advanced project report

A

Project Study Report

On

Training undertaken at

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

Titled

“COMPARATIVE ANALYSIS OF INVESTMENT AVENUES AND

RESEARCH ON RESOURCE MOBILISATION”

Submitted in partial fulfillment for the

Award of degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted By: - Submitted To: -

Puneet Rawat Ms. Mahima Rai

MBA Semester 3rd H.O.D ~ AIMS

2008-2010

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APEX INSTITUTE OF MANAGEMENT & SCIENCE, JAIPUR

(Affiliated to University of Rajasthan & Rajasthan Technical University)

Approved by AICTE, Ministry of HRD, Govt. of India

PREFACE

Training is an important part of our Management curriculum. Th e MBA courses help a

student in getting acquainted with the manner in which his/her knowledge is being

practically used at a large scale. Hence, students switch from the process of learning to

implementing his/her knowledge, him /her abrupt change. This Training reports describes

each and every detail of work I performed to make a successful competition of the project.

This report also gives you a brief idea of how I moved ahead step by step reaching to

specify height and ultimate completing the goal.

The aim of this project is to develop awareness among the people regarding Financial

Avenues especially Fixed Deposits.

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ACKNOWLEDGEMENT

I express my sincere thanks to my Project guide at HDFC, Mr. NEERAJ PACHOURI,

Designation Officer Operation, for guiding me right from the inception till the successful

completion of the project. I sincerely acknowledge him for extending their valuable

guidance, support for literature, critical reviews of project and the report and above all the

moral support he had provided to me with all stages of this project.

I would like to extend my deep sense of gratitude towards, Mr. AMIT DAGA (CA),

Manager~ Operation & Resources, HDFC Ltd., for his help and guidance.

I would also thank to the supporting staff, for their help and cooperation throughout the

project.

In Last I would remain ever thankful to my family, friends and everyone who may have

helped me directly or indirectly during the course of this project.

(Signature of Student)

PUNEET RAWAT

AIMS - JAIPUR

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EXECUTIVE SUMMARY

The following report is a part-fulfillment of the work done at HDFC Ltd. as a management

trainee. The report is based on the project titled “Comparative Analysis of Investment

Avenues and Research on Resource Mobilization”. The area of work for this project is

“Market Research for the business of Fixed Deposits”.

The company HDFC Ltd. is majorly into the business of home loans and as part of its fund

raising process for disbursement of home loans, it has quite recently started to accept fixed

deposits from the public.

In this way, the company can successfully reduce its cost of operation. However, since the

present contribution of the fixed deposits to the total amounts of loan disbursed is merely

30% therefore the main purpose of undertaking this project revolves around to increase the

business of FDs for the company.

Under Competitive Analysis – 14 Banking Sector competitors and 10 Non-Banking Sector

competitors have been studied focusing upon – the product features, various schemes

under the same product, Rate of Interest, Commission rates, Incentive Plans etc. and then

basing on which analysis have been drawn.

The source of data was through personal visits to each of the institution and was based on

open-ended interview sessions with officer in charged with the department of fixed deposits.

The analysis part is inclusive of – Cross Tabulation Comparisons, Tick Box Comparisons

and a 3-Step analysis process constituting – Identifying key problematic area in the

operation of the business, To find a rational solution concerning the problem and finally to

shape the solution according to the feasibility criteria of the company considering its

limitations and constraints.

Under the study of Active KPs, the source of data was personal interaction with the key

partners and filling of questionnaires, so designed. The analysis from the study of active

KPs includes – identifying the key problematic areas that they KPs face in their dealing with

the company, the strength areas of the company and perception mapping analysis.

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CONTENT TABLE

Preface

Acknowledgement

Executive Summary

Contents

1. Introduction to the Industry 7

2. Company Profile 15

3. Research Methodology 23

3.1 Title of the Study

3.2 Duration of the Project

3.3 Objective of Study

3.4 Type of Research

3.5 Sample Size and Method of selecting sample

3.6 Scope of Study

3.7 Limitation of Study

4. Facts and Findings 28

5. Analysis and Interpretation 55

6. SWOT Analysis 66

7. Conclusion 68(a)

8. Recommendation 68

9. Suggestions 70

10. Appendix 72

11. Bibliography 78

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INTRODUCTION TO INVESTMENT INDUSTRY

India Financial Market promotes the savings of the economy, providing an effective channel

for transmitting the financial policies. It is a well-developed, competitive, efficient and

integrated financial sector. There are large numbers of buyers and sellers of the financial

product, the prices are fixed by the market forces of demand and supply within the Indian

Financial Market. The other markets of the economy assist the functioning of the financial

market in India.

FINANCIAL AVENUES

There are many types of financial investment avenues such as Insurance, Saving a/c’s,

Government bonds, Postal savings, Mutual funds and Shares/Stock Market, Fixed Deposits

etc. Every individual as got his own mode of investment and their own reasons of investing.

There are many more tools to invest and each & every investment avenue got its own

importance and returns. Various investment Avenues listed are:-

1. Insurance

2. Mutual funds

3. Bond market

4. Stock (Equities) Market

5. Foreign Exchange market

6. Money market

7. Commodity market

8. Real Estate market

9. Bullion Market

10. Fixed Deposits

1. INSURANCE

Insurance is a form of risk management, primarily used to hedge against the risk of a

contingent loss.

Insurance is a contract between an individual (Insured) & an insurance company (Insurer).

The insurance rate is a factor used to determine the amount to be charged for a certain

amount of insurance coverage, called the premium.

In Insurance, in return for the payment of premium by the insured, the insurers pay the

financial losses suffered by the insured as a result of the occurrence of unforeseen events.

Insurance is defined as the equitable transfer of the risk of a loss, from one entity to

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http://en.wikipedia.org/wiki/Risk

http://en.wikipedia.org/wiki/Hedge_(finance)

http://en.wikipedia.org/wiki/Risk_management

another, in exchange for a premium, and can be thought of as a guaranteed small loss to

prevent a large, possibly devastating loss.

Insurance companies may be classified into two groups:

Life insurance companies, which sells Whole life assurance plan, Endowment

Assurance plan, term assurance plan, Plans for children, Pension plans etc

Non-life, General, Property/Casualty insurance companies, which sell other

types of insurance.

2. MUTUAL FUNDS

Mutual funds is a company (collective investments) that gathers (pools) money from many

investors and invests in stocks, short-term money market financial instruments, Equity,

Debentures, Bonds and other securities and distribute the proceeds as Dividends.

The Mutual Funds in India are handled by Fund Managers, also referred as the Portfolio

managers.

In India Mutual Funds are regulated by SEBI. The Share value of the Mutual Funds in India

is known as Net Asset Value per Share (NAV). The NAV is calculated on the total amount

of the Mutual Funds in India, by dividing it with the number of shares issued and

outstanding shares on daily basis.

TYPE/ SCHEMES OF MUTUAL FUNDS

The mutual fund schemes can be classified according to their Investment Objective:-

According Life Span

1. Open-Ended: - Funds whose units can be freely sold & purchased by investors.

a. These Funds are not listed in stock exchange & no. of MF’s are unlimited.

b. Provides instant liquidity as investor can redeem in matter of 2-3 days.

2. Close-Ended: - Funds have fixed no. of units & fixed tenure (3, 5, 10, 15 yrs).

a. After maturity units are redeemed or made open-ended.

b. Conservative approach; declare dividend annually or Semi-annually.

According Income Objectives

1. Growth Funds aim to provide capital appreciation over a long-term.

2. Income Funds provide regular & steady income viz. debenture, Bonds G-sec etc.

According Portfolio Objectives

Equity Funds are those that invest in Shares or Equity of companies.

Debenture Funds are those that invest in debenture of company.

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Balanced Funds are combination of both Stocks and Debentures. The aim is to

provide both Growth & Regular income also called as Ideal funds.

According Load Basis

1. Load Funds are those who charges commission for entry & exit. It means

commission is payable on purchase or sale of units of funds.

2. No-Load Funds are those that don’t charge a commission for Entry & Exit.

Special Schemes

Industry Specific schemes invest only in the industries specified in the offer

documents. Industry like Info Tech, FMCG etc.

Index Funds schemes uses particular index for investment such as BSE, NSE etc.

Exchange Trend Funds are a type of funds that aims to achieve the same return as

a particular market index.

Gold Trade Funds are schemes that invest in primarily Gold & its related

instruments.

3. BOND MARKET

The bond market (also known as the debt, credit, or fixed income market) is a financial

market where participants buy and sell debt securities, usually in the form of bonds.

"Bond market" usually refers to the government bond market, because of its size, liquidity,

lack of credit risk and, therefore, sensitivity to interest rates. Because of the inverse

relationship between bond valuation and interest rates, the bond market is often used to

indicate changes in interest rates or the shape of the yield curve.

Types of Bond markets

Securities Industry and Financial Markets Association classify the bond market into 5:-

1. Corporate

2. Government & agency

3. Municipal

4. Mortgage backed, asset backed, and collateralized debt obligation

5. Funding

4. STOCK MARKET

A stock market is a public market for the trading of company stock and derivatives at an

agreed price; these are securities listed on a stock exchange as well as those only traded

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privately.

India stock market offers a great opportunity to the investors as right now it is experiencing a

boom in many of its shares. The healthy banking and monetary services have secured the

investment possibilities in the Indian Stock Market to a large extent.

The Bombay Stock Exchange BSE, the oldest organization in Asia, gives information about

the prices of the shares of the Stock Market in India. The other organizations highlighting on

the share trading in the Indian Stock Market is National Stock Exchange of India (NSE).

The Nifty and the Sensex are the indicators which are the parameters denoting the prices of

the stocks of the major companies of the NSE and the BSE respectively.

SEBI~ Securities and Exchange Board of India which supervises the functioning of the Stock

markets in India.

The Indian Equity Market is also called as Indian share market or Indian stock market. The

forces of the market depend on monsoons, global funding flowing into equities in the market

and the performance of various companies.

SHARES: - A share is one of a finite number of equal portions in the capital of a company.

The income received from shares is called a Dividend, and a person who owns shares is

called a Shareholder.

Types of Shares

There are two types of shares under Indian Company Law:-

1. Equity shares mean that part of the share capital of the company which are not

preference shares.

2. Preference Shares means shares which fulfill the following 2 conditions.

It carries preferential rights in respect of Dividend at fixed rate.

It also carries preferential right in regard to payment of capital on winding up.

Types of Preference Shares

Cumulative or Non-Cumulative

Redeemable and Non- Redeemable

Participating Preference Share or Non-Participating Preference Shares

5. FOREIGN EXCHANGE MARKETS

The Foreign Exchange market is where currency trading takes place. It is where banks and

other official institutions facilitate the buying and selling of foreign currencies. FX transactions

typically involve one party purchasing a quantity of one currency in exchange for paying a

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quantity of another.

Presently, the FX market is one of the largest and most liquid financial markets in the world,

and includes trading between large banks, central banks, currency speculators, corporations,

governments, and other financial institutions. The average daily volume in the global foreign

exchange and related markets is continuously growing.

The foreign exchange market is unique because of

its trading volumes,

the extreme liquidity of the market,

its geographical dispersion,

Its long trading hours: 24 hours a day except on weekends.

6. MONEY MARKET

The money market is the global financial market for short-term borrowing and lending. It

provides short-term liquidity funding for the global financial system. The money market is

where short-term obligations such as Treasury bills, commercial paper and bankers'

acceptances are bought and sold.

The money market consists of financial institutions and dealers in money or credit who wish

to either borrow or lend. Money market trades in short-term financial instruments commonly

called "paper."

The core of the money market consists of banks borrowing and lending to each other, using

commercial paper, repurchase agreements and similar instruments.

The performance of the Indian Money Market is heavily dependent on real interest rate that

is the interest rate that is inflation adjusted. Though the money market is free from interest

rate ceilings, structural barriers and other institutional factors can be held responsible for

creating distortions in India Money Market.

7.COMMODITY MARKET

The vast geographical extent of India and her huge population is aptly complemented by the

size of her market. The broadest classification of the Indian Market can be made in terms of

the commodity market and the bond market. Here, we shall deal with the former in a little

detail.

The commodity market in India comprises of all palpable markets that we come across in

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our daily lives. Such markets are social institutions that facilitate exchange of goods for

money. The cost of goods is estimated in terms of domestic currency. India Commodity

Market can be subdivided into the following two categories:

Wholesale Market

Retail Market

8. REAL ESTATE MARKET

Real estate is a legal term, which refers to Immovable properties. The term real estate

covers land accompanied with anything perpetually attached to the land, for example

buildings, malls, commercial hubs etc.

Real Estate Market is in its full swing with residential developments, malls, commercial

centers, IT hubs. The demand for houses has increased with increase in population and the

real estate developers are building luxurious as well as affordable projects to meet this rising

demand. India is also a commercial hub and along with the IT centers, many shopping malls

and other recreational centers are coming up as well.

9. BULLION MARKET

The meaning of the word “Bullion” is a mass of precious metal, primarily ' gold & silver' that

can be cast into ' ingots ' or ' coins '. The defining attribute of bullion is that it is valued by its

mass and purity rather than by its face value as in the case of money. In short, the amount

of bullion owned by a nation is precisely the intrinsic valuation of the amount of gold

reserves that a country has owned.

It is used as an indicator of the wealth possessed by a nation. Needless to say that the

market is under the strict supervision of the Central Government.

Gold is having to compete with investment in stock market, industries, and a wide range of

durable consumer goods, the rural people till date prefer to invest in 22 carat jewellery.

In present day context, the following statements hold true:

Gold is being valued in India as a secondary source of investment after bank

deposits.

According to WGCR, India has the single largest market consumption of gold.

In many countries, people have been trusted Gold as abetter investments than bonds &

stocks especially when stock market falls abruptly, gold & silver an important & popular

investment due to the following reasons:

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Highly liquid & low trading commission

Good hedge against inflation

High prestige values (jewellery) & Offers convenient way of storing health.

Possess high degree of money’s worth.

Free from scams

10. FIXED DEPOSIT

FIXED DEPOSITS: - A Fixed Deposit defined as a Term Deposit which allows us to deposit

money for a fixed time period. When the deposit period elapses, the depositors get interest

on the amount deposited. The fixed deposit interest rates can be as high as 10.5% or more

but recently it dips to the 7-8% only. Just deposit your savings at a bank of your choice and

watch your money grow over time. Senior citizens prefer this investment as there are hardly

any hassles and problems in managing it. Persons interested in investment with the

objective of liquidity and mobility also find this investment very lucrative.

Assured return schemes have suddenly emerged as the most sought after investment

avenues among investors. This is not surprising given the extent to which investors have

lost their money in the recent crash in stock markets, properties, derivatives and certain

fixed income products; which has ultimately propelled investors to look for safer investment

options.

Various companies raise money through the route of company fixed deposits. The features

of all these deposits are same; the only difference is being the entity that is issuing the

deposit, so there will be a difference in the risk element for the investors in these deposits.

Fixed Deposit-REVIEW

A fixed deposit account allows one to deposit your money for a set period of time, thereby

earning a higher rate of interest in return. Fixed deposits also give depositor a higher rate of

interest than a savings bank account.

FDR’s- BENFITS

Variable deposits periods ranging from 12 months to 120 months in non-banks and

from 7 days to 10 years in banking institutes.

The FDs assures the repayment of accrued higher interest and principal amount.

The principle amount is safe in FDs as there is an investment avenue of very low risk

as compared to other investment option available in market.

Option to withdraw the deposit at any time before maturity without any difficulty.

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Deposit avail loans upto 75-90% of the principal.

Higher Safety: Ensures safety of money.

FDR’s – MINIMUM RANGE

The minimum deposit amount is Rs.5, 000/- in major banks and Rs.10, 000/- or more in non-

banking institutes and can be made in multiples of Rs.100/- or more-varies from company to

company Fixed Deposits.

FDR’s - ASSURANCE

There is fully safety in the case of banks as bank FD are insured under the Deposit

Insurance & Credit Guarantee Scheme Of India (DICG) in which deposit are insured upto

Rs.1Lakhs will be paid back to depositors but beyond that depends on financial position of

insolvent bank. Company Fixed Deposits are unsecured instruments, i.e. there are no

assets backing them up. It depends on the strength of the company and its ability to pay

back deposit at the time of its maturity. While investing in an NBFC, always remember to

first check out its credit rating. Also, beware of NBFCs offering ridiculously high rates of

interest.

RISKY FDR’s

Companies which pay a rate of interest higher than 11%, Companies which are not paying

regular dividends to its shareholders. New companies belonging to first generation of

promoters, which have yet to prove their creditworthiness. It is best to avoid private limited

companies, and partnership firms and other un-incorporated bodies. Such companies are

under no obligation to publish their balance sheets working results and it is, therefore, very

difficult to judge their performance.

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COMPANY PROFILE ~ HDFC LTD.

The “HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED” was incorporated

on October 17th, 1977 with the primary objective of promoting Home ownership by providing

Long-term Finance to households for their housing needs. HDFC was promoted with an

initial share capital of Rs. 100 million.

HDFC the pioneer of housing finance in India has assisted more than 3 million families to

own a home of their own, through housing loan approvals of over Rs.1, 647 billion. It has

consistently striven for and developed an excellent reputation for professionalism, integrity

and an impeccable record of customer friendly services. It has turned the concept of

housing finance for the growing middle class in India into a profitable, professionally

managed, world class enterprise.

HDFC’s main objective is to enhance residential housing stock and promote home

ownership. Another objective is to increase the flow of resources to the housing sector by

integrating the housing finance sector with the overall domestic financial markets.

HDFC offerings range from hassle-free home loans and deposit products, to property

related services and a training facility. HDFC is the owner corporation of a mighty empire.

It has 7 wholly owned and 10 other subsidiaries.

HDFC has Solid Financial Base it is proven only by that in March 2008, after deducting the

taxes the net profit is of Rs. 2436 crores however during the recession period in March 2009

it declines to 2282 Crores. HDFC balance sheet size exceeds to 1, 00,000 crores.

HDFC as a brand is a synonym of efficiency, which is reflected through the fact that it has

got lowest NPA (Non-Performing Assets) in the entire global economy at the rate of 0.84 %

and now according to the recent reports it decreases to 0.56% only.

HDFC enjoys an “AAA” credit rating from two most reputed credit rating companies of the

country – CRISIL and ICRA since past 15 Years; which is a commendable achievement in-

itself. This rating represents the ‘HIGHEST SAFETY’ as regards timely repayment of

principal & interest. Such ratings focus on the company’s attribute of a stable, consistent

and safe player.

HDFC has been recognized among India’s Best Managed Companies and today has

emerged as a financial conglomerate by promoting a bank, insurance companies (for life

and general), an asset management company, a realty company, a credit bureau and a real

estate venture capital company.

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HDFC has employee strength of 1490 (as on 31st March) includes professionals from the

fields of finance, law, accountancy, engineering and marketing; they are dedicated work-

personnel and always keen to serve their clients with their best of ability. It also has one of

the lowest turn-around of serving clients of about 15 minutes only as all the companies

processing is hassle-free, with no processing fees and minimum documentation is required.

It has a network of 280 offices across country, with 14 branches in the state of Rajasthan.

HDFC Ltd. believes in consistent performance which is created by the right combination of

these 4 features:

1. SAFETY

2. SECURITY

3. LIQIDITY

4. RETURN

SUBSIDIARIES & ASSOCIATES COMPANIES

HDFC Ltd is the parental companies under which there are so many subsidiaries & other co-

promoted companies works in different fields of finance.

1. HDFC Asset Management Co. Ltd

2. HDFC Bank

3. HDFC ERGO General Insurance Company Limited (formerly HDFC General

Insurance company Limited)

4. GRUH Finance ltd.

5. HDFC Mutual Fund

6. HDFC Standard Life Insurance Company

7. HDFC Venture Capital Ltd.

8. Other Companies Co-Promoted BY HDFC

1) HDFC Developers Ltd.

2) HDFC Holdings Ltd.

3) HDFC Investments Ltd.

4) Home Loan Services India Pvt. Ltd

5) HDFC Property ventures Ltd.

6) HDFC Realty Ltd.

7) HDFC Sales Private Limited

8) HDFC Subsidiary Life Insurance Co. Ltd

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9) HDFC Trustee Co. Ltd.

10)HDFC Ventures Trustee CO. Ltd.

HDFC LTD. - PRODUCT LINE

HDFC Ltd. basically deals with two main products

HDFC HOME LOANS

HDFC FIXED DEPOSITS

HDFC HOME LOANS

The business of HOME LOANS deals with sanctioning of loans against mortgage of the

property. HDFC earned an experience of 32 years in home loans & their loan product is

customised to provide solutions to customer unique concern.

TYPES OF HOME LOAN

1) Home Improvement Loan

2) Home Extension Loan

3) Short Term Bridging Loan

4) Land Purchase Loan

5) Existing Loan Customers

6) Loans to Professionals for Non Residential Premises Loan

7) Home Equity Loans

HDFC FIXED DEPOSITS

HDFC has instituted well-defined service standards for both Depositors and Deposit agents

(Key Partners). HDFC has been able to mobilise deposits from over 10 lakhs Depositors.

Outstanding deposits grew from Rs. 1,458 crores in March 1994 to 11,278 crores in March

2008. Much of this success can be attributed to its strong Brand Image, Superior Services,

Security and above all, the significant contribution made by HDFC's Deposit Agents. HDFC

has over 50,000 deposit agents and distributes all its retail savings (deposit) products

primarily through this channel.

The business of HDFC Fixed Deposits can be classified under as follows:-

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HDFC INDIVIDUAL DEPOSITS

Deposit s accepted directly from Individual or by the Key Partner for a Resident / Non-

Resident Individual, Minors through Guardian, Hindu undivided family.

1. FIXED RATE DEPOSITS

2. VARIABLE RATE DEPOSITS Variable Rate Deposit is a new addition to the wide

range of deposit products offered by HDFC to enable the depositors to take

advantage of movements in interest rates.

Following options are available under both Fixed Rate & Variable Rate Deposit –

a. Annual Income Plan

b. Monthly Income Plan

c. Non-Cumulative- Quaterly Plan

d. Non-Cumulative- Half Yearly Plan

e. Cumulative Deposits

FEATURES OF INDIVIDUAL DEPOSITS:-

1. DEPOSITS CAN BE PLACED BY:

Resident / Non-Resident Individuals, Minor through guardians, Hindu Undivided

Families.

2. MODE OF ACCEPTANCE:

Deposits can be made by cheques/DD, in favor of “Housing Development Finance

Corporation Ltd.” or “HDFC Ltd.” and should be marked “account payee”.

3. INTEREST:

Interest on deposits placed under Monthly Income Plan, Non-cumulative Option and

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FIXED DEPOSITS

INDIVIDUAL

REGULAR PREMIUM

TRUSTS

REGULAR PREMIUM

Annual Income Plan shall be paid on fixed dates as given below:

Monthly Income Plan Last day of each month

Non-Cumulative Option-

Quarterly

March 31st, June 30th, September 30th,

December 31st

Non-Cumulative Option-

Half Yearly

March 31st & September 30th

Annual income Plan March 31st

4. ELECTRONIC CLEARING SERVICE(ECS):

This facility is provided to depositors in select centers whereby the interest will be

credited directly to the depositor’s bank account. There is no extra charge to it.

5. DEDUCTION OF INCOME TAX AT SOURCE (TDS):

Income tax will be deducted at source under Section 194A of the Income Tax Act,

1961at the rates in force. If the trust is not liable to pay income tax then the trust is

required to submit a declaration form in Form No. 15G so that income tax is not

deducted at source. Senior citizens may submit a declaration in form 15H.

6. PRE-MATURE WITHDRAWL:

The rules relating pre-mature withdrawal are as follows:

No repayment within period of 3 months.

After 3 months but before 6 months- NO INTREST PAID

After 6 months but before maturity- 2% less than applicable ROI or 3% lower

than minimum rate if rate is not specified for any period i.e. for less than 12

months.

7. RENEWAL AND REPAYMENT OF DEPOSIT:

For renewal, prescribed application form should be duly filled & be signed by

the depositors along with discharged deposit receipt.

For repayment of deposit the duly discharged deposit receipt must be

surrendered to HDFC at least before the date of maturity.

Renewal from date of maturity, irrespective of period lapsed since maturity.

Advance renewal facility can be renewed one month in advance.

8. QUICK LOAN FACILITY AVAILABLE:

Available after 3 months

Upto 75% of Deposit amount

ROI- 2% above the Deposits ROR

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9. NOMINATION FACILITY:

Only individual depositor’s single or jointly, can nominate a single person under this

facility.

HDFC TRUST DEPOSITS

HDFC offers a wide range of deposit products, a secure investment option, with attractive

returns. Deposits are accepted from Charitable Trusts, Religious Trusts, Educational

Institutions, Employees' Welfare Trusts and others as decided by the management.

1. FIXED RATE DEPOSITS

2. VARIABLE RATE DEPOSITS Variable Rate Deposit is a new addition to the wide

range of deposit products offered by HDFC to enable the depositors to take

advantage of movements in interest rates.

Following options are available under both Fixed Rate & Variable Rate Deposit –

a. Monthly Income Plan

b. Non-Cumulative Deposits

c. Annual Income Plan

d. Cumulative Deposits

FEATURES OF TRUST DEPOSITS: -

1. DEPOSITS CAN BE PLACED BY:

Charitable Trusts, Religious Trusts, Association of Persons, Co-operative societies,

Partnership Firms and others as decided by the management.

2. MODE OF ACCEPTANCE:

Deposits can be made by Cheques/Demand Drafts/RTGS in favour of HDFC ltd.

3. INTEREST:

Interest on deposits placed under Monthly Income Plan, Non-cumulative Option and

Annual Income Plan shall be paid on fixed dates as given below:

Monthly Income Plan Last day of each month

Non-Cumulative

Option- Quarterly

March 31st, June 30th, September 30th,

December 31st

Non-Cumulative

Option- Half Yearly

March 31st & September 30th

Annual income Plan March 31st

4. INTEREST RESET DATE FOR VARIABLE RATE DEPOSITS:

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Rate of Interest (ROI) will be reset at the beginning of each interest period.

5. SAFETY AGAINST FRAUDULENT ENCASHMENT OF INTEREST WARRANTS:

To avoid fraudulent encashment of interest warrants/cheques the depositor should

provide details of bank, branch & account number in the application form, which will

be printed on front page of the interest warrant/ cheques.

6. ELECTION CLEARING SERVICE (ECS):

This facility is provided to depositors in select centers whereby the interest will be

credited directly to the depositor’s bank account. There are no extra charges levied

for this facility as per present RBI guidelines.

7. DEDUTION OF INCOME TAX AT SOURCE (TDS):

Income tax will be deducted at source under Section 194 A of the Income Tax Act,

1961 at the rates in force. If the trust is not liable to pay income tax then the trust is

required to submit a declaration form in Form No. 15G.

8. PRE-MATURE WITHDRAWL:

The rules relating pre-mature withdrawal are same as individual deposits.

9. RENEWAL AND REPAYMENT OF DEPOSIT:

Same as the Individual deposits

10.QUICK LOAN FACILITY AVAILABLE:

Available after 3 months

Upto 75% of Deposit amount

ROI- 2% above the Deposits ROR

INCENTIVE PLANS OF THE COMPANY

The company conducts two contests on monthly basis to motivate its agents. A format of

each of it is as follows:

HDFC DEPOSITS ~ Rs 5 LAKHS + CONTEST

ELIGIBILITY KPs who have mobilized Rs 5 Lakhs and above

during the given time period.

CONTEST PERIOD

1 March 2009 till 10 March 2009



APPLICABLE TO All office in Rajasthan

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CONTEST PRIZE

DEPOSIT AMOUNT MOBILIZED PRIZE AMOUNT (RS)

Rs 5 lakhs to 9.99 lakhs 250



Rs 25 lakhs & above 1250

HDFC DEPOSITS ~ “MONTHLY TOP 5” CONTESTS:-

ELIGIBILTY KPs who have mobilized Rs 6 lakhs and above

during the month

CONTEST PERIOD 31 March 2009

APPLICABLE TO All offices in Rajasthan

CONTEST PRIZE

RANK CONTEST PRIZE AMOUNT

1 1500

2 1250

3 1000

4 750

5 500

RESEARCH METHODOLOGY

~ 22 ~

3.1 TITLE OF THE PROJECT

The project report on the “COMPARATIVE ANALYSIS OF INVESTMENT AVENUES AND

RESEARCH ON RESOURCE MOBILISATION” is based on the study of various features

of fixed deposits and management of different channels for mobilization of fixed deposits.

This project highlights the other financial avenues and shows how the Fixed Deposits are

beneficial over other.

In market, powerful competitors are classified into 2 major classes namely: Banks & Non-

Banking institution. HDFC Ltd. face tough competition from banking sector & from its own

field of Non-Banking sector inspite of all these the major competitor of HDFC Ltd. is Post

Offices etc. The bank companies accept deposits directly by the investor in the form of

cash/cheques/DD, but in Non-Banking sector there is also an option middleman which is

simple called as AGENTS & technically called as KEY PARTNERS (KPs). Non-banking

companies accept deposits through these agents or key partners and they are really loyal

towards their clients.

The KPs have a significant role to play in bringing the deposits contributing to the business

of fixed deposits of company, in place of which they get brokerage rate or commission with

attractive incentive packages. Beside this, the company also attracts & retains KPs by

conducting the certain CONTEST for the active key partner. The company mainly deals

with through Key Partners and they generate the business of 75% of overall deposits.

3.2 DURATION OF THE PROJECT

The duration of project is 40 days from 18th May, 2009 to 26 June, 2009.

3.3 OBJECTIVE OF THE PROJECT

There are 4 main objective of the project work. They are as follows:

1. To draft a feasible plan of action meant to attract potential KPs so that they actively

contribute to the business.

2. To study the active KPs and to find out the main strength areas of the company so

that they can be further built upon.

3. To do a competitive analysis for the company and find out the nature of products and

incentive schemes offered by competitors.

4. To draw a feasible plan to increase the visibility and reach of the company with

respect to its competitors.

~ 23 ~

The first objective aims at creating a feasible plan of action as to how the current problem

can be eliminated and the target of increasing the market share can be achieved.

The second objective will help the company to know the main strengths that do have an

impact in creating a unique position in the minds of its Key Partners. It is requisite as the

identified strengths can further be built upon to maintain and enhance good relations and

satisfy its customer better.

The third objective deals with one of the most important aspect of problems i.e. to analyze

competitors of the company and find what are the current features and additional benefits

that they provide above HDFC Ltd. This would help to identity main flows and suggest

those features that need to be incorporated in the present range of product to improvise it

further.

The fourth objective deals with the latent motive of making its presence felt by the public

with respect to its competitors. The area of work will be to draw a plan as to how to increase

the popularity of the product focusing on the strength of company so as to increase the

demand for the company’s product.

3.4 TYPE OF RESEARCH:

Exploratory and Descriptive research

The research is mainly both exploratory and descriptive in nature, information is

been gathered by both primary and secondary sources. The secondary data has been

taken by visiting the most of the bank & NBFC’s and also internet is used for getting the

facts & figures required for the research purposes. The objective of the exploratory

research is to gain insights and ideas. A well structured questionnaire was prepared for the

primary research to collect the perception of the Active Key partners.

3.5 SAMPLE SIZE & METHODOLOGY OF COLLECTING DATA:

The area of work is regarding Market Research of Fixed Deposit for HDFC Ltd. The

methodology of data collection of the work done so far is as follows:

1. COMPETITIVE ANALYSIS

FOR BANKING SECTOR COMPETITORS:

SOURCE OF DATA Personal visits to the particular bank and meeting

with the concerned officer.

Websites of that particular bank.

SAMPLE SIZE 14 Top Rated Banks

~ 24 ~

ANAYSIS OF DATA Cross – Tabulation Comparison

Tick Box comparison

FOR NON-BANKING SECTOR COMPETITORS:

SOURCE OF DATA Personal visits to the particular institution and

meeting with the concerned officer.

Websites of that particular institute.

SAMPLE SIZE 10 Non-Banking Financial Companies

ANAYSIS OF DATA Cross – Tabulation Comparison

Tick Box Comparison

2. STUDY OF ACTIVE KEY PARTNERS

SOURCE OF DATA Personal Interaction with the Key Partners and

interviewing them.

Filling of questionnaire so designed.

SAMPLE SIZE Restricted to100 respondents

ANAYSIS OF DATA Perception Mapping and compilation of data through

pie-charts.

Identifying the strengths and problems relating to the

working module of the company based on the

interaction with KPs.

3.6 PURPOSE/SCOPE OF THE PROJECT

The company HDFC Ltd. is a pioneer and leader in housing finance industry. It has two

main products - Home Loans and Fixed Deposits.

Basically the company has its focus in the business of housing loans but as part of its fund

raising process for disbursement of home loans, HDFC also have quite recently started to

accept fixed deposits from the public.

Though the company is one of the highest mobilizes of fixed deposits outside the banking

system, yet its retail deposit as a component of total funding required for the year is around

30 % of the current year’s disbursements of loans, which is the prime area of concern as

they rest of the amount has to be gathered through sources of external loans, which

undoubtedly increases the liabilities and the cost of its operation. Thus, the focus of the

~ 25 ~

company is to minimize the same by increasing revenues through internal source i.e. -

through business of fixed deposits.

The business of FDs for the company is done mainly through agents called Key Partners or

KPs. Key Partners are classified into 2 classes on the basis of the amount mobilized of

fixed deposits they made in the last financial year:

1. Active Key Partners

2. In-Active Key Partners

Active key partners are current asset of the company which makes the company to grow

and spread good word of mouth in the market.

The company offers enough flexibility to its agents as they are not bound by any legal

limitation to do business with them only, i.e. they can do similar natured work for their

competitors as well. Also no minimum educational qualification is required to become an

agent. But because of lack of any legal limitation to restrict these agents to do business with

them only; the problem that had cop up is that a major chunk of these KPs have become

INACTIVE and draw little or no business for the company but are drawing huge business

for their competitors, which is a Serious Cause of Concern and one of the biggest

hindrance in the goal of the company to increase the business of fixed deposits.

3.7 LIMITATIONS OF THE PROJECT

The area of work for project is bounded by certain limitations. They are as under:

1. The data collected is confined to one state only due to limited resources (both

manpower and capital), is also not of entire population as a random list of sample of

active KPs was taken from the company’s database which adds on to the fear of

sample being not truly expressive.

2. Also while studying the Active KPs-- aiming to find the strength areas of the

company the data so collected was drawn out of a random sample of company’s

database, also since at times it was difficult to get co-operation from sample to get

the requisite feedback the data so collected may not be representative of the entire

population.

3. HDFC Ltd. is basically a Non-Banking Financial Institution which is governed by NHB

(National Housing Bank) but the business of Fixed Deposits undoubtedly suffers a

stiff competition from Banking Sector. So while doing the competitive analysis

comparison has been made between banking and non-banking sector which may

appear arbitrary and irrational.

~ 26 ~

4. Also while doing the competitive analysis some of the non-banking financial

institutions did not share their specific details specially relating to the commissions

and the incentive plans due to their internal policies regarding security reasons, thus

the information was then collected from their agents and not from the companies

directly, through no compromises were made regarding the accuracy of the data.

5. While drafting the Visibility plans, the suggestions revolve around only those choices

that offer the advantage of being cost-effective even though they may not be the best

alternative plans. This is because of the fact that HDFC Ltd. as a company has a

policy to offer a very little budget for such advertising plans which had limited the

options available.

~ 27 ~

FACT & FINDINGS ~ COMPETATIVE ANALYSIS

COMPETITOR IN THE MARKET

HDFC Ltd. being a major player in the market in the business of fixed Deposits is

consistently trying to make its product and schemes more valuable to its customer in order

to attract them. In the present scenario, people have starting investing their money in Fixed

deposits as it ensures fixed rate return on investment. If investment advisor are to be

trusted, FDs are being considered as the best option by the investors because of the

attractive rate interest as well as the current state of the market.

The market is full of options for the customer. A bunch of companies like TATA Motors Ltd,

ShriRam Transport Finance Company, Life Insurance Corporation Housing Company are

currently raising their Deposits by offering the interest rate from 9-12%. HDFC Ltd facing

tough competition mainly from the Non-Banking Institution which are offering higher rate of

interest, at greater risk about which customer is not aware. The company also faces

competition from the Banking Institutions because the banks are driving the business of

Fixed Deposits and has a great share in market.

So, the competitors of HDFC Ltd. are broadly classified into 2 groups:

BANKING INSTITUTE: - (Regulate as per RBI Guidelines)

It includes both nationalized and private Banks:

I. Nationalized Banks Are : Central Bank of India, State Bank of India, Union Bank of

India, State Bank of Bikaner & Jaipur, Bank of Baroda, Punjab National Bank,

Oriental Bank of Commerce, Canara Bank, Bank of India, IDBI Bank etc.

II. Private Banks Are : HDFC Bank, ICICI Bank, Axis Bank, ING VAYSYA Bank, Kotak

Mahindra Bank Ltd etc.

NON-BANKING INSTITUTE: - (Regulate as per NHB Guidelines)

It includes both nationalized and private Institutes: ICICI Housing Finance Company, TATA

Motors Limited, ShriRam Transport Finance Company, Life Insurance Corporation Housing

Company, Mahindra & Mahindra Financial Services Ltd., CENTBANK Home Finance Ltd.,

PNB Home Finance Ltd., and CAN-FIN Homes Ltd.

~ 28 ~

PROFILE OF COMPETITOR BANKS

HDFC Ltd. is facing competition from banks which offering Fixed Deposits at competitive

rate of interest to the customers. The study deals with the 14 major Banks listed below

which are competitive to HDFC Ltd. They are as follows:-

1. Axis Bank

2. Bank of Baroda (BOB)

3. Bank of India

4. Canara Bank

5. Central Bank of India

6. HDFC Bank

7. Hong Kong & Shanghai Banking Corporation(HSBC) Limited

8. ICICI Bank

9. Kotak Mahindra Bank Ltd

10.Oriental Bank of Commerce (OBC)

11.Punjab National Bank (PNB)

12.State Bank of Bikaner & Jaipur (SBBJ)

13.State Bank of India (SBI)

14.Union Bank of India

AXIS BANK

Brief Profile: - Axis Bank was the first of the new private banks to have begun operations

in 1994, after the Government of India allowed new private banks to be established.

The Group's principal activities are to provide commercial banking services which include

merchant banking, direct finance, infrastructure finance, venture capital fund, advisory,

trusteeship, Forex, treasury and other related financial services. The Bank has strengths in

both retail and corporate banking and is committed to adopting the best industry practices

internationally in order to achieve excellence.

ABOUT THE BUSINESS OF FIXED DEPOSITS:

The term deposits of the company have been categorized 4 different schemes are as:-

Fixed Deposit.

Recurring Deposit.

Tax Saver Fixed Deposit.

Encash 24.

~ 29 ~

BANK OF BARODA

BRIEF PROFILE:- Maharajah of Baroda Sir Sayajirao Gaekwad III founded the bank on

July 20, 1908 in the princely state of Baroda, in Gujarat. The bank, along with 13 other

major commercial banks of India, was nationalized on 19 July 1969, by the Government of

India. It has a wide network of over 2800 branches and about 1000+ ATMs.

Bank of Baroda offers a wide range of banking products and financial services to corporate

and retail customers through a variety of delivery channels and through its specialized

subsidiaries and affiliates in the areas of investment banking, credit cards and asset

management.


The term deposits of the company categorized under 5 different schemes are as:

FAST ACCESS DEPOSIT SCHEME

REGULAR INCOME PLAN

REGULAR INCOME CUM RECURRING DEPOSIT

TAX SAVING TERM DEPOSITS

RECURRING DEPOSITS

BANK OF INDIA

BRIEF PROFILE: - Bank of India (BOI) was established on 7 September 1906 and has

completed 103 years of its successful existence. The Bank was under private ownership

and control until July 1969 when it was nationalized along with 13 other banks, it was then

that it got the stature of being a commercial public sector bank.

The Company's principal activities are to provide banking and treasury services to

individuals and corporate clients. It provides short and long term loans to agricultural, small

scale industries and other priority sectors. The Bank has been the first among the

nationalized banks to establish a fully computerized branch and ATM facility at the

Mahalaxmi Branch at Mumbai way back in 1989.


The term deposits of the company categorized under 5 different schemes are as:

SHORT / FIXED DEPOSIT RECIEPTS

QUARTERLY/ MONTHLY TERM DEPOSIT

RECURRING TERM DEPOSIT

STAR FLEXI--RECURRING DEPOSIT SCHEME

~ 30 ~

http://en.wikipedia.org/wiki/1906

http://en.wikipedia.org/wiki/September_7

http://en.wikipedia.org/wiki/Government_of_India



http://en.wikipedia.org/wiki/July_19

http://en.wikipedia.org/wiki/Gujarat

http://en.wikipedia.org/wiki/Vadodara

http://en.wikipedia.org/wiki/Princely_state


http://en.wikipedia.org/wiki/July_20

http://en.wikipedia.org/wiki/Sayajirao_Gaekwad_III

http://www.bankofbaroda.com/pfs/termdeposits.asp

http://www.bankofbaroda.com/pfs/recurringdeposit.asp

http://www.bankofbaroda.com/pfs/regincome.asp

http://www.bankofbaroda.com/pfs/fadeposit.asp

STAR SUNIDHI TAX-SAVING DEPOSIT SCHEME

CANARA BANK

BRIEF PROFILE:-Canara Bank was founded as “Canara Bank Hindu Permanent Fund”

in 1906, by late Sri. Ammembal Subba Rao. In 1910 it became a limited company as

'Canara Bank Ltd.' in 1910 and became Canara Bank in 1969 after nationalization.

Sound founding principles, enlightened leadership, unique work culture and remarkable

adaptability to changing banking environment have enabled Canara Bank to be a frontline

banking institution of global standards.

The bank as of September 2008, has domestic presence of order- 2710 branches across

the country that include over 2000 ATMs- the highest among nationalized banks.


The term deposits of the company categorized under the following 5 different schemes are:

FIXED DEPOSIT

RECURRING DEPOSITS

CAN-TAX SAVER SCHEME

ASHRAYA DEPOSIT SCHEME

KAMADHENU DEPOSIT (Re-investment Plan)

CENTRAL BANK OF INDIA

BRIEF PROFILE:-Established in 1911, Central Bank of India was the first Indian

commercial bank which was wholly owned and managed by Indians. The establishment of

the Bank was the ultimate realization of the dream of Sir Sorabji Pochkhanawala, who

proclaimed the bank to be the 'property of the nation and the country's asset'.

Central Bank has been playing an increasingly active role in promoting the key thrust areas

of agriculture, small scale industries as also medium and large industries.

Central Bank of India has large network in 27 out of 28 States as also in 4 out of 7 Union

Territories in India. Central Bank of India holds a very prominent place among the Public

Sector Banks on account of its network of 3413 branches and 237 extension counters at

various centers throughout the length and breadth of the country.

Besides serving the public it also has many corporate clients some of them are themselves

banking institutes like- ICICI, HDFC, IDBI, UTI, LIC etc. which is a strong indicator of the

kind of repute it enjoys as a banking institute.

~ 31 ~


The term deposits of the company have been categorized under 6 different schemes are:-

MONEY MULTIPLIER DEPOSIT CERTIFICATE (MMDC)

MONTHLY INTEREST DEPOSIT RECEIPT (MIDR)

QUARTERLY INTEREST DEPOSIT RECEIPT (QIDR)

CENTRAL'S SENIOR CITIZEN DEPOSIT SCHEME

CENTRAL'S FLEXI YIELD DEPOSIT SCHEME

CENT TAX SAVING DEPOSIT

ICICI BANK

BRIEF PROFILE: - ICICI Ltd. was formed in 1955 at the initiative of the World Bank, the

GOI and representatives of Indian industry. The principal objective was to create a

development financial institution for providing medium-term and long-term project financing

to Indian businesses. In the 1990s, ICICI transformed its business from a development

financial institution offering only project finance to a diversified financial services group

offering a wide variety of products and services, both directly and through a number of

subsidiaries and affiliates like ICICI Bank which was formulated in the year 1994.

ICICI Bank offers a wide range of banking products and financial services to corporate and

retail customers through a variety of delivery channels and through its specialized

subsidiaries and affiliates in the areas of investment banking, life and non-life insurance,

venture capital and asset management.

The Bank has a network of 1,419 branches and about 4,644 ATMs in India and presence in

18 countries.


The term deposits of the company categorized under the following 3 schemes are:

ICICI Fixed deposit

Security Deposit

Tax Saver Fixed Deposit.

HDFC BANK

~ 32 ~

BRIEF PROFILE:-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 thus 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, with a simple mission to be “World Class Indian Bank”

with a single minded focus on product quality and service excellence.

HDFC Bank now, has 1,500 branches and over 2,890 ATMs, in 530 cities in India, and all

branches of the bank are linked on an online real-time basis.


The term deposits of the company categorized under the following 4 different schemes are:-

REGULAR FIXED DEPOSIT

FIVE YEAR TAX SAVING FIXED DEPOSIT

SUPER SAVER FACILITY

SWEEP IN FACILITY

HONGKONG AND SHANGHAI BANKING CORPORATION (HSBC

BRIEF PROFILE: - HSBC's origins in India date back to 1853, when the Mercantile

Bank of India was established in Mumbai. The Bank has since, steadily grown in reach and

service offerings, keeping pace with the evolving banking and financial needs of its

customers.

HSBC today, has vigorously developed its role as one of the leading banking and financial

services organizations in the world. In India, the Bank offers a comprehensive suite of

world-class products and services to its corporate and commercial banking clients as also

to a fast growing personal banking customer base.


The term deposits of the company are known by the name FIXED DEPOSITS. The main

features of this scheme are as follows:

AMOUNT OF DEPOSIT – The minimum amount of deposit is Rs.10000/- and

there is no ceiling for maximum amount.

PERIOD OF DEPOSIT – Tenure of deposit ranges from 15 Days to 10 Years.

~ 33 ~

RATE OF INTEREST – ROI shall be rate prevailing on the date of deposit, which

varies according to the tenure, which shall be compounded quarterly.

NOMINATION FACILITY – Nomination can make as per guidelines applicable.

PRE-MATURE WITHDRAWAL – Pre-mature withdrawal is possible. Interest is

paid at the rate applicable for the period run, without penal cut on deposit

accounts closed prematurely.

TAX IMPLICATION – Interest on these deposits shall be liable to tax under the

Income Tax Act. TDS will be applicable as per extant guidelines.

AUTOMATIC RENEWALS – In case the customers have not withdrawn the

deposits after its maturity, the account shall be automatically renewed and

applicable interest shall also be provided.

LOAN FACILITY – No loans or advance facility are available under this scheme.

KOTAK MAHINDRA BANK LIMITED

BRIEF PROFILE:-The Kotak Mahindra group is a financial organization established in

1985 in India. It was previously known as the Kotak Mahindra Finance Limited, a NBFC. In

February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the

license to carry on banking business by the RBI. Kotak Mahindra Finance Ltd. is the first

company in the Indian banking history to convert to a bank.

Kotak Mahindra is one of India's leading financial organizations, offering a wide range of

financial services that encompass every sphere of life.

The group has a distribution network of more than 1300 branches, franchisees,

representative offices and satellite offices across cities and towns in India and offices in

New York, London, San Francisco, Dubai, Mauritius and Singapore.


The term deposits of the company are known by the name FIXED DEPOSITS. The main

features of this scheme are as follows:

AMOUNT OF DEPOSIT – The minimum amount of deposit is Rs.1000/- and

there is no ceiling for maximum amount.

PERIOD OF DEPOSIT – Tenure of deposit ranges from 7 Days to 10 Years.

RATE OF INTEREST – Rate of interest shall be the appropriate rate prevailing

on the date of deposit, which will vary according to the tenure of deposit, which

shall be compounded quarterly.

~ 34 ~

NOMINATION FACILITY – Nomination available as per guidelines applicable.

PRE-MATURE WITHDRAWAL – Pre-mature withdrawal is possible on demands

of the customers. Interest is paid at the rate applicable for the period run; without

penal cut on deposit accounts closed prematurely.

TAX IMPLICATION – Interest on these deposits shall be liable to tax under the

Income Tax Act. TDS will be applicable as per extant guidelines.

AUTOMATIC RENEWALS – In case the customers have not withdrawn the

deposits after its maturity, the account shall be automatically renewed and

applicable interest shall also be provided.

LOAN FACILITY – Loan or overdraft facility is available upto 90% of the entire

deposit amount at nominal cost.

ORIENTAL BANK OF COMMERCE BANK

BRIEF PROFILE: - Oriental Bank of Commerce was established in 1943 in Lahore by

Late Rai Bahadur Lala Sohan Lal who was also the founder chairman of the bank. After the

Independence the head office was shifted to Amritsar. The OBC was nationalized in 1980.

OBC bank has been quite contributive towards national development by actively involving in

poverty elevating programs like – THE GRAMEEN PROJECT, the Scheme has a unique

feature of disbursing small loans to rural folks with high emphasis on working women.

It has also launched 'The Comprehensive Village Development Programme'. The

programme focuses on providing a comprehensive and integrated package providing rural

finance to the villagers with Village Development as its focus, thus contributing towards

infrastructural development and augmentation of income for each farmer of the village.


The term deposits of the company categorized under 4 different schemes are:-

TERM DEPOSIT

FLEXI FIXED DEPOSIT SCHEME

TAX SAVING TERM DEPOSIT

PRAGATI DEPOSIT SCHEME

PUNJAB NATIONAL BANK

~ 35 ~

BRIEF PROFILE:-Established in 1895 at Lahore, undivided India, Punjab National Bank

(PNB) has the distinction of being the first Indian bank to have been started solely with

Indian capital. The bank was nationalized in July 1969 along with 13 other banks.

PNB can boost itself of a successful track record of 110 years and to possess largest

branch network in India- about 4525 Offices including 432 Extension Counters. Moreover,

it’s been listed amongst the 300 World companies & 7 Indian companies.



SPECTRUM FIXED DEPOSIT SCHEME

ANUPAM ACCOUNT

MULTI BENEFIT FIXED DEPOSIT SCHEME

RECURRING DEPOSIT SCHEME

SWECHHA JAMA YOJNA / FLEXI FIXED DEPOSIT

STATE BANK OF BIKANER AND JAIPUR

BRIEF PROFILE:-State Bank of Bikaner and Jaipur was established in 1963 after

amalgamation of erstwhile State Bank of Jaipur (established in 1943) with State Bank of

Bikaner (established in 1944) as a subsidiary of State Bank of India.

The Bank's main area of operation is Rajasthan, with presence at all important centers in

the country. The Bank has 860 branches consisting of 849 business branches, 8 service

branches, 2 asset recovery branches and 1 treasury branch and has sponsored 3 RRBs.

The Company operates in India only. Internet Banking has been extended to all our

branches for retail customers and select branches for corporate customers.


The term deposits of the company categorized under the following 6 different scheme are:-

Term Deposit Scheme

SBBJ Flexi Deposit Scheme:

Special Term Deposit Scheme

Recurring Deposit Scheme

Special Scheme For Senior Citizens

SBBJ Tax Saving Term Deposit Scheme

STATE BANK OF INDIA

~ 36 ~

http://sbbjbank.com/We_offer/pb_deposit4.htm#SBBJ%20TAX%20SAVING%20TERM%20DEPOSIT%20SCHEME

http://sbbjbank.com/We_offer/pb_deposit4.htm#SPECIAL%20SCHEME%20FOR%20SENIOR%20CITIZENS

http://sbbjbank.com/We_offer/pb_deposit3.htm#RECURRING%20DEPOSIT%20SCHEME%23RECURRING%20DEPOSIT%20SCHEME

http://sbbjbank.com/We_offer/pb_deposit3.htm#SPECIAL%20TERM%20DEPOSIT%20SCHEME%23SPECIAL%20TERM%20DEPOSIT%20SCHEME

http://sbbjbank.com/We_offer/pb_deposit3.htm#SBBJ%20FLEXI%20DEPOSIT%20SCHEME:%23SBBJ%20FLEXI%20DEPOSIT%20SCHEME:

http://sbbjbank.com/We_offer/pb_deposit3.htm#TERM%20DEPOSIT%20SCHEME%23TERM%20DEPOSIT%20SCHEME

BRIEF PROFILE: - The STATE BANK OF INDIA was established in the year 1973. SBI

is India's oldest and a premier Public Sector Bank which works actively in line to the

guidelines of Reserve Bank of India and also of Government of India.

SBI stands strong with about own 10000 branches and over 5100 branches of its

associated banks thus offering the largest banking network to the Indian customer. Today,

the Bank is the largest provider of infrastructure debt and the largest arranger of external

commercial borrowings in the country and is also the only Indian bank to feature in the

Fortune 500 list.

SBI also possess 7 Subsidiaries in India – SBI Capital Markets, SBICAP Securities, SBI

DFHI, SBI Factors, SBI Life and SBI Cards - thus forming a formidable group in the Indian

Banking scenario.


The term deposits of the company have been categorized into 2 sub-categories. They are:-

TERM DEPOSITS

RECURRING DEPOSITS

UNION BANK OF INDIA

BRIEF PROFILE: - On the onset of 20th century Union Bank of India started its journey

in Indian Banking Sector and has completed successful 88 years of its existence and has

been firmly committed to consolidating and maintaining its identity as a leading, innovative

commercial Bank.

Union Bank is a Public Sector Unit with 55.43% Share Capital held by the Government of

India and rest is owned by eminent individuals who are experts in diversified fields of

Banking like Retail, SME, and Technology.



CUMULATIVE DEPOSIT SCHEME

DEPOSIT REINVESTMENT CERTIFICATE

MONTHLY INCOME SCHEME

UNION FLEXI-DEPOSIT

UNION TAX SAVER

COMPARATIVE TABULAR PRESENTATION OF ROI OF DIFF BANKS:-

TABLE 1-

~ 37 ~

TIME SLAB

HDFC

BANK

ICICI

BANK

KOTAK

MAHINDRA

UNION

BANK SBBJ

7- 14 Days 3.00 0.00 0.00 3.50 0.00

15-29 Days 3.50 3.75 3.00 3.754.50

30-45 Days 4.00 4.00 3.50 4.00

46-60 Days 4.50 4.00 4.50

5.00

5.50

61-90 Days 5.00 4.00 5.50

91-180 Days 5.50 6.25 5.50

6.006.75

6 months - < 9 months 7.00 7.25 7.25

9 months - < 1 Year 7.25 8.00 6.50 7.50 7.50

1 Year - < 2 Year 8.00 1 8.25 7.00 8.00 9.00

2 Year - < 3 Year 8.00 8.25 2 7.50 8.00 9.25

3 Year - < 5 Year 8.00 8.25 8.00 8.00 8.50

above 5 Year 8.00 8.25 8.00 8.00 8.50

TABLE 2-

TIME SLAB PNB

AXIS

BANK

BANK OF

BARODA

BANK

OF INDIA

CENTRL

BANK

7- 14 Days 3.75 0.00 3.50 3.25 3.75

15-29 Days4.25

3.00 4.75

4.25 4.75

30-45 Days 4.00 4.50

46-60 Days5.00

5.00 5.25 6.00 7.00

61-90 Days 5.00

91-180 Days 5.50 6.50 6.75 6.25 7.50

6 months - < 9 months 7.00 7.50 8.00

7.25 7.75

9 months - < 1 Year 8.00 8.15 7.50 7.75

1 Year - < 2 Year 8.00 8.00 8.50 8.00 8.80

2 Year - < 3 Year 8.00 8.00 8.755 8.25 8.50

3 Year - < 5 Year 8.00 8.00 8.50 8.25 8.50

above 5 Year 7.75 8.00 8.50 8.25 8.50

TABLE 3-

~ 38 ~

TIME SLAB HSBC CANARA BANK OBC SBI

7- 14 Days 0.00 3.254 3.50 3.25

15-29 Days 3.50 4.00 4.25 4.00

30-45 Days

4.50

4.00 4.75 4.00

46-60 Days

5.50 6.00 5.5061-90 Days 5.25

91-180 Days 5.25 6.25 7.00 6.25

6 months - < 9 months 5.50 7.00 7.75 7.00

9 months - < 1 Year 8.00 5 7.25 8.00 7.25

1 Year - < 2 Year 7.50 8.25 8.25 8.25

2 Year - < 3 Year 7.50 8.25 8.50 8.25

3 Year - < 5 Year 7.50 8.25 8.50 8.25

above 5 Year 7.50 8.25 8.50 8.25

NOTES:

1 = 8.10 % for 1 year 16 days

2 = 9.00 % for 2 year 5.5 months

3 = 8.50 for 1 year 1 month

4 = Minimum amount is 5 Lakhs

5 = 9.00 % for 750 days

TICK BOX COMPARISON ON THE BASIS OF FEATURES

Table 1-

CENTRAL

BANK OF

INDIA

UNION

BANK OF

INDIA

SBI HDFC

BANK

AXIS

BANK

ODD-DEPOSIT AMOUNTS

ODD-DEPOSIT TENURE PERIODS

QUATERLY INT PAYMENT

NO-PENALTY ON PRE-MATURITY

~ 39 ~

TAX BENEFIT SCHEMES

NOMINATION FACILITY

LOAN FACILITY

OD FACILITY

TRANSFER OF ACCOUNTS

WITHOUT CHARGES

Table 2-

ORIENTAL

BANK

ICICI

BANK

SBBJ

BANK

KOTAK

MAHINDRA

HSBC

BANK

ODD-DEPOSIT AMOUNTS

ODD-DEPOSIT TENURE

PERIODS

QUATERLY INTEREST

PAYMENT

NO-PENALTY PRE-MATURITY

TAX BENEFIT SCHEMES

NOMINATION FACILITY

LOAN FACILITY

OD FACILITY

TRANSFER OF ACCOUNTS

WITHOUT CHARGES

Table 3-

PNB BANK OF

BARODA

CANARA

BANK

BANK

OF INDIA

ODD-DEPOSIT AMOUNTS

~ 40 ~

ODD-DEPOSIT TENURE PERIODS

QUATERLY INTEREST PAYMENT

NO-PENALTY PRE-MATURITY

TAX BENEFIT SCHEMES

NOMINATION FACILITY

LOAN FACILITY

OD FACILITY

TRANSFER OF ACCOUNTS WITHOUT

CHARGES

PROFILE OF NON –BANKING COMPETITOR

Besides competition from Banking Sector, HDFC Ltd. has direct and tough competition from

its own field of non-banking institution. Under the study we have identify the 9 major

competitors and research will be carried over them. They are as follows:-

1. NABARD

2. Post Office Deposits schemes

3. ICICI Housing Finance Company

4. TATA Motors Limited

5. ShriRam Transport Finance Company

6. Life Insurance Corporation Housing Company

7. Mahindra & Mahindra Financial Services Ltd.

8. CENTBANK Home Finance Ltd.

9. PNB Home Finance Ltd.

10.CAN-FIN Homes Ltd.

~ 41 ~

NATIONAL BANK FOR AGRICULTURE AND RURAL

DEVELOPMENT (NABARD)

BRIEF PROFILE:-

RBI in the year 1979 had set up a Committee to Review Arrangements for Institutional

Credit for Agriculture and Rural Development (CRAFICARD). On the recommendations of

the report submitted to Governor, RBI on November 28, 1979 by the committee; the

establishment of NABARD was proposed to the parliament and the Parliament through the

Act 61 of 81 approved it.

NARARD was then established with an initial capital of Rs 100 Crore, which was enhanced

to Rs 2,000 Crore, fully subscribed by the Government of India and the RBI.

At the time of its establishment, NABARD was proposed with the mission of –

“Promoting sustainable and equitable agriculture and rural development through effective

credit support, related services, institution building and other innovative initiatives.”


NABARD is not into direct business of Fixed Deposits but it has got a similar patterned form

of investment options for public i.e. It has come up with BHAVISHYA NIRMAN BONDS,

they are considered one of the important competitor as this scheme of NABARD is quite

popular with the target market of HDFC ltd. and the nature of this scheme is such that it

offers interest rates to public and is operating into the business through agents and so it

also has a commission plan (like HDFC Ltd. does for its agents).

SALIENT FEATURES OF NABARD RURAL BONDS:

NATURE OF BONDS - BHAVISHYA NIRMAN BONDS are an instrument under Sec.

80 C of IT ACT, 2000. They are ZERO-COUPON BONDS that have an issue period

of financial year 2006-07 to 8008-2009. These bonds have a face value of Rs.

20000/- and have tenure period of 10 years.

ISSUE PRICE- The issue price may vary from time to time, presently (w.e.f. 15 Jan

2009) the price per bond is Rs.8750/- for investment below Rs.1 Crore per investor

per day. For investments above Rs. 1 Crore issue price shall be decided by the

Head Quarter.

RATE OF INTEREST- the rate of interest shall be calculated on Simple Interest

basis of order 12.85% p.a. or its compounded yield will be 8.62%

TAXATION- Income/Gains arising out of Bonds are treated as Capital Gains so

procedures of capital gain tax shall be applicable. However, NO TDS shall be

~ 42 ~

http://www.nabard.org/craficard.asp

deducted.

LIQUIDITY- NABARD BONDS are listed on BSE and these bonds are transferable

or can be treated as security. Trading of bonds are possible in DEMAT form only.

For trading the ‘Market Lot’ is 5 bonds.

NOMINATION- Nomination facility is also available for these bonds.

WHO CAN APPLY- Individuals in their own names or in the name of their minor

children as natural/legal guardians. Hindu Undivided Families through the Karta of

the Hindu Undivided Family. (Applications by HUF would be given the same

treatment as that to applicants by individuals).

GOVERNING LAW- The bonds are governed by and shall be construed in

accordance with the existing laws in India, NABARD Bonds Regulations, SEBI/RBI

directives or any other regulation. Any dispute arising thereof will be subject to

jurisdiction at Mumbai.

Additional Incentive Plans For Agents:

There are NO ADDITIONAL incentives provided by the company for its agents besides the

commission rates.

GENERAL POST OFFICE (GPO)

BRIEF PROFILE: - The postal service comes under the Department of Posts which is a

part of the Ministry of Communications and Information Technology that comes under the

working arena of Government of India and the Postal Service Board is the apex body of this

department.

Besides providing a good medium of connectivity through various postal services, the

institution also helps to promote small and medium savings in both rural and urban portions

of the country through its various schemes that are symbolic of highest security and optimal

returns. One of the important reason why the GPO schemes are so popular among masses

as a source of investment is the fact that many of them offer tax exemption options and so

even today being a public sector unit it gives stiff competition of all big corporate private

players, which is indeed a remarkable achievement.


The Fixed Deposit investments offered by the Indian Postal Department are a banking

service which is similar to a Bank Fixed Deposit. The term deposit of the company has

been categorized under the following heads:

~ 43 ~


POST OFFICE TIME DEPOSIT (TD)

NATIONAL SAVINGS CERTIFICATE (NSC)

POST OFFICE RECURRING DEPOSIT (RD)

POST OFFICE MONTHLY INCOME SCHEME (MIS)

POST OFFICE SENIOR CITIZEN SAVINGS SCHEME

KISAN VIKAS PATRA (KVP)

Information regarding the agents of general post office:

The institution deals into the business of fixed deposits both directly and through agents to

whom they provide commission rates for their contributions into the business.

COMMISSION RATES:

The Post office attracts representatives or agents by offering flat 1.00% brokerage for any

type of the deposits. Besides this, there is no incentive plans for the agents.

IDENTITY CARD:

The post office provides an identity card to each of its agents which is indicative of details

like- Name of agent, Code No. Branch allotted, attested photograph of the agent duly

stamped and signed by the officer in charged. This act as a proof of being a genuine agent

and helps to gain confidence in convincing customers and at the same time it also instills a

sense of belongingness and pride to be associated with the institution.

Renewal of Agency Of Post Office:

The agency given to the representatives or agents gets expired after every 3 years which

needs to be renewed.

LIFE INSURANCE CORPORATION LTD.

BRIEF PROFILE: - Life Insurance Corporation of India Limited had its eminent start in

the year 1956 and has completed over 53 years of successful existence. And over this

period it has gained such repute that the three letters ‘LIC’ now stands as a synonym for

insurance, safety and excellent services.

The company’s main area of operation is dealings in various types of insurances, and is a

reputed name of this industry.

The company enjoys “AAA” rating from CRISIL for its business of fixed deposits which

signifies ‘Security of Highest Order’ which represents its sound existence in this sector.

The company has a wide network across country which includes - 6 Regional offices, 13

Back offices, 127 Marketing Units, 2048 Branch offices and more than 1002149 Agents.

~ 44 ~

http://www.indiapost.gov.in/Netscape/KVP.html

http://www.indiapost.gov.in/Netscape/6yearsNSC.html

http://www.indiapost.gov.in/Netscape/TimeDeposit.html


The term deposit of the company has been categorized under two heads. They are

NON-CUMULATIVE DEPOSITS

CUMULATIVE DEPOSITS

COMMISSION RATES:

The agents are entitled to the commission for the amount mobilized by depositors at the

following rates:

PERIOD OF DEPOSIT COMMISION PAYABLE

1 Year 0.50%

2Years 1.00%

3 Years 1.50%

5 Years 2.00%

Additional Incentive Plans for Agents:


commission rates.

CENT HOME FINANCE

BRIEF PROFILE: - Established in the year 1991, CENTBANK Home Finance Limited is

a subsidiary of Central Bank of India. Central Bank of India was the first Indian commercial

bank which was wholly owned and managed by Indians.

The housing subsidiary Cent Bank Home Finance Ltd. was started with its headquarters at

Bhopal in Madhya Pradesh. The main objective of the Company is promotion of Housing

Finance activities. The Company has well-established network all over India. The Company

is having 12 branches all over India.


The fixed deposit includes 3 schemes named below:

o SCHEME- 1 = FIXED DEPOSIT – QUARTERLY INCOME SCHEME

o SCHEME- 2 = FIXED DEPOSIT – MONTHLY INCOME SCHEME

o SCHEME- 3 = FIXED DEPOSIT – CUMULATIVE SCHEME

COMMISSION RATES:

At present time, the Company is accepting public deposits only directly. There is no

provision for appointment of agents/representatives for the purpose of collecting deposits.

~ 45 ~

Until few years back, the company had channels for accepting deposit through agents in

lieu of which agents get flat brokerage at rate of 0.50% of deposited amount.



commission rates.

PUNJAB NATIONAL BANK HOUSING FINANCE COMPANY

BRIEF PROFILE: - Punjab National Bank (PNB) was established in the year, 1895 in

Lahore.PNB Housing Finance Ltd is a wholly owned subsidiary of the Punjab National

Bank. PNB Housing Finance, Ltd. was incorporated in 1988 and has its head quarter in

New Delhi, India. It has around 28 branches across country.

PNB Housing Finance Ltd has main business of offering loans for purchase / construction

of houses, apartments etc and also for repairs, renovations or up gradation of the

immovable residential properties. It also offers investment opportunities to general public

through fixed deposit schemes and various insurance packages. For its fixed deposit

schemes it offers cumulative and non-cumulative fixed deposit schemes. However, the

interest rates for both cumulative and non-cumulative half-yearly schemes are the same,

but as the cumulative scheme is compounded at half-yearly intervals, the annual yields for

them are much higher.


The business of Deposits under PNB Housing Finance Ltd has been categorized as –

Fixed Deposit Scheme

Cumulative Fixed Deposit Scheme

COMMISSION RATES:

PERIOD (months) % OF BROKERAGE

12 0.25

24 0.50

36 0.75

48 1.00

60 1.25

72 1.50

84 1.75


~ 46 ~


commission rates.

ICICI HOME FINANCE COMPANY LIMITED

BRIEF PROFILE: - ICICI Home Finance Company Limited ("ICICI HFC") is one of the

leaders in the Indian mortgage finance and realty space. It is a 100 percent subsidiary of

the famous ICICI Group.

Besides housing loans, the company offers its customers fixed deposits with triple benefits

of safety, trust and returns. These deposits come with “AAA” and “MAAA” ratings from

leading credit agencies, CARE and ICRA, respectively. These are the high credit quality

ratings and hence offer high safety to its customers.

The vision of the company as a growing housing finance company is to make the dream of

owning a new home come true, for millions of Indians. For this, the company offers wide

range of innovative products - from different type of home loans to property related services

to help their customer’s dreams to come true.


ICICI fixed deposit can be classified as

1. ICICI DEPOSITS

2. ICICI SPECIAL DEPOSITS

The above mentioned each fixed deposit include 2 schemes named below:

1. NON CUMULATIVE SCHEME

ANNUAL OPTION

MONTHLY OPTION

QUARTERLY OPTION

2. CUMULATIVE SCHEME

COMMISSION RATES:

PERIOD OF DEPOSIT COMMISSION RATES

1 Year 0.75

2 Year 1.00

3 Years and above 1.25


The company frequently changes its incentive plans on an yearly basis but keeps alluring

packages that attract the attention of not only the agents but also of its competitors like –

~ 47 ~

international holiday package of 2 nights and 3 days for couple on the deposit amount of 5

Crore and above, Flat cash prize of 10000 on deposits of 15 Lakhs or more but with a time

limit of one month, daily household appliances etc.

CAN FIN HOMES LTD (CFHL)

BRIEF PROFILE: - The Company “CAN FIN HOMES Ltd.” has been set up under the

sponsorship of Canara Bank in the year 1987, which was also the "International Year for

Shelter for the Homeless".

CFHL was set up with the mission of promoting Home Ownership and increasing Housing

Stock all over the country. To achieve this prime objective, Can Fin employs the best of its

resources and has, till date, seen over 100,000 families secure homes.

CFHL is the first and the biggest bank sponsored Housing Finance Company (HFC) in the

country and one among the top players in the country's housing finance sector. The

company has a standing of over 17 years.

CFHL is one among the four HFCs selected by NHB in its first phase of securitization

programme. The company also enjoys 5 Star rating from NHB for the purpose of refinance.

CFHL's Deposit programme enjoys "MAA+" rating, which is the highest possible under High

Safety rating. And the company has wide network of 46 branches across the country.


CanFin Homes Ltd. has broadly divided its deposits schemes into 2 parts:

FOR INDIVIDUALS

o FIXED DEPOSIT SCHEME

o CUMULATIVE DEPOSITS SCHEME

FOR TRUSTS

o CAN FIN TRUST FIXED DEPOSIT SCHEME

o CAN FIN TRUST CUMULATIVE DEPOSIT SCHEME

COMMISSION RATES:

FOR INDIVIDUAL DEPOSITS


12 0.50

24 0.75

36 - 84 1.00

For Trust Deposits

~ 48 ~

The company does not pay any commission for trust deposits to their agents mainly

because they try to approach their clients themselves.



commission rates.

MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD.

BRIEF PROFILE: - A subsidiary of Mahindra & Mahindra Limited (a leading tractor and

UV manufacturer with over 60 years’ experience in the Indian market), MAHINDRA &

MAHINDRA FINANCIAL SERVICES LTD. is one of the India’s leading non-banking finance

companies. Focused on the rural and semi-urban sector, the company provides finance for

utility vehicles, tractors and cars and has the largest network of branches covering these

areas.

The company has a goal to become the most preferred provider of retail financing services

in the rural and semi-urban areas of the country. And seek to position itself between the

organized banking sector and local money lenders, offering the customers competitive,

flexible and speedy lending services.

The company principally finance UVs used both for commercial and personal purposes,

tractors and cars. While it predominantly finances Mahindra & Mahindra UVs and tractors, it

has continued to expand its lending to vehicles not manufactured by Mahindra & Mahindra

Limited.


Business of Deposits under Mahindra & Mahindra Finance Ltd. has been categorized as –

Cumulative Deposit Scheme

Non - Cumulative Deposit Scheme

COMMISSION RATES:

For Deposits of Cumulative Scheme

PERIODS (Months) COMMISSION RATE (%)

12 0.50

18 0.50

24 0.75

36 1.00

For Deposits of Non-Cumulative Scheme

~ 49 ~

http://www.mahindrafinance.com/about/vision.asp

PERIODS (Months) COMMISSION RATE (%)

12 0.50

24 0.75

36 1.00


For agents who have got a single deposit business worth 1 Crore: the company

gives an additional incentive of 0.25 %, above the normal rate available.

For agents who have got a single deposit business worth 5 Crore: the company

gives an additional incentive of 0.50 %, above the normal rate available.

Besides the owners of the franchise also provide special gifts to those agents who

bring in huge deposits at their personal level (not provided by the company).

TATA MOTORS LIMITED

BRIEF PROFILE: - Established in 1945, TATA MOTORS LTD. is a part of the famous

TATA GROUP and one of the world's largest manufacturers of commercial vehicles. It is

the leader in commercial vehicles in each segment, and among the top three in passenger

vehicles with winning products in the compact, midsize car and utility vehicle segments.

The company is the world’s fourth largest truck manufacturer, and the world’s second

largest bus manufacturer.

The company was formulated on the vision “to be the best in the manner in which it

operates; best in the products it delivers and best in the value system and ethics.”

The main business dealings of the company are - to manufacture, design and market

passenger and commercial vehicles in India.

All this replicates its strong financial presence in the industry, also not to forget its recent

hit of “NANO CAR” which has crashed the market before it was launched.



QUARTERLY INCOME PLAN

CUMULATIVE DEPOSIT PLAN

COMMISSION RATES:

DEPOSIT PERIOD COMMISSION RATE (%)

1 Year 0.30

2 Year 0.75

~ 50 ~

http://en.wikipedia.org/wiki/Commercial_vehicles

3 Year 1.50



commission rates.

SHRIRAM TRANSPORT FINANCE COMPANY LIMITED (STFC)

BRIEF PROFILE: - Shriram Transport Finance Company Limited (STFC) is the flagship

company of the Shriram Group which has significant presence in Chit Funds, Consumer

Durable Finance, Life Insurance, General Insurance, Stock Broking, Property Development,

Project Engineering and Wind Energy.

STFC is one of the country’s largest players in commercial vehicle finance. It was

established in the year 1979. The company has a wide network of 470 branches and

service centers spanning a geography which covers 91.3% of Truck Owners across

country.

From the orthodoxy of the 1970s through 1990s, to the pragmatism of the new millennium,

Shriram takes credit for having brought about a revolution in the institutional mindset.

Today, the Citigroup, UTI Bank, ICICI Bank and other leading banking institutions are proud

associates of Shriram in financing Pre-owned Trucks.

STFC was set up with the objective of offering the common man a host of products and

services that would be helpful to him on his path to prosperity. Over the decades, the

company has achieved significant success in reaching this objective, and has created a

tremendous sense of loyalty amongst its customers.

ABOUT THE BUSINESS OF DEPOSITS:


FIXED DEPOSITS

CUMULATIVE DEPOSITS

COMMISSION RATES:


1 Year 1.00 %

2 Year 2.00 %

3 Years & above 3.00 %

NOTE: Commission rates are same for both the deposit schemes.

ADDITIONAL INCENTIVE PLANS FOR AGENTS:

~ 51 ~

The company keeps different attractive packages for the agents every year as it believes it

add variety and creativity that helps to motivate agents to contribute more deposits. The

packages include – Maruti 800 cars, Holiday Packages, Household Utility Accessories (Air

Conditioners, Television Sets etc.)

These packages not only boost the morale of present agents but also attract the attention of

other company’s agents who get lured to become a part of their organization.

TABULAR PRESENTATION OF RATE OF INTEREST OF VARIOUS NON-

BANKING SECTORS

ROI Cross Tabulation Comparison

ICICI HFC TATA MOTORS M & M LIC LTD. GPO

1 Years 9.00 10.10 10.50 8.00 6.25

2 Years 9.00 10.50 11.00 8.25 6.50

3 Years 9.10 11.00 11.50 8.50 7.25

5 Years &

above

9.10 - - 8.50 7.50

SRM NABARD PNB HFC CAN-FIN

HFC

CENT HFC

1 Years 10.00 - 7.00 9.25 7.00

2 Years 10.50 - 7.25 9.50 7.50

3 Years 11.10 - 7.25 9.00 7.75

5 Years &

above

11.10 8.50 7.50 9.00 7.75

TABULAR PRESENTATION OF COMMISSION RATE OF DIFFERENT

NON-BANKING INSTITUTE

~ 52 ~

Commission Rates Of the Non-Banking Institution for the Agents:-

ICICI HFC TATA MOTORS M & M LIC LTD. GPO

1 Years 0.75 0.30 0.50 0.50 1.00

2 Years 1.00 0.75 0.75 1.00 1.00

3 Years 1.25 1.50 1.00 1.50 1.00

5 Years & above 1.25 1.50 1.00 2.00 1.00

STFC NABARD PNB HFC CAN-FIN HFC CENT HFC

1 Years 1.00 Rs 50 0.25 0.50 1.00

2 Years 2.00 Rs 50 0.50 0.75 1.00

3 Years 3.00 Rs 50 0.75 1.00 1.00

5 Years & above 3.00 Rs 50 1.00 –

1.75

1.00 1.00

TICK BOX COMPARISON OF NON-BANKING COMPETITORS

ICICI HFC TATA LIC M & M GPO

INTEREST ON MONTHLY/

QUARTERLY BASIS

OFFER ROI > 9.50 % OFFER MINIMUM COMMISSION

>= 0.50 %

ADDITIONAL ROI < 0.50 % FOR

SENIOR CITIZENS

SEPARATE INCENTIVE PLANS

FOR AGENTS

SECURITY (AAA RATINGS) TAX BENEFIT SCHEMES AVAILIBILITY OF LOAN

FACILITY

NOMINATION FACILITY AVAILABILITY OF RECURRING

DEPOSITS

~ 53 ~

TICK BOX COMPARISON OF NON-BANKING COMPETITORS (cont’d)

STFC CENT HFC NABARD PNB HFC CAN-FIN

INTEREST ON MONTHLY/

QUARTERLY BASIS

OFFER

ROI > 9.50 %

OFFER MINIMUM

COMMISSION >= 0.50 %

ADDITIONAL ROI < 0.50 %

FOR SENIOR CITIZENS

SEPARATE INCENTIVE

PLANS FOR AGENTS

SECURITY (AAA RATINGS) TAX BENEFIT SCHEMES AVAILIBILITY OF LOAN

FACILITY

NOMINATION FACILITY

AVAILABILITY OF

RECURRING DEPOSITS

~ 54 ~

ANALYSIS & INTREPRETATION

5.1 ANALYSIS OF FEATURES THAT LACK IN HDFC BUT PRESENT IN

ITS BANKING COMPETITORS

1. Banking Sector companies have a trend to offer Term or Fixed Deposits for variable

periods of time especially in days and various combinations in months which offer

great flexibility to its customers. Here, HDFC Ltd. has a loses this segment at all

since its product schemes have minimum lock-in tenure of 1 year.

2. Banking Sector companies also have an edge as they serve to small and medium

investors as they accept Fixed / Term deposits even for small amounts like – Rs 50,

100 and so on. However at HDFC Ltd. the minimum amount of deposits has to be Rs

10000/- in this way they discourage small investors and loose amount market share.

3. Some of the banks like ICICI, Yes Bank, Federal Bank, Central Bank of India etc.

offer a higher rate of interest than HDFC Ltd. so a rational consumer will have a

tendency to drift to them in order to maximize its returns.

4. Some of the banks have offered the flexibility to make a single account that have the

features of both Savings accounts and Fixed Deposit account wherein they can earn

~ 55 ~

the higher rate of interest on one hand and at the same time they possess the

flexibility to withdraw money any time and from anywhere.

5. Majority of the banks do not charge penal charges for pre-mature withdrawals.

However, with HDFC Ltd. as there is no provision to withdraw money upto 3 months

and subsequently there are no interest provided to customers if they withdraw the

amount in less than 6 months. Hence this is one of the biggest causes of distress for

the customers that for a long time of 6 months there is no incentive for their deposit

at HDFC Ltd.

6. Another major issue against HDFC Ltd. is that it calculates the interest amount on

yearly basis while majority of the banks compound it on a quarterly basis therefore

their annualized yield is higher even at the same level of rate of interest. So a

rational investor who is aware of this technicality will genuinely favour those banks

that offer interests that are compounded on a quarterly basis.

5.2 ANALYSIS FROM THE STUDY OF NON-BANKING COMPETITORS

The analysis is as follows:

1. COMPETITIVE ROI IN THE MARKET – Today’s world is a buyer’s market, when a

rational consumer finds competitive rate of interest (which is the return for its

investment) he will tend to get attracted by it and might opt to drop HDFC Ltd. for its

list.

NBFC INTREST RATE OFFERED

ICICI HOME FINANCE 9.15

CAN-FIN HFC 9.50

TATA MOTORS 11.00

M & M 12.87

SRIRAM TFC 14.58

2. LACK OF EFFECTIVE TRAINING PROCEDURES FOR THE KEY PARTNERS –

The Company as of now does not cater to the issue of providing training to the new

recruits. Training is essential as it not only informs agents about the company details

~ 56 ~

but also make them aware of the nitty-gritty of the product features that helps them

to convince and tap potential customers.

3. LACK OF FLEXIBLE DEPOSIT TENNURES – Non-Banking Sector offers variability

in deposit tenures some offer high flexibility in deposit tenures as it even accepts

deposits of order 1 – 10 years.

HDFC Ltd. on the contrary offers deposits with minimum tenure of 1 Year to a

maximum of 5 years only.

4. POLICY OF PRE-MATURE WITHDRAWAL – According to the company’s policy,

there shall be a minimum lock-in period of 3 months – within which the customer

cannot withdraw his money at all. Moreover, from the period of 3 months upto 6

months there will be no payment of interest made to the customer at all and beyond

the tenure of 6 months till the date of maturity there are penal cuts on interest

applicable of order – 2 – 3 % depending upon the situation.

5. LACK OF ACCEPTANCE OF CASH DEPOSITS- HDFC Ltd. does not accept cash

for making term deposits. It can be possible through cheques or demand drafts.

Making a DD incurs a fee for the client and there problems associated with the

cheques is of handling from bank to home or office. Since such clients have other

options like – ICICI HFL, GPO etc. who readily accept the cash deposit. So they do

not wish to make their term deposits with HDFC Ltd. which again makes the

company to lose clients.

6. LESS COMPETITIVE COMMISSION – An important issue that creates

dissatisfaction among KPs and is an important issue about lack of motivation for

them is the fact that the company`s commission rates are less competitive with

respect to their competitors.

7. MINIMUM MARKETING SUPPORT – Another important issue is the company

makes very little efforts to make its presence felt v.i.z. its competitors i.e. – HDFC

Ltd. as a brand is known for its Home Loans but there is very less awareness in the

market that the company is also into the business of Fixed Deposits.

~ 57 ~

Thus, lack of mass- awareness about the product and its feature creates another

issue that requires immediate attention.

5.3 STUDY OF ACTIVE KEY PARTNERS

The company HDFC Ltd. operates into its business of Fixed Deposits majorly through

informal channels i.e. through agents that they popularly term as Key Partners or KPs. These

Key Partners are broadly categorized as Active and Inactive Key Partners depending upon

their contribution made towards the business of the company.

Active Key Partners are those agents who are actively involved in promoting the business for

the company and are contributing huge revenues for the company. Active Key Partners were

studied majorly with two main objectives:

1. To identify the main problematic areas that these agents come across while working for

the company so that they can be improved upon.

2. To identify the main strength areas of the company so that they can be further built upon

and new agents can be recruited and can be motivated to work basing them.

~ 58 ~

For the study of Active Key Partners a random sample of 100 agents were studied. The

information was gathered through personal interaction and filling up of the questionnaire. At

times, even informal open-ended interviews also conducted wherever it was made possible.

The data so collected was then complied and the analyses basing them are as follows-

STRENGTHS OF THE COMPANY AS PRECIEVED BY THE KEY

PARTNERS:

1. EXCELLENT SERVICE PROVIDER – The Company enjoys the repute of being

“THE BEST OF THE BEST” in the market in reference to its services. Both agents

and the customers seem to be appreciative of the treatment given by them through

its employees. Agents feel that one of the biggest motivator for them to ring deposits

at their door is Hassel-Free Quick Services that are provided to them at HDFC Ltd.

2. RIGHT BLEND OF SAFETY, SECURITY AND RETURNS – Deposits is one of the

many sources of long term investment options available to any individual. Hence,

they expect not only good returns but also safety of the principle amount. HDFC ltd.

is a brand that enjoys “AAA” rating from two most reputed credit rating institutions –

CRISIL and ICRA since past 15 years.

Moreover, people recognize that the company deals in safe business as they are

aware of the fact that the main business of the company is to give home loans in lieu

of mortgage of property, who value (mortgaged property) will tend to appreciate over

time, they have minimal risk in their business dealings.

3. LOWEST NPA LEVELS – The biggest indicator of company’s high efficiency level

and safe dealings is through the fact that it has the lowest NPA levels in the entire

world. NPA are the levels of bad debts incurred by the company in one financial

year. For HDFC ltd. this rate is 0.84 % whereas the ideal ratio for companies in this

business goes at around 1.50%. It is also a clear indication of the efficiency levels at

which the company operates and the lower the NPA level, lower are the business

risks associated.

4. TIMELY PAYMENTS – Another significant attraction of HDFC ltd. is the fact that it is

very prompt in clearing all its customer’s and agent’s payments. This has helped to

create a good image in the market that attracts significant attention.

5. ETHICAL CODE OF CONDUCT – Every company is recognized majorly by its code

of conduct. HDFC Ltd. is a brand image of being high on moral and ethical

~ 59 ~

principles. This feature attracts attention of not only agents but also of end

customers.

6. RECOGNIZE AGENT’S EFFORTS – Every year the company keeps a meeting cum

gathering especially for agents where it recognizes the efforts of its hard working

agents through award ceremony. This informal gathering cum prize distribution

ceremony creates emotional bonding between agents and the company employees

and also creates a sense of satisfaction and belongingness among agents who feel

motivated to be part of the organization.

7. CONTESTS SCHEMES – Another marketing strategy that is very popular among

agents are the contest schemes that are being organized by the company on

monthly basis. This scheme on one hand adds to additional income for the agents

but on the other hand motivates them to achieve their targets that are beneficial for

the company. Thus in this way it creates a WIN-WIN situation, which is appreciative

by all.

PROBLEMS THAT EFFECTS ACTIVE KEY PARTNERS

1. COMPETTIVE ROI - The biggest problem that any agent can face could be

regarding competitive interest rates available in the market, offered on only for the

customers.

2. FLEXIBLE DEPOSIT TENURES – HDFC ltd has very limited tenures that it offers its

customers with a minimum limit of 1 year which does not attract short term investors

who have varied options of depositing in days and flexible time periods offered by

the competitors. Hence due to lack of varied deposit tenures HDFC can lose short

term investors.

3. LACK OF ACCEPTANCE OF CASH DEPOSITS - HDFC Ltd. has a policy not to

accept cash deposits. Some of the partners feel this makes their job problematic as

lack of availability of DD or Cheques at the time of their customer’s deposits makes

unnecessary delay, excess cost & leads to wastage of time.

4. POLICY FOR PRE-MATURE WITHDRAWAL -Another cause of concern for the key

partners has been in regards to company’s policy for Pre-mature withdrawal. So it’s

difficult on agent’s part to convince the customers as other competitors do not offer

such rigid policies.

5. LESS COMPETITIVE COMMISSION RATES – Another important cause of concern

for the agents is the commission rates that are being provided by the company. After

~ 60 ~

the analysis, even the study reveals the fact the commission rates paid by the

company are below the market rate prevalent in today’s scenario. Some of the

agents have confessed this fact that mainly due to higher rates given by their

competitor they give huge business to them, even though they acknowledge the fact

that HDFC ltd. is much safer and more reputed brand to deal with!! Hence, this

clearly signifies the fact that the company does lose upon its business by giving less

commission to its agents.

6. LACK OF INCENTIVE PACKAGES FOR THE AGENTS – Some of the competitors

indeed give attractive packages for the agents if they achieve minimum target

amount like- Foreign tours, giving cars etc. that constantly motivates them to give

more business to them knowing the fact that HDFC ltd is a more repute and safe

brand. Thus lack of incentive packages for the agents can make the company to lose

business.

7. LACK OF ISSUE OF IDENTITY CARDS -Some of the agents feel that they should

be issued some Identity Cards by the company. Lack of this makes it difficult for

them at times to convince customers about being genuine, and to create an image

that No Fraudulent activity shall take place. Issuing of ID cards shall promote

goodwill of both agents and the company.

8. LACK OF PROPER CHANNEL TO TRAIN KEY PARTNERS – HDFC Ltd. have no

procedure so far to train its new recruited agents, this is one of the important flaws

faced by the company as such training not only enlightened these agents about the

company for which they are going to work in future but also makes them aware of

the Nitti-gritty of the product features which in turn helps them to convince the end-

customers and to target them effectively.

9. MINIMUM MARKETING SUPPORT – A majority of the agents feel that they are not

been provided with adequate marketing support which could have helped to improve

the visibility of the company. Lack of it makes the company to lose its business to

competitors as agents feel that if the customers proposed the agent to make

deposits only through a particular company, they can’t do much to change their

outlook.

10. INCONVENIENT LOCATION -The location of the branch is indeed another cause of

concern for the key partners as the distance that they need to travel (to make

deposits on behalf of the customers) is immense. Moreover, due to lack of adequate

~ 61 ~

parking space at times create trouble as their vehicles are being towed by the

policemen who cause much of distress and wastage of time.

5.4 PERCEPTION MAPPING OF TOP 5 NON-BANKING COMPANIES AS

PERCIEVED BY KEY PARTNERS

ATTRIBUTESEXCELLE

NTGOOD

AVERAG

E

SATISFACTO

RY

UNSATISFACTO

RY

ATTITUDE OF THE

EMPLOYEES 1 2 5,4 3

RATE OF

INTEREST 4 2 1,5 3

COMMISSION

RATES 3 2,4,5 1

~ 62 ~

INCENTIVES 2 1 3,5,4

SECURITY (AAA

RATING) 1,3,5 2 4

MARKETING

SUPPORT 2,5 1,4 3

TIMELY PAYMENT

OF COMMISSION 1 2,3,4,5

TIMELY

INFORMING

ABOUT CHANGES 4,5 1,2 3

AWARDS AND

RECOGNITION 1 2 ,5 3,4

ANNUAL MEETING 1 2,4,5 3

TRAINING FOR

AGENTS 5 1,2,3,4

KEY TO THE CHART

NAME OF COMPANIES COMPARED:

1 = HDFC Ltd.

2 = ICICI HOME FINANCE

3 = GENERAL POST OFFICE

4 = TATA MOTORS Ltd.

5 = LIC Ltd.

5.5 PIE-CHART REPRENTATIONS –

Following are the pie-chart presentations on 6 important criteria have to compare 5 different

companies dealing in similar businesses.

I. RATE OF INTEREST:

~ 63 ~

GoodAveragePoor

General PostOffice

TATA MOTORS Ltd.

HDFC Ltd.ICICI HFCLIC Ltd.

II. COMMISSION RATES:

GoodAveragePoor

HDFC Ltd.

General Post Of-fice

ICICI HFCLIC Ltd.TATA MOTORS Ltd.

III. SECURITY (RATINGS):

~ 64 ~

GoodAveragePoor

TATA MOTORS Ltd.

HDFC Ltd.GPOLIC Ltd.

ICICI HFC

IV. MARKETING SUPPORT:

GoodAveragePoor

GeneralPost Office

HDFC Ltd.TATA MO-TORS Ltd.

LIC Ltd.ICICI HFC

V. TIMELY PAYMENT OF COMMISSION:

~ 65 ~

GoodAveragePoor

HDFC Ltd.

ICICI HFCLIC Ltd.TATA MOTORS LtdGPO

VI. ATTITUDE OF THE EMPLOYEES:

GoodAveragePoor

General Post Of-fice

HDFC Ltd.

ICICI HFC

LIC Ltd.

TATA MO-TORS Ltd.

SWOT ANALYSIS

STRENGTH:

~ 66 ~

1. Safest Company to deal with has been rated AAA by CRISIL and ICRA since past 14

years.

2. The company can also boost itself of possessing lowest NPA in financial sector in

ASIA.

3. The company (for its business of Fixed Deposits) offers wide range of products to

suit individual needs i.e. monthly , quarterly , half-yearly and cumulative.

4. It even has Easy Way Savings Scheme for small investors.

5. It provides the easy and comfort of Door-to-door services.

6. HDFC has got wide network, possesses 280 offices across the country and 14

branches in the state of Rajasthan itself.

7. FD avail Loan against FD up to 75% of the amount & absolutely Hassel free helps to

avoid Pre- mature withdrawals.

WEAKNESS:

1. Since the company is a non-banking organization it is bound to work under NBFC

guidelines.

2. Deductions in interest rates up to 3% makes the customer feel the pain in the neck at

the time of premature withdrawal.

3. Fixed Deposits by nature have a disadvantage that money gets blocked for a fixed

period of time. This limits the hands of the customer in times of urgency.

4. Also there is need that with rapid growth and development of all most all cities and

villages of the country.

5. Another important is that Fixed Deposits not available for short period of time.

OPPORTUNITY:

1. HDFC is one of the strongest players of the market and being safest. Its present

competitors do not have any edge and are losing out due to economic slowdown as

they lack security and safety which the customers desire the most specially during

times like this, so there are huge chances of the company to gain from FD business

provided the message of its power and stability.

2. Fixed Deposits are considered safest amongst all other options to invest during

times of depression mainly because customers are bothered by the swings of share

market.

3. More apparently BROKERS who earlier used to give stiff competition to FD market

can now be leered to join hands with HDFC as KPs. They have an edge to benefit as

even they are bothered to ensure safety for their customer’s investment. ~ 67 ~

4. Huge untapped market potential also vests in form of small investments.

5. Potential markets can also be tapped from Villages and small districts.

6. The idea of MOBILE VANS is brilliant to increase both reach and visibility; it also at

the same time offers cost effective approach as the same van can be sent to

required area can construction cost of many branches can be reduced.

THEARTS:

1. A serious threat appears to arise from the fact that the company has a limited

visibility and reach ; this appears to be more haunting from the fact that even though

the competitors of HDFC are less competent and posses lesser safety and security

but still they are able to draw its customer due to lack of knowledge

2. Since there is global slowdown in the economy and the fact that it has to follow

NBFC guidelines so the company is left with limited flexibility to make interest rates

attractive to its customers, and so there are chances to lose huge customers to

competitors specially from banking sector which come under RBI guidelines and not

of NHBC.

3. Another obvious threat appears from the potential new entrants and present levels of

competitors.

4. Frequent changes in the government monetary policies and guidelines also affects

the company strategies which at times force the company to make such decision that

appear product quite unattractive in the eyes of the end-customers.

CONCLUSION

~ 68 ~

The market of the fixed deposit is in the boom phase as the share market stumbles

due to the global crisis which also affects the realty sector and the insurance sector.

This report helps the company to capture business for the business when there is volatility

in the market. The business of Fixed Deposits also is much needed for the capital

requirements of the Loans business.

Now company has to decide their different way according to the perception of the

customers to grasp the more business. For getting more business company has to involve

more Active key partners which generate prominent business by their great network. To

grow this channel in market awareness about the product is much needed. As the company

is well known and image in the market then there is no major problem to doing so.

Now, the way of success for the company in the current situation will be is to make more

aware about the company products and making more & more involvement in it.

Now if the company has to capture the market they will have to look for the innovation in

their product as well as service mix.

RECOMMENDATIONS

~ 69 ~

Recommendations made over the analysis & interpretation of the main competitor i.e. Non-

Banking Financial Institutions are as follows:-

1. Regarding the ROI in the Market – The company works on the principle of

conservatism therefore by its policies it will not generally tend to hike its ROI by huge

volumes. But minor hikes of order – 0.25 to 0.75 will not only make it more appealing

to the end customers but will also not cause much to the company’s pocket.

2. Regarding the training of the Key Partners HDFC Ltd. can ideally keep small

training sessions on every Saturday. Saturday being half-day for rest of the

employees, one or two company representatives can spend additional 2-3 hours in the

office (for which they can be paid incentives) & train the recruits. OR If the number of

new hires is limited then, such training sessions can also be kept on a fort-nightly

basis.

Saturday being a week-end will also be ideal time as the KPs can also spare some

time for such training sessions unlike on working days.

3. Regarding Flexible tenure of Deposits - HDFC Ltd. is a non-banking institute and

hence it receives its guidelines from NHB. Under its guidelines, the non-banking

institute cannot offer term deposits of order less than 12 months. Therefore it cannot

do anything to cater to small term depositors.

However, it can surely tap very long term investors by not limiting the deposit tenures

to just 5 years but to extend them upto 7 – 10 years.

4. Regarding the premature Withdrawal - It’s under NHB guidelines that the company

offers a minimum lock-in period of 3 months and beyond that upto 6 months

To overcome this problem on premature withdrawal company may offer more

attractive Loans on the deposits.

5. Regarding the Lack of Acceptance of the Cash Deposit – to prevent the Black

money laundering this will be adapted as the not take cash & one more problem with

that it may be risky as to be taken with customers. Now it is responsibility of the HDFC

Ltd. to promote this thing as there feature in front of their customers & in the market.

A formal convey of information of this fact should be made to NHB so that it levers

regulation and no company can have that edge.

~ 70 ~

6. Regarding the Commission to Key Partners – Since the company works on the

principle of not to over exaggerate its expenses but aims to reduce it at minimum

levels It will not be feasible to propose a high hike in commission rates. But certain

hike of 0.25-0.50% appears not only feasible (considering the kind of returns in terms

of profits it can give) but will also make the product more appealing to the KPs.

7. Regarding the Marketing Aspect – One of the important sources to increase the

visibility factor is through making advertisements in media like – Television,

Newspaper ADs, Big Hoardings, and Banners etc.

But since all these sources require huge investment, more feasible solution could be

thinking of small-little ways that will not only create massive awareness but would be

cost effective. For e.g. – making tyres covers with reference of FDs that can be given

to KPs who can further distribute to their clients, making – pens, calendars, book-

marks with HDFC FDs logo and brief description of its product features that can again

be circulated for distribution.

~ 71 ~

SUGESSTIONS

STUDY FOR INCREASING THE VISIBILITY

An important problem that the company’s business of Fixed Deposits faces is that the

general public does recognize the brand HDFC as a reputed company for home loans not

for the business of Fixed Deposits. Again many people do get confused HDFC Ltd’s Fixed

Deposit as the Fixed Deposit of HDFC Bank whereas realities both of them are competitors

for each other.

Hence a major objective in front of the company is to make the brand name popular for its

business of Fixed Deposits as well. Therefore the next important task in hand was

regarding to improve the visibility factor of the brand for its business of Fixed Deposits.

Under this part of study, various suggestions were to be identified that can possibly help to

popularize the company’s business of Fixed Deposit. The suggestions so made, are totally

based on my personal understanding about the nature of the business and the relevant

media that could be used for the same.

However, while making such suggestions the Ideas were bounded by the fact that the

company does not like to over-exaggerate its expenditure for advertisement and so

emphasis were made on initiating only cost-effective measures only.

SUGGESTIONS TO IMPROVE VISIBILITY

Some of the suggestions considering as the feasible to improve the company’s name &

fame of the company; are as follows:

I. Present the company conducts two contests on monthly basis to value the efforts of

‘that month’s top performers’ and gives away cash prizes ranging between Rs.500 to

Rs.2000, however such recognition are not widely noticeable. In-fact many of the

agents are not even aware of that some contests are even conducted by the

company. Therefore what ideally can be done is the names along with photograph of

such winners can be put upon the notice board of the company, so that when the

agents visit the company to get their customers fixed deposit register they can

actually see those winners. This will not only help to improve upon the visibility factor

for the company but will also act as a stron

g motivating factor for the agents to contribute more

business for the company in order to become the next winners.

~ 72 ~

II. In order to promote popularity of the company in the remote or Rural areas the

company can conducts camps in such areas where the company representatives

can convince and educate the masses about the benefits of term deposits in their

local dialects and at the same time shall skits and plays focusing on the importance

of small and timely savings in their lives can be conducted. And then basing which

the product can be promoted and the business can thus be extended in the interiors

of the state.

III. Now-a-days, FM Radios have also gained importance as a medium of

advertisements and is also quite cost effective with respect to the other mediums

like- televisions and newspapers ads. So what ideally can be done is in some

educative radio show, explaining the products features and their competitive edge

over other companies.

Another important source that is quite cost-effective and other good medium of

advertisement is MOBILE-SMS i.e. a bulk list of people can be sent sms featuring

the company’s product and the applicable rates.

IV. Since the company’s prospective target market can be salaried professionals

therefore institutions like-school, bank offices, privates institutes etc can be

contacted and offered bulk deposits schemes under which for all cumulative deposits

made by a group of 10-20 people, each one of them can be given 0.25% extra on

the prevalent deposits rates. Such schemes can be a good source of business

prospects for the company.

V. Another important cost effective suggestion can be that all the popular restaurants

can be contacted and small banners of HDFC Deposits can be posted at various

sections of the entire sitting arrangements so that they are well-noticed by the

customers.

~ 73 ~

APPENDIX

KEY PARTNER’S QUESTIONNAIRE

OBJECTIVE: - The Objective of this Questionssnaire is to get your feedback regarding

HDFC Ltd. business dealing that would help us to improve our services to serve you better,

so please answer to the entire question honestly and your answer will be kept confidential.

PERSONAL DETAILS:-

Name:

Age:

Agency Code:

No. of years you have been part of HDFC Ltd:

FEEDBACK DETAILS:-

Q1. How do you grade the overall experiences to be part of HDFC (Fixed Deposits)?

a. Excellent b. Satisfactory

c. Good d. Not satisfactory

Q2.If you are not satisfied, what is the reason behind that?

a. Low Brokerage Rate b. No appreciation for KPs

c. Lack of Services d. Any other

Q3. What are the monthly targets that you generate for HDFC Deposits?

A. below 1 lakhs b. 1-2 lakhs

c. 2-5 lakhs d. above 5 lakhs

Q4. What are the biggest challenges for you to attract Potential customers?

a. Hesitation b. Unawareness about Deposits

c. Unstable Market d. Fear of changing policy

e. Any other ________________________________________________________

Q5. What do you feel should be incorporate more in the present services of the

company?

_________________________________________________________________________

_________________________________________________________________________

Q6. Reasons for which you are been the Key Partner from such a long period?

a. Higher Safety b. Transparency

c. Strong Financial Base d. Good Services

~ 74 ~

e. AAA rating from 15years f. Customer Satisfaction

g. Professionally Managed Company h. All of them

Q7. Do you feel the Commission or Brokerage rates of HDFC are competitive or at

par with present market rate?

a. Yes

b. No

Q8. If NO, then what rate you expect & why?

_________________________________________________________________________

_________________________________________________________________________

Q9. What do you feel can be the biggest hindrance in the prospective growth of the

company in the days to come that can affect the profit margins for the company?

_________________________________________________________________________

_________________________________________________________________________

Q10. Which feature you like the most as Key Partner?

a. Highest Safety d. Good Services

b. Wide Range of Products e. Advance Renewal Facility

c. High Liquidity f. Any other

Q11. Are you sensitive with the INCENTIVES that HDFC Ltd. provides to its Key

Partners?

a. YES

b. NO

Q12. What type of Deposits customer preferred?

a. Regular Deposits

b. Premium Deposits

Q15. Are you an agent of any other Non-Banking/Banking institution?

a. YES

b. NO

Q16. If YES, then please mark & name of them?

a. Post Offices b. Nationalized banks

c. Private banks d. Non-banking Institution

e. Any other

Q17. Do you think there is need of Special meetings/classes to motivate Key

Partners?

~ 75 ~

a. YES

b. NO

Q18. Any suggestion regarding enhance the more & more KPs, Customer, Clients?

_________________________________________________________________________

_________________________________________________________________________

Q19. Any unusual experience or remark that you would like to bring in notice of the

management?

_________________________________________________________________________

_________________________________________________________________________

INTRESEST RATES ON VARIOUS DEPOSIT SCHEMES - HDFC REGULAR DEPOSITS

FOR INDIVIDUAL - (Fixed & Variable Rates) Interest rates effective from JUNE 18, 2009

REGULAR-ANNUAL INCOME PLAN

Period (Months) INDIVIDUAL SENIOR CITIZEN

24 – 35 7.65 7.90

36 – 59 7.90 8.15

60 – 84 8.25 8.50

Minimum Deposit Amount - Rs. 20,000

REGULAR - MONTHLY INCOME PLAN

Period (Months) INDIVIDUAL SENIR CITIZEN

12 – 23 7.10 7.35

24-35 7.35 7.60

36 – 59 7.60 7.85

60 – 84 7.95 8.20


REGULAR NON-CUMULATIVE - QUARTERLY OPTION


12-23 7.15 7.40

24-35 7.40 7.65

36-59 7.65 7.90

60-84 8.00 8.25

~ 76 ~


REGULAR NON-CUMULATIVE - HALF YEARLY OPTION


12-23 7.25 7.50

24-35 7.50 7.75

36-59 7.75 8.00

60-84 8.10 8.35


REGULAR - CUMULATIVE OPTION

Period (Months) INDIVIDUAL SENIOR CITIZENINDIVIDUAL

(Maturity Amt of Rs 20,000)

SENIOR CITIZEN

(Maturity Amt of Rs. 20,000)

12 7.40 7.65 21480.00 21530.00

24 7.65 7.90 23177.04 23284.82

36 7.90 8.15 25124.32 25299.36

48 7.90 8.15 27109.14 27361.26

60 8.25 8.50 29728.26 30073.14

72 8.25 8.50 32180.84 32629.36

84 8.25 8.50 34835.76 35402.84

Minimum Deposit Amount - Rs. 20,000 Interest Compounded annually

NOTE

Deposits are subject to tax deduction at source, wherever applicable.

Given Interest rates applicable for deposits below Rs 1 crore.

Other Terms and Conditions as per Deposit Applicable Form

HDFC PREMIUM DEPOSITSFOR INDIVIDUAL - (Fixed & Variable Rates) Interest rates effective from JUNE 18, 2009

PREMIUM-ANNUAL INCOME PLAN


30 8.00 8.25

45 8.00 8.25


PREMIUM DEPOSIT- MONTHLY INCOME PLAN

~ 77 ~


15 7.25 7.45

30 7.70 7.95

45 7.70 7.95


PREMIUM NON-CUMULATIVE - QUARTERLY OPTION


15 7.50 7.50

30 8.00 8.00

45 7.85 8.00


PREMIUM NON-CUMULATIVE - HALF YEARLY OPTION

Period (Months)Rate of Interest

(% p.a.)*

Maximum Deposit

without TDS (Rs.)**

15 7.60 65000

30 8.10 61000

45 7.95 62000


PREMIUM - CUMULATIVE OPTION

Period (Months) INDIVIDUAL SENIOR CITIZENINDIVIDUAL

(Maturity Amt of Rs 20,000)

SENIOR CITIZEN

(Maturity Amt of Rs. 20,000)

15 7.50 7.75 21903.12 21967.54

30 8.00 8.25 24261.12 24402.86

45 8.00 8.25 26705.90 26939.34

Minimum Deposit Amount - Rs. 20,000: Interest Compounded annually

NOTE

Deposits are subject to tax deduction at source, wherever applicable.

Given Interest rates applicable for deposits below Rs.1crore.

Other Terms and Conditions as per Deposit Applicable Form

HDFC DEPOSITS - FOR TRUSTS

Interest rates effective from JUNE 18, 2009

REGULAR DEPOSITS (Fixed & Variable Rates)

REGULAR DEPOSITS (Fixed & Variable Rates)

~ 78 ~

PERIOD Annual

Plan

Cumulativ

e

Half- Yearly

Option

Quarterly Option Monthly

Option

12-23 - 7.25% 7.15% 7.10%

24-35 7.65% 7.50% 7.40% 7.35%

36-59 7.90% 7.75% 7.65% 7.60%

60-84 8.25% 8.10% 8.00% 7.95%

Min.Amount (Rs) 20,000 20,000 20,000 40,000

For Cumulative Option Interests is Compounded Annually.

Deposits can be placed for any numbers of months between 12 & 60

PREMIUM DEPOSITS (Fixed & Variable Rates)

PREMIUM DEPOSITS (Fixed & Variable Rates)

PERIOD Annual

Plan

Cumulativ

e

Half- Yearly

Option

Quarterly Option Monthly

Option

15 7.50% 7.35% 7.25% 7.20%

30 8.00% 8.00% 7.65% 7.75% 7.50%

45 8.00% 8.00% 7.65% 7.75% 7.50%

Min.Amount (Rs) 10,000 20,000 20,000 20,000 40,000

For Cumulative Option Interests is Compounded Annually.

NOTE:-

Interest rates are subjected to change & the rates applicable will be the rate prevalent on the date of deposit.

Differential Interest Rates will be applicable for Rs. 1 crore & above as per the extant guidelines.

BROKERAGE & INCENTIVES RATES

Applicable on the deposits mobilised during the period 1st April to September 30th 2009 are:

INDIVIDUAL DEPOSITS (Regular & Premium)

PERIOD

(MONTHS)

Rate of

Brokerage

*Target Amount of Incentives Maximum Rate of

Commission

(Brokerage +Incentives)

Rs. 5 Lakhs Rs.10 Lakhs Rs.25 Lakhs

Rate of Incentives

12-23 0.25% 0.15% 0.20% 0.30% 0.55%

24-35 0.50% 0.30% 0.35% 0.50% 1.00%

36-47 0.75% 0.40% 0.45% 0.75% 1.50%

48-59 1.00% 0.40% 0.45% 1.00% 2.00%

60-84 1.25% 0.40% 0.45% 0.75% 2.00%

TRUST DEPOSITS (Regular & Premium)

PERIOD

(MONTHS)

Rate of

Brokerage

*Target Amount of Incentives Maximum Rate of

Commission

(Brokerage +Incentives)

Rs. 5 Lakhs Rs.10 Lakhs Rs.25 Lakhs

Rate of Incentives

~ 79 ~

12-23 0.25% 0.15% 0.20% 0.30% 0.55%

24-35 0.50% 0.30% 0.35% 0.50% 1.00%

36-47 0.75% 0.40% 0.45% 0.75% 1.50%

48-59 1.00% 0.40% 0.45% 1.00% 2.00%

60-84 1.25% 0.40% 0.45% 0.75% 2.00%

NOTE:-

Incentives will be paid to Key Partners only if they achieve the target amount during the period 1st April to September 30th

2009

EASY WAY SAVINGS

Brokerage will be paid @ 0.50 % p.a. proportionately for the actual period of each contribution made in the account.

BIBLIOGRAPHY

TEXT BOOKS:-

Kothari C.R., “Research methodology”, New age international Pvt. Ltd. 2nd

Edition.

Agrawal M.R., “Security Analysis & Investment Management” Garima

Publication,2008 1st Edition

Bhalla V.K, Investment Management, New Delhi: S.Chand Publication, Inc.2007,

13th Edition.

Ramaswamy V S, Namakumari S, “Marketing Management”, MACMILLAN

Business Books. 3rd edition.

Kotler Philip, “Marketing management” Persons Education, 11th edition.

Kotler Philip, Killer, Koshy, Jha, “Marketing Management” Persons Education,

12th edition.

Kumar Arun and N Meenakshi, “Marketing Management” Vikas Publications,

2006 1st edition.

HDFC Journals

“HDFC QUATERLY” – quarterly newsletter of Housing Development Finance

Corporation Limited.

“IN TOUCH” – a newsletter for Fixed Deposit’s Key Partners.

WEBSITES LINKS

http://www.articlesbase.com/banking-articles/fixed-deposit-the-best-and-secured-

way-to-save-money-692210.html

http://www.ecompare.co.in/savings/savings_search_results.cfm?

variable=form&compare_flush_flag=1&searchtype=basic&type=fixeddeposits

~ 80 ~

http://www.ecompare.co.in/savings/savings_search_results.cfm?variable=form&compare_flush_flag=1&searchtype=basic&type=fixeddeposits

http://www.ecompare.co.in/savings/savings_search_results.cfm?variable=form&compare_flush_flag=1&searchtype=basic&type=fixeddeposits

http://www.articlesbase.com/banking-articles/fixed-deposit-the-best-and-secured-way-to-save-money-692210.html

http://www.articlesbase.com/banking-articles/fixed-deposit-the-best-and-secured-way-to-save-money-692210.html

http://www.maduraidirectory.com/bandf/interest.php [ Accessed on 02 June

2009 ]

http://business.mapsofindia.com/investments/insurance/mutualfunds/indian

sharemarket/indian real state.html

http://www.rupeetimes.com/article/fixed_deposits/

fixed_deposits_in_india_benefits_drawbacks_and_precautions_1103.html

http://www.articlesbase.com/personal-finance-articles/fixed-depositsthe-

favorable-deposits-again-762295.html

http://www.articlesbase.com/finance-articles/fixed-deposits-infusing-faith-in-

people-650293.html

http://www.caclubindia.com/articles/article_list_detail.asp?article_id=754

http://cdrates.bankaholic.com/advantages-disadvantages-of-cd-accounts/

http://www.indianground.com/nri/faqs-nri-banking.aspx

http://iic.nic.in/iic5_a02.htm [ Accessed on 12 April 2009 ]

http://www.ratekhoj.com/news/index.php/fixed-deposits/flexi-deposits-in-india-a-

hybrid-of-savings-accounts-and-fixed-deposits-141/

http://www.rediff.com/money/2006/jan/18tax.htm

WEBSITES

Company website – www.hdfc.com

www.business.mapsofindia.com

Websites of all the 15 banks and 10 non-banks studied under competitive analysis.

~ 81 ~

http://www.hdfc.com/

http://www.rediff.com/money/2006/jan/18tax.htm

http://www.ratekhoj.com/news/index.php/fixed-deposits/flexi-deposits-in-india-a-hybrid-of-savings-accounts-and-fixed-deposits-141/

http://www.ratekhoj.com/news/index.php/fixed-deposits/flexi-deposits-in-india-a-hybrid-of-savings-accounts-and-fixed-deposits-141/

http://iic.nic.in/iic5_a02.htm

http://www.indianground.com/nri/faqs-nri-banking.aspx

http://cdrates.bankaholic.com/advantages-disadvantages-of-cd-accounts/

http://www.caclubindia.com/articles/article_list_detail.asp?article_id=754

http://www.articlesbase.com/finance-articles/fixed-deposits-infusing-faith-in-people-650293.html

http://www.articlesbase.com/finance-articles/fixed-deposits-infusing-faith-in-people-650293.html

http://www.articlesbase.com/personal-finance-articles/fixed-depositsthe-favorable-deposits-again-762295.html

http://www.articlesbase.com/personal-finance-articles/fixed-depositsthe-favorable-deposits-again-762295.html

http://www.rupeetimes.com/article/fixed_deposits/fixed_deposits_in_india_benefits_drawbacks_and_precautions_1103.html

http://www.rupeetimes.com/article/fixed_deposits/fixed_deposits_in_india_benefits_drawbacks_and_precautions_1103.html

http://business.mapsofindia.com/investments/insurance/mutual

http://www.maduraidirectory.com/bandf/interest.php

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