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CHAPTER 1

INTRODUCTION



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1.0 INTRODUCTION

The main purpose that banks have been serving since their inception is keeping our money safe

for us. While keeping our money safe, they also let us earn a certain amount of interest on the

money deposited with them. Traditional banks have been doing this, and internet banks continue

the same function. The only difference is in the way the transactions are made.

We all know about internet banking and most of us use it quite often as well, but few of us

actually understand about the history of internet banking and how it all came out. Knowing the

history of internet banking can be incredibly useful, especially since it will allow us to have more

respect for the little things that we take for granted.

Computers themselves have really come an enormous way since their initial establishment, as the

earliest electronic computers were so large that they would take up the entire area of a room,

while today some are so small that they can hardly be seen at all.

In today's world, computers play an incredibly large role in the way the world exists in general,

and the majority of tasks could actually not be completed if not for the use of computers.

Although there are certainly some areas and jobs that cannot yet be completed solely bycomputers and which thus still require actual manpower, for the most part, computers have

helped to make life significantly easier, productive, and more convenient for us all.

Internet banking has been around for quite a few years now, but has really only become

prominent over the past year or so in particular. Internet banking offers an array of different

advantages to the user, including: account balances and history including year-to-date

information, the ability to transfer money from one account to another and to payees for bill

payments, check history, reorders, and stop payments, check credit card balances and statements,

complete online loan applications, secure interactive messaging with staff, and much more.

Internet banking basically allows you to be able to do everything that you can in your regular

banking institution, only with the benefit that you can do it all right from the convenience of your

own home. Not only is this great because you can be comfortable and have peace of mind



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knowing that you can keep track yourself of all your banking issues, but as well it allows for

more ease because you never have to worry about rushing out and making it to the bank.

MEANING OF ONLINE BANKING

Online Banking is a concept which enables everyone to conduct business with a bank from the

comfort of home or office.

Online Banking means ³application of electronic technology towards transfer of funds through

an electronic terminal, computer or magnetic tape to conduct various transactions like cash

receipts, payments, transfer of funds, etc.´ It is often known as banking on net or e banking.

1.2 Statement of the problem

A study of Online Banking services provided at HDFC Bank



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1.3 OBJECTIVES OF THE STUDY

The current study was undertaken to achieve the following stated objectives:

1. To analyze awareness among customers using Online Banking service.

2. To know about the Online Banking service provided by HDFC Bank.

3. To know the cause why customers are using or not using Online Banking service.

4. To the confidence of the customers of HDFC Bank in using these services.

5. To study the popularity of the online Banking service among the customers of

HDFC Bank



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1.4 Significance of the study

This will cover the benefits derived in using internet banking and it·s fundamental.

1.4.1 ONLINE BANKING ² HOW IS IT DIFFERENT?

Many consumers today are turning to the ease and convenience of Internet banking to take care

of their financial needs. With the new levels of access made possible by the Internet, people can

now check the status of their finances with the click of a button.

The history of Internet banking has evolved from simply allowing customers to check balances

online, to now being able to trade stocks and bonds from the comfort of their own home!

1.4.2 WHY USE ONLINE BANKING?

Online banking services have grown from simply allowing customers to check balances, to

trading assets. Internet banking gives you the power to control your finances completely. You are

no longer tied down to managing your money during the hours the bank is open. If you want to

transfer a balance after business hours, you can! If you have access to the Internet and have a

number of recurring monthly bills, then you should use Internet banking to make your life easier.

1.4.3 FEATURES OF ONLINE BANKING

The user controls all bill paying, transfers, and investments from home. There are other features,

though of online banking. One of these is increased accessibility to your account information.

Users of online banking services can access their account information from anywhere in the

world! This is particularly helpful for businesses.

Now business people can access their accounts, even when on overseas business trips. Business

Internet banking is extremely popular for this reason.

A particularly popular aspect of online banking services is the ability to make bill payments

electronically. With a minimum degree of set-up, customers can enter the amounts of their paper

bills (or opt to receive electronic bills) and process all their payments at one time, from one

screen



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1.5 Limitations and scope of the study

1.5.1 Limitations

The following were the limitations of the study:

1. Non representative sample: In this research project a sample survey was

conducted. A sample of 100 respondents was selected. So such sample size cannot

be said to be the true representative of the universe.

2. Shortage of time: The time period of study was very limited. It is very difficult to

have in detail study on project work due to limited time period. The period of 4 to

6 weeks is not enough for the proper study of the project.

3. Inadequate data: The data provided was not up to the mark due to which we

faced problems in our research.

4. Lack of scientific method: The lack of scientific training in methodology of

research was great impediment in our research program, which led to the delay of

research.

5. Biasness in the responses: The answers provided by the respondents suffer from

biasness.

6. Cost Factor: It was not possible to conduct extensive research due to paucity of

funds.

1.5.2 SCOPE OF THE STUDY

The scope of this project is limited to the activities of the operations unit of the banking system

which include opening of Account, Deposit of funds, Withdrawal of funds and transfer.



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CHAPTER 2LITERATURE

REVIEW



2 LITERATURE REVIEW

2.1. AN INTRODUCTION TO ONLINE BANKING

Internet banking is changing the banking industry and is having the major effects on banking

relationships. Banking is now no longer confined to the branches were one has to approach the

branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. In true

Internet banking, any inquiry or transaction is processed online without any reference to the

branch (anywhere banking) at any time. Providing Internet banking is increasingly becoming a

"need to have" than a "nice to have" service. The net banking, thus, now is more of a norm rather

than an exception in many developed countries due to the fact that it is the cheapest way of

providing banking services.

2.2 MEANING OF ONLINE BANKING

Online Banking means ³application of electronic technology towards transfer of funds through

an electronic terminal, computer or magnetic tape to conduct various transactions like cash

receipts, payments, transfer of funds, etc.´ It is often known as banking on net or e banking.

2.3 DEVELOPMENT OF ONLINE BANKING IN INDIA

The financial reforms that were initiated in the early 1990s and the globalization and

liberalization measures brought in a completely new operating environment to the banks. The

bankers are now offering innovative and attractive technology-based services and products such

as µAnywhere Anytime Banking¶, µTele-Banking¶, µInternet Banking¶, µWeb Banking¶, µOnline

Banking¶, µMobile Banking¶, etc. to their customers to cope with the competition. The process

started in the early 1980s when Reserve Bank of India (RBI) set up two committees in quick

succession to accelerate the pace of automation of operations in the banking sector. A high-level

committee was formed under the chairmanship of Dr. C. Rangarajan, then Governor of RBI, to

draw up a phased plan for computerization and mechanization in the banking industry over a

five-year time frame of 1985±1989. The focus by this time was on customer service and two



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models of branch automation were developed and implemented. Having gained experience in the

earlier mode of computerization, the second Rangarajan committee constituted in 1988 drew up a

detailed perspective plan for computerization of banks and for extension of automation to other

areas such as funds transfer, e-mail, BANKNET, SWIFT, ATMs, Online Banking, etc. The

Government of India enacted the Information Technology Act, 2000 (generally known as IT Act,

2000), with effect from 17 October 2000 to provide legal recognition to electronic transactions

and other means of electronic commerce. RBI had set up a µWorking Group¶ on Online Banking

to examine different aspects of Online Banking. The Group had focused on three major areas of

Online Banking such as

(1) Technology and security issues,

(2) Legal issues and

(3) Regulatory and supervisory issues.

RBI had accepted the recommendations of the µWorking Group¶, and accordingly issued

guidelines on µinternet banking in India¶ for implementation by banks. The µWorking Group¶ has

also issued a report on online banking covering different aspects of online banking.

Internet banking in India is currently at a nascent stage. While there are scores of companies

specializing in developing internet banking software, security software and website designing

and maintenance, there are few online financial service providers. ICICI bank is the first one to

have introduced online Banking for a limited range of services such as access to account

information, correspondence and, recently, funds transfer between its branches.

Several finance portals for provision of non-banking financial services, e-trading and e

broking have come up. Commercial applications such as Electronic Bill Presentment

and Procurement systems may not be introduced in India immediately, but are likely to

have a greater impact than the retail applications. The corporate sector is adequately

computerized and has already recognized the important role of e-commerce in future.

Increasingly, companies are setting up websites even where there are no immediate

tangible increasingly, companies are setting up websites even where there are no

immediate tangible benefits to them from doing so.



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2.4 ONLINE BANKING IN INDIA ± RBI GUIDELINES

In India, internet banking or online Banking is in rudimentary stage. In order to promote safety

and soundness of internet banking activities, the RBI constituted a Working Group on Internet

Banking. The Group issued guidelines in June 2001. The Group divided the internet banking

products in India into 3 types based on the levels of access granted. They are

y Information Only System

y Electronic Information Transfer System

y Fully Electronic Transactional System.

2.5 ADVANTAGES AND DISADVANTAGES OF ONLINE BANKING

Internet Banking also has its advantages and disadvantages. Below are mentioned the most

popular advantages of using Internet Banking along with some unavoidable disadvantages.

The advantages include

y Convenience - online banking sites never close; they're available 24 hours a day,seven days a week, and they're only a mouse click away;

y Portability ± you now have access to money whenever there is an emergency,

whether or not you are in the country;

y Transaction speed - online bank sites generally execute and confirm transactions

at the same rate or quicker than, ATM processing speeds;

y Reduction in workload - No more standing in long lines at the bank, eliminating

endless paper based bank statements.



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The disadvantages include

y Lack of Computerization - which relates to virtual banks, revolves around the

lack of ATMs;

y Start-up may take time - In order to register for your bank's online program, you

will probably have to provide ID and sign a form at a bank branch which can be

time consuming;

y Learning curve - Banking sites can be difficult to navigate at first;

y Problem of Security ± Various sites are not properly looked at to ensure whether

customer¶s money is safe in cyber world or not.

2.6 TRADITIONAL BANKING VS ONLINE BANKING

Online Banking or internet banking works much like traditional banking. The primary difference

is that in online Banking account and information is accessed, payments are made and statements

reconciled using computer rather than paper or the phone to complete transactions. Instead of

going down to local branch office when one bank online he/she can accomplish multiple tasks at

once with the click of a button.

Online banking is rapidly becoming more and more popular as consumers recognize the

advantages online banking has to offer. For one most banks charge fewer fees if you take

advantage of their online banking services. You can also stop receiving paper statements if you

like in many cases and conduct 95% of your business over the Web when you take advantage of

Internet banking.

For those that have a hard time keeping track of paper statements, Internet banking is a life saver.

Internet banking is also advantageous for frequent travelers that need to keep a close eye on their

finances from abroad.



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2.7 NETBANKING SERVICE AT HDFC BANK

Online Banking is HDFC Bank's Internet Banking service. It provides up-to-the-second account

information. Online Banking lets the customer manage his/her account from the comfort of

his/her mouse - anytime, anywhere. Online Banking services provides access to account

information, products and other services (including transactions of non-financial and financial in

nature) as advised by the Bank from time to time to the customers through the website of the

Bank. Online Banking Services also include the services for Demat account, Credit Cards and

loan on the website of the Bank.

The HDFC Bank web site (www.hdfcbank.com) also features two versions of a demo facility -

one "interactive" and the other "guided" - making it possible for even Internet illiterates to get

comfortable with its services.

On the downside, however, 'registration' for the service involves downloading of a form that

needs to be posted/delivered to any of its branches - not exactly "web savvy" as we would call it.

Also, the form itself requires Adobe Acrobat Reader to be installed and the file size will exceed

5.5 MB, which translates roughly into an hour or more of on-line time. Its 3-question FAQ page

also assumes a high level of computer knowledge from users ... not consistent with the rest of the

website.

Online Banking service provides a host of features at the finger-tips:

y View Account Balances & Statements

y Transfer Funds between accounts

y Create Fixed Deposits Online

y Request a Demand Draft

y Pay Bills

y Order a Cheque Book

y Request Stop Payment on a Cheque



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CHAPTER 3RESEARCH

METHODOLOGY



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3.0 RESEARCH METHODOLOGY

Research is a common parlance which refers to search for knowledge. It is a procedure of logical

and systematic application of the fundamentals of science to the general and overall questions of

a study and scientific technique, which provide precise tools, specific procedures, and technical

rather philosophical means for getting and ordering the data prior to their logical analysis and

manipulating different type of research designs is available depending upon the nature of

research project, availability of manpower and circumstances.

According to D. Slesinger and M. Stephenson research may be defined as ³the manipulation of

things, concepts or symbols for the purpose of generalizing to extend, correct or verify

knowledge, whether that knowledge aids in the construction of theory or in the practice of an

art´. Thus it is original contribution to the existing stock of knowledge of making for its

advancement. In short, the search of knowledge through objective and systematic method of

finding solution to a problem is research.

3.1 RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in procedure. In

fact, the research design is the conceptual structure within which research is conducted. This

research was descriptive in nature.

Descriptive research:

The research undertaken was a descriptive research as it was concerned with specific

predictions, with narration of facts and characteristics concerning online Banking service

Provided by HDFC Bank.



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3.2 SAMPLING DESIGN

The following factors have been decided within the scope of sample design:

3.2.1Universe of study: Universe of the study means all the persons who are the customers of

HDFC Bank in the world.

Theoretical: It covered all the individuals who are the customers of HDFC

Bank in the world.

Accessible: It covered all the individuals who are the customers of HDFC

Bank in India who are within our reach. In this study accessible population was

customers of HDFC Bank in India.

3.2.2Sample Size: A sample of minimum respondents was selected from various areas of Jaipur.

An effort was made to select respondents evenly. The survey was carried out on 100

respondents.

3.2.3Sample Unit: In this project sampling unit consisted of the various individuals who had

their bank accounts with HDFC Bank.

3.2.4Sampling Technique: For the purpose of research convenient sampling techinque was

used.

3.2.5Sampling Frame: It consisted of various sources from where information about the

respondent is extracted. Mainly personal links and employees of HDFC Bank, Jaipur are used for

getting information about the respondents.



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3.3 DATA COLLECTION AND ANALYSIS

3.3.1 DATA COLLECTION

There were two types of data sources used in this research. These were

3.3.1.1 Primary data

Primary data is the data collected for the first time from the source and never have been used

earlier. The data can be collected through interviews, observations and questionnaires. In this

project, an appropriate questionnaire was designed which was filled by the customers of HDFC

Bank to know their opinions regarding the Online Banking service provided by HDFC Bank.

3.3.1.2 Secondary data

Secondary data is the data collected from already been use or published information like

journals, diaries, books, etc .In this research project, secondary source used were various

journals, and website of various online journals.

3.3.2 DATA ANALYSIS

3.3.2.1 Tools Of Presentation:

It means what all tools are used to present the data in a meaningful way so that it becomes easily

understandable.

In this research

*tables and

*graphs were used for presenting the data.

3.3.2.2Tools of Analysis

In this research the tools of analysis used were percentages. SPSS software was used to conduct

Friedman Anova, Reliability analysis and Factor Analysis.



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CHAPTER 4COMPANY

PROFILE



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COMPANY PROFILE

4.1 AN INTRODUCTION TO THE COMPANY

4.1.1 FORMATION OF THE COMPANY

HDFC Bank was incorporated in August 1994, and, currently has a nationwide network of 1,725

Branches and 5,016 ATM's in 780 Indian towns and cities. 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.

4.1.2 PROMOTER

HDFC is India's premier housing finance company and enjoys an impeccable track record in

India as well as in international markets. Since its inception in 1977, the Corporation has

maintained a consistent and healthy growth in its operations to remain the market leader in

mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has

developed significant expertise in retail mortgage loans to different market segments and also

has a large corporate client base for its housing related credit facilities. With its experience in the

financial markets, a strong market reputation, large shareholder base and unique consumer

franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

4.1.3 DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over

761 branches spread over 327 cities across India. All branches are linked on an online real-time

basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank's

expansion plans take into account the need to have a presence in all major industrial and



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commercial centers where its corporate customers are located as well as the need to build a

strong retail customer base for both deposits and loan products. Being a clearing/settlement bank

to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has

a strong and active member base. The Bank also has a network of about over 1977-networked

ATMs across these cities. Moreover, all domestic and international Visa/MasterCard, Visa

Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders can access

HDFC Bank¶s ATM network.

4.1.4 CAPITAL STRUCTURE

The authorized capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion). The paid-up capital is

Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of the bank's equity and about19.4% of the equity is held by the ADS Depository (in respect of the bank's American

Depository Shares (ADS) Issue). Roughly 31.3% of the equity is held by Foreign Institutional

Investors (FIIs) and the bank has about 190,000 shareholders. The shares are listed on the ³The

Stock Exchange´, Mumbai and the National Stock Exchange. The bank's American Depository

Shares are listed on the New York Stock Exchange (NYSE) under the symbol "HDB".

4.2 Mission of HDFC bank

4.2.1 Mission

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

4.2.2 Objective

The objective is to build sound customer franchises across distinct businesses so as to be the

preferred provider of banking services for target retail and wholesale customer segments, and to

achieve healthy growth in profitability, consistent with the bank's risk appetite.



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BUSINESS STRATEGY

The bank is committed to maintain the highest level of ethical standards, professional integrity,

corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on

four core values - Operational Excellence, Customer Focus, Product Leadership and People.

Increase our market share in India¶s expanding banking and financial services industry by

following a disciplined growth strategy focusing on quality and not on quantity and

delivering high quality customer service.

Leverage our technology platform and open scalable systems to deliver more products to

more customers and to control operating costs.

Maintain our current high standards for asset quality through disciplined credit risk

management.

Develop innovative products and services that attract our targeted customers and address

inefficiencies in the Indian financial sector.

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

Focus on high earnings growth with low volatility.

4.3 PRODUCT 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:

4.3.1 Wholesale Banking Services

The Bank's target market ranges from large, blue chip manufacturing companies in the Indiancorporate 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.



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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.

4.3.2 Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full range of financialproducts 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, Online Banking andMobile 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 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.



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4.3.3 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.

4.3.4 PRODUCT SCOPE:

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

company cares for both, individuals as well as corporate and small and medium enterprises. For

individuals, the company has a range accounts, investment, and pension scheme, different types

of loans and cards that assist the customers. The customers can choose the suitable one from a

range of products which will suit their life-stage and needs. For organizations the company has a

host of customized solutions that range from funded services, Non-funded services, Value

addition services, Mutual fund etc. These affordable plans apart from providing long term value

to the employees help in enhancing goodwill of the company.

The products of the company are categorized into various sections which are as follows:

· Accounts and deposits.

· Loans.

· Investments and Insurance.

· Forex and payment services.

· Cards.

· Customer center .



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4.4 FUNCTIONAL DEPARTMENT OF THE ORGANIZATION

Figure 4.4.1: Structure of functional department

4.5 ORGANIZATION STRUCTURE AND ORGANIZATION CHART OF

HDFC BANK

Figure 4.5.1: organizational structure of HDFC bank

HDFC BANK LTD

DIRECT SALES TEAM

AREA SALES HEAD

AREA SALESMANAGER

SALES MANAGER

TEAM LEADER

CONTRACT SALESEXECUTIVES

BRANCHMANAGER

PERSONALBANKER

OPERATIONALDEPARTMENT

ACCOUNTDEPARTMENT

TRALER

Chairman

Managing Director & C E O

Joint Managing Director

(Domestic Banking)

Joint Managing Director

(International Business)

Executive

DirectorExecutive

DirectorExecutive

Director

Executive Director

(Retail Banking)

Sr. General Managers

General Managers



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BOARD OF DIRECTORS

The Composition of the Board of Directors of the Bank is governed by the Companies Act, 1956,

the Banking Regulation Act, 1949 and the listing requirements of the Indian Stock Exchanges

where securities issued by the Bank are listed. The Board has strength of 12 Directors as on

March 31, 2008. All Directors other than Mr. Aditya Puri, Mr. Harish Engineer and Mr. Paresh

Sukthankar are non-executive directors. The Bank has five independent directors and six non-

independent directors. The Board consists of eminent persons with considerable professional

expertise and experience in banking, finance, agriculture, small scale industries and other related

fields. None of the Directors on the Board is a member of more than 10 Committees and

Chairman of more than 5 Committees across all the companies in which he/she is a Director. All

the Directors have made necessary disclosures regarding Committee positions occupied by them

in other companies.

y Mr. Jagdish Kapoor, Mr. Keki Mistry, Mrs. Renu Karnad, Mr. Aditya Puri,

Mr. Harish Engineer and Mr. Paresh Sukthankar are non-independent

Directors on the Board.

y Mr. Arvind Pande, Mr. Ashim Samanta, Mr. Gautam Divan, Mr. C. M.

Vasudev and Dr. Pandit Palande are independent directors on the Board.

y Mr. Keki Mistry and Mrs. Renu Karnad represent HDFC Limited on the

Board of the Bank.

The Bank has not entered into any materially significant transactions during the year, which

could have a potential conflict of interest between the Bank and its promoters, directors,

management and/or their relatives, etc. other than the transactions entered into in the normal

course of business. The Senior Management have made disclosures to the Board confirming

that there are no material, financial and/or commercial transactions between them and the

Bank which could have potential conflict of interest with the Bank at large.



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TECHNOLOGY

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

communication systems. All the bank's branches have online connectivity, which enables the

bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also

provided to retail customers through the branch network and Automated Teller Machines

(ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology available

internationally, to build the infrastructure for a world class bank. The Bank's business is

supported by scalable and robust systems which ensure that our clients always get the finest

services we offer.

The Bank has prioritized its engagement in technology and the internet as one of its key goals

and has already made significant progress in web-enabling its core businesses. In each of its

businesses, the Bank has succeeded in leveraging its market position, expertise and technology to

create a competitive advantage and build market share.

4.6 AWARDS AND ACHIEVEMENTS

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.

It is extremely gratifying that our efforts towards providing customer convenience have been

appreciated both nationally and internationally.



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Awards In 2009

Euro money Awards 2009 'Best Bank in India'

Economic Times Brand

Equity & Nielsen Research annual survey

Most Trusted Brand - Runner Up

Asia Money 2009 Awards 'Best Domestic Bank in India'

IBA Banking Technology Awards 2009 'Best IT Governance Award - Runner up'

Global Finance Award 'Best Trade Finance Bank in India for 2009

IDRBT Banking Technology Excellence

Award 2008 'Best IT Governance and Value Delivery'

Asian Banker Excellence in Retail

Financial Services

'Asian Banker Best Retail Bank in India Award

2009 '

Table 4.6.1: Awards in 2009

Awards In 2008

Finance Asia Country Awards for

Achievement 2008 'Best Bank and Best Cash Management Bank '

CNN-IBN 'Indian of the Year (Business)'

Nasscom IT User Award 2008 'Best IT Adoption in the Banking Sector'

Business India 'Best Bank 2008'

Forbes Asia Fab 50 companies in Asia Pacific

Asian Banker Excellence in Retail

Financial Services Best Retail Bank 2008

Microsoft & Indian Express Group Security Strategist Award 2008

World Trade Center Award of

honour

For outstanding contribution to international trade

services.

Business Today-Monitor Groupsurvey

One of India's "Most Innovative Companies"

Financial Express-Ernst & Young

Award Best Bank Award in the Private Sector category

Global HR Excellence Awards - Asia

Pacific HRM Congress:

'Employer Brand of the Year 2007 -2008' Award -

First Runner up, & many more

Business Today 'Best Bank ' Award

Table 4.6.2: Awards in 2008



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4.7 SWOT ± HDFC

SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,

Opportunities, and Threats involved in a project or in a business venture.

STRENGTHS

1. HDFC is the strongest and most venerable play on Indian mortgages over the long term. The

management of the bank is termed to be one of the best in the country.

2. HDFC has differentiated itself from its peers with its diversified network and revamped

distribution strategy

3. HDFC has been highly proactive in passing on the cost and benefit to customers.

4. High degree of customer satisfaction.

5. Lower response time with efficient and effective service.

6. Large share of low-cost deposits, higher net interest margin

7. Better quality of assets, NPA of 0.4 per cent

8. Higher profitability

WEAKNESSES

1. High dependence on individual loans.

2. Major stake held by American financial groups which are under stress due to economic

slowdown.

3 .Customer service staff needs training.

4. Processes and systems, etc need to be better managed

5. Management covers insufficient.

6. Sectoral growth is constrained by low unemployment levels and competition for staff

7. Marginal international presence



28

OPPORTUNITIES

1. Fast growing insurance business in the country.

2. Untapped rural markets.

3. Could extend to overseas broadly

4. Fast-track career development opportunities on an industry-wide basis.

5. An applied research centre to create opportunities for developing techniques to provide added-

value services.

6. Unique partnership to create job opportunities for IFBI¶s PGDBO students

7. HDFC bank automates business processes with Staff ware; HDFC Bank anticipates major cost

savings whilst maintaining high levels of customer service thanks to new enterprise software

agreement.

8. HDFC Bank plans to set up a non-banking finance company (NBFC) to undertake fund-based

activities.

9. After showing a significant growth overall, India is able to attract Many international

financial & banking institutes, which are known for their state of art working and keeping

low operation costs.

THREATS

1. Loss of market share to commercial banks and HFC¶s

2. Higher than expected increase in funding cost

3. Risk of fraud and NPA accretion due to increase in interest rates and fall in property prices is

inherent to the mortgage business

4. Lack of infrastructure in rural areas could constrain investment.

5. High volume/low cost market is intensely competitive.

6. Very high competition prevailing in the industry

7. Extension overseas holds a lot of risk!



29

CHAPTER 5

DATA ANALYSIS

ANDINTERPRETATION



30

DATA ANALYSIS AND INTERPRETATION

Statement 5.a Demographic Profile Of The Respondents

Table 5.a Demographic Profile of the Respondents

DemographicsNumber of

Respondents

Percentage Of

Respondents

Age:

Below 20 yrs

20 ± 35 yrs

35 ± 50 yrs

50 ± 65 yrs

65 yrs and above

1

33

40

17

9

1 %

33 %

40 %

17 %

9 %

TOTAL 100 100 %

Qualification:

Undergraduate

Graduate

Post Graduate

5

65

30

5 %

65 %

30 %

TOTAL 100 100 %

Occupation:

Businessman

Housewife

Self Employed

Service

Student

Professional

32

7

17

27

4

13

32 %

7 %

17 %

27 %

4 %

13 %

TOTAL 100 100 %



31

Analysis and interpretation:

From the data collected it was found majority of respondents that is 40%

belonged to the age of 35 to 50 years, followed by the age group of 20 to 35 years.

It was found that the majority of the respondents were graduates. It was found

that the majority of the respondents were from the business class followed by the

service class and self employed people. It was found that the majority of the

respondents fell between the income group of Rs 6 to Rs 10 lakhs, followed by

income group between Rs 2 to Rs 6 lakhs.

Thus it can be concluded that the majority of the respondents were knowledgeable

and were well informed about the banking services.

Annual Income:

Less than Rs 2 Lakhs

Rs. 2 ± 6 Lakhs

Rs. 6 ± 10 Lakhs

Rs. 10 ± 15 Lakhs

Rs. 15 ± 20 Lakhs

Rs. 20 Lakhs and above

12

27

39

17

5

0

12 %

27 %

39 %

17 %

5 %

0 %

TOTAL 100 100 %



32

Statement 1: Time period since the HDFC Bank¶s services are being availed

Table 5.1 Time period since the HDFC Bank¶s services are being availed

Time Period Number of respondents

Percentage of

respondents

Less Than 2 years

2 ± 5 years

5 ± 10 years

More Than 10 years

9

18

31

42

9 %

18 %

31 %

42 %

Total 100 100 %

Figure 5.1 Time period since the HDFC Bank¶s services are being availed


From the data collected, it can be that the majority of the respondents that is 42% of the

respondents have been HDFC Bank¶s customer for more than 10 years, followed by 5 to

10 years with 31% of respondents.

It can be concluded that the majority of the respondents have been HDFC Bank¶s

customer for more than 10 years.

Less Than 2years

2 ± 5 years 5 ± 10 years More Than 10years

9%

18%

31%

42%



33

Statement 2: Products and services of HDFC Bank availed by the customers

Table 5.2: Products and services of HDFC Bank availed by the customers

Products and services Number of respondents Percentage of respondents

Loans

Deposit Accounts

Credit Cards

Debit Cards

Forex Services

ATM

NRI Services

49

63

27

19

22

24

13

22.58 %

29.03 %

12.44 %

8.75 %

10.13 %

11.05 %

6.00 %

Total 217* 100 %

Figure 5.2: Products and services of HDFC Bank availed by the customers

Analysis and interpretation

It was found that majority of the respondents that is 29% availed deposit accounts,

followed by loans, credit cards, ATM¶s and forex services with 23%, 12%, 11% and 10%

respectively. It can be inferred that that majority of the respondents availed the deposit

accounts among the various products and services offered by the HDFC Bank.

* The total is more than sample size because of multiple responses.

23%

29%

12%9 %

10 %

11 %

6 %

Loans

Deposit Accounts

Credit Cards

Debit Cards

Forex Services

ATM

NRI Services



34

Statement 3: Perception about the products and services offered by HDFC Bank

Table 5.3: Perception about the products and services offered by HDFC Bank

Perception Number of respondents Percentage of respondents

Lucrative

Non lucrative

Can¶t say

80

5

15

80 %

5 %

15 %

Total 100 100 %

Figure 5.3: Perception about the products and services offered by HDFC Bank

Analysis and interpretation

From the data collected, it was found that the majority of the respondents that is 85% said

that the products and services offered by HDFC Bank were lucrative. While just 5% of the

respondents said that the products and services offered were non lucrative and the

remaining 15% were not able form any opinion.

It can be inferred that the majority of the felt that the products and services offered by

HDFC Bank were lucrative.

Lucrative Non lucrative Cant say

80 %

5 %

15%



35

Statement 4: Ways to access to HDFC Bank

Table 5.4: Ways to access to HDFC Bank

Ways Number of Respondents

Percentage of

Respondents

Online Banking

Phone Banking

One View

ATM

Branch Network

Email Statement

Insta Alert

53

28

7

29

76

34

3

23.05 %

12.18 %

3.05 %

12.60 %

33.04 %

14.78 %

1.30 %

Total 230* 100 %

Table 5.4: Ways to access to HDFC Bank

23%

12%

3%

13%

33%

15%1% Net Banking

Phone Banking

One View

ATM

Branch Network

Email Statement

Insta Alert



36


It was found from the data collected that 33% of the respondents accessed the bank

through Branch network. About 23% of the respondents accessed the bank through online

Banking followed by email statements with about 15%. Marginally 1% and 3% of the

respondents used insta alert and one view to access the bank.

It was inferred that majority of the respondents accessed the bank through branch network.


Statement 5: Awareness regarding Online Banking Service provided by HDFC Bank

Table 5.5: Awareness regarding Online Banking Service provided by HDFC Bank

Awareness Number of respondents Percentage of respondents

Yes

No

96

4

96 %

4 %

Total 100 100 %

Table5.5

: Awareness regarding Online Banking Service provided by HDFC Bank



37


From the data collected it was found that majority of the respondents that is 96% were

aware of the online Banking service provided by HDFC Bank while just 4% of the

respondents were not aware of the same service.

It was concluded that majority of the respondents of the respondents were aware of the

online Banking service.

Statement 6: Accessibility of Online Banking Facility provided by HDFC Bank

Table 5.6: Accessibility of Online Banking Facility provided by HDFC Bank

Accessibility Number of respondents Percentage of respondents

Yes

No

81

19

81 %

19 %

Total 100 100 %

Figure 5.6: Accessibility of Online Banking Facility provided by HDFC Bank

81 %

19 %

Yes

No



38


Of the data collected it was found that about 81% of the respondents had accessed the

online Banking service provided by the HDFC Bank while 19% of the respondents said

that they had not accessed the same.

It can be inferred that the majority of the respondents had availed the online Banking

service.

Statement 7: Online Banking services of HDFC Bank availed

Table 5.7: Online Banking services of HDFC Bank availed

ServicesNumber of

respondents

Percentage of

respondents

View accounts balances & statements

Transfer funds between accounts

Create Fixed Deposit onlineRequest a demand draft

Pay bills

Order a cheque book

Request stop payment on a cheque

44

32

85

29

16

11

30.39 %

22.07 %

5.51 %3.44 %

20.00 %

11.03 %

7.56 %

Total 145* 100 %

Figure 5.7: Online Banking services of HDFC Bank availed



39


It was found that the majority of the respondents that is 30% of the respondents used the

online Banking service for viewing accounts and balances, followed by 22% and 20% of

the respondents who availed the same for transferring the funds between accounts and for

paying the bills respectively. Marginally 3% of the respondents used the same service to

request a demand draft.

It can be inferred that the majority of the respondents used the online Banking service

provided by HDFC Bank to view their accounts and balances.


30%

22%6%

3%

20%

11%

8%

View accounts balances &

statements

Transfer funds between

accounts

Create Fixed Deposit online

Request a demand draft

Pay bills

Order a cheque book

Request stop payment on a

cheque



40

Statement 8: Reasons for which Online Banking service should be availed

Table 5.8: Reasons for which Online Banking service should be availed

Reasons Mean Rank Ranks

Convenience 3.12 1

Curiosity 5.07 7

Low cost 4.41 5

Quick service 3.33 2

Maintenance 3.46 3

Safety 4.48 6

User friendly 4.13 4

1 being the most important and 7 being the least important


Scores are significantly different on The Friedman two way ANOVA test (p<0.001) for

the listed 7 reasons due to which Online Banking service should be availed. The first rank

being the most important was given to convenience and the last rank that is 7 was givento curiosity.

It can be concluded that majority of the respondents regarded convenience as the most

important reason for which Online Banking service should be availed and curiosity as the

least important reason for the same.



41

Statement 9: Frequency of using the Online Banking service in a month

Table 5.9: Frequency of using the Online Banking service in a month

Frequency Number of respondents Percentage of respondents

Less than once

1 to 3 times

3 to 8 times

8 to 15 times

More than 15 times

28

39

10

4

0

34.56 %

48.14 %

12.34 %

4.96 %

0 %

Total 81 100 %

Figure 5.9: Frequency of using the Online Banking service in a month


It was found that the majority of the respondents that is 48 % used the Online Banking

service one to three times in a month while 35 % said that they used the same service less

than once in a month. None of the respondents said that they availed the same facility

more than 15 times in a month.



42

It can be inferred that the majority of the respondents availed the Online Banking service

one to three times in a month.

Statement 10 : Difficulties faced while using the Online Banking service of HDFC Bank

Table 5.10 : Difficulties faced while using the Online Banking service of HDFC

Bank

DifficultiesNumber of

respondents

Percentage of

respondents

Logging in to your account

Making transactions

Safety issues

Unable to understand webpages

Regularly changing the IPIN and Password

9

27

32

6

7

11.11 %

33.33 %

39.50 %

7.40 %

8.64 %

Total 81 100 %

Figure 5.10 : Difficulties faced while using the Online Banking service of HDFC

Bank



43


It was found that the majority of the respondents that is 40% said that safety issues was

the major difficulty that they faced while using the Online Banking service, followed by

34% of the respondents who felt that making transactions with the bank through Online

Banking was difficult. However, 8% of the respondents faced difficulty in understanding

the webpages and 7% of the respondents felt that changing the IPIN and Password

regularly was difficult.

It was inferred that the majority of the respondents regarded the safety issues as the major

difficulty that they faced while using the Online Banking service.

Statement 11: Frequency of visiting the HDFC Bank branch

Table 5.11: Frequency of visiting the HDFC Bank branch

Frequency Number of respondents Percentage of respondents

Everyday

Alternate days

Once in a week

Twice in a month

Thrice in a month

Twice in a week

Once in a week

21

26

18

9

5

14

7

21 %

26 %

18 %

9 %

5 %

14 %

7 %

Total 100 100 %

Figure 5.11 Frequency of visiting the HDFC Bank branch



44


It was found that the majority of the respondents that is 26% said that they visited the

bank branch every alternate day, followed by 21% of the respondents who visited the

bank everyday. Only 5% of the respondents visited the bank branch thrice in a month.

It can be inferred that the majority of the respondents said that they visited the bank

branch every alternate day.

Statement 12: The main reason for which the bank branch is typically visited

Table 5.12: The main reason for which the bank branch is typically visited

ReasonsNumber of

respondents

Percentage of

respondents

To make a deposit

To get a advice for investment purpose

To inquire about a balanceTo withdraw a cheque

To order a cheque book

To transfer funds between accounts

31

13

723

15

11

31 %

13 %

7 %23 %

15 %

11 %

Total 100 100 %

0

5

10

15

20

25

30

Everyday Alternate

days

Once in a

week

Twice in a

month

Thrice in a

month

Twice in a

week

Once in a

week

21 %

26%

18 %

9 %

5 %

14 %

7 %



45

Figure 5.12: The main reason for which the bank branch is typically visited


It was found that the majority of the respondents that is 31% said that the main reason of

visiting the bank is to make a deposit, followed by 23% who said that they visited the

bank branch typically to withdraw a cheque. Of the total only 7% and 11% of the

respondents visited the bank to inquire about a balance and to transfer funds between

accounts respectively.It can be inferred that the majority of the respondents said that the main reason of visiting

the bank is to make a deposit.



46

Statement 13: Agreement regarding Online Banking service being better than traditional

banking

Table 5.13: Agreement regarding Online Banking service being better than

traditional banking

Agreement Number of respondents Percentage of respondents

Yes

No

64

36

64 %

36 %

Total 100 100 %

Figure 5.13: Agreement regarding Online Banking service being better than

traditional banking


Of the data collected it was found that the majority of the respondents that is 64%

respondents agreed that online Banking is better than the traditional banking while 36%

of the respondents disagreed with the statement.

It can be inferred that the majority of the respondents felt that the online Banking service

was better than traditional banking.

64%

36%

Yes

No



47

Statement 14: Reasons due which Online Banking service is not popularly used

Table 5.14: Reasons due which Online Banking service is not popularly used

Reasons Mean Rank Rank

Online banking web pages are confusing 4.40 5

Use of computer or internet is difficult 4.53 6

Neither friends nor relatives use internet 4.03 4

Online banking facility is not secured 3.43 2

It is more expensive than going to a branch 4.76 7

Online banking offers no receipts on

payments3.28 1

Online banking is not reliable 3.57 3

1 being the most important and 7 being the least important


Scores are significantly different on The Friedman two way ANOVA test (p<0.001) for

the listed 7 reasons due to which Online banking service is not popularly being used. The

Online banking offers no receipts on payments was ranked first that is the most important

reason while it is more expensive than going to a branch was given the last rank that is

seven.

It can be concluded that the majority of the respondents regarded that the most important

reason for which Online banking service is not being used popularly was that it does not

offer receipts on payments and the least important reason was that it is more expensive

than going to a branch.



48

CHAPTER 6 SUMMARY

SUMMARY OF THE STUDY

I went through a good learning practice in my HDFC Bank for the past two months which has

developed me to heights of understanding the customers mind as well their taste and preferences

in the field of services sector.

The ³Banking Online System is a big and ambitious project. I am thankful for being provided

this great opportunity to work on it. As already mentioned, this project has gone through

extensive research work. On the basis of the research work, we have successfully designed and

implemented banking online System. This system is based upon 2-tier client server architecture.

The working environment was excellent which enabled me to learn the products and services

features as well as the internal aspects of management level in my bank.



49

CHAPTER 7 FINDINGS



50

FINDINGS OF THE STUDY

The findings of the study were as follows:

1. The majority of the respondents have been HDFC Bank¶s customer for more than

10 years.

2. The majority of the respondents availed the deposit accounts among the various

products and services offered by the HDFC Bank.

3. The majority of the felt that the products and services offered by HDFC Bank

were lucrative.

4. The majority of the respondents accessed the bank through branch network.

5. The majority of the respondents of the respondents were aware of the online

banking service.

6. The majority of the respondents have availed the online banking service.

7. The majority of the respondents used the online banking service provided by

HDFC Bank to view their accounts and balances.

8. The majority of the respondents regarded convenience as the most important

reason for which Online banking service should be availed and curiosity as the

least important reason for the same.

9. The majority of the respondents availed the Online banking service one to threetimes in a month.

10. The majority of the respondents faced the safety issues was the major difficulty

that they faced while using the Online banking service.

11. The majority of the respondents said that they visited the bank branch every

alternate day.

12. The majority of the respondents said that the main reason of visiting the bank is to

make a deposit.

13. The majority of the respondents felt that the online banking service was better

than traditional banking.

The majority of the respondents agreed that online banking is convenient and safe to use and felt

that transaction costs are lesser in case of online banking service. While majority of therespondents disagreed that online banking facility reduces the frequency of customer visits to a

physical bank



51

CHAPTER 8

CONCLUSION



52

CONCLUSION

The introduction of new technology has been changing the attire of banking. The brick and

mortar banking is slowly giving place to click of the mouse banking. Technology is aiding

globalization and integration of financial markets across the globe. Customer¶s expectations for

new products and alternatives delivery channels have been rising. Banks are under pressure to

offer today, what customers would be expecting tomorrow. Thanks to innovations and spread of

new technology, banks today offer the customer a choice to conduct his business across the

counter, over phone or via a computer. The Rangarajan Committee (1988) report is the first step

for the introduction of computers. The Saraf Committee (1994) on Technology issues relating to

payments, cheques clearing and securities settlements made several recommendations to improve

the quality of service. The introduction of new instruments such as ATM, retail Electronic Funds

Transfer (EFT) and Electronic Clearing Services (ECS) have all helped in developing an

effective, efficient and speedy payment and settlement systems.

In literature, the major emphasis has laid on significant innovation and investment is under way

that could lead to very rapid expansion in fully electronic business to business and consumer to

consumer payments in near time. While the pace of change in these market makes it difficult to

determine, eventually these innovations will generate substantial effeciencies in retail paymentsystem. Bank regulators are paying significant attention to appropriate risk management of new

technology. Evidence reveals a sense of urgency about the adoption of new technology and

reflects substantial competitive pressure to act quickly.

The objective of the study was to study was to comprehend the Online banking service provided

by HDFC Bank. The research was descriptive in nature. The universe of the study was the

customers of the HDFC Bank. The survey was carried out on 100 respondents. In this research

for data analysis tools used were tables and graphs. Majority of the respondents were aware of

the Online banking service provided by the bank and availed the various services offered through

online banking. Majority of the respondents felt that online banking facility have enabled the

customers to perform various banking transactions online. It is hoped that the survey findings

will have some useful applications.



53

CHAPTER 9

RECOMMENDATION

RECOMMENDATIONS

Following are the recommendations of the study:

a. The bank should make some efforts to familiarize the customers to various

services through demonstrations.

b. The bank should adopt more upgraded techniques to make their customer feel

more secure while accessing their accounts.

c. Effective awareness campaigns should be undertaken by the banks to make their

customers more aware of online banking service.

d. The bank should make an effort to provide a platform from where the customers

can access different accounts at single time without extra charge.

e. The bank should take steps to create a trust in mind of customers towards security

of their accounts.

f. The HDFC bank should introduce more services which can be accessed through



54

CHAPTER 10

BIBLIOGRAPHY

6.6: BIBLIOGRAPHY

BOOKS

y Cooper and schinder Research Methodology New Delhi Tata McGraw-Hill Ltd 2001

y Tull S. Donald et al Hawkins I. Del --Marketing Research Measurement & Methods

6 th

edition

Published by Asoke K. Ghosh, Prentice-Hall of India pvt. Ltd.

y Cooper R. Donald et al Schindler S.Pamela ±Business Research Method logy 2006

edition

Published by TATA McGraw HILL Publishing Company limited

WEBSITES

y www.hdfcbank.com

y www.rbi.org.in

y www.wikipedia.in



55

11 ANNEXURE

QQUUEESSTTIIOONNNNAAIIR R EE

1. Name ______________________________________

2. Age ___

Que.1: For how many years you are availing HDFC Bank services?

Less Than 2 years

2 ± 5 years

5 ± 10 years

More Than 10 years

Que.2: How are the various services offered by HDFC bank?

Lucrative

Non lucrative

Can¶t say

Que.3: By which way you access to HDFC Bank?

Online Banking

ATM

Branch Network

Phone Banking

Email Statement

Que. 4 Are you aware of Online banking service by HDFC?

YES

NO



Que. 5 Do you Access Online Banking Facility provided by HDFC Bank?

YES

NO

Que. 6 what is the frequency of using the Online banking service in a month?

Less than once

1 to 3 times

3 to 8 times

More than 8 times

Que. 7 what are the Difficulties faced while using the Online Banking service of HDFC

Bank?

Logging in to your account

Making transactions

Safety issues

Unable to understand webpages

Que. 8 Agreement regarding Online banking service being better than traditional banking?

Yes

No

Que. 9 Reasons due which Online Banking service is not popularly used

Online Banking web pages are confusing

Use of computer or internet is difficult

Online Banking facility is not secured

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