customer satisfaction in terms of service in hdfc bank

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A Study on Customer Satisfaction in terms of service at HDFC Bank

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BANK

DEFINITION:

A bank is a financial intermediary that accepts deposits and channels those deposits into lending

activities, either directly or through capital markets. A bank connects customers with capital

deficits to customers with capital surpluses.

The definition of a bank varies from country to country. Under English common law, a banker is

defined as a person who carries on the business of banking, which is specified as

Conducting current accounts for his customers Paying cheques drawn on him, and Collecting cheques for his customers.

In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in

relation to negotiable instruments, including cheques, and this Act contains a statutory definition

of the term banker: banker includes a body of persons, whether incorporated or not, who carry on

the business of banking. Although this definition seems circular, it is actually functional, because

it ensures that the legal basis for bank transactions such as cheques does not depend on how the

bank is organized or regulated.

The business of banking is in many English common law countries not defined by statute but by

common law, the definition above. In other English common law jurisdictions there are statutory

definitions of the business of banking or banking business. When looking at these definitions it is

important to keep in mind that they are defining the business of banking for the purposes of the

legislation, and not necessarily in general. In particular,


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Most of the definitions are from legislation that has the purposes of entry regulating andsupervising banks rather than regulating the actual business of banking. However, in many cases

the statutory definition closely mirrors the common law one. Examples of statutory definitions:

Banking business" means the business of receiving money on current or deposit account,paying and collecting cheques drawn by or paid in by customers, the making of advances

to customers, and includes such other business as the Authority may prescribe for the

purposes of this Act

Banking business" means the business of either or both of the following:

receiving from the general public money on current, deposit, savings or other similaraccount repayable on demand or within less than [3 months] ... or with a period of call

or notice of less than that period;

paying or collecting cheques drawn by or paid in by customers

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct

debit and internet banking, the cheque has lost its primacy in most banking systems as a payment

instrument. This has led legal theorists to suggest that the cheque based definition should be

broadened to include financial institutions that conduct current accounts for customers and enable

customers to pay and be paid by third parties, even if they do not pay and collect cheques.


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STANDARD ACTIVITIES:

Banks act as payment agents by conducting checking or current accounts for customers, paying

cheques drawn by customers on the bank, and collecting cheques deposited to customers' current

accounts. Banks also enable customer payments via other payment methods such as telegraphic

transfer, EFTPOS, and ATM.

Banks borrow money by accepting funds deposited on current accounts, by accepting term

deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money bymaking advances to customers on current accounts, by making installment loans, and by

investing in marketable debt securities and other forms of money lending.

Banks provide almost all payment services, and a bank account is considered indispensable by

most businesses, individuals and governments. Non-banks that provide payment services such as

remittance companies are not normally considered an adequate substitute for having a bank

account.

Banks borrow most funds from households and non-financial businesses, and lend most funds to

households and non-financial businesses, but non-bank lenders provide a significant and in many

cases adequate substitute for bank loans, and money market funds, cash management trusts and

other non-bank financial institutions in many cases provide an adequate substitute to banks for

lending savings too.

CHANNELS:

Banks offer many different channels to access their banking and other services:


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ATM is a machine that dispenses cash and sometimes takes deposits without the need fora human bank teller. Some ATMs provide additional services.

A branch is a retail location Call center Mail: most banks accept check deposits via mail and use mail to communicate to their

customers, e.g. by sending out statements

Mobile banking is a method of using one's mobile phone to conduct banking transactions

Online banking is a term used for performing transactions, payments etc. over the Internet Relationship Managers, mostly for private banking or business banking, often visiting

customers at their homes or businesses

Telephone banking is a service which allows its customers to perform transactions overthe telephone without speaking to a human

Video banking is a term used for performing banking transactions or professional bankingconsultations via a remote video and audio connection. Video banking can be performed

via purpose built banking transaction machines (similar to an Automated teller machine),

or via a videoconference enabled bank branch.

HISTORY OF BANKS:

The first banks were probably the religious temples of the ancient world, and were probably

established in the third millennium BC. Banks probably predated the invention of money.

Deposits initially consisted of grain and later other goods including cattle, agricultural

implements, and eventually precious metals such as gold, in the form of easy-to-carry

compressed plates. Temples and palaces were the safest places to store gold as they were

constantly attended and well built. As sacred places, temples presented an extra deterrent to


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Would-be thieves. There are extant records of loans from the 2nd century BC in Babylon that

were made by temple priests/monks to merchants.

EARLIEST BANKS:

By the time of Hammurabi's Code, dating to ca. 1760 BCE, banking was well enough developed

to justify laws governing banking operations. Ancient Greece holds further evidence of banking.

Greek temples, as well as private and civic entities, conducted financial transactions such as

loans, deposits, currency exchange, and validation of coinage. There is evidence too of credit,

whereby in return for a payment from a client, a moneylender in one

Greek port would write a credit note for the client who could "cash" the note in another city,

saving the client the danger of carting coinage with him on his journey. Pythius, who operated as

a merchant banker throughout Asia Minor at the beginning of the 5th century BC, is the first

individual banker of whom we have records. Many of the early bankers in Greek city-states weremetics or foreign residents. Around 371 BC, Pasion, a slave, became the wealthiest and most

famous Greek banker, gaining his freedom and Athenian citizenship in the process. The 4th

century BC saw increased use of credit-based banking in the Mediterranean world. In Egypt,

from early times, grain had been used as a form of money in addition to precious metals, and

state granaries functioned as banks. When Egypt fell under the rule of a Greek dynasty, the

Ptolemies (332-30 BC), the numerous scattered government granaries were transformed into a

network of grain banks, centralized in Alexandria where the main accounts from all the state

granary banks were recorded. This banking network functioned as a trade credit system in which

payments were affected by transfer from one account to another without money passing. In the

late 3rd century BC, the barren Aegean island of Delos, known for its magnificent harbor and

famous temple of Apollo, became a prominent banking center. As in Egypt, cash transactions


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Were replaced by real credit receipts and payments were made based on simple instructions with

accounts kept for each client. With the defeat of its main rivals, Carthage and Corinth, by the

Romans, the importance of Delos increased. Consequently it was natural that the bank of Delos

should become the model most closely imitated by the banks of Rome.

Ancient Rome perfected the administrative aspect of banking and saw greater regulation of

financial institutions and financial practices. Charging interest on loans and paying interest on

deposits became more highly developed and competitive. The development of Roman banks was

limited, however, by the Roman preference for cash transactions. During the reign of the Roman

emperor Gallienus (260-268 AD), there was a temporary breakdown of the Roman banking

system after the banks rejected the flakes of copper produced by his mints. With the ascent of

Christianity, banking became subject to additional restrictions, as the charging of interest was

seen as immoral. After the fall of Rome, banking was abandoned in western Europe and did not

revive until the time of the crusades.

DURING LATE ANTIQUITY AND MIDDLE AGES:

During the 3rd century AD, banks in Persia and other territories in the Persian Sassanid Empire

issued letters of credit known as sakk.

Muslim traders are known to have used the cheque or sakk system since the time of Harun al-

Rashid (9th century) of the Abbasid Caliphate. In the 9th century, a Muslim businessman could

cash an early form of the cheque in China drawn on sources in Baghdad, a tradition that was

significantly strengthened in the 13th and 14th centuries, during the Mongol Empire. Indeed,

fragments found in the Cairo Geniza indicate that in the 12th century cheques remarkably similar

to our own were in use, only smaller to save costs on the paper. They contain a sum to be paid


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And then the order "May so and so pay the bearer such and such an amount". The date and name

of the issuer are also apparent.

Jews were ostracized from most professions by local rulers, the Church and the guilds and so

were pushed into marginal occupations considered socially inferior, such as tax and rent

collecting and money lending, while the provision of financial services was increasingly

demanded by the expansion of European trade and commerce.

Medieval trade fairs, such as the one in Hamburg, contributed to the growth of banking in a

curious way: moneychangers issued documents redeemable at other fairs, in exchange for hard

currency. These documents could be cashed at another fair in a different country or at a future

fair in the same location. If redeemable at a future date, they would often be discounted by an

amount comparable to a rate of interest. Eventually, these documents evolved into bills of

exchange, which could be redeemed at any office of the issuing banker. These bills made it

possible to transfer large sums of money without the complications of hauling large chests ofgold and hiring armed guards to protect the gold from thieves. Beginning around 12th century,

the need to transfer large sums of money to finance the Crusades stimulated the re-emergence of

banking in western Europe. In 1156, in Genoa, occurred the earliest known foreign exchange

contract. Two brothers borrowed 115 Genoese pounds and agreed to reimburse the bank's agents

in Constantinople the sum of 460 bezants one month after their arrival in that city. In the

following century the use of such contracts grew rapidly, particularly since profits from time

differences were seen as not infringing canon laws against usury. In 1162, King Henry the II

levied a tax to support the crusadesthe first of a series of taxes levied by Henry over the years

with the same objective. The Templars and Hospitallers acted as Henry's bankers in the Holy

Land. The Templars' wide flung, large land holdings across Europe also emerged in the 1100

1300 time frame as the beginning of Europe-wide banking, as their practice was to take in local


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Currency, for which a demand note would be given that would be good at any of their castles

across Europe, allowing movement of money without the usual risk of robbery while traveling.

By 1200 there was a large and growing volume of long-distance and international trade in a

number of agricultural commodities and manufactured goods in western Europe; some of the

goods traded during that period included wool, finished cloth, wine, salt, wax and tallow, leather

and leather goods, and weapons and armour. Individual trading concerns and combines often

specialized in one or more of these, as did individual producers; because a large amount of

capital was required to establish, e.g., a cloth manufacturing business, only the largest firms

could diversify. As a result, businesses and clusters of businesses tended to market fairly narrow

product lines. Big firms like the Medici bank could and did specialize; the Medicis

manufacturing division had a number of manufacturing facilities producing many different types

of cloth. Perhaps the best example of product policy comes from the Cistercian monastic order,

where individual monasteries and granges tended to specialize in particular agricultural products

or types of industrial production, usually with an eye to meeting particular local or regionalmarket needs.

Ironically, the Papal bankers were the most successful of the Western world, though often goods

taken in pawn were substituted for interest in the institution termed the Monte di Piet.

When Pope John XXII (born Jacques d'Euse (12491334) was crowned in Lyon in 1316, he set

up residency in Avignon. Civil war in Florence between the rival Guelph and Ghibelline factions

resulted in victory for a group of Guelph merchant families in the city. They took over papal

banking monopolies from rivals in nearby Siena and became tax collectors for the Pope

throughout Europe. In 1306, Philip IV expelled Jews from France. In 1307 Philip had the Knights

Templar arrested and acquired their wealth, which had become to serve as the unofficial treasury

of France. In 1311 he expelled Italian bankers and collected their outstanding credit. In 1327,


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Avignon had 43 branches of Italian banking houses. In 1347, Edward III of England defaulted on

loans. Later there was the bankruptcy of the Peruzzi (1374) and Bardi (1353). The accompanying

growth of Italian banking in France was the start of the Lombard moneychangers in Europe, who

moved from city to city along the busy pilgrim routes important for trade. Key cities in this

period were Cahors, the birthplace of Pope John XXII, and Figeac. Perhaps it was because of

these origins that the term Lombard is synonymous with Cahorsin in medieval Europe, and

means 'pawnbroker'. Banca Monte dei Paschi di Siena SPA (MPS) Italy, is the oldest surviving

bank in the world.

After 1400, political forces turned against the methods of the Italian free enterprise bankers. In

1401, King Martin I of Aragon expelled them. In 1403, Henry IV of England prohibited them

from taking profits in any way in his kingdom. In 1409, Flanders imprisoned and then expelled

Genoese bankers. In 1410, all Italian merchants were expelled from Paris. In 1401, the Bank of

Barcelona was founded. In 1407, the Bank of Saint George was founded in Genoa. This bank

dominated business in the Mediterranean. In 1403 charging interest on loans was ruled legal in

Florence despite the traditional Christian prohibition of usury. Italian banks such as theLombards, who had agents in the main economic centers of Europe, had been making charges for

loans. The lawyer and theologian Lorenzo di Antonio Ridolfi won a case which legalized interest

payments by the Florentine government. In 1413, Giovanni di Bicci deMedici was appointed

banker to the pope. In 1440, Gutenberg invents the modern printing press although Europe

already knew of the use of paper money in China. The printing press design was subsequently

modified, by Leonardo da Vinci among others, for use in minting coins nearly two centuries

before printed banknotes were produced in the West.

By the 1390s silver was short all over Europe, except in Venice. The silver mines at Kutn Hora

had begun to decline in the 1370s, and finally closed down after being sacked by King Sigismund

in 1422. By 1450 almost all of the mints of northwest Europe had closed down for lack of silver.


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The last money-changer in the major French port of Dieppe went out of business in 1446. In

1455 the Turks overran the Serbian silver mines, and in 1460 captured the last Bosnian mine. The

Last Venetian silver grosso was minted in 1462. Several Venetian banks failed, and so did the

Strozzi bank of Florence, the second largest in the city. Even the smallest of small change

became scarce.

WESTERN BANKING HISTORY:

The Church officially prohibited usury, which reafirmed the view that it was a sin to charge

interest on a money loan. The development of double entry bookkeeping would provide a

powerful argument in favor of the legitimacy and integrity of a firm and its profits. There is

evidence of bookkeeping practices starting in the 13th century, while the Farolfi ledger of 1299

1300 is the earliest evidence of full double-entry bookkeeping. Giovanno Farolfi & Company

were a firm of Florentine merchants whose head office was in Nmes whose ledger shows thatthey also acted as moneylender to Archbishop of Arles, their most important customer. His

patronage must also have shielded the Florentines from any trouble over the Church's official ban

on usury, which in any case was not seriously enforced, provided the rate of interest was not

extortionate; the Archbishop himself borrowed from the Farolfi at 15 per cent per annum.

Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy,

to the rich cities in the north like Florence, Venice and Genoa.The Bardi and Peruzzi families

dominated banking in 14th century Florence, establishing branches in many other parts of

Europe. Perhaps the most famous Italian bank was the Medici bank, set up by Giovanni Medici

in 1397. Modern Western economic and financial history is usually traced back to the coffee

houses of London. The London Royal Exchange was established in 1565. At that time


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moneychangers were already called bankers, though the term "bank" usually referred to their

offices, and did not carry the meaning it does today. There was also a hierarchical order among

Professionals, at the top were the bankers who did business with heads of state, next were the city

exchanges, and at the bottom were the pawn shops or "Lombard". Some European cities today

have a Lombard street where the pawn shop was located.After the siege of Antwerp trade moved

to Amsterdam. In 1609 the Amsterdamsche Wisselbank (Amsterdam Exchange Bank) was

founded which made Amsterdam the financial center of the world until the Industrial Revolution.

Banking offices were usually located near centers of trade, and in the late 17th century, the

largest centers for commerce were the ports of Amsterdam, London, and Hamburg. Individuals

could participate in the lucrative East India trade by purchasing bills of credit from these banks,

but the price they received for commodities was dependent on the ships returning (which often

didn't happen on time) and on the cargo they carried (which often wasn't according to plan). The

commodities market was very volatile for this reason, and also because of the many wars that led

to cargo seizures and loss of ships.

GLOBAL BANKING:

In the 1970s, a number of smaller crashes tied to the policies put in place following the

depression, resulted in deregulation and privatization of government-owned enterprises in the

1980s, indicating that governments of industrial countries around the world found private-sector

solutions to problems of economic growth and development preferable to state-operated, semi-

socialist programs. This spurred a trend that was already prevalent in the business sector, large

companies becoming global and dealing with customers, suppliers, manufacturing, and

information centres all over the world.


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Global banking and capital market services proliferated during the 1980s and 1990s as a result of

a great increase in demand from companies, governments, and financial institutions, but also

Because financial market conditions were buoyant and, on the whole, bullish. Interest rates in the

United States declined from about 15% for two-year U.S. Treasury notes to about 5% during the

20-year period, and financial assets grew then at a rate approximately twice the rate of the world

economy. Such growth rate would have been lower, in the last twenty years, were it not for the

profound effects of the internationalization of financial markets especially U.S. Foreign

investments, particularly from Japan, who not only provided the funds to corporations in the

U.S., but also helped finance the federal government; thus, transforming the U.S. stock market by

far into the largest in the world.

Nevertheless, in recent years, the dominance of U.S. financial markets has been disappearing and

there has been an increasing interest in foreign stocks. The extraordinary growth of foreign

financial markets results from both large increases in the pool of savings in foreign countries,

such as Japan, and, especially, the deregulation of foreign financial markets, which has enabled

them to expand their activities. Thus, American corporations and banks have started seekinginvestment opportunities abroad, prompting the development in the U.S. of mutual funds

specializing in trading in foreign stock markets. Such growing internationalization and

opportunity in financial services has entirely changed the competitive landscape, as now many

banks have demonstrated a preference for the universal banking model prevalent in Europe.

Universal banks are free to engage in all forms of financial services, make investments in client

companies, and function as much as possible as a one-stop supplier of both retail and

wholesale financial services. Many such possible alignments could be accomplished only by

large acquisitions, and there were many of them. By the end of 2000, a year in which a record

level of financial services transactions with a market value of $10.5 trillion occurred, the top ten

banks commanded a market share of more than 80% and the top five, 55%. Of the top ten banks

ranked by market share, seven were large universal-type banks (three American and four


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European), and the remaining three were large U.S. investment banks who between them

accounted for a 33% market share.

This growth and opportunity also led to an unexpected outcome: entrance into the market of

other financial intermediaries: nonbanks. Large corporate players were beginning to find their

way into the financial service community, offering competition to established banks. The main

services offered included insurances, pension, mutual, money market and hedge funds, loans and

credits and securities. Indeed, by the end of 2001 the market capitalisation of the worlds 15

largest financial services providers included four nonbanks.

In recent years, the process of financial innovation has advanced enormously increasing the

importance and profitability of nonbank finance. Such profitability priorly restricted to the

nonbanking industry, has prompted the Office of the Comptroller of the Currency (OCC) to

encourage banks to explore other financial instruments, diversifying banks' business as well as

improving banking economic health. Hence, as the distinct financial instruments are being

explored and adopted by both the banking and nonbanking industries, the distinction between

different financial institutions is gradually vanishing.

MAJOR EVENTS IN BANKING HISTORY:

11001300 - Knights Templar run earliest Euro wide /Mideast banking.

15421551 - The Great Debasement refers to the English Crowns policy of coinage debasement

during the reigns of Henry VIII and Edward VI.

1602First joint-stock company, the Dutch East India Company founded.

1602 - The Amsterdam Stock Exchange was established by the Dutch East India Company for

dealings in its printed stocks and bonds.


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1609 - The Amsterdamsche Wisselbank (Amsterdam Exchange Bank) was founded.

1690 - The Massachusetts Bay Colony was the first of the Thirteen Colonies to issue

permanently circulating banknotes.

1694 - The Bank of England was set up to supply money to the King .

1716 - John Law opens Banque Gnrale

1717 - Master of the Royal Mint Sir Isaac Newton established a new mint ratio between silverand gold that had the effect of driving silver out of circulation (bimetalism)and putting Britain on

a gold standard.

1720The South Sea Bubble and John Law's Mississippi Scheme, which caused a European

financial crisis and forced many bankers out of business.

1775The first building society, Ketley's Building Society, was established in Birmingham,

England.

1781The Bank of North America was found by the Continental Congress.

1791 - The First Bank of the United States was a bank chartered by the United States Congress.

The charter was for 20 years.

1800Rothschild family founds Euro wide banking.

1816 - The Second Bank of the United States was chartered five years after the First Bank of theUnited States lost its charter. This charter was also for 20 years. The bank was created to finance

the country in the aftermath of the War of 1812.

1862 - To finance War Between the States, the federal government under U.S. President

Abraham Lincoln issued a legal tender paper money, the so-called greenbacks.


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1874 - The Specie Payment Resumption Act provided for the redemption of United States paper

currency, known colloquially as greenbacks, in gold, beginning in 1879.

1913 - The Federal Reserve Act created the Federal Reserve System, the central banking system

of the United States of America, and granted it the legal authority to issue legal tender.

193033 In the wake of the Wall Street Crash of 1929, 9,000 banks close, wiping out a third of

the money supply in the United States.

1933 - Executive Order 6102 signed by U.S. President Franklin D. Roosevelt forbid the hoarding

of Gold Coin, Gold Bullion, and Gold Certificates by U.S. citizens, except for a small amount.

This effectively ended the convertibility of dollars to gold for US citizens.

1971 - The Nixon Shock was a series of economic measures taken by U.S. President Richard

Nixon which canceled the direct convertibility of the United States dollar to gold by foreign

nations. This essentially ended the existing Bretton Woods system of international financial

exchange.

1986The "Big Bang" (deregulation of London financial markets) served as a catalyst to

reaffirm London's position as a global centre of world banking.

2008Washington Mutual collapses. It was the largest bank failure in history.

BANKING IN INDIA:

Banking in India originated in the last decades of the 18th century. The first banks were The

General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790;


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both are now defunct. The oldest bank in existence in India is the State Bank of India, which

originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of

Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and

the Bank of Madras, all three of which were established under charters from the British East

India Company. For many years the Presidency banks acted as quasi-central banks, as did their

successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon

India's independence, became the State Bank of India.

HISTORY OF BANKING IN INDIA:

Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a

consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and

still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that

issues stock and requires shareholders to be held liable for the company's debt) It was not the first

though. That honor belongs to the Bank of Upper India, which was established in 1863, and

which survived until 1913, when it failed, with some of its assets and liabilities being transferred

to the Alliance Bank of Simla. When the American Civil War stopped the supply of cotton to

Lancashire from the Confederate States, promoters opened banks to finance trading in Indian

cotton. With large exposure to speculative ventures, most of the banks opened in India during

that period failed. The depositors lost money and lost interest in keeping deposits with banks.

Subsequently, banking in India remained the exclusive domain of Europeans for next several

decades until the beginning of the 20th century.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire

d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;


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branches in Madras and Puducherry, then a French colony, followed. HSBC established itself in

Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the

British Empire, and so became a banking center.

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in

Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in

1895, which has survived to the present and is now one of the largest banks in India.

Around the turn of the 20th Century, the Indian economy was passing through a relative periodof stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial

and other infrastructure had improved. Indians had established small banks, most of which served

particular ethnic and religious communities.

The presidency banks dominated banking in India but there were also some exchange banks and

a number of Indian joint stock banks. All these banks operated in different segments of the

economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign

trade. Indian joint stock banks were generally undercapitalized and lacked the experience and

maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon

to observe, "In respect of banking it seems we are behind the times. We are like some old

fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome

compartments." The period between 1906 and 1911, saw the establishment of banks inspired by

the Swadeshi movement. The Swadeshi movement inspired local businessmen and political

figures to found banks of and for the Indian community. A number of banks established thenhave survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of

Baroda, Canara Bank and Central Bank of India.The fervour of Swadeshi movement lead to

establishing of many private banks in Dakshina Kannada and Udupi district which were unified

earlier and known by the name South Canara ( South Kanara ) district. Four nationalised banks


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started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada

district is known as "Cradle of Indian Banking".

POST-INDEPENDENCE:

The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,

paralyzing banking activities for months. India's independence marked the end of a regime of the

Laissez-faire for the Indian banking. The Government of India initiated measures to play an

active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the

government in 1948 envisaged a mixed economy. This resulted into greater involvement of the

state in different segments of the economy including banking and finance. The major steps to

regulate banking included:

The Reserve Bank of India, India's central banking authority, was nationalized on January1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act,

1948 (RBI, 2005b).[Reference www.rbi.org.in]

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank ofIndia (RBI) "to regulate, control, and inspect the banks in India."

The Banking Regulation Act also provided that no new bank or branch of an existing bankcould be opened without a license from the RBI, and no two banks could have common

directors.

CUSTOMER SATISFACTION:


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Customer satisfaction, a business term, is a measure of how products and services supplied

by a company meet or surpass customer expectation. It is seen as a key performance

indicator within business and is part of the four of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of

business strategy.

However, the importance of customer satisfaction diminishes when a firm has increased

bargaining power. For example, cell phone plan providers, such as AT&T and Verizon,

participate in an industry that is an oligopoly, where only a few suppliers of a certain

product or service exist. As such, many cell phone plan contracts have a lot of fine print

with provisions that they would never get away if there were, say, a hundred cell phone plan

providers, because customer satisfaction would be way too low, and customers would easily

have the option of leaving for a better contract offer.

MEASURING CUSTOMER SATISFACTION:

Organizations need to retain existing customers while targeting non-customers. Measuring

customer satisfaction provides an indication of how successful the organization is at

providing products and/or services to the marketplace.

Customer satisfaction is an abstract concept and the actual manifestation of the state of

satisfaction will vary from person to person and product/service to product/service. The

state of satisfaction depends on a number of both psychological and physical variables

which correlate with satisfaction behaviors such as return and recommend rate. The level of


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satisfaction can also vary depending on other factors the customer, such as other products

against which the customer can compare the organization's products.

Work done by Parasuraman, Zeithaml and Berry (Leonard L) between 1985 and 1988

delivered SERVQUAL which provides the basis for the measurement of customer

satisfaction with a service by using the gap between the customer's expectation of

performance and their perceived experience of performance. This provides the researcher

with a satisfaction "gap" which is semi-quantitative in nature. Cronin and Taylor extendedthe disconfirmation theory by combining the "gap" described by Parasuraman, Zeithaml and

Berry as two different measures (perception and expectation) into a single measurement of

performance relative to expectation.The usual measures of customer satisfaction involve a

survey with a set of statements using a Likert Technique or scale. The customer is asked to

evaluate each statement in terms of their perception and expectation of performance of the

service being measured. Arguably, consumers are less complex than some of these surveys

tend to portend. They are basically in two simple states; satisfied or not satisfied. On or off,

just like a switch. A business can measure its customer satisfaction index by relating the

aggregates of satisfied customers versus dissatisfied customers.

METHODOLOGIES:

American Customer Satisfaction Index (ACSI) is a scientific standard of customer

satisfaction. Academic research has shown that the national ACSI score is a strong predictor

of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal

Consumption Expenditure (PCE) growth. On the microeconomic level, research has shown

that ACSI data predicts stock market performance, both for market indices and for


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individually traded companies. Increasing ACSI scores has been shown to predict loyalty,

word-of-mouth recommendations, and purchase behavior. The ACSI measures customer

satisfaction annually for more than 200 companies in 43 industries and 10 economic sectors.

In addition to quarterly reports, the ACSI methodology can be applied to private sector

companies and government agencies in order to improve loyalty and purchase intent. Two

companies have been licensed to apply the methodology of the ACSI for both the private

and public sector: CFI Group, Inc. applies the methodology of the ACSI offline, and

Foresee Results applies the ACSI to websites and other online initiatives. ASCI scores have

also been calculated by independent researchers, for example, for the mobile phones sector,

higher education, and electronic mail.

The Kano model is a theory of product development and customer satisfaction developed in

the 1980s by Professor Noriaki Kano that classifies customer preferences into five

categories: Attractive, One-Dimensional, Must-Be, Indifferent, Reverse. The Kano model

offers some insight into the product attributes which are perceived to be important to

customers. Kano also produced a methodology for mapping consumer responses to

questionnaires onto his model.

SERVQUAL or RATER is a service-quality framework that has been incorporated into

customer-satisfaction surveys (e.g., the revised Norwegian Customer Satisfaction

Barometer) to indicate the gap between customer expectations and experience.

J.D. Power and Associates provides another measure of customer satisfaction, known for its

top-box approach and automotive industry rankings. J.D. Power and Associates' marketing

research consists primarily of consumer surveys and is publicly known for the value of its

product awards. Other research and consulting firms have customer satisfaction solutions as

well. These include A.T. Kearney's Customer Satisfaction Audit process, which


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incorporates the Stages of Excellence framework and which helps define a companys status

against eight critically identified dimensions.

MEASURING CUSTOMER SATISFACTION IN THE BANKING INDUSTRY

Banking operations are becoming increasingly customer dictated. The demand for 'banking

supermalls' offering one-stop integrated financial services is well on the rise. The ability of

banks to offer clients access to several markets for different classes of financial instruments

has become a valuable competitive edge. Convergence in the industry to cater to the

changing demographic expectations is now more than evident. Bank assurance and other

forms of cross selling and strategic alliances will soon alter the business dynamics of banks

and fuel the process of consolidation for increased scope of business and revenue. The

thrust on farm sector, health sector and services offers several investment linkages. In short,

the domestic economy is an increasing pie which offers extensive economies of scale that

only large banks will be in a position to tap. With the phenomenal increase in the country's

population and the increased demand for banking services; speed, service quality and

customer satisfaction are going to be key differentiators for each bank's future success. Thus

it is imperative for banks to get useful feedback on their actual response time and customer

service quality aspects of retail banking, which in turn will help them take positive steps to

maintain a competitive edge.

The working of the customer's mind is a mystery which is difficult to solve and

understanding the nuances of what customer satisfaction is, a challenging task. This

exercise in the context of the banking industry will give us an insight into the parameters of

customer satisfaction and their measurement. This vital information will help us to build


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satisfaction amongst the customers and customer loyalty in the long run which is an integral

part of any business. The customer's requirements must be translated and quantified into

measurable targets. This provides an easy way to monitor improvements, and deciding upon

the attributes that need to be concentrated on in order to improve customer satisfaction. We

can recognize where we need to make changes to create improvements and determine if

these changes, after implemented, have led to increased customer satisfaction. "If you

cannot measure it, you cannot improve it." - Lord William Thomson Kelvin (1824-1907).

THE NEED TO MEASURE CUSTOMER SATISFACTION:

Satisfied customers are central to optimal performance and financial returns. In many places

in the world, business organizations have been elevating the role of the customer to that of a

key stakeholder over the past twenty years. Customers are viewed as a group whose

satisfaction with the enterprise must be incorporated in strategic planning efforts. Forward-

looking companies are finding value in directly measuring and tracking customer

satisfaction (CS) as an important strategic success indicator. Evidence is mounting that

placing a high priority on CS is critical to improved organizational performance in a global

marketplace.

With better understanding of customers' perceptions, companies can determine the actions

required to meet the customers' needs. They can identify their own strengths and

weaknesses, where they stand in comparison to their competitors, chart out path future

progress and improvement. Customer satisfaction measurement helps to promote an

increased focus on customer outcomes and stimulate improvements in the work practices

and processes used within the company. When buyers are powerful, the health and strength

of the company's relationship with its customersits most critical economic assetis its


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best predictor of the future. Assets on the balance sheetbasically assets of production

are good predictors only when buyers are weak. So it is no wonder that the relationship

between those assets and future income is becoming more and more tenuous. As buyers

become empowered, sellers have no choice but to adapt. Focusing on competition has its

place, but with buyer power on the rise, it is more important to pay attention to the

customer.

Customer satisfaction is quite a complex issue and there is a lot of debate and confusion

about what exactly is required and how to go about it. This article is an attempt to review

the necessary requirements, and discuss the steps that need to be taken in order to measure

and track customer satisfaction.

WHAT CONSTITUTES SATISFACTION?

The meaning of satisfaction: "Satisfied" has a range of meanings to individuals, but it

generally seems to be a positive assessment of the service.

The word "satisfied" itself had a number of different meanings for respondents, which can

be split into the broad themes of contentment/happiness, relief, achieving aims, achieving

aims and happy with outcome and the fact that they did not encounter any hassle:

Happy- Content

- Happy, pretty happy, quite happy


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- Pleased

- Walked out of there feeling good

- Walk out of there chuffed

- Grateful the service has been OK

Relieved- Thank God for that

- Phew

- At ease

- Can relax

- Stress reduction

- Secure

- Safe

- Go to the bank with a troubled mind and they sort it out for you

- Sleep at night without worrying what's going to go on

- Everything is sorted out in your mind and you're happy

- Secure, you know the money has been sorted out

- Knowing the money's going to be there


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Achieving aims- Achieving your aim or goal

- Getting what you went in for

- Achieve whatever it is you wanted to achieve

- Come away with a proportion of what you want

- Got what wanted in the end

- Got what you went down for

- Everything went according to plan, the way it should have done

- Met expectations

- To be unsatisfied is when you come out and you are still on the same level as

you were before.

Achieving aims, and happy with outcome- Happy with the results

- Happy with what you've got

- When you walk out you're happy they've sorted everything out and quickly


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- Happy with outcome

- Pleased with what's happened

- Content with what's been done for you

- A feeling of happiness having achieved your goal

- You go in there feeling down and the only way you are going to come out

satisfied is if they have been good to you.

No hassle- Not frustrated

- Everything goes smooth

- No hassle

- No problems

- No hassle getting there

- Straightforward

Clearly then there is some variation in understanding of the term. Some of the

interpretations fit with the definitions used in much of the service quality and satisfaction

literature, where satisfaction is viewed as a zero state, merely an assessment that the serviceis adequate, as opposed to "delight" which reflects a service that exceeds expectations.

However, most respondents have more positive interpretations of the term. These questions

allow us to identify priorities for improvement by comparing satisfaction with stated (overt)


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importance, comparing satisfaction with modeled (covert) importance (from identifying key

drivers of overall satisfaction), as well as respondents' own stated priorities.

SERVICE QUALITY AND CUSTOMER SATISFACTION:

There is a great deal of discussion and disagreement in the literature about the distinction

between service quality and satisfaction. The service quality school view satisfaction as an

antecedent of service quality - satisfaction with a number of individual transactions "decay"

into an overall attitude towards service quality. The satisfaction school holds the oppositeview that assessments of service quality lead to an overall attitude towards the service that

they call satisfaction. There is obviously a strong link between customer satisfaction and

customer retention. Customer's perception of Service and Quality of product will determine

the success of the product or service in the market. If experience of the service greatly

exceeds the expectations clients had of the service then satisfaction will be high, and vice

versa.. In the service quality literature, perceptions of service delivery are measured

separately from customer expectations, and the gap between the two provides a measure of

service quality.


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TITLE OF THE STUDY:

A study on customer satisfaction in terms of service at HDFC Bank, Bangalore.

STATEMENT OF THE PROBLEM:

The expectations of the customers influence their buying behavior. The customers

relate this expectation to the quality of service provided by the banks. The level of

expectation differs from person to person but everyone wants the banks to provide the

services which can satisfy their needs to their expected level or to a higher level so as to

offer them a higher satisfaction. The level of satisfaction of customers is affected by some

other attributes also other than the quality of service such as their experience with the bank

employees etc. As there is a huge competition in the banking sector in India, the customersatisfaction is an important factor for the success of the banks. So with this background an

attempt has been made to study the satisfaction of the customers of HDFC Bank taking into

consideration some important attributes which customers consider for rating their

satisfaction.


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OBJECTIVES OF THE STUDY:

To identify the major attributes of customer satisfaction. To study customer perception about HDFC Bank Ltd. To identify and study the various ways of ensuring customer satisfaction adopted by

HDFC Bank Ltd.

SCOPE OF THE STUDY:

The scope of the study is confined to measure the customer satisfaction at HDFC Bank.

This study is based on sample survey.

SIGNIFICANCE OF THE STUDY:

Satisfied customers are central to optional performance and financial returns.

Business organizations have been elevating the role of the customer to that of a key

stakeholder over the past 20 years. Customers are viewed as group whose satisfaction with

the enterprise must be incorporated in strategic planning efforts. Forward-looking

companies are finding value in directly measuring customer satisfaction as an important

strategic success indicator.

With better understanding of customers perception, companies can determine the actions

required to meet the customers needs.


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RESEARCH DESIGN:

1. RESEARCH METHODOLOGY:The research methodology would be descriptive.

2. DATA COLLECTION:The data would be collected from primary source through questionnaires.

3. DATA SOURCE:Both primary and secondary sources of data will be used. The major type of

information used is primary data. This is done through primary survey. The literature

review is a secondary data type. The sources include books, periodicals, websites etc.

LIMITATIONS OF THE STUDY:

This study is geographically restricted to Bangalore city only. Findings are based on sample survey through questionnaires. Hence there is a scope for the respondents to be biased or pretentious.


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COMPANY PROFILE:

OVERVIEW AND PROFILE OF HDFC BANK:

The Housing Development Finance Corporation Limited (HDFC) HDFC Bank Ltd is a

major Indian financial services company based in India, incorporated in August 1994, after

the Reserve Bank of India allowed establishing private sector banks. The Bank was

promoted by the Housing Development Finance Corporation, a premier housing finance

company (set up in 1977) of India. HDFC Bank has 1,780 branches and over 5,231 ATMs,

in 883 towns and cities in India, and all branches of the bank are linked on an online real-

time basis. As of 31st March 2010 the bank had total assets of US$ 39.723 billion. For the

fiscal year 2009-2010, the bank has reported net profit of Rs 3,032 crore. Total annual

earnings of the bank reached Rs 21,158 crore. HDFC Bank was incorporated in 1994 by

Housing Development Finance Corporation Limited (HDFC), India's largest housing

finance company. It was among the first companies to receive an 'in principle' approval

from the Reserve Bank of India (RBI) to set up a bank in the private sector. The Bank

started operations as a scheduled commercial bank in January 1995 under the RBI's

liberalization policies.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


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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.

BUSINESS FOCUS:

HDFC Banks mission is to be a World-Class Indian Bank. 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 banks risk appetite. The banks are committed to maintain

the highest level of ethical standards, professional integrity, corporate governance and


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regulatory compliance. HDFC Banks business philosophy is based on four core values

Operational Excellence, Customer Focus, Product Leadership and People.

MANAGEMENT:

Mr.C M Vasudev is the Non-Executive Chairman of the Bank effective July 6, 2010. The

Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years and

before joining HDFC Bank in 1994 was heading Citibanks operations in Malaysia. Mr.

Aditya Puri is the Economic Times Business Leader 2010 The Banks 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.

TECHNOLOGY USED IN HDFC BANK:

In the era of globalization each and every sector faced the stiff competition from their rivals.

And world also converted into the flat from the globe. After the policy of liberalization and

RBI initiatives to take the step for the private sector banks, more and more changes are

taking the part into it. And there are create competition between the private sector banks and

public sector bank. Private sector banks are today used the latest technology for the different

transaction of day to day banking life. As we know that Information Technology plays the


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vital role in the each and every industry and gives the optimum return from the limited

resources. Banks are service industries and today IT gives the innovative Technology

application to Banking industries. HDFC BANK is the leader in the industries and today IT

and HDFC BANK together combined they reached the sky. New technology changed the

mind of the customers and changed the queue concept from the history banking transaction.

Today there are different channels are available for the banking transactions HDFC BANK

is the very consistent player in the new private sector banks. New private sector banks to

withstand the competition from public sector banks came up with innovative products and

superior service.

HDFC BANK PRODUCT AND CUSTOMER SEGMENTS:

LOAN PRODUCT:

Centralized Processing

Units

Derived Economies of scale

Electronic Straight Through

Processing

Reduced Transaction Cost

Data Warehousing , CRM Improve cost efficiency,

Cross sell

Innovative Technology

Application

Provide new or superior

products


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Personal Loans

Smart Draft

Home loans

Two Wheeler Loans

New Car Loans

Used Car Loans

Cash Back Loans

Car N Cash Loans Loan Against Gold

Educational Loan Loan Against Securities

Loan Against Property

Loans Against Rental Receivables


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Health Care Finance

Retail Agri Loans

Tractor Loans

Commercial Vehicle Finance

Construction Equipment Finance

Warehouse Receipt Loans

Construction Equipment Finance

DEPOSIT PRODUCT:

Savings Account

Regular Savings Account

Savings Plus Account Senior Citizens Account

Institutional Savings Account


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Salary Account

Current Account

Fixed Deposits

Demat Account

Safe Deposit Lockers

Recurring Deposit

INVESTMENTS AND INSURANCE:

Wealth Advisory Services

Mutual Funds

Tax Planning

Life Insurance

General Insurance


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Health Insurance

Bonds

Equities & Derivatives

Mudra Gold Bar

Mudra Silver Bar

CARDS:

Credit Cards

Debit Cards Prepaid Cards

PAYMENT SERVICES:

Net Safe

IVR 3D Secure

Merchant Services


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Prepaid Mobile Recharge

BillPay

Visa BillPay

PayNow

Register & Pay

InstaPay

DirectPay

Visa Money Transfers E-Monies National Electronic Funds Transfer

Online Payment of Excise & Service Tax

Online Payment of Direct Tax

ACCESS TO BANK:

Net Banking


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Credit Cards Online

Phone Banking

InstaAlerts

MobileBanking

ATM

OneView

Email Statements

Branch Network

FOREIGN EXCHANGE AND TRADE SERVICES:

Travellers Cheques

Foreign Currency Cash

ForexPlus card

Foreign Currency Drafts


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Remittances

Forex service Branch Locater

WHOLESALE BANKING:

The banks target market ranges from large, blue-chip manufacturing companies in the

Indian corporate to small & mid-sized corporates and agri-based businesses. For these

customers, the Bank provides a wide range of commercial and transactional banking

services, including working capital finance, trade services, transactional services, cash

management, etc. The bank is also a leading provider of structured solutions, which

combine cash management services with vendor and distributor finance for facilitating

superior supply chain management for its corporate customers. Based on its superior

product delivery / service levels and strong customer orientation, the Bank has made

significant inroads into the banking consortia of a number of leading Indian corporates

including multinationals, companies from the domestic business houses and prime public

sector companies. It is recognized as a leading provider of cash management and

transactional banking solutions to corporate customers, mutual funds, stock exchange

members and banks.

RETAIL BANKING SERVICES:


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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. 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. 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 areasForeign 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


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treasury products are provided through the banks 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 managing the returns and market risk on

this investment portfolio.

BUSINESS MIX:

HDFC Bank is a consistent player in the private sector bank and have a wellbalanced product and business mix in the Indian as well as overseas markets.

Customer segments (retail & wholesale) account for 84% of Net revenues ( FY2010)

Higher retail revenues partly offset by higher operating and credit costs.

Equally well positioned to grow both segments.

BUSINESS STRATEGY:

HDFC BANK mission is to be "a World Class Indian Bank", benchmarking themselves

against international standards and best practices in terms of product offerings, technology,


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service levels, risk management and audit & compliance. The objective is to build sound

customer franchises across distinct businesses so as to be a preferred provider of banking

services for target retail and wholesale customer segments, and to achieve a healthy growth

in profitability, consistent with the Bank's risk appetite. Bank is committed to do this while

ensuring the highest levels of ethical standards, professional integrity, corporate governance

and regulatory compliance. Continue to develop new product and technology is the main

business strategy of the bank. Maintain good relation with the customers is the main and

prime objective of the bank.

HDFC BANK BUSINESS STRATEGY EMPHASIZES THE FOLLOWING:

Increase market share in Indias expanding banking and financial services industryby 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 moreproducts to more customers and to control operating costs.

Maintain current high standards for asset quality through disciplined credit riskmanagement.

Develop innovative products and services that attract the targeted customers andaddress inefficiencies in the Indian financial sector.

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

Focus on high earnings growth with low volatility.


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SWOT ANALYSIS:

The overall evaluation of the companys Strength, Weakness, Opportunities and Threats is

called as SWOT Analysis. The external environment analysis of any business will give you

the opportunities and threats facing the business. The external environment consists of two

parts:

1) MACRO ENVIRONMENT: Demographic, Economic, Technology, Political-legal,Socio-cultural

2) MICRO ENVIRONMENT: Customers, Competition, Distributors, Suppliers.

The Internal Environment Analysis will give you the strength and weakness of the business.

STRENGTH:

HDFC Bank has the right strategy for the right products.


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Superior customer service vs. competitors. Great Brand Image. Products have required accreditations. High degree of customer satisfaction. Good Work place.

Lower response time with efficient and effective service. Dedicated workforce aiming at making a long-term career in the field.

WEAKNESS:

Some gaps in range for certain sectors. Customer service staff needs training. Sectoral growth is constrained by low unemployment levels and competition for

staff.

Processes and systems, etc. Management cover insufficient.

The External Environmental Analysis will give you the opportunities and threats of the

business.

OPPORTUNITIES:

Profit margins will be good.


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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.

MILESTONES IN THE HISTORY:

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

Indian Bank". They realized that only a single-minded focus on product quality and service

excellence would help us get there. Today, they are proud to say that they are well on our

way towards that goal.

It is extremely gratifying that their efforts towards providing customer convenience have

been appreciated both nationally and internationally.


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AUGUST 30, 1994: Company Incorporated; Our Bank received "in principle" RBIs

approval to start a commercial Bank.

JANUARY 5, 1995: Received Banking License and entered into strategic alliance with

National Westminster Bank group.

JANUARY 16, 1995: First Branch inaugurated (Ramon House, Churchgate).

FEBRUARY 18, 1995: Corporate Office and a full service Branch at Sandoz House, Worli

inaugurated by the then Union Finance Minister, Dr. Manmohan Singh.

MARCH 14, 1995: HDFC Bank launches its IPO of Rs.500 million (5,00,00,000 equity

shares at Rs.10 each at par) eliciting a record 55 times oversubscription.

MAY 19, 1995: Listing in the Bombay Stock Exchange.

MAY 20, 1995: First AGMat Birla Matushri Sabhagar, Marine Lines, Mumbai.

NOVEMBER 8, 1995: Listing in the National Stock Exchange.

1995-1996:

Total Balance sheet crosses Rs.10 billion (Rs. 1000 crore) Appointed clearing bank by the NSCCL heralding the genesis of what was to become

a major "capital markets infrastructure" business.

1996-1997:


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Declared maiden dividend of 8% on equity shares for year end March 31, 1997. Launched retail investment advisory services. Over 19000 deposit accounts and adding 2500 new accounts per month.

1997-1998:

Entered into an agreement with NSDL for Demat. Launched 1st retail lending product - Loans against shares. ROE crossed 20% for financial year ended March 31, 1998 at 23.9%. Our Branch network touched 50. Launched full scale telephone banking in Mumbai and Delhi. Bank appointed sub custodian by Lloyds Bank. Entered into MOU with Ahmedabad Stock Exchange to provide Clearing Bank

services.

1998-1999:

Became part of the MasterCard/Cirrus ATM network and tied up with AmericanExpress to provide ATM cash access to its card members.

Our DP (Depository Participant) business witnessed phenomenal growthtotalinvestor accounts touched 50,000 as on March 31, 1999.

Became the countrys leading provider of cash clearing and settlement services toStock Exchanges (NSE and Mumbai, Ahmedabad, Calcutta Stock Exchanges.


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Launched online real time netbanking. Launched first international debit card in India.

1999-2000:

Times Bank amalgamation on Feb 26, 2000. First Bank in India to launch Mobile Banking on January 1, 2000.

2000-2001:

Focused offering for NRI customers launched. 14 dedicated NRI Centers to cater tothem.

2001-2002:

Listing in the New York Stock Exchange (July 20, 2001). First Bank in India to get ISO 9001:200 Certification for Depository services at the

Central processing Unit and backed processing of retail liabilities and direct banking

operations.

ISO 9001:2000 certification for Custodial Services.


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2003-2004:

Credit card launched in over 100 citiescredit card base touches 1 million.

2005-2006:

Womens Debit Card launched March 2006.

2007-2008:

Centurion Bank of Punjab merged with HDFC Bank.

2008-2009:

Dec 12, 2008 Tie up with Postal Department to extend rural reach.

2009-2010:

Dec 21, 2009: Kanjur Marg Office inaugurated by Mr. Deepak Parekh HDFCChairman and Mr. Aditya Puri, our MD.

Our 4000th ATM launched.


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2010-2011:

Our Intensive Rural Campaign launched with 1st Mega Loan Mahotsav inPimpalgaon in Maharashtra.

First Bank to retail silver bars in India.

Our 5000th ATM launched.

AWARDS:

2011:

IDC FIIA Awards 2011 Excellence in Customer Experience

2010:

Outlook Money 2010 Awards Best Bank

Businessworld Best Bank Awards 2010 Best Bank (Large)

Teacher's Achievement Awards 2010

(Business)

Mr. Aditya Puri

The Banker and PWM 2010 Global

Private Banking Awards

Best Private Bank in India


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Economic Times Awards for Corporate

Excellence 2010

Business Leader of the Year - Mr.

Aditya Puri

Forbes Asia Fab 50 Companies - 5th year in a row

NDTV Business Leadership Awards

MIS Asia IT Excellence Award 2010

Best Private Sector Bank

BEST BOTTOM-LINE I.T. Category

Dun & Bradstreet Banking Awards

2010

Overall Best Bank Best Private Sector Bank Best Private Sector Bank in

SME Financing

Institutional Investor Magazine Poll HDFC Bank MD, Mr. Aditya Puri

among "Asian Captains of Finance

2010"

IDRBT Technology 2009 Awards Winner :

1) IT Infrastructure

2) Use of IT within the Bank

Runners-up:

IT Governance (Large Banks)

ACI Excellence Awards 2010 Highly Commended - Asia Pacific

HDFC Bank


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FE-EVI Green Business Leadership

Award

Best performer in the Banking

category

Celent's 2010 Banking Innovation

Award

Model Bank Award

Avaya Global Connect 2010 Customer Responsiveness Award -

Banking & Financial Services

category

Forbes Top 2000 Companies Our Bank at 632nd position and

among 130 Global High Performers

Financial Express - Ernst & Young

Survey 2009-10

Best New Private Sector Bank Best in Growth Best in strength

Asian Banker Excellence Awards 2010 Best Retail Bank in India Best in M&A Integration Technology Implementation

The Asset Triple A Awards Best Cash Management Bank in India


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Euromoney Private Banking and

Wealth Management Poll 2010

1) Best Local Bank in India (second

year in a row)

2) Best Private Banking Services

overall (moved up from No. 2 last

year)

Financial Insights Innovation Awards

2010

Innovation in Branch Operations -

Server Consolidation Project

Global Finance Award Best Trade Finance Provider in India

for 2010

Banking Technology Awards 2009 1) Best Risk Management Initiative

and

2) Best Use of Business Intelligence.

SPJIMR Marketing Impact Awards

(SMIA) 2010

2nd Prize

Business Today Best Employer Survey Listed in top 10 Best Employers in the

country

CUSTOMER SATISFACTION:

Customer satisfaction is equivalent to making sure that product and service performance

meets customer expectations. It is the perception of the customer that the outcome of a


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business transaction is equal to or greater than his/her expectation. Customer satisfaction

occurs when the acquisition of products and /or services provides a minimum negative

departure from expectations when compared with other acquisitions and when the marginal

utility of a transaction is equal to or greater than preceding acquisitions. Customer

satisfaction occurs when the perception of the reward from the purchase of goods or

services by the customer meets or exceeds his/her perceived sacrifice. The perception is a

consequence of matching past purchase and consumption experience with the current

purchase.

CUSTOMER SERVICE AND SATISFACTION:

When we talk about customer service and/or satisfaction, we talk about creativity.

Creativity allows us to handle or diffuse problems at hand or later on rather in the process of

conducting the everyday business. We talk about how, or what, does the organization have

to do to gain not only the sale but also the loyalty of the customer. We want to know the

payoff of the transaction both in the short and long term. We want to know what our

customers Want? We want to know if our customers are satisfied. Satisfaction, Of course,

means that what we delivered to a customer met the customers Approval. We want to know

if customers are delighted and willing to come back, and so on. Fleiss 2 and Feldman 3

present examples of that delightfulness in their writings. Fleiss has written about Ben and

Jerrys ice cream and Feldman has discussed excellence in a cab ride. As important as

delightfulness is, some of us minimize it, or even totally disregard it. At this point, we fail.


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We must understand customer expectation levels concerning quality. We must also

understand the strategy for customer service quality, and next we must understand the

measurement and feedback cycles of Customer satisfaction. The customer is the person or

unit receiving the output of a process on the system. In fact, it is worth emphasizing that a

customer can be the immediate, intermediate, or ultimate customer. Also, a customer may

be a person or persons, or a process or processes. Customer satisfaction, however, is when

the customer is satisfied with a product/service that meets the customers needs, wants, and

expectations.

CUSTOMER SATISFACTION SURVEYS HELP TO:

Improve customer, client, or employee loyalty.

React quickly to changes in the market. Identify and capitalize on opportunities. Beat the competition. Retain or gain market share. Increase revenue. Reduce costs.

COMPANYS EFFORT TO INCREASE CUSTOMER SATISFACTION:

Promote good and fair banking practices by setting minimum standards in dealingwith customers.

Increase transparency so that the customers can have a better of what you canreasonably expect from the services.


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Promote a fair and cordial relationship between the customer and the bank. Foster confidence in the banking system.

TO HELP THE CUSTOMER TO UNDERSTAND HOW OUR FINANCIAL

PRODUCTS AND SERVICES WORK BY:

Giving the customer information about the bank in any one or more of the followinglanguages: Hindi, English or the appropriate local language.

Ensuring that the Banks advertising and promotional literature is clear and notmisleading.

Ensuring that the customers are given clear information about the Banks product andservices, the terms and conditions and the interest rates/service charges.

Giving you information on what are the benefits to the customers, how the customerscan avail of the benefits, what are their financial implications and whom they can

contact for addressing their queries.

TO HELP THE CUSTOMER TO USE THEIR ACCOUNT OR SERVICE BY:

Providing you regular appropriate updates. Keeping the customers informed about the changes in the interest rates, charges or

terms and conditions.

BEFORE BECOMING A CUSTOMER THE BANK WILL:

8/3/2019 Customer Satisfaction in Terms

customer satisfaction in terms of service in hdfc bank

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