RETAIL BANKING in HDFC BANK

PROJECT SUBMITTED TO THE UNIVERSITY OF MUMBAI FOR THE

PARTIAL FULFILLMENT OF THE DEGREE OF

BACHELOR OF COMMERCE

BANKING & INSURANCE

BY

MASTER GURPREET SINGH GURMUKH SINGH

ROLL NO - 72014

UNDER THE GUIDANCE OF

MRS. ABHA MAHESHWARI

DEPARTMENT OF COMMERCE

TILAK COLLEGE OF SCIENCE & COMMERCE

NAVI MUMBAI - 400703

YEAR 2016-2017

INTRODUCTION

Retail banking also known as Consumer Banking is the provision of services by a bank to individual consumers, rather than to companies, corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.

Retail banking encompasses the services offered to consumers by commercial banks. The term “retail" refers to the almost storefront-shopping nature of commercial banking services.

Retail banking is, however, quite broad in nature – it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services.

Retail banking refers to provision of banking services to individuals and small business where the financial institutions are dealing with large number of low value transactions. This is in contrast to wholesale banking where the customers are large, often multinational companies, governments and government enterprise, and the financial institution deal in small numbers of high value transactions.

The concept is not new to banks but is now viewed as an important and attractive market segment that offers opportunities for growth and profits. Retail banking and retail lending are often used as synonyms but in fact, the later is just the part of retail banking. In retail banking all the needs of individual customers are taken care of in a well-integrated manner.

NEED AND IMPORTANCE OF RETAIL BANKING

Traditional lending to the corporate are slow moving along with high NPA risk, treasure profits are now loosing importance hence Retail Banking is now an alternative available for the banks for increasing their earnings. Retail Banking is an attractive market segment having a large number of varied classes of customers. Retail Banking focuses on individual and small units. Customize and wide ranging products are available. The risk is spread and the recovery is good. Surplus deployable funds can be put into use by the banks. Products can be designed, developed and marketed as per individual needs.

Today’s retail banking sector is characterized by three basic characteristics:

Multiple products (deposits, credit cards, insurance, investments and securities)

Multiple channels of distribution (call center, branch and internet) Multiple customer groups (consumer, small business and corporate).

SCOPE OF STUDY:

The scope of this research is to identify the banking services of HDFC Bank. This research is based on primary and secondary data. This study only focuses on the dimensions of the banking services rather it aims to understand the skill of the company in the area of retail banking that shows the areas which require improvement and which are performing well. This study was done taking two branches of HFDC in Mumbai. The survey was restricted to the bank customers of HDFC only.

OBJECTIVES:

To understand Optimization of retail banking channels.

To explore various schemes and services offered by HDFC Bank.

To analyze satisfaction level of customers for various services.

To suggest strategies for improvement in Customer Service.

To estimate the future growth of Indian retail banking.

P RODUCT RANGE OF RETAIL BANKING IN HDFC BANK

New Private sector banks have great resource mobilizing and asset expansion capabilities which cannot be undermined by the fact these banks volume. Which have taken decades of option for the old private sector bank to build. These bank are dominating the market with new product, services and ideas. Information technology has enabled many private banks are emerging strong in banking and financial services with the marketing of new product and service based on technological capabilities.

In the present scenario HDFC bank Ltd. is a fast emerging bank. Now the emergence of the retail concept of the banking customers are expecting more and better services. Today customer prefer private banks because they can have personal relationship with the bank personnel, with lesser hierarchy and It is possible for these banks to forget closer ties with customers also.

HDFC Bank provide the following service :-

1.         Current A/C                                                                   

2.         Loan

3.         Corporate Salary A/C                                                          

4.         Online A/C

5.         Debit Card                                                                            

6.         Phone Banking

7.         Intercity/ Inter Branch Banking                                            

8.         Net Banking

9.         Bill Pay

LITERATURE REVIEW

The present study is accordingly, devoted to a detailed probe into the retail banking inIndia. It also focuses to make a comparative study, on the basis of quality dimensions,between public sector banks and private sector banks. The study has set its scope toevaluate the nature, prospects and challenges as well as organization and working ofretail banking in India.

Before embarking upon the actual conduct of the study, a survey of availableand pertinent published work on the subject of this study is made in order to have aninsight into the depth of Retail Banking and also the specific aspects covered in thework. The Review of Literature presented below recounts the work so far done in thefield of present study, the nature of the work, the aspects dealt with as well as briefoutcome emerging from the studies.

1. Bayel & Janalgie (1994) had set their goals of services quality dimensions inRetail Banking. First the study investigates & identifies the services qualitydimensions pertaining to financial services. Secondly, it examines therelationship between perception accorded to these dimensions & the overall attitude towards the banking. Thirdly, it examines the important discriminationin service quality factors among the different group of banks by pairedcomparison.

2. The market research report by RNCOS (2006), entitled as “Booming IndianRetail Banking Sector” provides extensive research and rational analysis of theopportunities, challenges and drivers critical to the growth of the retailbanking Industry in India. The future overview of the industry in terms ofasset size, number of financial cardholders and various other importantfeatures. The future forecast discussed the prospects of different arms ofbanking Industry, including rural banking by bank assurance, financial cards,mobile banking and role of technology in retail banking, pension fund and futurecourse of action or strategies for Retail Banking.

3. Capegemini & Efma (2007) in the article entitled as, “Transforming OperatingModels in Retail Banking” focuses why bank managers went for transforming operating models, increasing revenue growth, improving

customer servicesand cutting costs. The major findings of this article conducted by survey relateto what Retail Banking operating models look like today and what drives theirinformation and what these models will look like in five years in the area ofretail banking operations conducted. The retail banks managers would focuson five key success factors to globalize their operating models.Developinginternational governance, ensuring consistency with market and productstrategy investing upfront in IT transformation building a very thorough HRvision and focusing on execution quality.

4. A.B Arnoud (2008) in this article, entitled as, “Review of Competition in theDutch Retail Banking Sector” presents the details of retail banking sector inservice quality quoting the model of service in Netherland that has one of theworld’s most concentrated banking sectors. This document explores keypractices and regulatory issues for the Dutch Retail Banking Sector which isfollowing the concept of cross-selling to make consumer banking profitable.The study in general gives the overall experience of retail banking consumersegment in the Netherland.

5. Manoj Kamar Joshi (2008) in his article entitled as “Customer Service inRetail Banking in India” deals with the service aspects of banks in retailbanking. It attempts to highlight that customer service of high standard andquality implemented through the use of modern technology helps banks tosucceed in the competitive world of retail banking. Banks should also providecomprehensive information to the borrowers with regard to the fees / chargeslevied while processing the loans. Banks, by standardizing the procedures,shall make the customer’s visit to banks hassle free and direct them to the rightofficials to save the customers from making time-consuming enquiries.

6. Bahia and Natel (2009) proposed a specific scale, the BSQ (Bank ServiceQuality) for measuring perceived service quality in retail banking consisting ofsize dimensions: effectiveness and assurance, access price, tangibles, serviceportfolio and reliability.

LIMITATIONS OF THE STUDY

1. It was difficult to collect data from all over the country on account ofrestraints of time and finance. Yet best endeavors have been made to collectlatest information and data from as many sources as have been possible.

2. The study has used convenience sample. Banks are not willing to share theinformation about customer’s profile because of privacy policies.

3. As the sample size is very small, geographical and regional differences couldnot be made.

4. Because of the time constraint, this study includes only few districts within Mumbai

RESEARCH METHODOLOGY

DATA SOURCE:

Primary Data:

The primary data was collected by the means of a survey. Questionnaires were prepared and customers of the banks ate two branches were approached to fill up the questionnaires. The Questionnaires contains 20 questions which reflect on the type and quality of services provided by the banks to the customers. The response of the customer is recorded on the grade scale of Agree, Strongly Agree, Uncertain, Disagree and Strongly Disagree for each question. The filled up information was later analyzed to obtain the required interpretation and the findings.

Secondary Data:

Inorder to have a proper understanding of the service quality of bank a depth study was done from the various sources such as books, a lot of data is also collected from the official websites of the banks and the articles from various search engines like google, yahoosearch and wiki.com