Summer Training Report

on
“A Study of the impact of Digitalization on banking services with
reference to HDFC Bank”

Submitted towards the partial fulfillment of the requirement for the

award of the degree of Post Graduate Diploma in Management

Submitted to: Submitted by:

Ashish Chandra
Mr. Atul Arora
GM18058
Associate Professor

GL BAJAJ INSTITUTE OF MANAGEMENT AND RESEARCH

GREATER NOIDA

2019
Acknowledgement

A Project Report is an assessment of one’s great skill and aptitude. One needs to devote
in immense patience, time and brain for the compilation of one such rewarding outcome
of true efforts.

If words are considering to be signs of gratitude then let these words convey the very
same my sincere gratitude to HDFC Bank for providing me with an opportunity to do
Summer Training, and giving necessary directions on doing this Project to the best of
my ability.

I am indeed thankful to Honorable Director General Dr. Urvashi Makkar for provided
the wonderful opportunity of getting exposed to industrial and business working know–
how.

I would like to render my sincere heart full gratitude to my Faculty Mentor Mr. Atul
Arora for guiding me right from the inception till the completion of the project. I
sincerely acknowledge him for extending the valuable guidance, support for literature,
critical reviews of the project and above all the moral support provided to me in all
stages of this project. He has an inspirational mentor guiding me through every step of
my project, thus making the entire Training a complete learning process with lots of
enthusiasm.

Last but not least I would take the opportunity to thanks Mrs. Aarti Vaid (Branch
Manager of Sector- 50 branch) for her wonderful support & inspirable guiding. She
always taught me new things related to banking and also to grow its business.

Ashish Chandra

GM18058
 DECLARATION

I Ashish Chandra student of PGDM from GL Bajaj Institute of

Management and Research, Greater Noida hereby declare that I have
completed summer internship on the project titled “A Study of the impact
of Digitalization on banking services with reference to HDFC Bank”
as part of the course requirement.
The project duration was from 1st May 2019 to 30th June 2019.

I further declare that the information presented in this project is true and
original to the best of my knowledge.

Ashish Chandra
Place: Greater Noida
Industry Guide Certificate
 G.L. Bajaj Institute of Management and Research
Summer Internship Report
PGDM Batch 2018-20
Certificate by Faculty Guide

This is to certify that the Summer Internship Project, titled “A Study of

the impact of Digitalization on banking services with reference to
HDFC Bank” submitted by Ashish Chandra Roll No. GM18058 was
carried out under my guidance and supervision.
To the best of my knowledge and belief, the information presented by him
has not been submitted elsewhere.

Signature:
Mr. Atul Arora
Associate Professor
Date:
Abstract
This project is done on digitalization topic in the area of “A Study of the impact of
Digitalization on banking services with reference to HDFC Bank” undertaken HDFC
Bank Ltd. The most challenging job for any employee is to understand customer’s need
and satisfy them. The era has come where every customer wants to work from home
and need not to visit bank every now and then. Digitalization has changed the concept
of banking services. HDFC bank has provided all the possible ways for customers to
use digital platform efficiently and effectively.

The digital revolution is upon us and touches every aspect of our lives, including
banking. The report is done basically to know the awareness level of customers who
visit bank for digital banking. HDFC bank has initiated campaigns for digitalizing the
banking system. Because of digitalization the customers are more satisfied and able to
save time. More than half of the work related to banking they work from home only
using net banking and application.

The study is conducted to check the impact of Digitalization on banking services so that
bank can work on those points and can promote more and more for digital banking.
Moreover, study of impact of digitalization helps the bank to understand the mindset of
customers whether they are interested for digital baking or not. The aim of survey is to
analyses perception of customers regarding the digital baking platform offered by
HDFC Bank Ltd.

By the end of the report and survey conducted, it is expected to get all the information
and findings related to digitalization and banking. However, there are many different
aspects of findings in report and various dimension like age, gender, occupation.
Different people have different perception for digital banking. It is mostly seen that
youth are more engaged in net banking and digital banking. HDFC bank is trying hard
to make the presence of digital banking among their customers.
 TABLE OF CONTENT

Chapter PARTICULARS PAGE NO

No.

Acknowledgement I

Declaration II

Industry Guide Certificate III

Faculty Guide Certificate IV

Abstract V

List of Tables

List of Figures

1. Introduction of Banking

a. Meaning and Definition

b. Indian Banking Industry

c. Indian Banking System

d. Major Players in India

2. Introduction to Digitalization

a. Meaning and Definition

b. Digital Banking

3. Company Profile

a. History of HDFC Bank

b. Mission, Vision and Objectives

c. Management at HDFC Bank

 d. Business Profile

e. Ratings/Awards

f. Products of HDFC Bank

g. Digital Services of HDFC Bank

h. Digital Initiatives

i. Departments at HDFC Bank

g. Swot Analysis of HDFC Bank

Part II

4. Literature Review

5. Objectives of the study

6. Research Methodology

a. Research Design

b. Research Type

c. Sampling Design

d. Sources of Data Collection

e. Data Collection Tools

f. Methods of Data Collection

Part III

7. Data Analysis & Interpretations

8. Findings

9. Conclusion

10. Suggestions
11. Limitations

12. Bibliography

13. Appendix
List of Tables
List of Figures
 CHAPTER 1
INTRODUCTION
TO
BANKING
MEANING AND DEFINITION:

Bank is an institution that deals in money and its substitutes and provides crucial
financial services. The principal type of baking in the modern industrial world is
commercial banking & central banking.

Banking Means "Accepting Deposits for the purpose of lending or Investment of

deposits of money from the public, repayable on demand or otherwise and withdraw by
cheque, draft or otherwise."

ORIGIN OF BANKING:

Its origin in the simplest form can be traced to the origin of authentic history. After
recognizing the benefit of money as a medium of exchange, the importance of banking
was developed as it provides the safer place to store the money. This safe place
ultimately evolved in to financial institutions that accepts deposits and make loans i.e.,
modern commercial banks.

INDIAN BANKING INDUSTRY

BANKING INDUSTRY AT GLANCE

Banking is nearly as old as civilization. The history of banking could be said to have
started with the appearance of money. The first record of minted metal coins was in
Mesopotamia in about 2500B.C, the first European banknotes, which was handwritten
appeared in1661, in Sweden. Cheque and printed paper money appeared in the 1700’s
and 1800’s, with many banks created to deal with increasing trade.

The history of banking in each country runs in lines with the development of trade and
industry, and with the level of political confidence and stability. The ancient Romans
developed an advanced banking system to serve their vast trade network, which
extended throughout Europe, Asia and Africa.
Modern banking began in Venice. The word bank comes from the Italian word “ban
co”, meaning bench, because moneylenders worked on benches in market places. The
bank of Venice was established in 1171 to help the government raise finance for a war.

At the same time, in England merchant started to ask goldsmiths to hold gold and silver
in their safes in return for a fee. Receipts given to the Merchant were sometimes used
to buy or sell, with the metal itself staying under lock and key. The goldsmith realized
that they could lend out some of the gold and silver that they had and charge interest,
as not all of the merchants would ask for the gold and silver back at the same time.
Eventually, instead of charging the merchants, the goldsmiths paid them to deposit their
gold and silver.

The bank of England was formed in 1694 to borrow money from the public for the
government to finance the war of Augsburg against France. By 1709, goldsmith was
using bank of England notes of their own receipts.

New technology transformed the banking industry in the 1900’s round the world, banks
merged into larger and fewer groups and expanded into other country.

HISTORY OF INDIAN BANKING INDUSTRY

Banking in India has a long and elaborate history of more than 200 years. The beginning
of this industry can be traced back to 1786, when the country’s first bank, Bank of
Bengal, was established. But the industry changed rapidly and drastically, after the
nationalization of banks in 1969.

Indian Banking sector is dominated by Public sector banks (PSBs) which accounted for
72.6% of total advances for all SCBs as on 31st March 2008. PSBs have rapidly
expanded their foot prints after nationalization of banks in India in 1969 and further in
1980. Although there is a restrictive entry/expansion for private and foreign banks in
India, these banks have increased their presence and business over last 5 years.

Peculiar characteristic of Indian banks unlike their western counterparts such as high
share of household savings in deposits (57.4% of total deposits), adequate
capitalization, stricter regulations and lower leverage makes them less prone to
financial crisis, as was seen in the western world in mid FY09.
The Scheduled Commercial Banks (SCBs) in India have shown an impressive growth
from FY04 to the mid of FY09. Total deposits, advances and net profit grew at CAGR
of 19.6%, 27.4% and 20.2% respectively from FY03 to FY08. Banking sector recorded
credit growth of 33.3% in FY05 which was highest in last 2 and half decades and credit
growth in excess of 30% for three consecutive years from FY04 to FY07, which is best
in the banking industry so far. Increase in economic activity and robust primary and
secondary markets during this period have helped the banks to garner larger increase in
their fee based incomes.

A significant improvement in recovering the NPAs, lowest ever increase in new NPAs
combined with a sharp increase in gross advances for SCBs translated into the best asset
quality ratio for banking sector in last two decades. Gross NPAs to gross advances ratio
for SCBs decreased from the high of 14% in FY2000 to 2.3% in FY08.

Within the group of banks, foreign and private sector banks grew at higher rate than the
industry from FY03 to FY08 primarily because of lower base effect and rapid expansion
undertaken by these banks. In FY09, overall growth in credit and deposits was led by
PSBs. However, growth of private and foreign banks was significantly lower in FY09
due to their high exposure to stressed sectors and problems at parent level for foreign
banks.

Unsecured bank credit has risen over the years and stood at 23.3% of bank credit in
FY08 as compared to just 10.9% in FY2000. Lending to sensitive sector has also grown
at CAGR of 46.1% from FY05 to FY08. In the backdrop of the economic downturn,
we feel that the excellent performance seen in last five years ended FY08 will be
difficult to repeat in coming years.

We expect that with the downturn in the economy, credit and deposit growth will
moderate in coming years. Credit growth will be led by spending on the infrastructure
while retail credit will show a moderate growth. Margin pressures due to lag effect of
rate cuts between interest rate on deposits and advances, lower treasury gains and core
fee income and increasing in provisions for NPAs is likely to put pressure in the bottom
line of the banks.
Going forward, PSBs’ which are close to the required lower level of government stake
and have concentrated presence in particular region are likely to consider its merger
with other PSB as an important option if they want to sustain the growth seen in past.

FUNCTIONS OF BANKS

Primary Functions

 Acceptance of Deposits
 Making loans & advances
 Loans
 Overdraft
 Cash Credit
 Discounting of bills of exchange

Secondary Functions
 Agency functions
 Collection of cheques & Bills etc.
 Collection of interest and dividends.
 Making payment on behalf of customers
 Purchase & sale of securities
 Facility of transfer of funds
 To act as trustee & executor.

Utility Functions

 Safe custody of customers valuable articles & securities.

 Underwriting facility
 Issuing of traveler’s cheque letter of credit.
 Facility of foreign exchanges
 Providing trade information
 Provide information regarding credit worthiness of their customer.
 STRUCTURE

The Indian banking system can be classified into nationalized banks, private banks and
specialized banking institutions. The Reserve Bank of India is the foremost monitoring
body in the Indian Financial sector. It is a centralized body that monitors discrepancies
and shortcomings in the system.

Banking segment in India functions under the umbrella of Reserve Bank of India (RBI)
– the regulatory, central bank. This segment broadly consists of:

1. Commercial Banks
2. Co-operative Banks
The commercial banking structure in India consists of:

1. Schedule Commercial Banks

2. Unscheduled Banks
Schedule Commercial Banks constitute of those banks, which have included second
schedule of Reserve Bank of India (RBI) act 1934. RBI in turn includes only those
banks in this schedule that satisfy the criteria laid down vide section 42 (60 of the act)
this sub sector can broadly classified into:

1. Public Sector
2. Private Sector
3. Foreign Sector
Public sector banks have either government of India Reserve Bank of India (RBI) as
the majority shareholder. This segment comprises of:

1. State Bank of India (SBI) and its subsidiaries

2. Other Nationalized Banks

Industry estimates indicate that out of 274 commercial banks operating in the
country, 223 banks are in the public sector and 51 are in the private sector. These
private sector banks include 24 foreign banks that have begun their operations here.
The specialized banking institutions that include cooperatives, rural banks, etc. form a
part of the nationalized banks category.
 INDIAN BANKING SYSTEM

Reserve Bank of India

Schedule Banks Non-Schedule Banks

Central co-op
State co-op Commercial Commercial Banks
Banks and
Banks Banks Primary Cr.
Societies
Societies

Indian Foreign

Public Sector Private Sector HDFC,

Banks Banks ICICI, etc
ICICI etc.

State Bank of Other Nationalized Regional

India and its Banks Rural Banks
Subsidiaries
CLASSIFICATION ON THE BASIS OF OWNERSHIP

On the basis of ownership banks are of the following types:

PUBLIC SECTOR BANKS

Public sector banks are those banks which are owned by the Government. The Govt.
runs these Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6
banks were also nationalized. Therefore, in 1980 the number of nationalized bank 20.
But at present there are 9 banks are nationalized. All these banks are belonging to public
sector category. Welfare is their principle objective.

PRIVATE SECTOR BANKS

These banks are owned and run by the private sector. Various banks in the country
such as ICICI Bank, HDFC Bank etc. An individual has control over their banks in
preparation to the share of the banks held by him.
CO-OPERATIVE BANKS

Co-operative banks are those financial institutions. They provide short term &
medium term loans to their members. Co-operative banks are in every state in India.
Its branches at district level are known as the central co-operative bank. The central
Co-operative bank in turn has its branches both in the urban & rural areas. Every state
Co-operative bank is an apex bank which provides credit facilities to the central co
operative bank. It mobilized financial resources from richer section of urban
population by accepting deposit and creating the credit like commercial bank and
borrowing from the money mkt. It also gets funds from RBI.

CLASSIFICATION ACCORDING TO FUNCTION

On the basis of functions banks are classified as under

COMMERCIAL BANK

The commercial banks generally extend short-term loans to businessmen & traders.
Since their deposits are for a short-period only. They cannot lend money for a long
period. These banks reform various types or agency job for their customers. These
banks are not in a position to grant long-term loans to industries because their deposits
are only for a short period. The majority of joint stock banks in India are commercial
banks which finance trade & commerce only.

SAVING BANKS

The principle function of these banks is to collect small saving across the country and
put them into productive use. These banks have shown marked development in
Germany & Japan. These banks are established in HAMBURG City of Germany in
1765. In India a department of post offices functions as a saving banks.

FOREIGN EXCHANGE BANKS

These are special types of banks which specialize in financing foreign trade. Their main
function is to make international payments through purchase & sale of exchange bills.
As it well known, the exporters of a country prefer to receive the payments for exports
in their own currency. Thus these banks convert home currency into foreign currency
and vice versa. It is on this account that these banks have to keep with themselves stock
of the currency of various countries. Along with that, they have to open branches in
foreign countries to carry on their business

INDUSTIRAL BANKS

The industrial banks extend long term loans to industries. In fact, they also help
industrials firms to sell their debentures and shares. Sometimes, they even underwrite
the debentures & shares of big industrial concerns.

These banks found their origin in India. These banks made a significant contribution to
the development of agricultural and industries before independence. Mahajan’s, rural
moneylenders and jewelers have been the forerunner of these banks in India.

INDIGENIOUS BANKS

These banks found their origin in India. These banks made a significant contribution to
the development of agricultural and industries before independence. Mahajan’s, rural
moneylenders and jewelers have been the forerunner of these banks in India.
CENTRAL BANK

The central bank occupies a pivotal position in the monetary and banking structure of
the country. The central bank is the undisputed leader of the money market. As such it
supervises controls and regulates the activities of commercial banks affiliated with it.
The central bank is also the higher monetary institution in the country charged with the
duty & responsibility of carrying out the monetary policy formulated by the
government. India's central bank known as the reserve bank of India was set up in 1935.

AGRICULTURAL BANK

The commercial and the industrial banks are not in a position to meet the credit
requirements of agriculture. Hence, there arises the need for setting up special type of
banks of finance agriculture. The credit requirement of the farmers are two types.
Firstly, the farmers require short term loans to buy seeds, fertilizers, ploughs and other
inputs. Secondly, the farmers require long-term loans to purchase land, to effect
permanent improvements on the land to buy equipment and to provide for irrigation
works. There are two types of agriculture banks.

1. Agriculture co-operative banks, and

2. Land mortgage banks. The farmer provides short-term credit, while the letter
extends long-term loans to the farmers.

OPPORTUNITIES

The Banking sector is considered the most lucrative option in today’s job market. In
the industry, a position in Treasury or Forex is considered right on top and this is
followed by careers in Private Banking, Investment Banking and Retail Banking. One
could work in a variety of areas in banking industry including Recurring Deposit
account, banking officer, probationary officer, loan officer, assessor, personal loan
officer, home loan officer, home loan agent, loan manager, mortgage loan underwriter,
loan processing officer, accountant, product marketing and sales executive, and
customer service executive among others.
In the Financial Services, some of the important jobs include that of a stockbroker who
is essentially a person who buys and sells securities on behalf of individuals and
institutions for some commission. While some brokers like to practice with individual
client’s others work for institutions. Brokers who work for institutional investors are
often called securities traders. Many prefer to work as dealers, advisors and securities
analysts. Security analysts are those who advise companies on floatation’s of shares as
they are expected to have sound knowledge of capital markets.

Investment analysts are the backbone of the financial services sector. They study
the financial reports of companies, assess various statistical information, profitability
projections, compare financial results, survey the industry as a whole and on the basis
of the available information, and finally conclude to a decision. Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions.

MAJOR PLAYER IN INDIA

1. HDFC BANK LTD

2. ICICI BANK LTD
3. STATE BANK OF INDIA LTD
4. PUNJAB NATOINAL BANK LTD
5. BANK OF BARODA LTD
6. KOTAK MAHINDRA BANK LTD
7. AXIS BANK LTD
8. CANARA BANK LTD
9. INDUSIND BANK LTD
10. YES BANK LTD
 INTRODUCTION TO DIGITALIZATION

Digitalization is the use of digital technologies to change a business model and provide
new revenue and value-producing opportunities; it is the process of moving to a digital
business.

Integration of digital technologies into everyday life by the digitization of everything

that can be digitized.

“Digital” is the new buzz word in the banking sector, with banks all around the
globe hopping onto the digital bandwagon. Just like how the introduction of
mobile technology massively disrupted innovation in the banking sector,
digital is now doing the same. Banks of all sizes are making sizeable
investments in digital initiatives in order to maintain a competitive edge. So,
what does “digital” actually mean?

It is the simplicity of design, the removal of friction and the ability to improve the
customer experience.

DIGITAL BANKING

MEANING AND DEFINITION

“Digital Banking – a new concept in the area of electronic banking, which aims to
enrich standard online and mobile banking services by integrating digital technologies,
for example strategic analytics tools, social media interactions, innovative payment
solutions, mobile technology and a focus on user experience.”

Digital banking is:

 Delivering a customized but consistent FI brand experience to customers across all

channels and points of interaction...
 ...underpinned by analytics and automation...
 ...and requiring a change in the operating model, namely products and services,
organization, culture, and skills and IT...
 ...in order to deliver demonstrable and sustainable economic value.

Digital Banking is the application of technology to ensure seamless end-to-end

processing of banking transactions/operations; initiated by the client, ensuring
maximum utility; to the client in terms of availability, usefulness and cost; to the bank
in terms of reduced operating costs, zero errors and enhanced services.

Benefits to the bank:

1. Lower operating costs through;

i. the elimination of costly back-office processing operations,
ii. fewer (or ideally no) errors,
iii. smaller branch footprint (the typical branch can become a kiosk affair,
providing technology interfaces for the client to use plus the ability to deal
with banking specialists via a video link) – a minimum number of actual staff
will be required.
iv. concentrating banking/business specialists in a single centre, who are then
available to clients via a technology link (either on their mobile, pc or via a
kiosk branch).

Operating cost savings of between 20% to 40% could be achieved this way, according
to industry experts. Cutting costs has the opposite effect on profits – they go up.

2. Dumping legacy systems;

i. Make no mistake - one of the biggest drawbacks to going ‘Digital’ is this
irrational clinging to legacy systems (developed in the 1960s and 1970s) that
hold progress back. Banks plead the huge cost of making the change. They
are wrong. The ultimate costs of not making the change are far greater.

Benefits to the customer:

 1. Improved services and product offerings;
i. 24/7 bank services and availability through your mobile, pc or kiosk branch,
ii. ‘smart banking’ applications that allow ALL transactions to be completed
from the device of your choice, from beginning to end (with clear
instructions and fail safe mechanisms),
iii. access to a FULL range of services (savings, investments, insurance, loans,
mortgages, foreign currency, etc.),
iv. new useful client services such as warnings, notifications, budgeting,
expenditure analyses, savings programs, calculators (you name it – the range
is endless),
v. Lower charges (and therefore cheaper banking),
vi. Banking that meets the client’s needs (not the banks)
vii. Banking will mean digital banking from 2015
2. 69% of customers already use the Internet to buy financial products
3. Customers are willing to pay for digital banking
4. Banks need to improve their digital offer to attract new customers

Digital banking is set to overtake branch networks as the preferred access channel for
how customers will interact with their bank by 2015.

Online and mobile are preferred channels, particularly for Generation Y

customers

Immersed in digital
 Digital communication is pervasive; from mobile phones to tablet computers, we are
immersed in digital. Recent development of new digital features has led to:

 Improvements in user-experience design through interactive, game-like interfaces that are

starting to merge the boundaries between the real and the virtual and bringing data to life
through rich visualisations.
 Advances in mobile devices and networks, providing new services such as enhanced
digital security and the ability to access the Internet from anywhere (partially limited by
high international roaming charges).
 The rise of social media and collaboration tools, empowering customers and employees,
and moving control of the ‘brand message’ from businesses to consumers.
 Innovation in digital analytics and predictive models, driving deeper insight into
customers’ behaviour and enabling highly targeted and relevant treatment strategies to be
executed through digital media.
 New channel integration technologies, enabling a more seamless end-to-end experience
for customers with their bank.

Generation Y is fully embracing digital communication and is the customer group with
whom banks need to establish customer primacy relationships. The advantage of being
the primary bank is increased share of wallet and higher revenue over time, based on a
strong sense of customer loyalty – and good customer service.

PwC research shows that Generation Y are more than 20% more likely to use, or
consider using online or mobile banking services, than Baby Boomers and nearby twice
as likely as ‘matures’. According to this research, their primary bank is consistently
more likely to be the bank of choice for customers when they are planning to buy
another banking product.

Consumer expectations are changing with digital interaction

Present day consumers expect high quality digital communication. Rich content
including elegant designs, instant search results and interactive features. Bank websites,
especially online banking sections, are now required to offer a pleasant experience
while remaining highly functional.
It is still common for banks to send out account statements using the postal service;
however, for many people digital banking offers 24/7 account balance control – there
is a clear preference, especially for younger customers, to want instantaneous access to
their accounts. The posted account statement is snail mail in comparison. The utility of
snail mail, by contrast, is rapidly dying.

Consumers have access to more information than ever before, they now communicate
with more people and more frequently – traditional word-of-mouth has a completely
different meaning when one considers the immediacy of Facebook, Twitter or even
email. Access to information and the ease with which consumers can share views with
those they know – or even ‘the world’ – is dramatic. Good experiences can be easily
shared online... as can negative ones.

It is important that banks understand the importance of customer thinking in deciding

where to trust their money and in choosing their primary banking relationship. This has
long-term influence personally, but also as an element of influence on their friends and
those they communicate with online.

Banks should consider four main aspects of a robust digital offering:

1. Customer attitudes and behaviour are changing

2. Digital is preferred globally.

3. Digital is a part of Generation Y’s lifestyle and this is the key time for them to decide
on their primary banking relationship.

4. Digital is evolving – technology devices and software all serve to disrupt traditional
means of communication. Simultaneously, each brings opportunity.

Security is the foundation of digital banking

Security extends from the bank’s hardware to the user’s device – whether a PC/Mac at
home, an iPad or the newest Smartphone. In all cases, digital banking must employ
robust security technologies which protect the communication, user information and
the bank’s IT infrastructure.

Indeed, it is clear that for digital banking to be a rewarding experience for the customer
and a profitable growth area for the banks, technology partners, payment processing
service providers and mobile phone operators – there ought to be a comprehensive
agreement on shared technology standards and processes. The European Commission
has just issued a Green Paper, ‘Towards an integrated European market for card,
internet and mobile payments’ which addresses many of the issues while being much
broader than online banking itself. Luxembourg’s LuxTrust is a strong step here in
moving digital banking forward in terms of a security standard.

Digital in Private Banking

Private Banks have been slow to introduce digital technology applications for their
customers arguing that the private banking industry is a personal and pre-dominantly
face to face business with little need for such applications to enhance the relationship.
Security and privacy issues are two of the reasons cited for not embracing these new
developments.

However, there are a number of arguments for private banks to seriously evaluate their
digital strategy and make it one of the cornerstones of their service offering and brand
building activities. As the next generation of private banking clients start to dominate,
private banks will need to avoid the image of an old out-of-date bank that has lost touch
with its clients.

Private banking is about being a trusted advisor as well as being connected and
recommended. Since the digital revolution, which started in the 1990’s, people are
increasingly turning to the Internet not only to inform themselves regarding financial
products but also the reviews of other customers using the products and services.
Customers are already using social media to share their views on financial products and
services.

There is some recognition here in Luxembourg of the increasing place digital

communication is taking, as noted in The PwC Global Private Banking / Wealth
Management Survey 2011 which found that 38 percent of private bankers expected to
interact more with their clients through social media in the next two years and that 56
percent of private banks expected to use mobile technologies over the same period.
 COMPANY PROFILE

2.1 About the industry

2.1.1 Indian Banking structure

The structure of Indian banking system that created during the pro-independence period
was without any purposive control and direction. There was no thorough keeping
money laws expect from the Bank Charter Act 1876 which directed the three managing
bank and the Indian Companies Act 1913 gave some sheltered gatekeepers against bank
disappointments.
 BANKING
SYSTEM

Non Scheduled
Scheduled Banks
Banks

Scheduled
Scheduled Co. -
Commercial
Operative Banks
Banks

Scheduled Urban Scheduled State

Public Sector Private Sector Foreign Banks Regional Rural
Co - operative Co - Operative
Banks (27) Banks (30) (40) Banks (196)
Bank (52) Bank (16)

State Banks of
Nationalized Old Private New Private
India and its
Banks (19) Sector Banks (22) Sector Banks (8)
Associates (8)

(Fig: 2.1, Indian Banking Structure)

In 1935, The State Bank of India Act, was passed, as needs be, The Imperial Bank of
India' was nationalized and State Bank of India rose with the target of augmentation of
managing an account offices on a huge scale, particularly provincial and semi – urban
region and for different of the general population purposes. In 1969, fourteen
noteworthy Indian Commercial Banks were nationalized and in 1980, six more were
included to constitute the general population segment banks. Business Banks in India
are arranged in Scheduled Bank and Non Scheduled Banks. Booked Banks are
including nationalized Bank, SBI and its backups, private segment banks and outside
banks. Non Scheduled Banks are those incorporated into the second Scheduled of the
RBI Act, 1934.

 Scheduled Banks
 Non Scheduled Banks
 Nationalized Banks
 Old Private Bank
 New Private Banks
 Foreign Banks
 Co-Operative Banks

2.1.1.1 Scheduled Banks:

The second planned of RBI act, make a rundown of banks which are depicted as
Scheduled Banks. In the terms of RBI act, 1934, the required sum is just Rs. 5 Lakh.
 The Scheduled Banks appreciate a few benefits. It implies that booked banks
conveys wellbeing and distinction esteem contrasted with non-scheduled banks. It
is involved to get renegotiate office as pertinent.

2.1.1.2 Non Scheduled Banks:

The commercial banks not included in the 2nd schedule of the RBI act are known
as non-scheduled banks. They are not qualified for offices like refinance and
rediscounting of bills and so on, from RBI. They are engaged in lending money
discounting and collection bills and various agency services. They demand higher
security for credits.

2.1.1.3 Nationalized Banks:

The nationalized banks incorporate 14 banks nationalized on nineteenth July, 1969

and the 6 more nationalized on fifteenth April, 1980. They are likewise scheduled
banks, after this nationalization the administration’s attempt to actualize different
welfare plans.

2.1.1.4 Old Private Bank:

These banks all enrolled under Companies Act, 1956. Fundamental distinction
between Co-operative bank and Private Banks is its aim. Cooperative banks work
for its members and private banks are work for possess benefit.

2.1.1.5 New Private Banks:

These banks lead the market of Indian banking business in brief period due to its
assortment of administrations and way to deal with handle client and furthermore
as a result of long working hours and speed of administrations. This is likewise
enrolled under the Company Act 1956. Amongst old and new private banks there
is wide distinction.

2.1.1.6 Foreign Banks:

Foreign Banks mean multi-nations bank. In the event of Indian foreign banks are such
banks which open its branch office in India and their head office are outside of India.
Example - HSBC Bank, City Bank, Standard Chartered Bank and so forth.

2.1.1.7 Co-operative Banks:

Co-operative Banks another segment of the Indian bank with the institution of the Co-
operative Credit Societies were satiated inferable from the expanding interest of Co-
operative Credit, another Act of the 1994, which accommodate the expanding interest
of Co- operative Central banks by an association of essential credit societies or by an
association of essential credit socialites and individuals.
2.2 Introduction of company
The Housing Development Finance Corporation Limited (HDFC) was among the first
to get an 'in principle' endorsement from the Reserve Bank of India (RBI) to set up a
bank in the private area, as a major aspect of RBI's progression of the Indian Banking
Industry in 1994. The bank was joined in August 1994 for the sake of 'HDFC Bank
Limited', with its enlisted office in Mumbai, India. HDFC Bank started tasks as a
Scheduled Commercial Bank in January 1995.

Incorporated in the year 1994, HDFC Bank is one of the largest privately-owned
financial institutions in the country. Its headquarters are located in Mumbai,
Maharashtra. Operating through a network of 4,729 branches and 12,259 ATM’s in
2,669 cities and towns of India, the bank offers a wide range of products and services
that cater to different customer segments. Its product gamut includes personal banking,
wholesale banking, credit cards and loans such as personal loan, business loan, housing
loan, auto loan, loan against property, etc. HDFC is also one of the most advanced
banks in terms of technology offering user-friendly online banking portal and mobile
app.

HDFC Bank has a wide range of products engineered to suit the needs of the banking
sector this is backed up by a dedicated Relationship Management Team and dedicated
servicing department.
 HDFC Bank Limited Brief Summary

Type Private

Industry Banking, financial services

Founded August 1994

Headquarters Mumbai, Maharashtra, India

Key people Aditya Puri (MD)

Products Credit cards, consumer banking, corporate banking, finance and

insurance, investment banking, mortgage loans, private
banking, private equity, wealth management

Revenue ₹81,602 crore(US$12 billion) (2018)

Operating income ₹25,732 crore(US$3.8 billion) (2018)

Net income ₹14,550 crore(US$2.2 billion) (2018)

Total assets ₹863,840 crore(US$130 billion) (2018)

Number of 84,325 (March 2018)

employees

(Fig: 2.1, HDFC Bank Limited Brief Summary)

2.2.1 Distribution Network

HDFC Bank is headquartered in Mumbai. As of March 31, 2018, the Bank's distribution
network was at 4,787 branches in 2,691 cities. All branches are connected on an online
ongoing premise. Clients crosswise over India are additionally overhauled through
different conveyance channels, for example, Phone Banking, Net Banking, Mobile
Banking and SMS based banking. The Bank's extension designs take into account
considering the need a nearness in all major industrial and commercial centers, where
its corporate clients are situated, and additionally the need to build a strong retail
customer base for both deposits and loan products Being a clearing/settlement bank to
different leading stock traders, the Bank has branches in focuses where the NSE/BSE
have a solid and dynamic member base.

The Bank likewise has a system of 12,635 ATMs crosswise over India. HDFC Bank's
ATM system can be gotten to by all residential and worldwide Visa/MasterCard, Visa
Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

2.2.2 Technology

HDFC Bank works in a profoundly computerized condition as far as data innovation

and correspondence frameworks. All the bank's offices have online availability, which
empowers the bank to offer fast supports exchange offices to its clients. Multi-branch
get to is likewise given to retail clients through the branch organize and Automated
Teller Machines (ATMs).
The Bank has tried significant endeavors and interests in gaining the best innovation
accessible globally, to manufacture the foundation for a world-class bank. As far as
core banking software, the Corporate Banking business is upheld by Flex cube, while
the Retail Banking business by Fin ware, both from I-flex Solutions Ltd. The
frameworks are open, scalable and web-empowered.
The Bank has organized its commitment to innovation and the web as one of its key
objectives and has already made significant progress in web-empowering its core
business. In each of its businesses, the Bank has prevailed with regards to utilizing its
market position, expertise and innovation to create a competitive advantage and build
market share.

2.2.3 Amalgamation of times bank and centurion bank of Punjab with HDFC bank

On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank
was formally affirmed by Reserve Bank of India to finish the statutory and
administrative endorsement process. According to the plan of amalgamation, investors
of CBOP got 1 offer of HDFC Bank for each 29 offers of CBoP.

The amalgamation enhanced HDFC Bank as far as expanded branch arrange,

geographic reach, and client base, and a greater pool of talented labor.

In a turning point exchange in the Indian keeping money industry, Times Bank Limited
(another new private area bank advanced by Bennett, Coleman and Co. /Times Group)
was converged with HDFC Bank Ltd., powerful February 26, 2000. This was the
principal merger of two private banks in the New Generation Private Sector Banks.
According to the plan of amalgamation affirmed by the investors of the two banks and
the Reserve Bank of India, investors of Times Bank got 1 offer of HDFC Bank for each
5.75 offers of Times Bank.

2.2.4 Promoter

HDFC is India's premier housing finance company and appreciates a perfect reputation
in India and in addition in global markets. Since its commencement in 1977, the
Corporation has kept up a reliable and solid development in its activities to remain the
market pioneer in contracts. Its exceptional credit portfolio covers well finished a
million abiding units. HDFC has created huge ability in retail contract advances to
various market sections and furthermore has an extensive corporate customer base for
its lodging related credit offices. With its involvement in the financial markets, strong
market reputation, substantial investor base and novel customer establishment, HDFC
was in a perfect world situated to advance a bank in the Indian environment.

2.2.5 Capital Structure

As on 31st March, 2015 the approved offer capital of the Bank is Rs. 550 Crore. The
paid-up share capital of the Bank as on the said date is Rs 501,29,90,634/ -
(2506495317) value offers of Rs. 2/ - each). The HDFC Group holds 21.67 % of the
Bank's value and around 18.87 % of the value is held by the ADS/GDR Depositories
(in regard of the bank's American Depository Shares (ADS) and Global Depository
Receipts (GDR) Issues). 32.57 % of the value is held by Foreign Institutional Investors
(FIIs) and the Bank has 4,41,457 investors.

The offers are recorded on the Bombay Stock Exchange Limited and the National Stock
Exchange of India Limited. The Bank's American Depository Shares (ADS) are
recorded on the New York Stock Exchange (NYSE) under the image 'HDB' and the
Bank's Global Depository Receipts (GDRs) are recorded on Luxembourg Stock
Exchange under ISIN No US40415F2002.

2.2.6 Mission

HDFC Bank's mission is to be a World Class Indian Bank.

The goal is to build sound client establishments crosswise over particular organizations
to be the preferred provider of managing an account administration for target retail and
wholesale client segments, and to accomplish solid development in profitability, steady
with the bank's risk appetite. The bank is resolved to keep up the highest level of ethical
standards, professional integrity, corporate governance and regulatory compliance.
HDFC Bank's business philosophy depends on five core values:

 Operational Excellence
 Customer Focus
 Product Leadership
 People
 Sustainability

2.2.7 Vision

 To maintain the highest level of ethical standards, professional integrity and

regulatory compliance.
 HDFC Bank’s business philosophy is based on four core values such as:
 Operational excellence
 Customer focus
 Product leadership
 People

2.2.8 Objective

 To build sound customer franchises across distinct business so as to be the

preferred provider of banking services for target retail and wholesale customer
segments.
 To achieve healthy growth in profitability, consistent with the bank’s risk
appetite.

2.2.9 SWOT Analysis

 STRENGTH WEAKNESS

OPPORTUNITY THREAT

a) Strength

 HDFC Bank is India's largest private sector lender by assets by having

4,787 branches and 12,635 ATMs
 HDFC bank is located in 2,691 cities in India and has more than 800
locations to serve customers through Telephone banking
 The bank’s ATM card is compatible with all domestic
and international Visa / Master card, Visa Electron/ Maestro, Plus / cirus
and American Express. This is one reason for HDFC cards to be the
most preferred card for shopping and online transactions
 HDFC bank has the high degree of customer satisfaction when
compared to other private banks
 The attrition rate in HDFC is low and it is one of the best places to work
in private banking sector
 HDFC has lots of awards and recognition, it has received ‘Best Bank’
award from various financial rating institutions like Dun and Bradstreet,
Financial express, Euro money awards for excellence, Finance Asia
country awards etc.
 HDFC has good financial advisors in terms of guiding customers
towards right investments

b) Weaknesses

 HDFC bank doesn’t have strong presence in Rural areas, where as ICICI
bank its direct competitor is expanding in rural market
  HDFC cannot enjoy first mover advantage in rural areas.
Rural people are hard core loyal in terms of banking services
 HDFC lacks in aggressive marketing strategies like ICICI
 The bank focuses mostly on high end clients
 Some of the bank’s product categories lack in performance and doesn’t
have reach in the market
 The share prices of HDFC are often fluctuating causing uncertainty for
the investors

c) Opportunities

 HDFC bank has better asset quality parameters over government banks,
hence the profit growth is likely to increase
 The companies in large and SME are growing at very fast pace. HDFC
has good reputation in terms of maintaining corporate salary accounts
 HDFC bank has improved it’s bad debts portfolio and the recovery of
bad debts are high when compared to government banks
 HDFC has very good opportunities in abroad
 Greater scope for acquisitions and strategic alliances due to strong
financial position

d) Threats

 HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%.

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 HDFC is not able to expand its market share as ICICI imposes major
threat
 The government banks are trying to modernize to compete with private
banks
 RBI has opened up to 74% for foreign banks to invest in Indian market

2.2.10 Profit and loss statement of HDFC Bank

Standalone Profit &

Loss account In crore
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
 Income
Interest Earned 80,241.36 69,305.96 60,221.45 48,469.90 41,135.53
Other Income 15,220.30 12,296.50 10,751.72 8,996.35 7,919.64
Total Income 95,461.66 81,602.46 70,973.17 57,466.25 49,055.17
Expenditure
Interest expended 40,146.49 36,166.73 32,629.93 26,074.24 22,652.90
Employee Cost 6,805.74 6,483.66 5,702.20 4,750.96 4,178.98
Selling, Admin &
30,116.35 23,569.29 19,638.98 15,768.85 13,073.31
Misc Expenses
Depreciation 906.34 833.12 705.84 656.3 671.61
Operating Expenses 22,690.37 19,703.33 16,979.70 13,987.55 12,042.20
Provisions &
15,138.06 11,182.74 9,067.32 7,188.56 5,881.70
Contingencies
Total Expenses 77,974.92 67,052.80 58,676.95 47,250.35 40,576.80

Net Profit for the Year 17,486.73 14,549.64 12,296.21 10,215.92 8,478.38
Profit brought forward 32,668.94 23,527.69 18,627.79 14,654.15 11,132.18
Total 50,155.67 38,077.33 30,924.00 24,870.07 19,610.56
Equity Dividend 0 0 2,401.78 2,005.20 1,643.35
Corporate Dividend Tax 0 0 488.95 408.21 279.29
Per share data (annualized)
Earning Per Share
67.38 56.78 48.64 40.76 35.34
(Rs)
Equity Dividend (%) 650 550 475 400 342.5

Book Value (Rs) 409.6 349.12 287.47 247.39 181.23

Appropriations
Transfer to Statutory
7,953.58 3,953.42 3,275.97 2,807.28 2,185.93
Reserves
Transfer to Other
1,748.68 1,454.97 1,229.62 1,021.59 847.84
Reserves
Proposed
Dividend/Transfer to 0 0 2,890.73 2,413.41 1,922.64
Govt
Balance c/f to
40,453.42 32,668.94 23,527.69 18,627.79 14,654.15
Balance Sheet
Total 50,155.68 38,077.33 30,924.01 24,870.07 19,610.56

(Table: 2.2, Profit & Loss of HDFC Bank)

 8,478.38
Mar '14 40,576.80
49,055.17

10,215.92
Mar '15 47,250.35
57,466.25

12,296.21 Net Profit for the Year

Mar '16 58,676.95
70,973.17 Total Expenses
Total Income
14,549.64
Mar '17 67,052.80
81,602.46

17,486.73
Mar '18 77,974.92
95,461.66

0.00 20,000.0040,000.0060,000.0080,000.00100,000.00
120,000.00

(Fig: 2.2, Graph of Growth in Expenses, income and total growth)

The above graph shows the continuous growth in expenses, total growth & total income
in every financial year. If the expenses will increase the profit will also be increased.

2.3 Business Profile

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 segments:

 Wholesale Banking

 Treasury

 Retail Banking

2.3.1 Wholesale Banking

The Bank’s target market is primarily large, blue-chip manufacturing companies in the Indian
corporate sector and to a lesser extent, small & mid-sized corporates and agri-based businesses. For
these customers, the Bank provides a wide range of commercial and transactional banking services,
including working capital finance, trade services, transactional services, cash management, etc. The
bank is also a leading provider of structured solutions, which combine cash management services
with vendor and distributor finance for facilitating superior supply chain management for its
corporate customers. Based on its superior product delivery / service levels and strong customer
orientation, the Bank has made significant inroads into the banking consortia of a number of leading
Indian corporates including multinationals, companies from the domestic business houses and prime
 public sector companies. It is recognised as a leading provider of cash management and transactional
banking solutions to corporate customers, mutual funds, stock exchange members and banks.

 2.3.2 Treasury

Within this business, the bank has three main product areas - Foreign Exchange and Derivatives,
Local Currency Money Market & Debt Securities, and Equities. With the liberalization 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 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.

 2.3.3 Retail Banking

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 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. It is also a leading provider of Depository
Participant (DP) services for retail customers, providing customers the facility to hold their
investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in association with
VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank launched its
credit card business in late 2001. By March 2015, the bank had a total card base (debit and credit
cards) of over 25 million. The Bank is also one of the leading players in the “merchant acquiring”
business with over 235,000 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.

2.4 Source of income earned and spent

It is more important for every organization to know about from where and where to spent money.
And balanced between these two things rupee earned and rupee spent are required for smooth running
of business and financial soundness. This type of watch can control and eliminate the unnecessary
spending of business. In this diagram it includes both things from where Bank earned Rupee and
where to earned Rupee and where to spend. HDFC Bank earned from the ‘Interest from Advances
51.14%, ‘Interest from Investment’ 27.12%, and Bank earned commissions exchange and brokerage
of 15.25%. These are the major earning sources of the bank also earned from the Forex and
Derivatives and some other Interest Income. Bank spent 39.75% on interest Expense, 30.27% on
operating expense and 14.58% on provision. Bank also spent Dividend and Tax on dividend, Loss on
Investment, Tax.

(Fig: 2.3, Source of income earned and spent )

2.5 Competitors of HDFC Bank

Market Net
Last Cap.
Name Logo Interest Net Profit Total Assets
Price
(Rs. Cr.) Income
HDFC
2,146.40 558,956.44 80,241.35 17,486.75 1,063,934.31
Bank

Kotak
1,372.15 261,549.89 19,748.49 4,084.30 264,933.40
Mahindra

ICICI
273.40 175,849.07 54,965.89 6,777.42 771,791.46
Bank

Axis Bank 532.55 136,755.83 45,780.31 275.68 691,329.57

Induslnd
1,935.10 116,199.53 17,280.75 3,605.99 221,626.17
Bank

Yes Bank 371.40 85,634.18 20.267.42 4,224.56 312,445.60

Bandhan
580.00 69,182.69 4,802.30 1,345.56 44,310.07
Bank

RBL Bank 579.90 24,409.70 4,507.57 635.09 61,850.75

ING
Vysya 1,027.00 19,719.13 5,205.22 657.85 60,413.23
Bank

Federal
83.45 16,503.28 9,752.86 878.85 114,976.93
Bank
IDFC
39.45 13,429.22 8930.00 859.30 112,159.66
Bank

City Union
173.55 12,701.92 3,402.42 592.00 35,270.78
Bank

Karur
103.55 7,524.35 5,699.65 345.67 61,807.61
Vysya

DCB Bank 180.45 5,570.87 2,412.99 245.34 30,222.09

South Ind
22.65 4098.52 6,192.81 334.89 82,685.88
Bank

Karnataka
118.35 3,345.81 5,423.75 325.61 64,126.55
Bank

JK Bank 50.70 2,823.27 6621.40 202.72 82,018.66

Lakshmi
101.65 2,602.18 3,041.62 -584.87 35,244.71
Vilas

Dhanlaxmi
17.15 433.92 1,013.32 -24.87 12,333.12
Bank

(Table: 2.4, Competitors of HDFC Bank)

DIGITAL INITIATIVES

Private sector lender HDFC Bank launched nationwide campaign to position itself as a
premier digital bank.
Integrated, nationwide brand campaign “Har Zaroorat Poori Ho Chutki Mein, Bank
Aapki Mutthi Mein... the campaign will reinforce bank's position as India's premier
digital bank".
Some initiatives are-
PayZapp– A complete payment solution for all your needs.
Chillr – App to enable customers to send money to any person on phone contact list.
Digital Wallet -to transact on any website for HDFC Bank and non-HDFC Bank
customers.
HDFC Bank Watch Banking– A banking experience on a personalized wearable
device taking consumer’s interaction with the bank to a whole new level.
30-Minute Auto Loan, 15-minute Two-Wheeler Loan.
10-second personal loan disbursement.

HDFC Bank’s PayZapp

As smartphones are turning into wallets, several startups and banks have launched
mobile applications to enable peer-to-peer transactions, micro-payments as well as
payment solutions for merchants.

HDFC Bank, one of India's leading private sector bank, has now launched a
comprehensive mobile payment solution that encompasses several mobile commerce
scenarios. The latest initiative in HDFC Bank's digital banking offering christened
#GoDigital, 'PayZapp', allows one-click payments for all your spends.

PayZapp offers easy checkout using a single PIN without the need to enter credit/debit
card details or a code or OTP for the second factor authentication. The wallet in the app
is linked to your credit and debit card and acts as a virtual card - a virtual international
card that you can use for any transactions across the globe.

It doesn't have any transaction limit as well. Also, the app allows users to transfer
money instantly to anybody using a mobile phone or an email ID.

The app also integrates SmartBuy, a virtual mega marketplace from HDFC Bank that
lists all deals and offers by leading e-Commerce portals as well as utility payment
options. While HDFC Bank has managed to partner with leaders like Flipkart,
Makemytrip, Cleartrip, BookMyShow, Expedia, GoIbibo, Yatra and Big Basket at the
launch, the bank intends to get over 10,000 merchants onboard in next 45 days.

But, you are limited in options when you're booking an airline ticket. For instance, since
only partner OTAs would be available, but apart from straightforward discounts and
promotions, you'd also save on the convenience charges.
 In a casual conversation, the bank stated that one is likely to save at least 10-15% on
typical monthly purchases via SmartBuy.

At the moment, the app is available only for HDFC Bank customers and for Android
devices only. In the second phase - next three months - the service would open to other
cardholders and also see the launch on iOS and Windows devices too.

Soon, PayZapp would also introduce loyalty points, geo-targeted offers, QR code based
payments and contactless payment mobile instruments.

Although still in beta, the app is pretty straightforward to use. You need to register
using the mobilephone number already registered with the bank, fill in your details, and
create a Personal Identification Number (PIN). Your mobile number works as your
Login ID.

Parag Rao, Business Head, Cards, Payment Products and Merchant Acquiring Services
at HDFC Bank, said that the genesis of PayZapp stems from the 'banks are obsolete'
comments.

Every day an innovative startup is disrupting the space with convenient payment
instruments and bringing financial inclusion, and HDFC Bank does not want to be
considered as a 'dinosaur' despite several digital initiatives and industry firsts.

Unlike a mobile wallet, there's no hassle of pre-payment or recharging. Also, there are
no additional charges levied by the bank for purchases, fund transfers or bill payments
using the app.

HDFC Bank launches Chillr #GoDigital

 Partners with MobME for instant money transfer app

 App to enable customers to send money to any person on phone contact list
 (L-R) Mr Nitin Chugh, Head,
Digital Banking, HDFC Bank Mr. Dhiraj Relli, Branch Banking Head, HDFC Bank
and Mr. Sony Joy, CEO Chillr, unveil the product at the launch

HDFC Bank launched Chillr, a mobile app that allows users to instantly transfer money
to any contact in their phonebook 24 hours a day, seven days a week. HDFC Bank has
partnered with MobME, a Kochi-based technology firm, to launch this app.

Chillr allows users to send money in 3 simple steps:

1. Choose the recipient from your list of Chillr contacts

2. Enter the amount to be transferred & a message to recipient
3. Enter your secret M-PIN & press PAY

The recipient will instantly receive money in his / her bank account.

Chillr is a first-of-its kind application that is linked directly to the customer’s bank
account, so there is no need to worry about filling up a prepaid wallet. No passwords
are stored on the phone and it can be accessed only with an M-PIN known to the
customer alone.

With this app, customers no longer have to ask for account information and wait for a
set amount of time in order to add beneficiaries if they wish to transfer money. They
can send and request money directly on their mobile.
With Chillr, HDFC Bank customers can transfer money to any person in India, once
they download the app and register. The app is widely accessible as it works on Android
and iOS operating systems. It will soon be launched for the Windows phone as well.

The app is particularly useful for college students and young professionals. While
dining at restaurants, customers, particularly youngsters can split the bill using this app.
Parents, whose children are studying away from home in other cities can transfer money
via the app. In the near future it will also allow users to pay utility bills and various
merchants via the mobile.

Chillr is also an important tool for financial inclusion in rural markets, allowing migrant
workers to remit money to family back home in a secure manner. HDFC Bank has also
piloted the use of Chillr for its Sustainable Livelihood Initiative (SLI), a programme
that reaches out to people at the bottom of the pyramid by providing them with
livelihood finance and skills training. The participants running small businesses used
the app to make payments to employees, avoiding the hassle of travelling to the nearest
ATM to withdraw cash.

“Customer convenience is central to our concept of Digital. This Chillr app will
benefit various segments of people in the society. From students to young
professionals, from the migrant workers in cities to customers in rural India, this app
gives the convenience to send and receive money using your mobile phone in secured
manner. This app is one more important step by the Bank to leverage technology and
digital to offer banking services anytime and anywhere”

– Nitin Chugh, Head, Digital Banking, HDFC Bank

Chillr is the latest initiative in HDFC Bank’s digital banking offering christened
GoDigital. This campaign began on the banks of the Varanasi last year, with the launch
of its ‘Bank Aap Ki Muththi Mein’ offering, which literally converts the mobile phone
into a bank branch. Since then the bank has launched a host of innovative digital
initiatives. With Chillr, HDFC Bank is adding to its digital product suite.
 HDFC Bank to introduce Digital Wallet #GoDigital

 Available for HDFC Bank customers and all other debit and credit card holders
 Accessible from mobile app and online, as well as enabled with NFC for
contactless payments

HDFC Bank is all set to launch a digital wallet and an electronic marketplace for various
online merchants. Once an account holder or credit card holder registers for a digital
wallet, he can transact on most websites using only his wallet credentials. The wallet
will not be restricted to HDFC Bank customers, but also allow non-HDFC Bank debit
and credit card holders.

HDFC Bank is the market leader both as a card issuer and in processing card payments
for merchants, and accounts 40% of e-commerce transactions. With the shift from
desktops to mobile phone, mobile devices account for half of the purchases in terms of
number of transactions.
However, the complexity of entering card details onto a phone screen also leads to high
level of failed transactions. A digital wallet meets Reserve Bank of India’s requirement
of two-factor authentication but does away with the hassle of filling card details every
time. Also, the digital wallet – which can be accessed from a mobile app or online –
will be enabled for contactless payment using Near Field Communication (NFC) by
flashing the phone in front of readers that can accept NFC payments. Also, the
customers will not need to store their card details on third-party websites, and as a bank,
the details are in any case entrusted with the bank.

In a standard credit card purchase, the number of steps can go up to 11-12 including
filling in the 16-digit card number, name, expiry date, CVV and other details. Our
digital wallet will enable the transaction to be completed in two steps, which
substantially cuts down the failure rate on mobile phone purchases, which is as high as
50%.
– Parag Rao, Senior EVP and Head (Card Payment Products), HDFC Bank

According to industry estimates, by 2020, 30% of all digital payments will be done
using a digital wallet. HDFC Bank’s new offering, in line with the Go Digital initiative,
attempts to offer the “The future of mobile payments”

HDFC Bank Watch Banking

A Step forward in our journey – Go Digital: Bank Aapki Mutthi Mein

In December 2014, HDFC Bank launched its ‘Go Digital – Bank aapki mutthi mein’
campaign on the banks of the Varanasi river with an aim to provide holistic banking
services in all possible digital channels. Today, HDFC Bank provides 175+ banking
transactions through its Net banking platform and 80+ transactions through Mobile
banking (Mobile and Tablet apps).

HDFC Bank thought that it was the opportune moment to introduce a new category in
digital banking, leveraging the emerging wearable platforms, and becoming the first
bank in India to launch Watch banking for Apple Watch.

Why Apple Watch?

HDFC Bank is starting with the Apple Watch and aims to provide banking services
through all wearable devices across platforms like iOS and Android.
 We have started with Apple Watch since it is designed from ground up keeping in mind
what the user would want to do with such a device in a jiffy. HDFC Bank’s App has
been made keeping this in mind and the features are chosen accordingly.

Features of HDFC Bank Watch Banking

HDFC Bank will provide a total of 10 banking transactions in the current launch phase.
Some of them being View Account Information, Bill Payments, Recharges, Hot listing
facilities, locate nearest branch/ATM/offer, request statement/chequebook etc.
Moreover, HDFC Bank’s Watch Banking does not require our customers to download
a separate App. Customers can activate Watch Banking from an upgraded version of
HDFC Bank’s Mobile Banking App itself!

Security features and how will it work?

HDFC Bank brings in the same level of high security of its Mobile Banking App to its
Watch Banking experience.

 Any user information or data flow that happens, it if from the mobile phone to the
bank’s secure servers. The watch is merely a projection device.
 For added security, there is a watch banking PIN that the user himself sets during the
one time set-up process. This can be done only after entering his customer id and
password known only to the user.
 Additionally the Apple watch itself has a passcode lock just like other iOS devices.

HDFC Bank launches ‘Bank Aapki Muththi Mein’ – a bouquet of transactions on mobile
#GoDigital

 Technology agnostic, runs on all popular mobile platforms

 Largest offering of its kind in the country with over 75 banking transactions
 55% of all transactions at HDFC Bank are conducted through digital channels
 Allows customers to book FDs, RDs, pay bills, taxes, buy insurance, mutual
funds, even loans
 HDFC Bank today
launched Bank Aap Ki Muththi Mein, an offering that literally turns a mobile phone into
a bank branch. A bank branch the size of your palm that is with you round-the-clock,
wherever you are.

With over 75 transactions – all a touch away – it offers the customer the widest range
of transactions conceivable. These are both financial and non-financial transactions that
he needs in his daily life for which he would have to visit a branch, or an ATM. It is by
far the largest offering of its kind by any bank in India.

Besides essential transactions such as booking fixed- and recurring deposits, bill and
tax payments, buying insurance and mutual funds, the offering will also allow
customers – for the first time in the country – to buy instantly all kind of loans. It also
offers them fully customized, location-specific promotions, offers/deals on shopping,
dining, movies and entertainment.
With Bank Aap Ki Muththi Mein, you can do everything other than access your locker,
and deposit or withdraw cash. Customer convenience is central to our concept of
Digital. And, there is no bigger convenience than bringing your bank to the palm of
your hand. We are very excited to unveil our Bank Aap Ki Muththi Mein offering and
with it world class experience of banking to millions of our countrymen.

Mr. Nitin Chugh, Head – Digital Banking, HDFC Bank

Part of the Bank’s digital banking offering christened GoDigital, Bank Aap Ki Muththi
Mein is technology agnostic and runs on all mobile devices popular technology
platforms support. As of September 2014, India had over 900 million mobile users in
the country but only 40 million mobile banking customers.

Bank Aap Ki Muththi Mein works on both a smart phone as well as the basic phone that
supports internet browsing. For phones that do not support internet browsing, there’s
sms banking and missed-call banking. All that a customer needs to do is send a text to
or call a toll free number to know his account balance, get a mini statement, request a
check book or detailed account statement.

Today, 55% of all transactions at HDFC Bank are conducted through digital channels.
 LITERATURE REVIEW

Rameshgaava (2012) in his study on Topic ‘Indian Banking Sector’ finds that-

The sector of commercial banks consists of 33 foreign banks, 40 private sector banks,
and 27 public sector banks where majority ownership is included by the government.
During the reform period, the financial system permitted the banks to select their
lending rates and deposits, and also authorizes higher disclosure to make sure of large
transparency in the balance sheets. As a result of reforms in the banking sector the share
of entire assets of public sector banks was decreased to 75 percent from 90 percent. In
the private sector, the new banks entry diminished the concentration of assets which
further might have made the competition stronger which leads to more profitability,
productivity, and enhancing efficiency.

Dr. Richard Nyangosi (2014) in his study on Topic ‘Digitizing Banking Services’
finds that-

Internet and mobile technologies of recent years have gained momentum and are
impacting the working of every process including financial services. Financial Service
providers including banks are turning their necks toward the wave of these
Technologies. Their findings includes- Adoption of cell phone banking. Out of the
respondents surveyed, 26 percent had adopted cell phone banking in India out of those
who adopted, mostly were young aged. This service too like any other e-banking
services is gaining momentum as customers are finding it easy to bank 24x7. Using
different common E-banking services provided through a cell phone, which included:
balance inquiry, requesting cheque book, know last few transactions, requesting bank
statement, stop payment of cheque, and bill payment.
Adoption of Cyber Banking, the findings indicate that, 67.2 percent of the total sample
adopted Internet Banking and 36.8 did not adopt.
Perceived usefulness of SMS banking, financial products through cell phones have
proved to be useful to both customers and providers in recent times. Customers find it
easy, convenient, and efficient to transact conventional banking services which are non-
monetary in nature such as balance enquiry, transfer of funds, change password etc
through a mobile phone.
Malhotra, Pooja & Singh, (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, 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 primary limitation of the study is the scope
and size of its sample as well as other variables (e.g. market, environmental, regulatory
etc.), which may have an effect on the decision of the banks to offer a wide range of
Internet banking services. 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.

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.

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' behaviour 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 Customer’s 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-
banking's 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.
OBJECTIVE OF THE STUDY

 To identify the awareness and usage of Digital-Banking.

 To study the impact of digitalization.
 To know how much banking services has been improved.
 To study the satisfaction level of the respondents.

1.1. Scope of the study

The survey was conducted on Operative Level of IndusInd Bank. The

questionnaire for this survey was framed considering those factors where
corrective action can be taken. From the result of the survey the Forex
Department can take the corrective action to increase customer satisfaction
and thereby increase productivity towards Forex Services.

1. Indusind Bank provides banking services in global level. So the

awareness of forex card in tour & travel sector assesses it
market ability.
2. Forex card awareness in tour & travel sector assesses product’s
market position also.

1.2. Purpose of the Study

The study has been conducted for gaining practical knowledge about
Marketing research practices and fulfillment of PGDM Programme.
RESEARCH METHODOLOGY
1.1. Research Methodology Process

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. The various steps that are generally adopted by a
researcher in studying his research problem along with the logic behind
them are studied from it. It is necessary for the researcher to know not
only the research methods/techniques but also the methodology. It is
therefore necessary to design his/her methodology for them problem as
the same may differ from problem to problem.

For successful understanding and completion of the project, this

research was carried out in distinctive steps which show below with the
help of a figure:

Problem Identification

Research Design

Data Collection

Data Analysis & Interpretation

Research Report

(Fig: 5.1 – Steps in Research Methodology)

1.2. Research Design

Research Design indicates the methods and procedures of conducting
research study. In this case Descriptive research is undertaken which
help to know the characteristics of certain groups.

1.3. Sampling Technique

Since the project deals with the tour & travel agents convenient
sampling is approximate for making projection in the study. Population
groups which includes agent from tour & travel sector only. The units
are selected because of their convenient accessibility and proximity.
The data are quickly available and easily gathered. I have therefore
chosen the sampling method.

1.4. Sampling Size

The research is restricted to a sample size of 84.

1.5. Data Source

Data has been collected from various sources, there is combination of

both primary & secondary data that has been used in this research.

a) Primary Data

Primary data has also been collected through questionnaire. The data
collected through this method was adequate enough to make
projections in this study.

 Questionnaire

Questionnaires are very popular means of collecting data, but are

different to design and often require many rewrites before an
acceptable questionnaire is produced.

 Types of Questions used are:

Attitude questions to find out the respondents opinions or

attitudes to a given situation. The respondents then say that how
much they are aware with each one. An open question such as
“From which source you came to know about these services?
Should be used as an adjunct to the main theme of the
questionnaire and could allow the respondent to elaborate upon
 an earlier more specified question. However they were not be
used to introduce a section since there is high risk of influencing
later responses. The main problem of open question is that many
different answers have to be summarized and possibly coded.

b) Secondary Data

Articles have been sourced from magazines and journals dealing

with current happenings in Forex card. Internet and Text books
related to Forex card.

1.6. Tool & Technique for Analysis of Data

The data analysis has been done with using the MS Excel, SPSS
Software and test like Chi Square Test are used for analysis and
interpretation.

Research methodology is the process used to collect information and data for the
purpose of making business decisions. The methodology may include publication
research, interviews, surveys and other research techniques.

Research Methodology Process

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. The various
steps that are generally adopted by a researcher in studying his research problem along
with the logic behind them are studied from it. It is necessary for the researcher to know
not only the research methods/techniques but also the methodology. It is therefore
necessary to design his/her methodology for them problem as the same may differ from
problem to problem.

For successful understanding and completion of the project, this research was carried
out in distinctive steps which show below with the help of a figure:

Problem Identification

Research Design
 Data Collection

Data Analysis & Interpretation

Research Report

Research Design
A research design serves as a bridge between what has been established (the research
objectives) and how to accomplish these objectives. In fact, the research design is the
conceptual structure within which research is conducted; it constitutes the blueprint for
the collection, measurement and analysis of data. More explicitly, the design decisions
happen to be in respect of:
i) What is the study about?
ii) Why is the study being made?
iii) Where will the study be carried out?
iv) What type of data is required?
v) Where can be the required data found?
vi) What period of time will the study include?
vii) What will be the sample design?
viii) What technique of data collection will be used?
ix) How will the data be analyzed?
x) In what style will the report be prepared?

The function of research design is to provide for the collection of relevant evidence
with minimal expenditure of effort, time and money. But how all these can be achieved
depends mainly on the research purpose.
Research Type:

In this report I have used Descriptive research technique.

Descriptive research includes surveys and fact-finding enquiries of different kinds. The
major purpose of descriptive research is description of the state of affairs as it exists at
present. The main characteristic of this method is that the researcher has no control over
the variables.

Sampling Design:

For my survey I have used Convenience sampling technique.

Convenience sampling is a non-probability sampling technique where subjects are

selected because of their convenient accessibility and proximity to the researcher.

SAMPLE SIZE - Sample of 100 people was taken in order to conduct the research.

UNIVERSE - In accordance to the specified research universe is Lucknow city.

Sources of Data Collection:

PRIMARY DATA is the data which has been collected through personal contact.

 Through Questionnaire – Questionnaire is a written set of questions,

the answers to which are recorded by the respondents.
 Through Personal Interaction – In personal interaction an interviewer
asks questions in a face to face contact to the other person.

SECONDARY DATA is the data which are available in the form of fact and figures. The
sources of secondary data are:

 Websites
 Magazines
 Articles
Data Collection Tools:

For my survey I have used Pie chart, Graphs.

Methods of Data Collection:

For my survey I have collected data through Questionnaire.