SUMMER TRAINING REPORT

ON

“WORKING CAPITAL FINANCE OF HDFC

BANK”

Submitted in partial fulfilment for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

(Session 2017-19)

Under Supervision of : Submitted by :

Dr. Mrs. Jyoti Uppal Divesh Behal
Assistant Professor MBA 3RD SEM
HIMT, ROHTAK

HINDU INSTITUTE OF MANAGEMENT &

TECHONOLOGY
MAHARASHI DAYANAND UNIVERSITY, ROHTAK
 DECLARATION

I Divesh Behal, hereby declare that project entitled

“WORKING CAPITAL FINANCE OF HDFC BANK”
submitted to Maharshi Dayanand University, ROHTAK
in partial fulfilment of the requirement for Master
Degree of business administration (SEM 3rd) is my
original work. It is by my own and not copied one from
other.

Signature of the candidate

Divesh Behal

2
 Acknowledgement

This project report bears the imprint of those who had

rendered their wholehearted support and encouragement
without whose help this effort of mine would be in vain.
I express my deep sense of gratitude and sincere thanks
to my project guide Dr.Mrs. “Jyoti Uppal” for his
directions, suggestion and information provided which
were of utmost importance for the successful
completion of the project.
I thankful to the Mr. Lokesh Gupta who worked in
HDFC Bank for assisting me in the timely completion
of project.
No words and language can ever be sufficient to
express my gratitude to the above-mentioned persons
who provided me with the support to prepare this
project.

(Divesh Behal)

3
 Table of Contents
Page No.

CHAPTER-1

Introduction to Company 5-19

CHAPTER-2

Introduction to the topic 20-34

CHAPTER-3

Research Methodology 35-42

CHAPTER-4

Data Analysis & Interpretation

Chapter 5

Conclusion & Suggestions 43-44

Bibliography

4
 Chapter 1

Introduction to
company

5
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The
bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled
Commercial Bank in January 1995. HDFC is India's premier housing finance company and
enjoys an impeccable track record in India as well as in international markets. Since its
inception in 1977, the Corporation has maintained a consistent and healthy growth in its
operations to remain the market leader in mortgages. Its outstanding loan portfolio covers
well over a million dwelling units. HDFC has developed significant expertise in retail
mortgage loans to different market segments and also has a large corporate client base for its
housing related credit facilities. With its experience in the financial markets, a strong market
reputation, large shareholder base and unique consumer franchise, HDFC was ideally
positioned to promote a bank in the Indian environment.
HDFC Bank began operations in 1995 with a simple mission: to be a “World Class Indian
Bank.” We realized that only a single minded focus on product quality and service excellence
would help us get there. Today, we are proud to say that we are well on our way towards that
goal.

HDFC Bank Limited (the Bank) is an India-based banking company engaged in providing a
range of banking and financial services, including commercial banking and treasury
operations.

6
HISTORY OF HDFC BANK

HDFC BANK LTD was incorporated in August 1994 in the name of 'HDFC Bank Limited’,
with its registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and
Chairman-Emeritus, of HDFC Group.HDFC BANK LTD was amongst the first to set up
a bank in the private sector. The bank was incorporated on 30th August 1994 in the name of
‘HDFC Bank Limited’, with its registered office in Mumbai. It commenced operations as a
Scheduled Commercial Bank on 16th January 1995. The bank has grown consistently and is
now amongst the leading players in the industry.

HDFC is India's premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1977, the Corporation has
maintained a consistent and healthy growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units.

HDFC has developed significant expertise in retail mortgage loans to different market
segments and also has a large corporate client base for its housing related credit facilities.
With its experience in the financial markets, a strong market reputation, large shareholder
base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the
Indian environment In a milestone transaction in the Indian banking industry, Times Bank
was merged with HDFC Bank Ltd., effective February 26, 2000.

7
MANAGEMENT OF HDFC BANK
Mrs. Shyamala Gopinath, holds a Master’s Degree in Commerce and is a CAIIB. Mrs.
Gopinath has 39 years of experience in financial sector policy formulation in different
capacities at RBI. As Deputy Governor of RBI for seven years and member of the board.
Mrs. Gopinath had been guiding and influencing the national policies in the diverse areas of
financial sector regulation and supervision, development and regulation of financial markets,
capital account management, management of government borrowings, forex reserves
management and payment and settlement systems.

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years
and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of

experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad head various
businesses and functions and report to the Managing Director. Given 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.

BOARD OF DRECTORS

Mrs. Shyamala Gopinath Director

Mr. Partho Datta Director

Mr. Bobby Parikh Director

Mr. A. N. Roy Director

Mr. Malay Patel Director

Mr. Keki Mistry Director

8
 Mrs. Renu Karnad Director

Mr. Aditya Puri Director

Mr. Parse Sukthankar Director

Mr. Kaizad Bharucha Director

Mr. Umesh Chandra Sarangi Director

Mr. Srikanth Nadhamuni Director

TECHNOLOGY USED IN HDFC BANK

HDFC Bank operates in a highly automated environment in terms of information technology

and communication systems. All the bank’s branches have online connectivity, which enables
the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also
provided to retail customers through the branch network and Automated Teller Machines
(ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology
available internationally, to build the infrastructure for a world class bank. In terms of core
banking software, the Corporate Banking business is supported by Flex cube, while the Retail
Banking business by Fin ware, both from i-flex Solutions Ltd. The systems are open, scalable
and web-enabled.

The Bank has prioritised its engagement in technology and the internet as one of its key goals
and has already made significant progress in web-enabling its core businesses. In each of its
businesses, the Bank has succeeded in leveraging its market position, expertise and
technology to create a competitive advantage and build market share.

9
This type of technology gives the freedom to retail customers:

Centralized Processing Units  Derived Economies of Scale

Electronic Straight Through  Reduced Transaction Cost

Processing

Data Warehousing, CRM  Improve cost efficiency, cross sell

Innovative Technology  Provide new or superior products

Application

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

Wholesale Banking Services:

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian
corporate to small & mid-sized corporate and agri-based businesses. For these customers, the
Bank provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. The
bank is also a leading provider of 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 corporate including multinationals,
companies from the domestic business houses and prime public sector companies. It is
recognized as a leading provider of cash management and transactional banking solutions to
corporate customers, mutual funds, stock exchange members and banks.

10
Retail Banking Services:

The objective of the Retail Bank is to provide its target market customers a full range
of financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and delivered
to the customers through the growing branch network, as well as through alternative delivery
channels like ATMs, Phone Banking, Net Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank
Plus and the Investment Advisory Services programs have been designed keeping in mind
needs of customers who seek distinct financial solutions, information and advice on various
investment avenues. The Bank also has a wide array of retail loan products including Auto
Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. Itis
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 Master card Maestro debit card as
well. The Bank launched its credit card business in late 2001. By September 30, 2005, the
bank had a total card base (debit and credit cards) of 5.2 million cards. The Bank is also one
of the leading players in the "merchant acquiring" business with over 50,000 Point-of-sale
(POS) terminals for debit / credit cards acceptance at merchant establishments.

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, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on various
treasury products are provided through the bank's Treasury team. To comply with statutory
reserve requirements, the bank is required to hold 25% of its deposits in government
securities. The Treasury business is responsible for managing the returns and market risk on
this investment portfolio.

11
RATINGS / AWARDS

Credit Rating

HDFC Bank has its deposit programmes rated by two rating agencies - Credit Analysis &
Research Limited. (CARE) and Fitch Ratings India Private Limited. The bank's Fixed
Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents
instruments considered to be "of the best quality, carrying negligible investment risk".
CARE has also rated the bank's Certificate of Deposit (CD) programme "PR 1+" which
represents "superior capacity for repayment of short term promissory obligations". Fitch
Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "tAAA (ind)" rating
to the bank's deposit programme, with the outlook on the rating as "stable". This rating
indicates "highest credit quality" where "protection factors are very high".
HDFC Bank also has its long term unsecured, subordinated (Tier II) Bonds of Rs.4 billion
rated by CARE and Fitch Ratings India Private Limited. CARE has assigned the rating of
"CARE AAA" for the Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the
rating "AAA (ind)" with the outlook on the rating as "stable". In each of the cases referred to
above, the ratings awarded were the highest assigned by the rating agency for those
instruments?

Corporate Governance Rating:

The bank was one of the first four companies, which subjected itself to a Corporate
Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating
Information Services of India Limited (CRISIL). The rating provides an independent
assessment of an entity's current performance and an expectation on its "balanced value
creation and corporate governance practices" in future. The bank was assigned a 'CRISIL
GVC Level 1' rating in January 2007 which indicates that the bank's capability with respect to
wealth creation for all its stakeholders while adopting sound corporate governance practices
is the highest

Awards and Accolades:

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian

12
Bank". We realized that only a single-minded focus on product quality and service
excellence would help us get there. Today, we are proud to say that we are well on our way
towards that goal.

Over the years, the Bank has received recognition and awards from several leading
organizations and publications,

2017:

The Advertising Club Banking for Best Marketer in Banking sector

Marquees 2017

Greenwich Associates study HDFC Bank No. 1 in large corporate

relationships, mid-market penetration

Businessworld Digital Leadership and CIO - Best Analytics Implementation Award -

Awards 2017 HDFC Bank

The Asian Banker Technology Innovation - Best HR System Project

Awards 2017 - Best Lending Systems Project

CNBC TV 18 Financial Advisor Awards Best Performing Bank - Private Sector

2016-17

The Asset Triple A Asia Infrastructure Chemical Deal of the Year, India
Awards 2017

Euromoney Awards for Excellence 2017 India's Best Bank

Asia money Best Brands in Finance Best Banking Brand in India - HDFC Bank
Survey 2017

Businessworld India's Best Banks' survey 1. Best Bank - Overall

2016 2. Fastest Growing Large Bank

Dun & Bradstreet Corporate Award 2017 India's Leading Bank - Private Sector

12th BML Munjal Awards 2017 Sustained Excellence in Learning &

13
 Development

The Financial Express India's Best Banks - Profitability: Rank 1

2016 - Strength & Soundness: Rank 1
Bank of the Year

Finance Asia poll on Asia's Best Best CEO- Aditya Puri

Companies 2016 Best at Investor Relations- Rank 1
Most Committed to Corporate Governance-
Rank 1
Best Managed Company - Rank 2
Best at CSR - Rank 8
Bank of the Year

National Payments Excellence Awards Best Bank in Cheque Truncation System

2016 (CTS)
Best Bank in National Automated Clearing
House (NACH)
Best Bank in National Financial Switch (NFS)
Runner up in Rupay Cards

Asia money India Banking Awards 2017 Best Domestic Bank - India

Business Standard Annual Awards 2016 Banker of the year - Mr. Aditya Puri

IBA Banking Technology Awards 2017 Best IT Risk and Cyber Security Initiatives

Dun & Bradstreet - India's Leading BFSI India's Leading Banks - Private Sector
Companies & Awards 2017

Outlook Money Awards 2016 Bank of the year

Business Today - KPMG India's Best Bank Of The Year (Private Sector)
Banks 2016
Best Large Size Bank

14
 Fastest Growing Large Bank

The Asset Triple A Country Awards 2016 1. Best IPO, India

2. Best QIP, India

2018 :-

Aadhaar Excellence Awards 2018 • Best Performing Private Bank in Total Aadhaar Generation &
Update
• Best Performing Private Bank in Total Aadhaar Generation &
Update - In House Model
• Best Performing Branch of HDFC Bank in Total Aadhaar
Generation & Update for Kidwai Nagar Branch, Kanpur, Uttar
Pradesh.

NASSCOM AI Game Changer Awards Innovative Application in AI - Virtual Agent Engine

2018

Institutional Investor 2018 All-Asia Ranked in four categories -

Executive Team – Survey
• Best IR Professional: 2nd Rank among banks in Asia (ex-Japan)
• Best CEO: 2nd Rank
• Best CFO: 1st Rank
• Best IR Company: 3rd Rank

BrandZ's Top 100 Global Brands List HDFC Bank featured for the fourth time in the BrandZ's Top 100
Global Brands List

14th Visa Asia Pacific Security Summit India and South Asia Champion Security Award 2018

National Payments Excellence Awards HDFC Bank wins NPCI National Payments Excellence Awards
2018

Barron's World's Top 30 CEOs Mr. Aditya Puri in Barron's Top 30 Global CEOs for 4th year -
Growth Leaders Category

15
Dun & Bradstreet Corporate Award Best Bank
2018

Federation of Indian Export Best Bank : Export Finance - Non MSME

Organisation (FIEO)

Business Today Best Bank Awards Bank of the Year

Best in Innovation
Best Large Bank
Fastest Growing Large Bank

Dun & Bradstreet BFSI Awards 2018 India's Leading Bank - Private sector

Euromoney Private Banking and - Net-worth-specific services (High Net Worth Clients US $ 5-30
Wealth Management survey 2018 MN)
- Asset Management
- SRI/Social Impact Investing
- International Clients

10th BW Businessworld-PwC Best - Fastest Growing Large Bank

Banks' (2017) Survey - Best Large Bank
- Lifetime Achievement Award - Mr. Aditya Puri

16
 MISSION STATEMENT OF HDFC BANK
I. World Class Indian Bank
II. Benchmarking against international standards.
III. To build sound customer franchises across distinct businesses
IV. Best practices in terms of product offerings, technology, service levels, risk
management and audit & compliance

VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards, professional
integrity and regulatory compliance. HDFC Bank’s business philosophy is based on four core
values such as:-

1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
The objective of the HDFC Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-step window for all
his/her requirements. The HDFC Bank plus and the investment advisory services programs
have been designed keeping in mind needs of customers who seeks distinct financial
solutions, information and advice on various investment avenues.

BUSINESS STRATEGY
I. Increasing market share in India’s expanding banking
II. Delivering high quality customer service
III. Maintaining current high standards for asset quality through disciplined credit risk
management
IV. Develop innovative products and services that attract targeted customers and
address inefficiencies in the Indian financial sector.

17
INTEGRATED FINANCIAL SERVICES

SECURITISATION

HDFC CHUBB GENERAL

INSURANCE CO. LTD.

Future Activities

18

DISTRIBUTION
 CHAPTER 2

INTRODUCTION to
THE topic

19
INTRODUCTION

The project was carried out for understanding how the bank providing working capital
finances to businessmen and its market potential. HDFC Bank was established in the year of
1994, they are old player in banking sector. The bank has two principle client segments-
customer and asset management. The bank follows values such as- Integrity, teamwork,
respect, professionalism, & Mission. The segment of bank we are considering here is-
Corporate banking. This research helps us in finding out the customers view regarding the
term limit, & cash credit limit offered by the HDFC Bank and also identifying the potential of
the product offered by the HDFC bank.

COMPANY PROFILE

The Housing Development Finance Corporation Limited

( H D F C B a n k Ltd.)

BUSINESS OBJECTIVE

T h e p r i m a r y o b j e c t i v e o f HDFCi s t o e n h a n c e r e s i d e n t i a l
housing stock in the country through the provision of
h o u s i n g f i n a n c e i n a s ys t e m a t i c a n d p r o f e s s i o n a l manner,
and to promote home ownership. Another objective is to
increase the flowo f r e s o u r c e s t o t h e h o u s i n g s e c t o r
b y i n t e g r a t i n g t h e h o u s i n g f i n a n c e s e c t o r w i t h the overall
domestic financial markets.

ORGANISATIONAL GOALS

HDFC's main goals are to

20
(a) Develop close relationships with individual
households,

(b) Maintain its position as the premier housing finance

institution in thecountry,

(c) Transform ideas into viable and creative solutions,

(d) Provide consistently high returns to shareholders, and

(e) To grow through diversification by leveraging off the

existing client base

SLOGAN “We Understand Your World”

21
STRONG NATIONAL NETWORK

HDFC BANK

HDFC bank ltd provides various financial products and services. It operates in three
segments: Retail Banking, Wholesale Banking, and Treasury. The Retail banking segment
provides various deposit products, including savings Accounts, current accounts, fixed
deposits, and demat accounts. It also offers Auto, personal, commercial vehicle, home, gold,
and educational loans; loans Against securities and property and health care finance Working
capital finance, construction equipment finance, and warehouse Receipt loans, as well as
credit cards, debit cards, depository, investment Advisory, bill payments, and transactional
services. In addition, this segment Sells third party financial products, such as mutual funds
and insurance, as Well as distributes life and general insurance products through its tie-ups
with insurance companies and mutual fund houses.

The wholesale banking Segment provides loans, non-fund facilities, and transaction services
to large Corporate, emerging corporate, small and medium enterprise, supply chain, Public
sector undertaking, central and state government departments, and Institutional customers. It
offers deposit and transaction banking products, Supply chain financing, working capital
and term finance, agricultural loans, and funded non-funded treasury, and foreign exchange
products. This segment’s services include trade services, cash management, and money
Market, custodial, tax collection, and electronic banking. In addition, it provides
correspondent bank services to co-operative banks, private banks, foreign banks, and regional
rural banks. The Treasury Services segment operates primarily in areas, such as foreign
exchange, money market, interest rate trading, and Equities.

HDFC Bank is headquartered in Mumbai. As of June 30, 2017, the Bank’s distribution
network was at 4,727 branches across 2,666 cities. All branches are linked online on a real-
time basis. Customers across India are also serviced through multiple delivery channels such
as Phone Banking, Net Banking, Mobile Banking, and SMS based banking. The Bank’s
expansion plans take into account the need to have a presence in all major industrial and
commercial centres, where its corporate customers are located, as well as the need to build a
strong retail customer base for both deposits and loan products. Being a clearing / settlement
bank to various leading stock exchanges, the Bank has branches in centres where the NSE /

22
BSE have a strong and active member base. The Bank also has a network of 12,220 ATMs
across India. HDFC Bank’s ATM network can be accessed by all domestic and international
Visa / MasterCard, Visa Electron / Maestro, Plus / Cirrus and American Express Credit /
Charge cardholders.

Against the regulatory approvals for new branches in hand, the Bank expects to further
expand the branch network by around 150 branches by June 30, 2008. During the year, the
Bank stepped up retail customer acquisition with deposit accounts increasing from 6.2
million to 8.7 million and total cards issued (debit and credit cards) increasing from 7 million
to 9.2 million.

Whilst credit growth in the banking system slowed down to about 22% for the year ended
2008-09, the Bank’s net advances grew by 35.1% with retail advances growing by 38.6%
and wholesale advances growing by 30%, implying a higher market share in both segments.

The transactional banking business also registered healthy growth with cash management
volumes increased by around 80% and trade services volumes by around 40% over the
previous year. Portfolio quality as of March 31, 2008 remained healthy with gross
nonperforming assets at 1.3% and net non-performing assets at 0.4% of total customer assets.

Neeraj Jha
Head, Corporate Communication
HDFC Bank Limited,
HDFC Bank House, Senapati Bapat Marg
Lower Parel (W), Mumbai - 400 013.
Tel: 91 - 22 - 6652 1000 (B) Extn - 1308
Fax: 91 - 22 - 2490 3168
Email:

23
B) OBJECTIVES OF THE STUDY

The objectives of this project were mainly to study the term loan
limit, cash credit of financing the project of a businessmen but
there are some more and they are –

 The main purpose of our study is to render a better

understanding of the concept “Working Capital finance of
HDFC Bank”.

 To understand the planning and management of working capital

at BS SHAKTI LTD.
 To measure the financial soundness of the company by
analysing various ratios.
 To suggest ways for better management and control of working
capital at the concern.

24
Working Capital Finance

HDFC Bank offers you a unique range of working capital facilities at

your door-step. We offer affordable, convenient financial solutions
which are of paramount importance in running an efficient enterprise.

You can choose from the range of customized working capital loans
for smooth business operations.

Types of Working Capital

 Cash Credit / Overdraft
 Term Loan (TL)
 Letter of Credit (LC)
 Bank Guarantee (BG)
 Packing Credit (PC)
 Post Shipment Finance
 Bill Discounting
 Customer Segment: SMEs including Traders, Manufacturers ,
Service Enterprises, Retailers, Stockist, Distributors,
MerchantEstablishments, Departmental Stores, Supermarkets,
Restaurants, Multi Brand Outlets etc.

25
 Products Offered

 Valuedraw - Working Capital Facilities from Rs. 10 Lacs to

Rs. 25 lacs against wide range of collaterals adding more
value to Business.

 Elitedraw - Take your business to Elite heights with our

Working Capital Solutions for from Rs. 25 lac onwards
against wide range of collaterals.

26
 Value draw

Providing financial assistance to first-time borrowers/ existing

borrowers an efficient working capital solutions from the
Emerging Enterprises Group, the Valuedraw over draft facility !

Why choose this product?

 Credit facility up to Rs 25 Lacs/Take-Over of existing facilities at attractive interest rates.
 Wide range of collateral options
o Residential/Commercial/Industrial Property/Shares
o Stock/Book-Debts/Gold
 Dedicated Relationship Management
 Pre-Qualified “Business Credit Cards” to meet your business expenses

What documents needs to be submitted?

 CA Certified/Audited Financial statements
 Previous Six month bank statements
 Term loan re-payment track record if any
 Collateral Documents
 Any other documents as per bank’s discretion based on individual case merit.

Elite draw

Providing financial assistance to first-time borrowers/ existing

borrowers an efficient working capital solutions from the
Emerging Enterprises Group, the Valuedraw over draft facility !

27
 Why choose this product?
 Credit facility up to Rs 25 Lacs/Take-Over of existing facilities at attractive interest rates.
 Wide range of collateral options
o Residential/Commercial/Industrial Property/Shares
o Stock/Book-Debts/Gold
 Dedicated Relationship Management
 Pre-Qualified “Business Credit Cards” to meet your business expenses

What documents needs to be submitted?

 CA Certified/Audited Financial statements
 Previous Six month bank statements
 Term loan re-payment track record if any
 Collateral Documents
 Any other documents as per bank’s discretion based on individual case merit.

INTEREST RATE, CHARGES & FEES

Processing Fees Upto 1% (plus taxes) of the facility amount or Rs 7500/- whichever
is higher
Rs 5000/- (plus taxes) will be collected upfront as non-refundable
administrative cost towards the legal and valuation expenses
incurred prior loan sanction.

Renewal Fees Upto 0.75% (plus taxes) of facility amount. Taxes as applicable

Additional Interest Charged @ 18.00% p.a. for Overdue / delay / default of any monies
payable

Commitment Charges Average Utilisation> 60% - Nil charges

Average utilisation < 60%- 0.50% p.a (plus taxes) on the difference
between the actual utilisation and average quarterly utilisation of
60%.

28
 - Charges will be levied on a quarterly basis
Applicable only for CC/OD facility

Pre-Payment Charges Charged upto 2% (plus taxes) of the total limits sanctioned, in case
the facilities are taken over by another Bank during the tenor of the
loan. For Term Loans it would be charged on Principal Outstanding
as on date.
Loans pre-paid from own sources will not attract pre-payment
charges.

Stamp Duty & other As per applicable laws of the state

statutory charges

Legal / Valuation NIL

No Due Certificate / NIL

No Objection
Certificate (NOC)

Intra Day Peak NIL

utilization charges

Duplicate no due Rs. 250/- (plus taxes)

Certificate / NOC

Non-Submission of 2% Additional Rate of interest on the amount out-standing.

property/stock
insurance

Penal Interest @2% additional on existing ROI for non-submission of Insurance /

Stock Statement

Stock-audit charges Credit facilities from Rs 1 Cr to 5 Cr- Rs 8000 ( Plus GST )

Credit facilities > Rs 5 cr -Rs 12000 ( Plus GST )

ROC filling charges Rs 3000/- (plus taxes) per filing on availing bank empanelled vendor
(On customer request) services. Customers may also avail services of other vendors as per

29
 their convenience.

Issuance of Solvency 1% of the solvency certification value subject to minimum of Rs

certificate 1000 (plus taxes) and maximum of Rs 25,000 (plus taxes)

Cheque bounce Rs 450 (plus taxes) Per cheque bounce

charges for term loans

Late payment penalty 24% per annum (plus taxes) on the amount out-standing from date of
default.

Temporary over-draft 18% per annum on the amount utilised above the sanctioned credit
limit.

Commission on Up to 1.5% on LC/BG Amount (plus taxes)

LC/BG issuance

Penal Interest for @2% additional levy over existing Rate of Interest.
maintaining Current
Account with Other
Bank while facility is
granted under Sole
Banking (Applicable
where specific
permission is not taken
by the customer).

Penal interest on @2% additional levy over existing Rate of Interest from the date of
customer exposures, renewal overdue, subject to a minimum of Rs.2500 per month.
overdue for renewal of
credit facilities.

Penal interest for @2% additional levy over existing Rate of Interest from the date of
customers not LAD overdue, subject to a minimum of Rs.2500 per month.
submitting the Letter
Acknowledging their

30
Debt (LAD)

Higher levy in case Upto 2% additional levy over existing Rate of Interest.
account conduct
deteriorates

Incremental Interest @2% additional levy over existing Rate of Interest.

on Adhoc limits.

Incremental Interest 18% p.a. on TOD amount availed for the days, TOD is used.
on Temporary
overdrafts (TOD)

Penal Interest for not @2% additional levy over existing Rate of Interest.
complying with
documentation for the
credit facility.

Service Charges - for Rs. 500 for every physical stock statement collected or submitted.
processing Physical
Stock Statement.

31
C) SCOPE OF THE STUDY

This project will be a learning device for the finance student.

Through this project I would study the various methods of the
working capital management.
The project will be a learning of planning and financing working
capital.
The project would also be an effective tool for credit policies of
the companies.
This will show different methods of holding inventory and
dealing with cash and receivables.
This will show the liquidity position of the company and also how
do they maintain a particular liquidity position.

32
 STATEMENT OF PROFIT AND LOSS

For the year ended 31st March 2018

M/S B.S. SHAKTI STEEL PVT. LTD.

Particulars Figure as at the end Figure as at the end

of current reporting of current reporting
period(31.3.2018 period(31.3.2017)
P&L Sheet (All figures in
Rs. lacs) 31/03/2018 31/3/2017
Sales 12044.2 7581.7
Other Income 11.1 14.0
Total Income 12055.3 7595.6
Total Expenses 11522.1 7197.0
PBDIT 533.2 398.7
Interest 221.4 181.4
Depreciation 148.9 120.0
PBT 162.9 97.3
Tax 0.0 36.7
PAT 162.9 60.6
Cash Profits 311.7 180.6

Liabilities 2244.62
Equity Share Capital 499.1 499.1
Reserves (excluding
revaluation reserves) 650.9 488.0
Tangible Networth 1149.9 987.1
Short Term Debt 1601.2 1464.4
Long Term Debt 844.1 392.5

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Unsecured loans from
promoters 1389.2 1009.2
Total Debt 3834.5 2866.2
Current Liabilities (CL) 1549.1 1552.2
Provisions 59.8 190.9
Total Liabilities 6593.230 5596.360

Assets
Net Fixed Assets 1738.7 1428.5
Investments 62.1 0.0
Loans & Advances 0.0 0.0
Sundry Debtors 3517.9 2589.1
Inventories 1143.3 1410.2
Cash & Bank balances 50.3 40.2
Other Current Assets 81.1 128.4
Total Current Assets 4792.5 4167.9
Total Assets 6593.230 5596.360

Debt Repayment during the

year 281 131
Current funde based WC
(part of CL)
Financial Ratios
Gross Margin (PBDIT/TI) 4.4% 5.2%
Net Margin (PAT / TI) 1.4% 0.8%
Cash Profit Margin (Cash
Profits/TI) 2.6% 2.4%
ROCE 10.7% 10.3%
Current Ratio 1.49 1.30
Interest Coverage 2.41 2.20
DSCR 1.06 1.16
Debt / Equity Ratio 3.33 2.90
TOL / Tangible Networth 4.73 4.67
TOL/(Tangible NW+ Loans
from promo.) 1.60 1.80
Current Assets / Sales 40% 55%
Total Assets / Sales 55% 74%
Debtor Days 107 125

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Inventory Days cost of sales 36 72
Creditors days as cost of
sales 49 79
Working Capital Gap 3184 2425
Promoters contribution of
WC Gap 1582 960
Promoters contribution of
WC Gap (%) 50% 40%
Investment in group
companies 0 0
Investment in group cos./NW 0% 0%
Tangible networth / Facility
value 43% 37%
(TNW + USL from Prom.) /
Facility value 96% 75%
Raw Material Costs / Traded
Goods purchases 0.0 0.0
RM Costs / Sales 0% 0%
Employee costs 0 0.0
Employee Costs / Sales 0.0% 0.0%
Sales & Advtg/Marketing
Expenses 0.0 0
Mktg Expenses / Sales 0.0% 0.0%
Remuneration to
directors/partners 0.0 0

35
 RESEARCH

METHODOLOGY

36
 RESEARCH METHODOLOGY

DATA SOURCE

Primary Data:

The primary data was collected by means of a survey.

Questionnaires were prepared and customers of the banks at two
branches were approached to fill up the questionnaires. The
questionnaire contains 20 questions which reflect on the type and
quality of services provided by the banks to the customers. The
response of the customer and the is recorded on a grade scale of
strongly disagree, disagree, uncertain, agree and strongly agree
for each question. The filled up information was later analyzed to
obtain the required interpretation and the findings.

Secondary Data:

In order to have a proper understanding of the service quality of

bank a depth study was done from the various sources such as
books, a lot of data is also collected from the official websites of
the banks and the articles from various search engines like
Google, yahoo search and answers.com.

37
RESEARCH DESIGN

The research design is exploratory till identification of service

quality parameters. Later it becomes descriptive when it comes to
evaluating customer perception of service quality of the banks.

Descriptive research, also known as statistical research,

describes data and characteristics about the population or
phenomenon being studied. Descriptive research answers the
questions who, what, where, when and how.

Although the data description is factual, accurate and systematic,

the research cannot describe what caused a situation. Thus,
descriptive research cannot be used to create a causal
relationship, where one variable affects another. In other words,
descriptive research can be said to have a low requirement for
internal validity.

The description is used for frequencies, averages and other statistical

calculations. Often the best approach, prior to writing descriptive
research, is to conduct a survey investigation. Qualitative research

38
often has the aim of description and researchers may follow-up with
examinations of why the observations exist and what the implications
of the findings are

RESEARCH SAMPLE

SAMPLING PLAN:

Since it is not possible to study whole universe, it becomes necessary

to take sample from the universe to know about its characteristics.


Sampling Units: Customers of HDFC bank

Sample Technique: Random Sampling.

Research Instrument: Structured Questionnaire.

Contact Method: Personal Interview.

39
SAMPLE SIZE:

The work is a case of HDFC Bank, one of the largest bank of Indian
banking industry together representing over 25 per cent of the market
share of Indian banking space. The survey was conducted in the city
of Delhi with two branches of HDFC Bank, with 50 customers as
respondent.

40
DATA COLLECTION TOOL

1. Strongly disagree

2. Disagree

3. Neither agree nor disagree

4. Agree

5. Strongly agree

Likert scaling is a bipolar scaling method, measuring either

positive or negative response to a statement. The questionnaire
consists of two parts. The first part consists of three questions
concerning the demographic information of the respondent such
as the name, age, educational qualifications and income. The
second part consisting of 18 questions exploring the respondent‟s
perception about the service quality of HDFC. For evaluation of
service quality of HDFC bank service quality dimension of

41
reliability, assurance, tangibility, empathy and responsiveness is
used in order to evaluate the actual service quality of HDFC bank.

LIMITATIONS OF THE STRATEGY

 The study is only for the HDFC Bank confined to a particular

location and a very small sample of respondents. Hence the
findings cannot be treated as representative of the entire banking
industry.

 The study can also not be generalized for public and private
sector banks of the country.

 Respondents may give biased answers for the required data.

Some of the respondents did not like to respond.

42
 Respondents tried to escape some statements by simply
answering “neither agree nor disagree” to most of the
statements. This was one of the most important limitation faced,
as it was difficult to analyse and come at a right conclusion.

 In our study we have included 50 customers of bank because of

time limit.

43
44
 SWOT ANALYSIS

SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses,
and for looking at the Opportunities and Threats you face.Used in a business context, it helps
you carve a sustainable niche in your market. Used in apersonal context, it helps you develop
your career in a way that takes best advantage of your talents, abilities and opportunities.

SWOT ANALAYSIS OF HDFC BANK

STRENGTH

 Right strategy for the right products.

 Superior customer service vs. competitors.
 Great Brand Image
 Products have required accreditations.
 High degree of customer satisfaction.
 Good place to work
 Lower response time with efficient and effective service.
 Dedicated workforce aiming at making a long-term career in the field.

WEAKNESSES

 Some gaps in range for certain sectors.

 Customer service staff need training.
 Processes and systems, etc
 Management cover insufficient.

45
  Sectoral growth is constrained by low unemployment levels and
competition for staff

OPPORTUNITIES

 Profit margins will be good.

 Could extend to overseas broadly.
 New specialist applications.
 Could seek better customer deals.
 Fast-track career development opportunities on an industry-wide basis.
 An applied research centre to create opportunities for developing
techniques to provide added-value services.

THREATS

 Legislation could impact.

 Great risk involved
 Very high competition prevailing in the industry.
 Vulnerable to reactive
 attack by major competitors
 Lack of infrastructure in rural areas could constrain investment.
 High volume/low cost market is intensely competitive.

KEY POINT

SWOT Analysis is a simple but powerful framework for analyzing

company's Strengths and Weaknesses, and the Opportunities and

46
Threats you face. This helps you to focus on your strengths, minimize
threats, and take the greatest possible advantage of opportunities
available to you.

Conclusion

47
 CONCLUSION

Based on the study conducted it can be concluded that responsiveness,

assurance and reliability are the critical dimensions of service quality of
HDFC bank and they are directly related to overall service quality. The
factors that may delight customers tend to be concerned more with the
intangible nature of the service, commitment, attentiveness, friendliness,
care, and courtesy.
The employees give prompt services, always are ready to answer
the questions and are trustworthy. The main sources of dissatisfaction
appear to be cleanliness, up to date technology modern equipments, and
neatly dressed up employees. The Tangibility dimension of service quality
of HDFC bank is highly disappointing and serious steps are needed to be
taken to enhance this dimension. Customers of the bank are dissatisfied
with the empathy dimension. To satisfy these customers, the management
can take some attempts, noted earlier as recommendations.
The study brings about the areas which require urgent
attention of the employees, the management, and the policy makers of the
industry. These are areas in which customers are hugely dissatisfied with
the services of the banks against their expectation. This high degree of
dissatisfaction resulting from the services received clearly questions the
design of services or subsequent response of the bank employees. These
limitations are too serious to be avoided as these question the front-line
people dealing with the customers and the approach of the management in
taking customers seriously.

48
The management should understand the benefits of service quality. It
include increased customer satisfaction, improved customer retention,
positive word of mouth, reduced staff turnover, decreased operating costs,
enlarged market share, increased profitability, and improved financial
performance. In the days of intense competition, superior service is the
only differentiator left before the banks to attract, retain and partner with
the customers. Superior service quality enables a firm to differentiate itself
from its competition, gain a sustainable competitive advantage, and
enhance efficiency. Thus, improving service quality leads to the customer
satisfaction and, ultimately, to customer loyalty.

BIBLIOGRAPHY

BOOKS REFFERED:

Financial Management (Eight Edition), “

WEBSITES REFFERED:

www.wikipedia.com

www.hdfcbank.com

49
www.google.co.in

REPORTS/ARTICLES REFFERED:

Annual report of BS SHAKTI 2018

50