the industry and regulators will face. The authors of this study do

not pretend to be clairvoyant. They are mindful of the many financial predictions that were once

offered with confidence but turned out to be wrong or premature. This

study is perhaps best described as an exercise in strategic thinking. Its approach is to analyze what has

happened in the recent past! consider in detail reasons for expecting




Figure 3 :- ha!!enges faced by the banking industry

recent trends to continue or to change! and draw the conse7uences for bank and regulatory policies. 6s

always! uncertainties abound! and events that may now appear fairly improbable may in fact shape the

future.




Chapter 2:

THE COMANY RO!I"E: HD!C BANK "TD#

The Aousing evelopment $inance <orporation Cimited (A$< was amongst the first to receive an

Din principle’ approval from the 1eserve Bank of India (1BI to set up a bank in the private sector! as

part of 1BI’s liberalization of the Indian Banking Industry in &''). The bank was incorporated in

6ugust &'') in the name of DA$< Bank Cimited’! with its registered office in *umbai! India. A$<

Bank commenced operations as a -cheduled <ommercial Bank in Eanuary &'':.

*RO+OTER

A$< is India’s premier housing finance company and en#oys an impeccable track record in India as

well as in international markets. -ince its inception in &'++! the <orporation 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. A$< 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. "ith its experience in the financial markets! strong market

reputation! large shareholder base and uni7ue consumer franchise! A$< was ideally positioned to

promote a bank in the Indian environment.

CA*ITA, STRUCTURE

6s on *arch 5&! 89&) the authorized share capital of the Bank is 1s. ::9 crore. The paid=up capital as

on the said date is 1s )+'!,&!99!,+93= (85''9:9)5: e7uity shares of 1s. 83= each. The A$< Froup

holds 88.) G of the Bank%s e7uity and about &.'+ G of the e7uity is held by the 6- 3 F1 epositories (in respect of the bank%s 6merican epository -hares (6- and Flobal epository

1eceipts (F1 Issues. 5).&& G of the e7uity is held by $oreign Institutional Investors ($IIs and the

Bank has )!88!5&) shareholders.



Strategic Management Process $

CBo* - TI+ES BANK A+A,GA+ATION

Hn *ay 85! 899,! the amalgamation of <enturion Bank of 4un#ab with A$< Bank was formally

approved by 1eserve Bank of India to complete the statutory and regulatory approval process. 6s per

the scheme of amalgamation! shareholders of <Bo4 received & share of A$< Bank for every 8'

shares of <Bo4. The amalgamation added significant value to A$< Bank in terms of increased branch

network! geographic reach! and customer base! and a bigger pool of skilled manpower.

DISTRIBUTION NETORK

A$< Bank is head7uartered in *umbai. 6s of *arch 5&! 89&)! the Bank’s distribution network was

at 5!)95 branches in 8!&+& cities. 6ll branches are linked on an online real=time basis. <ustomers in

over &5'+ locations are also serviced through Telephone Banking. The Bank also has a network of

&&!8: 6T*s across India. A$< Bank’s 6T* network can be accessed by all domestic and

international isa 3 *aster<ard! isa /lectron 3 *aestro! 4lus 3 <irrus and 6merican /xpress <redit 3

<harge cardholders.

TECHNO,OGY

A$< Bank operates in a highly automated environment in terms of information technology and

communication systems. 6ll the bank’s branches have online connectivity! which enables the bank to

offer speedy funds transfer facilities to its customers. *ulti=branch access is also provided to retail

customers through the branch network and 6utomated Teller *achines (6T*s.The Bank has made

substantial efforts and investments in ac7uiring the best technology available internationally! to build

the infrastructure for a world class bank. In terms of core banking software! the <orporate Banking

business is supported by $lexcube! while the 1etail Banking business by $inware! both from i=flex

-olutions Ctd. The systems are open! scaleable and web=enabled. 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.



% Strategic Management Process

+ANAGE+ENT

*r. <.*. asudev has been appointed as the <hairman of the Bank with effect from th Euly 89&9. 6

retired I6- officer! *r. asudev has been a irector of the Bank since Hctober 899. Ae has held

several key positions in India and overseas! including $inance -ecretary! Fovernment of India!

/xecutive irector! "orld Bank and Fovernment nominee on the Boards of many companies in the

financial sector. The *anaging irector! *r. 6ditya 4uri! has been a professional banker for over 8:

years. Fiven the professional expertise of the management team and the overall focus on recruiting and

retaining the best talent in the industry! the bank believes that its people are a significant competitive

strength.

BUSINESSES

A$< Bank caters to a wide range of banking services covering commercial and investment banking

on the wholesale side and transactional 3 branch banking on the retail side. The bank has three key

business segments

/i0 %o!sa! Banking The Bank’s target market is primarily large! blue=chip manufacturing

companies in the Indian corporate sector and to a lesser extent! small 2 mid=sized corporates and agri=

based businesses. $or these customers! the Bank provides a wide range of commercial and transactional

banking services! including working capital finance! trade services! transactional services! cash

management! etc. The bank is also a leading provider of structured solutions! which combine cash

management services with vendor and distributor finance for facilitating superior supply chain

management for its corporate customers. Based on its superior product delivery 3 service levels and

strong customer orientation! the Bank has made significant inroads into the banking consortia of a

number of leading Indian corporates including multinationals! companies from the domestic business

houses and prime public sector companies. It is recognised as a leading provider of cash management

and transactional banking solutions to corporate customers! mutual funds! stock exchange members and

banks.



Strategic Management Process &

/ii0 Tr!as'ry"ithin this business! the bank has three main product areas = $oreign /xchange and

erivatives! Cocal <urrency *oney *arket 2 ebt -ecurities! and /7uities. "ith the liberalisation of

the financial markets in India! corporates 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 re7uirements! the bank is re7uired to hold 8:G

of its deposits in government securities. The Treasury business is responsible for managing the returns

and market risk on this investment portfolio.

/iii0 R!tai Banking The ob#ective of the 1etail 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 his3her

banking re7uirements. The products are backed by world=class service and delivered to customers

through the growing branch network! as well as through alternative delivery channels like 6T*s!

4hone Banking! 0etBanking and *obile Banking. The A$< Bank 4referred program for high net

worth individuals! the A$< Bank 4lus and the Investment 6dvisory -ervices 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

6uto Coans! Coans against marketable securities! 4ersonal Coans and Coans for Two=wheelers. It is

also a leading provider of epository 4articipant (4 services for retail customers! providing

customers the facility to hold their investments in electronic form. A$< Bank was the first bank in

India to launch an International ebit <ard in association with I-6 (I-6 /lectron and issues the

*aster<ard *aestro debit card as well. The Bank launched its credit card business in late 899&. The

Bank is well positioned as a leader in various net based B8< opportunities including a wide range of

internet banking services for $ixed eposits! Coans! Bill 4ayments! etc.



1' Strategic Management Process

RATINGS

Cr!it Rating

A$< Bank has its deposit programmes rated by two rating agencies = <redit 6nalysis 2

1esearch Cimited. (<61/ and $itch 1atings India 4rivate Cimited. The bank%s $ixed

eposit programme has been rated %<61/ 666 ($% JTriple 6K by <61/! which

represents instruments considered to be Lof the best 7uality! carrying negligible

investment riskL.

A$< Bank also has its long term unsecured! subordinated (Tier II Bonds of 1s.)

billion rated by <61/ and $itch 1atings India 4rivate Cimited. <61/ has assigned the

rating of L<61/ 666L for the Tier II Bonds while $itch 1atings India 4vt. Ctd. has

assigned the rating L666 (indL with the outlook on the rating as LstableL. In each of the

cases referred to above! the ratings awarded were the highest assigned by the rating

agency for those instruments.

AARDS - ACHIE3E+ENTS BANKING SER3ICES

Mr Paresh Sukthankar, Deputy

Managing Director, HDFC Bank

accepting the D&B Corporate Award 20!

A$< Bank began operations in &'': with a simple mission to be a 4or5ass Inian Bank4. "e

realised that only a single=minded focus on product 7uality and service excellence would help us get

there. Today! we are proud to say that we are well on our way towards that goal.




89&)

un 2 Bradstreet = *anappuram $inance

Cimited <orporate 6ward 89&) B!st Cor&orat! in Banking S!5tor

89&5

Businessworld B!st Bank in Inia /,arg! Banks0

Business -tandard+r Aitya *'ri Bank!r of t%! Y!ar

261#

Business India B!st Bank 261#

Flobal $inance -urvey ="orld%s Best

Banks 89&5B!st Bank in Inia

IB6 Innovation 6wards +ost Inno7ati7! 's! of T!5%noogy

$orbes 6sia )a8 96 Co"&ani!s ,ist for t%! :t% y!ar

Figure " :- #i!estones in the history

ORGANI;ATION STRUCTURE AND ORGANI;ATION HIERARCHY <

The organization structure of the company is headed by the administrative department which

coordinates and controls the executive department. The executive department is a link from the top and

the bottom comprising of the lower level employees such that they work together to fulfill the common

ob#ective of getting business from the persons who get in touch with them and see to it that they are

provided with the best of the B60> which constitute giving financial advise to providing 6ccount to

the customers. The lower level employees and the corporate financial consultants work together to see

to it that the database for providing financial B60> to sufficient number of people is made.

http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/DnB-Corporate-Awards2014.pdf


http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/Businessworld-Best%20Bank.pdf

http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/Website_Mr_Aditya_Puri_amed_Business_Standard_Banker_of_the_Year_2013.pdf


http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/Website_HDFC_Bank_tops_Business_Today_Best_Banks_Survey.pdf

http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/Website_HDFC_Bank_named_Best_Bank_in_India.pdf

http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/Businessworld-Best%20Bank.pdf



http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/Website_HDFC_Bank_tops_Business_Today_Best_Banks_Survey.pdf

http://www.hdfcbank.com/htdocs/aboutus/awards/pdf/Website_HDFC_Bank_named_Best_Bank_in_India.pdf




Managing

Director

Group Head(Regional

Branch

Banking)

Regional Head/ BranchBanking Head

Circle Head/ Zonal Head

Cluster Head

Branch Manager

BM! PB Sales! PB "elcome Desk! PB uthori#er! $ellers! $elleruthori#er! Head RMs! RMs


/ach team lead has a team comprising only of both senior as well as #unior market research analyst

who aid the team lead in the entire market research process as it has been discussed previously. This is

the basic organizational structure followed by A$< B60>.

Figure $ :-

%rgani&ationa! 'ierarchy

*RODUCT AND SER3ICE *RO)I,E O) THE ORGANI;ATION :-

A$< 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. $or

individuals! the company has a range of 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. $or organizations the company has a host of




customized solutions that range from $unded services! 0on=funded services! alue addition services!

*utual fund etc. These affordable plans apart from providing long

term value to the employees help in enhancing Foodwill of the company. The products of the company

are categorized into various sections which are as follows

4ersonal Banking -alary 6ccounts

-aving 6ccounts $ixed eposits

emat 6ccount -afe eposit Cockers

Coans <redit <ards

ebit <ards 4repaid <ards

Investments 2 Insurance $orex -ervices

4ayment -ervices 0etBanking

Insta6lerts *obileBanking

InstaMuery 6T*

4honeBanking 01I Banking

1upee -avings 6ccounts 1upee -aving 6ccounts

1upee $ixed eposits $oreign <urrency eposits

6ccounts for 1eturning Indians Muick remit (0orth 6merica! ;>!/urope! -outheast 6sia

India Cink (*iddle /ast! 6frica <oe7ual Cock Box




Figure ( :- Products ) Ser*ices of the bank

Chapter 3:STRATEGIC MANAGEMENT ROCESS (SM)

D!finition <

It is the full set of commitments! decisions and actions re7uired for a firm to achieve strategic

competitiveness and above average returns.

-trategic competitiveness when a firm successfully formulates and implements a value creating

strategy

6bove Naverage 1eturns 1eturns in excess of what an investor expects to earn from other

investments with a similar amount of risk




Figure + :- Strategic #anagement Process

Chapter 4:*ISION+ MISSION , BUSINESS !OCUS

#.1. HD)C GOA,S

&. evelop close relationships with individual households.8. *aintain our position as the premier housing finance institution in the country.5. Transform ideas into viable and creative solutions.). To grow through diversification by gaining leverage from our existing client base.:. To nurture the values and ethos of Brand A$< through all its -ubsidiaries and 6ssociate

<ompanies.

#.2. 3ISION STATE+ENT O) HD)C BANK

To build a "orld=<lass Indian Bank.

By offering a wide variety of relevant products and servicesO

& Tailored solutions for customers8 /nsure ;nmatched customer service5 4roviding the solution at right price) Aave wide and extensive reach

The delivery backbone for providing the above shall be by adopting world class technology.

#.#. +ISSION STATE+ENT O) HD)C BANK

Hur mission is to be La "orld <lass Indian BankL! benchmarking ourselves against international

standards and best practices in terms of product offerings! technology! service levels! risk management

and audit 2 compliance. The ob#ective is to build sound customer franchises across distinct businesses

so as to be a preferred provider of banking services for target retail and wholesale customer segments!

and to achieve a healthy growth in profitability! consistent with the Bank%s risk appetite. "e are




committed to do this while ensuring the highest levels of ethical standards! professional integrity!

corporate governance and regulatory compliance.

#.(. BUSINESS )OCUS

A$< Bank’s mission is to be a "orld <lass Indian Bank. The ob#ective 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. A$< Bank’s business

philosophy is based on five core values Hperational /xcellence! <ustomer $ocus! 4roduct Ceadership!

4eople and -ustainability.

#.9. BUSINESS *HI,OSO*HY

A$< Bank is a young and dynamic bank! with a youthful and enthusiastic team determined to

accomplish the vision of becoming a $or5ass Inian 8ank .

Hur business philosophy is based on five core values = C'sto"!r )o5's! O&!rationa E=5!!n5!!

*ro'5t ,!a!rs%i&> *!o&! and S'staina8iity. "e believe that the ultimate identity and success of

our bank will reside in the exceptional 7uality of our people and their extraordinary efforts. $or this

reason! we are committed to hiring! developing! motivating and retaining the best people in the

industry.



Strategic Management Process 1$

Chapter 5:EN*IRONMENTA" ANA"YSIS

D!finition <

/nvironment refers to all external forces which have a bearing on the functioning of business.

@/nvironment are largely if not totally external! and beyond the control of individual industrial

enterprises and their management. These are essentially the givers within which firms and their

managements must operate in a specific country and they vary! from country to country@.

B-./0e..De/./0

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M/../0 O 78e t/e.Ma0a9ee0t Str-t-re

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Cpa0; /a9eH-a0 re.-re.!/0a0/a Capa7//t/e.

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M=t9 I0tere>/ar/e.

M/r E0/r0e0t

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G7a

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B%S&'SS '&R*'M'$



1% Strategic Management Process

Figure , :- n*ironment ana!ysis

Chapter 6:INTERNA" EN*IRONMENTA" ANA"YSIS

6ny business has certain vision! mission and ob#ectives and a strategy to achieve them. $ormulation of

strategy is defined as establishing a proper "ir#$en%iron#ent "it . Indeed the ob#ectives should be based

on an assessment of the external environment and the organizational factors (internal environment.

• 3ision

• +ission

• O8?!5ti7!s

• +anag!"!nt Str'5t'r!

• H'"an R!so'r5!s

• )inan5ia )a5tors

• Co"&any I"ag! an Bran E@'ity

Int!rna anaysis toos 's!

(i -"HT 606PC-I-(ii B<F *6T1IQ



Strategic Management Process 1&

/i0 SOT ANA,YSIS O) HD)C BANK

Str!ngt%s

A$< bank is the second largest private banking sector in India having 8!89& branches and

+!&&9 6T*’s A$< bank is located in &!&+) cities in India and has more than ,99 locations to serve

customers through Telephone banking The bank’s 6T* card is compatible with all domestic and international isa3*aster card! isa

/lectron3 *aestro! 4lus3cirus and 6merican /xpress. This is one reason for A$< cards to be

the most preferred card for shopping and online transactions A$< bank has the high degree of customer satisfaction when compared to other private banks

The attrition rate in A$< is low and it is one of the best places to work in private banking

sector A$< has lots of awards and recognition! it has received DBest Bank’ award from various

financial rating institutions like un and Bradstreet! $inancial express! /uro money awards for

excellence! $inance 6sia country awards etc

A$< has good financial advisors in terms of guiding customers towards right investments

!akn!ss!s

A$< bank doesn’t have strong presence in 1ural areas! where as I<I<I bank its direct

competitor is expanding in rural market




A$< cannot en#oy first mover advantage in rural areas. 1ural people are hard core loyals in

terms of banking services.

A$< lacks in aggressive marketing strategies like I<I<I

The bank focuses mostly on high end clients

-ome of the bank’s product categories lack in performance and doesn’t have reach in the market

The share prices of A$< are often fluctuating causing uncertainty for the investors

O&&ort'niti!s

A$< bank has better asset 7uality parameters over government banks! hence the profit growth

is likely to increase

The companies in large and -*/ are growing at very fast pace. A$< has good reputation in

terms of maintaining corporate salary accounts

A$< bank has improved it’s bad debts portfolio and the recovery of bad debts are high when

compared to government banks

A$< has very good opportunities in abroad

Freater scope for ac7uisitions and strategic alliances due to strong financial position

T%r!ats

A$<’s nonperforming assets (046 increased from 9.&, G to 9.89G. Though it is a slight

variation it’s not a good sign for the financial health of the bank

The non banking financial companies and new age banks are increasing in India

The A$< is not able to expand its market share as I<I<I imposes ma#or threat

The government banks are trying to modernize to compete with private banks

1BI has opened up to +)G for foreign banks to invest in Indian market.




• 8nd largest private sector bank • 6pprox. 5)99 branches and &&8:9

6T*s across country

• /mployee friendly organization=lower

attrition rates as compared to other competitors

• <ustomer friendly approach

• -ound financial advisors for investment

clients

• 6doption of latest technology for bank

softwares and net banking facilities• Cow minimum balance in savings

account

• Cow presence in rural areas ascompared to most of its topcompetitors

• Cack of aggressive marketing

strategies in comparison to other banks

• Aeavy focus on mid and high level

clients

• 0ot all the verticals of the bank are

performing successfully•

;nstable share prices

• -cope in rural market

• -teady customer oriented approach to

drive business in future

• <orporate accounts! especially of the

growing -*/ sector

• Hperations abroad N scope in countries

like Bangladesh! ;6/ and -ri Canka

• Freater scope for ac7uisitions and

strategic alliances due to strongfinancial position

• Improvement in bad debt recovery

strategies

• Increasing percentage if 0on=

4erforming assets of the company

• *a#or competition threat from banks

like I<I<I! A-B<! 6QI- and -BI

• Increasing number of 0B$<s and

new age banks

• 6ttractive interest rates provided by

4-; banks in comparison to private banks

• -hifting consumer base from private

players to 4-; due to modernizationof 4-;s

• 1BI has opened up to +)G for foreign

banks to invest in Indian market

SOT ANAY,SIS O) HD)C BANK

H+P,%+ HRM,%+

S$R'G$HS "-'SSS

*PP*R$%'&$&S $HR$S




Figure . :- S/%0 na!ysis of the bank

/ii0 BCG +ATRI

The BCG "atri= is a chart that had been created by Bruce Aenderson for the Boston <onsulting

Froup in &'+9 to help corporations with analyzing their business units or product lines. This helps the

company allocate resources and is used as an analytical tool in brand marketing! product management!

strategic management! and portfolio analysis.

HD)C Bank

A$< B60> stands at star position in B<F matrix. 6s A$< bank have the high market growth and

they also have high market share. There is a lot of growth potential for the banking industry because of

increasing disposable income of customers! increasing working class! more volatility in other markets

also increasing importance of savings and already discussed almost 59G of the market is still untapped.




HD)C Ins'ran5!s

In insurance sector A$<’s most of the products are in star position. A$< insurance products have

high market share and high growth rate. -o we have lot of opportunity for investment.

HD)C +'t'a )'ns

*utual fund stands at cash cow. This shows that A$< high market share and low market growth rate

in mutual funds. This means we should only focus on profitable products and try to investment on those

products which are low market growth rate but perform well if proper investment is theirs.

Gro$t% an "argins

Aaving the funds to grow is only half the problem. Aowever! will the company actually growR The

sluggish rate of growth in the economy suggests that growth could indeed pose a problem. In fact! in

the first 7uarter of the financial year=ended 899&! A$< Ba0= a. a7e t rer> 0; a )3 per

cent growth in profits. This! however! may not be good enough to #ustify the valuation commanded by

the stock. 6nd if! due to the slowdown! the bank is forced to invest in government securities rather than

in loans! which generate higher returns! the margins will be affected. Hn the other hand! competition

from other banks may increase. Aence it can be concluded that A$< B60> stands at cash cow in

B<F matrix.




Figure 1 :- B #atri4

Chapter $:E@TERNA" EN*IRONMENTA" ANA"YSIS

*ESTE, ANAY,SIS




*oiti5a

fa5tors<

• Fovernme

nt

regulations Banks as a financial body are always restricted with policies and rules.

The 1BI closely governs the banks and other financial institutions and budgets made by the

government affects the banking activities and also its business to a certain extent.

Fovernment’s support to the 4-; banks has an impact on the performance of other private players.

1BI is going to allow foreign banks to invest upto +)G into the Indian market.

E5ono"i5 fa5tors<

• /very year! the changes in monetary policy affect the workings of the bank. The decisions on

the monetary policy impact the interest rates at which banks lend money.




• In the last 8 years 1BI has modified its monetary rates &5 times to curb inflation and other

financial risks related.

• Banking sector has played a ma#or role in the increasing F4 of the country! thereby providing

its support to strengthen the economy.• 1obust economic policies by the regulatory body helped Indian banks survive the severe

meltdown of 899'.

So5ia fa5tors<

• The life style of Indians consumers is rapidly changing and the buying power has also grown by

leaps and bounds

• The rural market is expanding rapidly too. The concept of banking has slowly begun to sink in

the minds of the rural population and is making an impact on the lives of the rural population

and also on the banks operating in rural areas.

• Illiteracy is still an issue that India is fighting with and therefore not many can read and

understand the terms of banks! thereby making them keep distance from banks.

T!5%noogi5a fa5tors<

• Banks have a wide network of 6T*s lately.

• 6utomated voice responsive machines help bank tackle small 7ueries of customers.

• Improved net banking and *obile facility provided by banks has helped many customers save

time! money and also unnecessary hassles.

• Internet banking or banking via the Internet can be considered a

remarkable development in the banking sector. The ability to carry out

banking transactions through the Internet has empowered customers

to execute their financial transactions within the comfort of their

homes and offices.




En7iron"!nta fa5tors<

• A$< Bank Eoins The 6nti=4lastic rive

• Hne of India%s leading banks= A$< Bank! is partnering with the city%s municipal authorities to

educate people about the danger posed by plastic bags to the environment! and to offer recycled

paper bags instead.

• The bank reinforced the >olkata *unicipal <orporation (>*< initiated anti=plastic awareness

drive by distributing recycled and eco=friendly paper bags to retailers and customers across nine

markets in the city.

• The initiative christened LBe Independent of 4lastic on Independence ayL is undertaken by the

bank to encourage people to proactively get rid of plastic bags and use eco=friendly recycled

paper bags.• A$< bank urges its customers to use the internet to transact with them especially in case of

*utual $unds by using A$<*$ Hnline Oslogan beingO.

• D"ith A$<*< Hnline you will help save a lot of paper and we encourage you to choose this

eco=friendly mode of transacting. "e hope you will help us in our endeavor to protect our

environment and help us -6/ 464/1! -6/ T1//-.’

,!ga fa5tors<

• Initiating appropriate legal proceedings as per <ollections re7uirement and helping <ollections

in meeting numbers and deadlines. "ithin the T6T prescribed for each process.

• /ffective vendor management including clearance of bills without delay. "ithin 5 days of

receipt of bills! bills to be forwarded to respective departments.




• Hverseeing and reviewing legal managers of the area by conducting periodical reviews and

ensuring that process adopted is in line with policy and re7uirements. (0ot 7uantifiable

• *aintaining *I- of the area and providing it to higher ups within T6T. (0ot 7uantifiable

• Aandling the claims raised against the bank effectively before all forums3 statutory bodies and

ensuring that no adverse orders are passed against the bank. (0ot 7uantifiable

Chapter %: THE INDUSTRY ANA"YSIS

In'stry Str'5t'r! /Using *ort!rs fi7! for5!s "o!0

4orter’s five forces analysis is a framework for industry analysis and business strategy development

formed by *ichael /. 4orter of Aarvard Business -chool in &'+'. It draws upon industrial organization

(IH economics to derive five forces that determine the competitive intensity and therefore!

attractiveness of a market.




6n LunattractiveL industry is one in which the combination of these five forces acts to drive down

overall profitability. 6 very unattractive industry would be one approaching Lpure competitionL! in

which available profits for all firms are driven to normal profit.

4orters model is! applied microeconomic principles to business strategy and analyzed the strategic

re7uirements of industrial sectors! not #ust specific companies. The five forces are competitive factors

which determine industry competition and include suppliers! rivalry within an industry! substitute

products! customers or buyers! and new entrants.

Banking is mainly a client oriented business. 6 high=7uality of services to the client is crucial for the

growth and stability of any bank. 6 wider distribution and access of financial services helps both

consumers and producers to raise their

welfare and productivity. -uch access is especially powerful for the poor as it provides them

opportunities to build savings! make investments! avail credit! and more important! insure themselves

against income shocks and emergencies.

To survive in an increasingly competitive environment! bank need to come up with various facilities

like Internet banking! mobile banking etc. "ith the onset of mobile banking! the industry finds itself at

the threshold of the next ma#or technological leap.




i. Bargaining &o$!r of B'y!rs =

*oderate bargaining power of customers on account of banks renders uniform services to the

clients. 0ow a day’s almost all banks would like to provide re7uisite information very easily by

way to Internet! *obile banking to the clients

ii. Bargaining &o$!r of S'&&i!rs = Cow bargaining power of supplier’s on account of 1BI

regulatory benchmarks. Banks have to meet numerous regulatory standards created by 1BI

iii. Co"&!titi7! Ri7ary = Aigh competition of account of number of prominent public! private!

foreign along with cooperative banks.

Top 4erforming 4ublic -ector Banks

a. 6ndhra Bank b. 6llahabad Bank c. 4un#ab 0ational Bank

Top 4erforming 4rivate -ector Banks

a. I<I<I Bank b. 6QI- Bank c. >otak *ahindra Bank

iv. A7aia8iity of S'8stit't!s = Aigh menace from substitutes like 0B$<’s! *utual funds!

Fovernment securities and T=bills.




v. T%r!at of n!$ !ntrants = Cow threat of new entrants on account of banking regulations. Before

setting up of a new bank! it is essential to take the consent of 1BI.

Figure 11 :- Porter5s $ Force #ode!




Chapter &: THE COMETITORS ANA"YSIS

+a?or *ay!rs in Inia <

&. A$< B60> CT

8. I<I<I B60> CT

5. -T6T/ B60> H$ I0I6 CT

). 4;0E6B 06TIH06C B60> CT

:. B60> H$ B61H6 CT

. $//16C B60> CT

+. 6QI- B60> CT

,. I0F P-P6 B60> CT

'. IBI B60> CT

&9. I0;-I0 B60> CT

&&. P/- B60> CT

A$< Bank is the second largest private bank in the country! the first being I<I<I Bank.

6 table stating the comparative analysis is given below




CO+*ETITION

ANA,YSIS < HD)C

BANK 3S ICICI

BANK

*ara"!t!r ICICI Bank HD)C Bank

R!7!n'! &5.' bn S :.' bn S

*rofit &.) bn S '85 mn S

Tota ass!ts &89 bn S bn S

E"&oy!!s +''+, ::+:8

Bran5%!s 859 8:))

AT+ ,995 '+9'

Int!rnationa &r!s!n5! &' countries : countries

Signifi5ant +-A *erger with *adurain 899&

6c7uisition of<entury Bank of4un#ab in 899,

Attra5ti7! off!ring call and collectfacility

<oncessional rateson savings accountfor women

customers+ini"'" 8aan5! in

+!tro 5iti!s

&9999 &9999

+ini"'" 8aan5! in

S!"i'r8an

:999 :99

Rat! a&&i5a8! on

sa7ings a55o'nt

5.:G on savingsaccount payableevery 7uarter

5.:G on savingsaccount payableevery half year

)D Rat!s19 a5s 5a&

G!n!ra

,.:9G '.8:G

)D Rat!s19 a5s 5a&s!nior 5iti!ns

'.8:G '.:9G

Ent!r&ris! strong%o enterprise bankingaccounts

-*/ Cending

Distri8'tion branches! 6T*!Internet banking!*obile banking!

branches! 6T*!Internet banking!*obile banking!

St'!nt off!rs special campusaccounts for students

zero balanceaccounts for studentsand minors




Figure 12 :- om6etiti*e ana!ysis

C*MP$&$& S"*$ '+.S&S

S$R'G$HS "-'SSS*PP*R$%'&$&S

-=H -trategies

• -trength Carge <apital Base.

• Hpportunity *arket

/xpansion.

• -trategy eep penetration into

the 1ural market.

"=H -trategies

• "eakness "orkforce

1esponsiveness.

• Hpportunity Hutsourcing of

0on=core Business.

• -trategy Hutsource <ustomer

<are 2 other /=helps.

$HR$S

-=T -trategies

• -trength Cow operating costs.

• Threat Increased competition

from other private banks.

• -trategy -teps to ensure

Coyalty by old <ustomers.

"=T -trategies

• "eakness 0ot e7ual to

International -tandards.

• Threat /ntry of many $oreign

Banks.

• -trategy <onsider additional

benefits




Figure 13 :- om6etiti*e S/%0 ana!ysis

DETAI,ED ANA,YSIS

i. Str!ngt%O&&ort'nity Anaysis /SO Strat!gy0 <

Str!ngt%<

It is well know that A$< Bank has the largest 6uthorised <apital Base in the Banking -ystem in

India i.e. having a total capacity to raise 1s.&'!999!999!999 (0on N 4remium alue.

O&&ort'nity<

-eeing the present financial 2 economic development of Indian /conomy and also

the tremendous growth of the Indian <ompanies including the ac7uisition spree followed by them! it

clearly states the expanding market for finance re7uirements and also the growth in

surplus disposal income of Indian citizens has given a huge rise in savings deposits N from the

above point it is clear that there is a huge market expansion possible in banking sector in India.

Strat!gy<

$rom the analysis of -trength 2 Hpportunity the simple and straight possible strategy

for A$< Bank could be = to penetrate into the rural sector of India for expanding its market share as

well as leading all other 4vt. Banks from a great gap.

ii. Str!ngt% T%r!at Anaysis /ST Strat!gy0 <

Str!ngt%




A$< Bank is not only known for large capital but also for having a low operations cost though

having huge number of branches and services provided.

T%r!at<

6fter showing a significant growth overall! India is able to attract many international financial 2

banking institutes! which are known for their state of art working and keeping low operation costs.

Strat!gy<

To ensure that A$< Bank keeps going on with low operation cost 2 have continuous business

it should simply promote itself well 2 provide 7uality service so as to ensure customer loyalty!

therefore guaranteeing continuous business.

iii. !akn!ss O&&ort'nity Anaysis /O Strat!gy0 <

!akn!ss <

It is well known that workforce responsiveness in banking sector is very low in Indian

banking sector! though A$< Bank has better responsible staff but it still lacks behind its counterparts

like A-B<! A$< B60>! <ITI B60>! P/- B60> etc.

O&&ort'nity <

In the present world! India is preferred one of the best places for outsourcing of business process works

and many more.

Strat!gy <

6s international companies are reaping huge benefits after outsourcing their customer care 2 B4H’s!

this same strategy should be implemented by A$< bank so as to have

proper customer service without hindering customer expectations.

i7. !akn!ss T%r!at Anaysis /T Strat!gy0 <




!akn!ss <

Though having an international presence! A$< Bank has not been able to keep up the

international standards in providing customer service as well as banking works.

T%r!at <

In recent times!India has witnessed entry of many international banks like <ITI Bank!

P/- Bank etc. which poses an external entrant threat to A$< Bank N as these Banks are known for

their art of working and maintain high standards of customer service.

Strat!gy <

6fter having new entrants threat ! A$< Bank should come up with more additional

benefits to its customers or may be even reduce some fees for any additional works of customers.

Chapter 1':!INANCIA" RESOURCES , CORE COMETENCIES

(.1. )INANCIA, RESOURCES <




Figure 1" :- Financia! Statements for the year ending 31 st #arch7 21"

(.2. CORE 3A,UES

The Bank’s five core values are

8i9 ustomer Focus

To achieve sustainable competitive advantage! A$< Bank relies not only on strong customer service!

but also on measuring customer experience. The Bank has invested in <1* Technology which

provides triggers for selling various products depending

on the customer profile. The 1elationship *anager is a trusted advisor to the customer N he3she has the

best interest of the customer and can advise competitor products! if the Bank’s product does not fit the

customer needs.

8ii9 %6erationa! 4ce!!ence

"ith a dedicated team to monitor 7uality and service standards! many of A$< Bank’s process

segments! including A1 Hperations are I-H certified. Hver 8899 7uality improvement pro#ects! aimed

at improving operational excellence have been successfully implemented. Hver ::9 employees have

7ualified for -ix -igma <ertification and over ,9 have earned the yellow belt




8iii9 Product eadershi6

A$< Bank has consistently developed innovative products and services that attract its targeted

customers. $ocusing on high earnings growth and low volatility! A$< Bank continues to develop and

distribute products3services that reduce cost of funds! by leveraging its extensive branch network. The

Bank actively tracks the performance of various products and depending on the feedback received!

tweaks product features! to better address customer needs.

8i*9 Sustainabi!ity

"e recognize -ocial and /nvironmental aspects as essential elements of a -ustainable business

philosophy and are committed to enhance our performance on these fronts. It is an endeavor to drive a

paradigm shift of viewing /-F (/nvironmental! -ocial and Fovernance parameters from risks to

opportunities and to incorporate social and environmental aspects into our business by embedding

sustainability in our -takeholders! 4roducts and -ervices.

8*9 Peo6!e

4eople are the Bank’s greatest strength. A$< Bank believes that the ultimate identity of success of

our Bank will reside in the exceptional 7uality of our people and their extraordinary efforts. $or this

reason! we are committed to hiring! developing! motivating and retaining best people in the industry.

The 4eople alue can be defined! as

Pro"essiona Transparency! fairness! absolute integrity and unbiased dealings with

stakeholders N customers! colleagues and vendors. 4eople are not afraid to experiment as long

as there is a convincing business logic and an honest attempt.

'espect "or the (ndi%idua 6bsolute meritocracy at the time of hiring or promoting individual

or assigning tasks and positions. There is a formal sexual harassment policy in place to ensure

dignity of individuals in the workplace.




)Can Do* Attitude The attitude to take oneself beyond one’s perceived limitations emphasizes

on persistence and perseverance in reaching one’s goals.

+#poyee Care A$< Bank cares for its employees. This is manifested in the fact that Bank

has instituted a 1eward and 1ecognition 4olicy to acknowledge and honour employee

contribution! be it business! cost saving initiatives or process improvements.

(.#. BUSINESS DI3ISION <

R!tai 8anking = Coans to Individuals (6uto

loan! Aousing Coan! /ducation Coan and

other personal loan or small businesses.

%o!sa! 8anking N Coans to *id and

Carge corporate ("orking <apital loans!

4ro#ect finance! Term loans! Cease $inance

Tr!as'ry O&!rations N Investment in

/7uity! erivates! <ommodities! *utual

$unds! Bonds! Trading and $orex operations

Ot%!r Banking B'sin!ss!s N *erchant Banking! Ceasing business! Aire purchase! -yndication

services etc.




Chapter 11:STRATEGIC ANA"YSIS

STRATEGY DE)INITION <

6 strategy is an integrated and coordinated set of commitments and actions designed to exploit corecompetencies and gain a competitive advantage.

6 firm has a competitive advantage when it implements a strategy competitors are unable to duplicate

or find too costly to try to imitate.




6 strategy is a comprehensive master plan stating AH" the corporation will achieve its mission and

ob#ectives. There are three types

• Cor&orat! = a corporation’s overall direction and the management of its businesses.• B'sin!ss = emphasizes improving the competitive position of a corporation’s products or services in a

specific industry or market segment.

• )'n5tiona = concerned with developing a distinctive competence to provide a company or business

unit with a competitive advantage.

Figure 1$ :- !assification of Strategies

/A0 COR*ORATE ,E3E, STRATEGY <




/B0 BUSINESS ,E3E, STRATEGY <

Hur business strategy emphasizes the following

Increase our market share in India’s expanding banking and financial

services industry by following a disciplined growth strategy focusing on

7uality and not on 7uantity and delivering high 7uality customer service.




Ceverage our technology platform and open scaleable systems to deliver

more products to more customers and to control operating costs.

*aintain our current high standards for asset 7uality through disciplined

credit risk management.

evelop innovative products and services that attract our targeted customers

and address inefficiencies in the Indian financial sector.

<ontinue to develop products and services that reduce our cost of funds.

$ocus on high earnings growth with low volatility.

HD,C Bank0s General Business Strateg1

Customer retention strateg1 (ma1 2! 2334) 5

• 6ll charges have been waived off

• -ervices like locker! de=mat! etc. would be charged at :9G.

• The charges on debit card have been taken off.

• Fave number to contact regarding any service.

/C0 )UNCTIONA, ,E3E, STRATEGY <

+ark!ting strat!gy <




Segmentation strateg1 6• emographics variables

Cocation = *etros 2 divisional cities

Hccupation = Business person 2 -alaried class (both govt. 2 private

6ge = -enior citizens 2 *inor

• psychographic variables Cifestyle = 4eople who believes in modern banking with higher set of service i. e.

internet banking (incontact! mobile refill! travel currency card etc.

$argeting strateg1 6• Target market

• Cor&orat! 8anking "ark!t this market target the industries 2 fulfill their financial

needs.• Ca&ita "ark!t < this segment is targeted on the long term needs of the individual as

well as of industries.R!tai 8anking "ark!t this segment is for retail investors 2 provide them short term

financial credit for their personal! house hold needs.

Positioning strateg1 6• A$< Bank has positioned itself as a bank which gives higher standard of services through

product innovation for the diverse need of individual 2 corporate clients. -o they want to

highlight following points in their positioning segment =<ustomer centric=-ervice oriented=4roduct innovation

*ro"otions strat!gy of HD)C Bank

LIt plans to send personalized mailers about various products to all those A$< come in contact with

during these mass promotions.L The bank has also tied up with Business Today! to sponsor &9!999

copies of the magazine in each metro. The cover of the sponsored copies would be the ecember issue




of Business Today! which rated A$< Bank as the best bank in the country. Hn the opposite side!

would be an advertorial which would talk about A$< as a one=stop financial supermarket%.

Go Cr!it 5ar< $or providing the better services to the customers and promoting their business!

A$< has launched the Fold <redit <ards. It%s overloaded with travel benefits = discounts! cash back

offers! air miles redemption.

Go Cr!it Car )!at'r!s - B!n!fits

Attra5ti7! R!$ar *oints = /arn & reward point per 1s &:9 spent on the Fold <redit <ard.

R!$ars &oints r!!"&tion = 6fter earning all those reward points on your A$< Bank Fold

<redit <ard! redeem them for exciting gifts and servicesU Pou could even convert them to airlinemiles with India%s leading airlines through the *y 1ewards programme.

or$i! a55!&tan5! = 6ccepted at over 85 million *erchant /stablishments around the

world! including &&9!999 *erchant /stablishments in India.

R!7o7ing 5r!it fa5iity = 4ay a minimum amount! which is :G (sub#ect to a minimum amount

of 1s.899 of your total bill amount or any higher amount whichever is convenient and carry

forward the balance to a better financial month. $or this facility you pay a nominal charge of #ust5.8:G per month (5'.9G annually.

)r!! Aon 5ar = Pou can share these wonderful features with your loved ones too = we offer

the facility of an add=on card for your spouse! children or parents. 6llow us to offer add=on cards

to you $1// H$ <H-T with our compliments.

Int!r!st fr!! 5r!it fa5iity = 6vail of up to :9 days of interest free period from the date of

purchase (sub#ect to the submission of the charge by the *erchant.

;!ro ia8iity on ost 5ar 6 If you happen to lose your <ard! report it immediately to our 8)=

hour call centre. 6fter reporting the loss! you carry zero liability on any fraudulent transactions on

http://www.hdfcbank.com/applications/misc/rewardcatalog/cc_rewards.asp

http://openwindow%28%27/personal/cards/popup_ccnumbers.htm','','width=760,height=410,scrollbars=yes%20,menubar=no,location=no,left=0,top=0')


http://www.hdfcbank.com/applications/misc/rewardcatalog/cc_rewards.asp






your card

*atin'" Cars G!t Aitiona B!n!fitsA$< Bank 4latinum <ard <ustomers Fet 6dditional Benefits compared to Fold 3 silver or other entry

level cards. $or instance! consider this! A$< <ards has a <o=Branded Hnline -hop with -urat

iamonds. By virtue of being A$< Bank <ustomer! you are already getting big discount. 0ow add

any item to your cart and enter ::,,&, J -tarting igits of 4latinum <ardK! you get additional

discount. This is #ust one such instance. Pou also get 4etrol -urcharge "aiver! I1<T< <harges "aived!

etc.

C!ar Tri& Dis5o'nt to D!8it Car Ho!rs

;se your HD)C Bank D!8it Car to book any flight! hotel or train 2 get &6 5as%8a5k omestic

6ir Hffer = Book any omestic $light and get &9G cash back on Base $are or 1s.8:9 cash back per

booking (whichever is less.

Trains = Book any Train and get &9G cash back or 1s.:9 cash back per booking (whichever is less

International 6ir Hffer = Book any International $light and get &9G cash back on Base $are or 1s.99

cash back per booking (whichever is less. Hot!s Off!r = Book any Aotel (omestic3International and

get &9G cash back on Base 4rice or 1s.:99 cash back per booking (whichever is less. To avail the cash

back kindly enter coupon code HD)CTRI* during step 5 of the booking process before payment.

HR STRATEGY <

The Bank is a team Nfocused organization that is characterized by

http://hdfc.suratdiamond.com/







<ollaborative relationshipsV

6pproachable and open communicationsV

<ourteous! efficient and effective servicesV and

$lexibility and fairness

*UR*OSE

The purpose of this strategy is to ensure that the human resources values framework incorporates fourkey principles! which areV

1. Co""'ni5ation

Bank’s management and staff will promote an environment where the principles of opencommunication will be upheld. $or the purpose of this policy !open communication encapsulates theidea ofV

W *utual recognition an respect at all levelsV

W $reedom to express one’s views and a commitment to resolving any interpersonal conflictV

W 4romotion and development of two way communication incorporating constructivefeedbackV

W 6ppropriate dissemination of dissemination of information.

W 2. O&&ort'nity Bank’s management and staff will promote a work environment that providesopportunity forV

Improved work practicesV

-upport of individuals in pursuit of personal and career growth and

/ncouragement of self development by recognizing and using individual strengths.

5. Inno7ationBank’s management and staff will promote an envioronment to encourage initiativeleading to flexibility and growth. This philosophy will facilitate improved work practices ! which meetorganizational needs through the challenging of preconceived ideas.

). Ini7i'a

Bank’s management and staff acknowledge the importance of each individual’s contribution to thework of the Bank by recognizing their 7ualities ! strengths and abilities and sharing these across theBank.




STRATEGIC QUALITY POLICY

• -/<;1ITP

The bank provides long term financial security to their policy. The bank does this by offering

life insurance and pension products.X

• T1;-T <

The bank appreciates the trust placed by their policy holders in the bank. Aence! it will aim to

manage their investments very carefully and live up to this trust.X

• I00H6TIH0 <

1ecognizing the different needs of our customers! the bank offers a range of innovative

products to meet these needs.X

• I0T/F1ITP

• <;-TH*/1 </0T1I<

• 4/H4C/ <61/ ?H0/ $H1 6CC 60 6CC $H1 H0/@

• T/6* "H1>

• EHP 60 -I*4CI<ITP

O&!ration R! S&i!r

• Hn &) *arch 89&5 an online magazine named <obrapost.com released video footage

from Hperation 1ed -pider showing high ranking officials and some employees of A$< bank

willing to turn black money into white which is violation of *oney Caundering <ontrol 6ct

• $ollowing this the government of India and 1BI have ordered an in7uiry

• The en7uiry confirmed violation of >P< (>now Pour <ustomer norms by A$< Bank. 6

penalty of 1s ): million was imposed on the bank by 1BI

http://en.wikipedia.org/wiki/Operation_Red_Spider


http://en.wikipedia.org/wiki/Money_Laundering_Control_Act

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Reserve_Bank_of_India





http://en.wikipedia.org/wiki/Government_of_India





HR D!&art"!nt

A1 epartment is responsible forV

1egular review and development of human resource management practicesV

4eriodic review of the work priorities to determine skill re7uirements needed to

meet the Bank’s strategic planV etermination of an organizational structure that will facilitate and improve

teamworkV and 6ppointment and promotion of staff on merit and to ensure that treatment of all

employees is fair and e7uitable.

T%! Organisationa Co"&!t!n5i!s R!@'ir! for E=5!!ntC'sto"!r S!r7i5! <

"hat customers want from A$< Bank is expressed into some organizational competencies N so that

you can see what you as *anager or Team Ceader must achieve within your team. If customers

want excellent service! how does the organisation or team go about providing itR eveloping and

-ustaining a 1eputation for -ervice /xcellence! identifies the Hrganisational <ompetenciesthat need to

be in place to deliver that excellent service. These organisational competencies have to be in place right

across the organisation. 6lthough you can do a lot yourself with your own team! "orld <lass -ervice

/xcellencerelies on a commitment and drive from the very top of the organisation to build these

competencies. The competencies are described below.

S!r7i5! *!rsonaity

The organisation has a well=defined personality which defines the particular way itdelivers service and

interacts with its customers. 6n excellent service provider tendsto have its own -ervice 4ersonality N an

identifiable set of service characteristics thatdefines how its service provision is different from that of

its competitors.

S!r7i5! C't'r!




There is a

culture

throughout

the

organisation’s people that focuses on givingexcellent service o both internal and external customers.

Ceaders and managers arecommitted to the service culture. They communicate the organisation’s

vision! values!leadership and continuous improvement methods to employees. /mployees

understandtheir own role in supporting the service culture. 6n example is provided by a

large!multinational organisation that supplies food products to retail stores. It includescustomer service

in its mission statement! publishes its organizational valuesprominently on its website! and issues a

one=page ?<ustomer -ervice <redo@ to all itsemployees. It ensures that all its people have a clear

understanding of the importanceof customer service in all that they do.

Co""itt! Staff

/mployees are well=motivated! have a can=do attitude! en#oy team working andsupporting their internal

customers. 4rofessional relationships exist throughout theorganisation! with high levels of trust!

openness and a no=blame culture! encouragingcontinuous improvement. 6n example is shown by an

organisation where teamsregularly have their own meetings to review customer service issues! talk

throughimprovements to processes and deal with customers’ problems. /ach month they appoint an

?/mployee of the *onth@ N and the winners of the award are sometimespeople who deal only with

internal customers.




C'sto"!r )o5's! *ro5!ss!s

-ystems and processes are designed around customers! whether internal or external. -ix systems or

processes in particular are seen as fundamental communication systems! systems for listening to

customers and employees! training systems! appraisal! reward and recognition systems! performance

measurement systems and service recovery systems. $or example! at all sites of a /uropean retailer

there are notice=boards to display up=to=date graphs showing customer satisfaction levels. This ties

employees’ and teams’ performances firmly to improvements for customers.

Easy To Do B'sin!ss it%

If the first four organisational competencies are in place! then they should lead toreally positive results

for customers N they will find the organisation easy to dobusiness with.6n example is provided by

guests at a prominent hotel group. The hotel finds that itwins and keeps many new customers because it

has ensured its online room bookingservice is highly customer focused and easy to use. <ombined with

the excellentservice reported by customers when they stay at the hotel! this means theorganisation is

easy to do business with.

)inan5ia B!n!fits

Hnce the organisational competencies are in place! your team and organisation canbuild a reputation

amongst its customers for service excellence. This in turn leads to <ustomer Coyalty! recommendation

and N in general N to financial success.

HR CO+*ETENCIES<

<ompetency is an underlying characteristic of an employee (i.e. a motive! trait! skill! aspects of

one’s self=image! social role! or a body of knowledge which results in effective and3or superior

performance. (4rof. Boyatzis! &',8




#;#;0 I;F%<#0I%; S=S0#

6 *anagement information system (*I- is a subset of the overall internal control of a business

covering the application of people! documents! technologies! and procedures by management

accountants to solve business problems such as costing a product! service or a business=wide strategy.

*I- should be designed to achieve the following goals

/nhance communication among employees.

eliver complex material throughout the institution.

4rovide an ob#ective system for recording and aggregating information.

1educe expenses related to labor=intensive manual activities.

-upport the organization%s strategic goals and direction

I;F%<#0I%; S=S0# I; '>F :

• Information technology can be a strategic tool in making A$< more efficient and effective.

A$< can reach more people in more efficient way by implementing right management




information system. IT creates an evolution in whole world in every business and so in banking

system.

• ue to I- employees can easily connect with other branches! customer service get improved!

online banking emerged and lot of others benefits

#I; S<?IS:

<onsumer Banking

"holesale Banking

%<;IS0I%; <S%@<S :

6pplication -oftware=

Feneral 6pplication -oftware

*icrosoft Hffice

0H58 6nti=irus

6dobe 1eader

atabase management software

Integrated software <C61I- ! CHT;-

-pecific 6pplication -oftware

A1 software called ? 6TC6- ?

6ccounting software called ?T6CCP@

*arketing software called ? <6CC460 ?




$inancial software called ?-4--@




B % S & ' ( S S & ' D & 7 ' o 8 e m 9 e r 2 : ! 2 3 3 : C o r p o r a t e " o m a n

6 p e o p l e % s p e r s o n$ h e H R h e a d o ; H D , C B a n k d o e s n < t l e t c o n t r o 8 e r s 1 s t o p h e r; r o m p e r ; o r m i n g

* a n d e e p * a i t r a ! ) ) ! t h e h e a d o f

h u m a n r e s o u r c e s ( A 1 a n d c o r

p o r a t e s e r v i c e s a t p r i v a t e s e c t o r A B $ <

B a n k ! h a s b e e n t h r o u g h t w o m e r g e r sa l r e a d y . $ i r s t ! w h i l e a t T i m e s B a n k

i n & ' ' ' ! w h e r e s h e m o v e d f r o m

c o n s u l t a n c y f i r m 6 r t h u r 6 n d e r s e n .

/ i g h t m o n t h s i n t o t h e # o b a s h e a d o f

A 1 ! T i m e s w a s a c 7 u i r e d b y A B $ <

B a n k . 6 n d t h e s e c o n d ! m o r e r e c e n t l y !

w h e n A B $ < B a n k a c 7 u i r e d < e n t u r i o n

B a n k o f 4 u n # a b = i t s e l f a c o m b i n a t i o n

o f s o r t s ! f o r m e d b y t h e m e r g e r o f

f o u r b a n k s .

6 s s i m i l a t i n g t h e c u l t u r e s o f t w o

o r g a n i s a t i o n s t o g e t h e r c a n b e t h e

t r i c k i e s t e x e r c i s e i n a n y m e r g e r V a n d

i n t h i s a r e a ! * a i t r a ! a p s y c h o l o g i s t

w h o L a l m o s t b e c a m e a s h r i n k L ! h a s

g a t h e r e d d e c e n t e x p e r i e n c e . - h e

b e g a n h e r c a r e e r a t a m a n u f a c t u r i n g

o u t l e t o f / i c h e r T r a c t o r s a t 4 a r w a n o o

i n $ l i m a c h a l 4 r a d e s h = f o l l o w i n g h e r

e d u c a t i o n a t C a d y - r i r a m < o l l e g e a n dT a t a I n s t i t u t e o f - o c i a l - c i e n c e s .

6 t a g e 8 8 ! s h e w a s t h e o n l y g i r l

i n m a n a g e m e n t i n a f a c t o r y f u l l o f

u n i o n w o r k e r s .

L B a c k t h e n ! L s h e r e c a l l s ! L w e h a d

l a b o u r i s s u e s w i t h t h e w o r k e r s !

b e c a u s e t h e y t h o u g h t w e w e r e p u s h

i n g f o r p r o d u c t i v i t y ! i n s t e a d o f b e i n g

k e e n a b o u t t h e i r w e l f a r e . I t s o r t e d o u t !

b u t t h e s e e x p e r i e n c e s t e a c h y o u a l o t

a b o u t b a l a n c i n g d i f f e r e n t i d e a s . 6 t

t h e e n d o f t h e d a y ! y o u b e t o n p e o p l e !

n o t s t r a t e g i e s . L

6 f t e r h e r s t i n t a t / i c h e r ! * a i t r a

m o v e d t o * u m b a i w h e r e s h e # o i n e d

6 0 Y F r i n d l a y s B a n k = f i r s t r e s p o n s i b l e

f o r t h e i n v e s t m e n t b a n k i n g s e g m e n t !

t h e n m o v i n g o n t o t h e A 1 f u n c t i o n V

i n b e t w e e n h e r r o l e s ! s h e s p e n t a

c o n s i d e r a b l e a m o u n t o f t i m e i n t h e

M a i t r a : c o n t e n t b e i n g k i n g m a k e r

t r e a s u r y s e g m e n t t o o . 6 0 Y F r i n d l a y s

w a s t h e n a : = b r a n c h o p e r a t i o n w i t h

5 ! 9 9 9 e m p l o y e e s . T h i s w a s f o l l o w e d

b y a s t i n t a t 6 r t h u r 6 n d e r s e n f o r t h r e e

y e a r s ! a s p a r t o f a c o r e t e a m t h a t

l o o k e d a f t e r A 1 i n i t i a t i v e s a c r o s s

/ u r o p e ! * i d d l e / a s t a n d 6 s i a .

6 f t e r 0 a n i E h a v e r i f r o m 6 r t h u r

6 n d e r s e n m o v e d t o h e a d T i m e s

B a n k ! * a i t r a # u m p e d s h i p t o o . B u t

w i t h i n e i g h t m o n t h s o f # o i n i n g !

T i m e s g o t m e r g e d i n t o A B $ < . B a n k . L I

w o n d e r e d b a c k t h e n i f I s h o u l d s t a y

o n V A B $ < B a n k w a s l e s s e r k n o w n

f o r i t s A 1 p o l i c i e s a n d s t r a t e g i e s . L

B u t s h e d e c i d e d t o t a k e t h e p l u n g e .

- i n c e t h e n ! * a i t r a h a s s e e n t h e

b a n k g r o w f r o m & ! 5 9 9 e m p l o y e e s t o

s s i m i l a t i n g t h e c u l tu r e s o ; t = o o r g a n i s a t i o n s

t o g e t h e r c a n 9 e t h e t r i c k i e s t e > e r c i s e in a n 1 m e r g e r ?

a n d i n t h i s a r e a ! M a i t r a ! a p s 1 c h o l o g i s t = h o @ a l m o s t

9 e c a m e a s h r i n k @ ! h a s g a t h e r e d d e c e n t e > p e r i e n c e

) , ! 9 9 9 ! w i t h i n t h e s p a n o f a d e c a d e .

L I t w a s a c o n s t a n t p r o c e s s ! L s h e

s a y s ! L a s w e w a n t e d e v e r y t h i n g t o f a l l

i n t o p l a c e L .

T h a t d i d n o t c o m e e a s y . T a k e C o r d

> r i s h n a B a n k ! f o r i n s t a n c e ! w h i c h w a s

m e r g e d i n t o < e n t u r i o n B a n k ! a l o n g

w i t h B a n k o f 4 u n # a b . T h e > e r a l a =

b a s e d b a n k h a d a u n i o n t h a t o p p o s e d

i t s m e r g e r w i t h < e n t u r i o n ! a n d t h e r e

w e r e b r a n c h e s t h a t h a d n % t s e r v i c e d a

s i n g l e c u s t o m e r i n m o n t h s . " h e n i t

c a m e t o a p p e a s i n g e m p l o y e e s i n 4 u n

# a b ! * a i t r a ( a 4 u n # a b i h e r s e l f t r a v

e l l e d t h e d i s t a n c e a l o n e . T o a d d r e s s

e m p l o y e e s i n > e r a l a ! s h e # o i n e d m a n

a g i n g d i r e c t o r 6 d i t y a 4 u r i ! w h o a s k e d

t h e m f o r a g o o d d a y % s w o r k ! f o r a g o o d

d a y % s p a y . C o o k i n g b a c k ! t h a t u n i o n

s t i l l e x i s t s . L B u t w e n e v e r h a d a p r o b

l e m w i t h i t ! L s a y s * a i t r a . L I f t h e

e m p l o y e e s a r e p e r f o r m i n g t h e i r

d u t i e s ! w h y s h o u l d t h e u n i o n b e a

p r o b l e m R L s h e a s k s .

T h e n e x t f e w m o n t h s w e r e s p e n t i n

b r i n g i n g t o g e t h e r p e o p l e ! c u l t u r a l l y

i n t e g r a t i n g t h e m a n d d e v i s i n g p a c k

a g e s f o r c o m p e n s a t i o n a n d p e r k s !

a p a r t f r o m c l e a r i n g g r i e v a n c e s . T h e r e

w e r e r e s i d u a l i s s u e s ! i d e o l o g i c a l d i f f e r

e n c e s a n d d u p l i c a t i o n o f w o r k . I nh i n d s i g h t ! s h e s a y s ! p u l l i n g i t o f f i s

e a s i e r w h e n o n e i s c l e a r a b o u t t h e

p o l i c i e s . L I s h o u l d b e a b l e t o d e f e n d

t h e m i n f r o n t o f a h u g e c r o w d !

o t h e r w i s e t h e p o l i c y i s n o t w o r t h

f o l l o w i n g ! L s h e s a y s .

6 s i f A 1 w a s n o t e n o u g h ! * a i t r a

h a n d l e d c o r p o r a t e s o c i a l r e s p o n s i b i l

i t y ( < - 1 f o r A B $ < B a n k t i l l s o m e t i m e

b a c k ! a n d m o r e r e c e n t l y ! t o o k o n h e r

p l a t e t h e r o l e o f d e v e l o p i n g A B $ <

B a n k % s & ! : 9 9 b r a n c h i n f r a s t r u c t u r e .

< - 1 ! s h e s a y s ! a l l o w e d h e r t o w o r k a t

t h e g r a s s r o o t s l e v e l i n e d u c a t i o n

a n d l i v e l i h o o d c r e a t i o n p r o # e c t s .

L T a k i n g c a r e o f i n f r a s t r u c t u r e e n t a i l s a

l o t o f e n e r g y . I t r e 7 u i r e s k e e p i n g

c o s t s a t a m i n i m u m ! b u t a t t h e s a m e

t i m e ! b r i n g i n g t h e b e s t t h a t i s

o f f e r e d ! L s h e s a y s .

6 p e o p l e % s p e r s o n ! f o r * a i t r a c o n

t e n t b e i n g k i n g m a k e r ! r a t h e r t h a n

k i n g . - h e c o u l d h a v e t a k e n a l i n e # o b a

f e w y e a r s a g o ! b u t A 1 r e m a i n s h e r f i r s t

p a s s i o n . L 6 n d i t i s g r e a t w h e n y o u r

p e r s o n a l p a s s i o n c a n b e b r o u g h t

a b o u t i n y o u r # o b ! L s h e a d d s .

) & S H ' ) & B +

A 2 4

Business India Sunday, 29 Nov 2009 Page# :130 Size : 503.82 sq.cm.




Chapter 12:HR SCORECARD

In order to perform an overall analysis we need to analyze >4Is! i.e. those factors influencing

performance of A1 department.

Cost &!r Hir!. By evaluating this factor you will be able to see how expensive the recruiting process

is. This process starts from posting #ob offer to the moment when a new person is officially employed

in the company. Cogically! the shorter this process is! the least expensive is cost per hire.

T'rno7!r Cost. These are the costs related to termination! new hire and learning. In other words! these

are expenses related to integrating a new person into the company.

T'rno7!r Rat!. This value represents the situation in your company related to leaving and hiring new

employees. *any people would agree that it is not good to change personnel too often. If the turnover

rate is very high! then maybe you are treating your personnel wrongR Hr is it something wrong with

your business in generalR $ind out.

Ti"! to )i. Basically! this is the time needed to fill a vacant position in the company. Hf course! this

time depends on how well A1 managers are working with




recruiters! advertising and people in general. The shorter this time! the better performance of your A1

department.

,!ngt% of E"&oy"!nt. This indicator is very easy to understand. It is possible to calculate an average

value. $or instance! in average an employee works : years for your company. Hf course! everything

depends on the position. If you are changing couriers or secretaries! this is not a big problem. But if

chief managers work for your company less than a year! this is definitely not good.

Training an D!7!o&"!nt. /ven if you hire the best specialist you need to integrate him into your

company and train. Hf course! you bear costs! related to training. If you manage to cut this cost without

harming 7uality of training! then your A1 department is doing a great #ob.

Saari!s> 5o"&!nsation> 8on's!s. It is very important to know that you are not overpaying and

allocating recourses wisely. This also concerns A1 department of any company. "ith Balanced

-corecard you will be able to see how effectively company’s funds are being used in A1 branch.

Cost Eff!5ti7!n!ss. It all comes to cost effectiveness after all. 6ll above=mentioned factors influence

performance of A1 department which has one goal N minimize costs and boost performance.




A$< Bank uses Hracle’s balanced scorecard as a techni7ue for evaluating the employees in the

organization.

Figure 1( :- '< Scorecard




Chapter 13:CONC"USION

• A$< Bank is among the top banks in the private sector domain. The bank boasts of a huge

amount of operational efficiencies for over the years. It has got a very good asset 7uality and

good coverage ratios. The bank has aggressively looked into rural areas and tier= and tier=I

cities.

•

"ith this prospect A$< is continuously working in this direction! but there are severalcompetitors already in the market with the similar strategy. This concludes that with the

changing economical and political scenario in order to maintain the position A$< needs to

follow some differentiating strategy. Because it has a very fine line of difference with its

competitor I<I<I and can outshine A$<.

• The organization must align its corporate and A1 strategy by using a holistic model concept.

There are no specific A1 strategies followed by the organization. *ore emphasis towards such

strategy formulation must take place.

•6 communication lab can be setup to attain more clarity in authority=responsibility

relationships.

• 4roper training should be given to everyone about how to use the software efficiently.

• <apacity within institution should be managed properly.




Re<ere0e.

• *r. 1akesh Farg! Branch *anager! Adfc Bank Ctd.! -<$ '=+9! 4hase 5B8! *ohali

• erma! 6nu#V 4aper on Adfc bank 6 fundamental analysis

• Book Business /nvironment= By 6swathappa

• 6rticle =Business India Sunday, 29 Nov 2009

• 6vailable from http33www.hdfcbank.com3personal3default.htm

• 6vailable from http33www.wikipedia.org3

• 6vailable from http33www.google.com3

• 6vailable from http33www.marketing'&.com3swot=analysis=hdfc3Zsthash.BTthsnti.dpuf

• 6vailable from http33www.moneycontrol.com

http://www.hdfcbank.com/personal/default.htm

http://www.wikipedia.org/

http://www.google.com/

http://www.marketing91.com/swot-analysis-hdfc/#sthash.BTthsnti.dpuf

http://www.moneycontrol.com/

http://www.hdfcbank.com/personal/default.htm

http://www.wikipedia.org/

http://www.google.com/

http://www.marketing91.com/swot-analysis-hdfc/#sthash.BTthsnti.dpuf

http://www.moneycontrol.com/

smp-150201070629-conversion-gate01

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