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LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT

Format of Declaration of Authenticity by StudentDECLARATION OF AUTHANTICITY BY STUDENT

I, " POOJA DEVI, hereby declare that the work presented herein is genuine work done

originally by me and has not been published or submitted elsewhere for the requirement of a

degree programme. Any literature, data or works done by others and cited within this

dissertation has been given due acknowledgement and listed in the reference section.

POOJA BRAR(Student's name & Signature)

10902414

(Registration No.)

Date: 21ST Aug.

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Report on Summer Training

ON

Comparative analysis of public bank (SBI) and private bank (HDFC)

(Report HDFC BANK)

Submitted to Lovely Professional University

In partial fulfillment of the

Requirements for the award of Degree of

Master of Business Administration

Submitted by: - POOJA DEVI

University Registration N:-10902414

Roll NO.:-RT1901A08

Section:-RT1901AO8

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ACKNOWLEDGEMENT

\

I would like to thank my project guide Miss Sukhwinder kaur which helps me to complete this

research project. His encouragement, time and effort are greatly appreciated.

I would like to for supporting me during this project and providing me an opportunity to learn

outside the class room. It was a truly wonderful learning experience.

I would like to dedicate this project to my colleagues and all those who help me to complete this

project. Without their help and constant support this project would not have been possible.

(POOJA DEVI)

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TABLE OF CONTENT (Including list of tables and illustrations):-

Summary

Introduction to banking services :-

Theoretical foundation

Objectives

Review of literature

Research Methodology

Source of data

Sample place

Sampling technique

Methodology

Overview of HDFC BANK LTD.

History

Growth

Landmarks

Major players

Profile of the HDFC BANK LTD.

Companys history

Financial status of the company

Balance sheet

Profit and loss account

Ratios

Introduction of SBI bank

Balance sheet

Profit and loss account

Ratios

SWOT analysis of HDFC bank

SWOT analysis of SBI BANK Combined analysis of SBI BANK & HDFC BANK

Recommendations

Conclusions

Bibliography

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Summary

We are beginning the study on comparative analysis of the private bank with public ba nk. Soon, aftersociety recognized the benefits of using money as a medium of exchange, it recognized the need fora safe place to save it. This safe place ultimately involved into financial institution that acceptdeposits and make loans.

During the origin of the bankers, most of the banks were public banks. The banks were limited andthe employees were paid from the government. They were not having close contact with thecustomers. The dealing of the staff with the customer was rude and they were not worried for the

deposits for which the government has employed them. Keeping in view the public dealing by thepublic banks, the private sector arouse its voice to establish the private bankers whose dealing withthe customer should be polite and the other tasks should be done in stipulated time. The private

banks in to the existence with full strength and power.

The survey has been done analyzing the services given by the private banks and public banks. Theresults are alarming and wonderful but there is one thing which has been ascertained from the surveythat is uneducated people and the people from the villages who do not know the difference betweenthe private and public.

Those people who are educated and of middle class they know the dealing of the private banks. Theprivate banks staff is very co-operative, loyal and helpful. The welcome desk of the private banks

solves the queries frequently and quickly .in private banks the staff understand the needs of thecustomers and the services are quick.

The customers need not to stand in the long queues like public banks. In public banks the queue arenot solved even visiting 7-8 days. Their operation of opening an account is very lengthy. In private

banks it is very simple and the new account is open very easily.

The loan facilities in the private banks are very attractive on low rate of interest and the procedure isvery simple but in public banks the rate of interest are high and they require so many documentswhich at least take one month.

The mission of the private banks is fulfilling socio-economic obligation and excellence in thecustomer service. Another mission is to achieve sustained growth of business and profitability whichis not available in public bank. The other schemes run by private banks such as special depositscheme, scheme for senior citizen, life insurance against deposit of money, nomination facility, andloan facility

On cheap interest rate where available but the normal men or a middle class man cannot take benefitof these due to their long process system.

In private banks customers satisfaction is the prime task where as in public bank no body is worriedabout this because they will get the recruitment from government on due date. Grievance handling

procedure is also faster in private banks .innovative services are only provided by the private banks.

All the private banks are computerized and link with internet. Their services are quick and correct in

comparison with public banks.But one thing which alarming that is education among the uneducated and village people. One thingwhich has been taken place in their minds is public bank is government bank and their money is safethere. They do not know clear picture of the private banks,

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Their procedure, work, dealing and safety of their money. Their is an urgent need to advertise thequalities and assurance of safety of money amongst middle society persons.

The young volunteers of private banks showed organize melas, visits to villages and publishedposters about the banking facilities and especially of their deposit money and their insurance of life.It is utmost requirement for campaign such type of festivals which will enhance their knowledge of

private banks.

FINDINGS:-

Procedure in private banks for deposits is very simple.

Customer services in private banks are very good customers are satisfied with the functioningand services provided by the banker.

The private banks have gain good reputation in the market due to its well planned goodcustomer service.

The private banking system is functioning with more advanced technology.

The co- operation of staff of private banks dealing quick solution and customer satisfactionsare praise worthy.

CHAPTER 1

(1.1) INTRODUCTION TO THE BANKING SECTOR

A banker or bank is a financial institution whose primary activity is to act as a payment agent forcustomers to borrow and lend. The first modern bank was founded in Italy in Genoa in 1406; itsname was Bunco did San Giorgio (Bank of St. George).

Many other financial activities were added over time. For example banks are important players infinancial markets and offer financial services such as investment funds. In some countries such asGermany banks are the primary owners of industrial corporations while in other countries such as theUnited States banks are prohibited from owning non-financial companies. In Japan, banks areusually the nexus of cross share holding entity known as zaibatsu In France"Bancassurance" ishighly present, as most banks offer insurance services (and now real estate services) to their clients

Indias financial service industry is dominated by the banking sector that contributes significantly tothe revenue of this industry. To be sure, the industry has generated tremendous employmentopportunities for the large sector of the strength and flexibility of its banking structure. In the Indiancontext; banking is verily the proxy and indeed the cornerstone of the overall economic growth of the

country. Before liberalization, the Indian banking structure was largely controlled and parameterslike branch size and location were given paramount importance.

The Indian banking industry has come from a long way from being a sleepy business institution to ahighly proactive and dynamic entity. This transformation has been largely brought about by the large

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dose of liberalization and economic reforms that allowed banks to explore new businessopportunities rather than generating revenues from conventional streams (i.e. borrowing andlending). The banking industry in India is highly fragmented with 30 banking units contributing toalmost 50% of deposit and 60% of advances. Indian nationalized banks (bank owned by thegovernment) continue to be the major lenders in the economy due to their sheer size and penetrativenetworks which assures them high deposit mobilization. The Indian banking industry can be broadlycategorized into nationalized, private banks and the specialized banking institutions.

The Reserve Bank of India acts as a centralized body monitoring any discrepancies and shortcomingsin the system. It is foremost monitoring body in the Indian financial sector. The nationalized banks(i.e. government owned banks) continue to dominate Indian banking arena. Industries estimatesindicate that out of 274 commercial banks operating in India, 223 banks are in public sector 51 are in

private sector. The private sector grid also includes 24 foreign banks that have started theiroperations here. Under the ambit of the nationalized banks comes the specialized banking institution.These institutions (i.e. co-operatives, rural development, imports and exports etc. these banks nimblefooted in approach and armed with efficient branch networks focus primarily on high revenue, richretail segments.

Unlike the commercial banks the co-operative do not lend on the basis of a prime-lending structureand hence have lower overheads. This enables them to give a marginally higher percentage on savingdeposits. Many of these co-operative banks diversified in specialized areas (catering to the vast retailaudience) like car finance, housing loans, truck finance etc. In order to banks too have investedheavily in information technology to offer high-end computerized services to its clients.

Figure: An application of Porters Five Forces model to the banking industry

Threat of new entrants- HIGH

Bargaining power Bargaining power

Suppliers-LOW buyers- HIGH

Threat of substitutes- LOW

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are asmentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

NEW ENTRANTS

INDUSTRYCOMPETITORS -LOW

SUBSTITUTES

BUYERSSUPPLIERS

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New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reformsafter 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase-in.

OBJECTIVES OF THE PRESENT STUDY

The present study focused on the perception of the difference in the services given by the hdfc banksand state bank of India. The main objectives of the study include the following:

.

PRIMARY OBJECTIVE

To study the different services given by the public and private bank.

To know the financial position of the hdfc bank and State bank of India

To study the level of awareness of respondents regarding the services provided by hdfc banksand state bank of India

To study the level of satisfaction of the customers from the services given by the public

and private bank.

Main objective of the Research is to know whether hdfc banks or state bank of India is

earning profit or bearing loss in its past five years year.

NEED FOR THE STUDY

To know that which bank satisfy the need of the customer either it is hdfc bank or state bankof India

To know the areas/ parameters that has to be corrected to increase the satisfaction level of thecustomers.

To study the need of the customer.

To study the problems faced by the customer in banks.

This study being based on the assumption that an interviewer is providing accurate andreliable information may not hold true in every case.

Firstly, there are public banks in the country and people just trust on the public banks. now,

India is a developing country

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(1.2) REVIEW OF LITERATURE

There are many banks in India some of them are public and some are private. Public banks are thosewhich are operated by the government and public banks are not. The working of the both banks issame deposit and withdrawal of cash. The main difference is the services and the products offered bythe banks.private banks give the good services as compare to public bank but the awareness of the

public about the private bank is less.so, the main thing is the awarness of the public and customersatisfaction.

(Arthur Meidan) (Year: 1983)Because of the intangible and inseparable characteristics of the bankservices, every bank needs to locate these services and branches at locations which provideaccessibility to the greatest numbers of both major categories of potential customersprivateindividuals and firms (i.e. corporate customers). This article presents the major channels ofdistribution for banking services and the four main types of quantitative techniques available for

bank branch location decisionseconomic, spatial, and bivariate and multiple regression methods.The article indicates the leading bank distribution strategiesdefensive, offensive andrationalization strategiesand attempts to assess the impact of new technology developments

particularly of Electronic Fund Transfer Systems (EFTS) and Automatic Teller Machines (ATMs)on the future of distribution of bank services and branch location.(D.W Cowell) (Year: 1990)The

objectives of this paper are firstly to outline the scope and the content of marketing, and secondly toexplore the nature of the marketing of services as distinct from the marketing of products. Infulfilling both these objectives the paper provides a background for other contributions in thiscollection dealing with a variety of marketing of financial services examples and situations. (RickyYee-Kong Chan) (Year: 1993)Reports a survey on the banking behavior of 300 college students inHong Kong which confirms several findings from Western countries. These include: limited bankingdemand of students; popularity of split banking in account ownership; price-consciousness ofstudents; and importance of location convenience and on-campus promotion. (Curtis P.McLaughlin, James A. Fitzsimmons) (Year: 1996)International trade in services is growingrapidly despite many barriers to trade. Consumer services are being established worldwide andincreasingly business services are becoming globalized in much the same way that manufacturing is

outsourcing overseas. The manager of a service organization can no longer ignore internationalcompetition in services, especially the globalization of back-room operations. Service managers needa framework in which to develop a global service strategy. Addresses two questions which managersface when developing a global service strategy: what are the factors that we can use to classify

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services in terms of their potential for moving globally; and how do these factors translate intostrategies for the globalization of specific services? The most common dimensions for classifyingservice operations include consumer involvement and customization, complexity of inputs andoutputs, and labour intensity. Examines five generic strategies: multi-country expansion; importingcustomers; following your customers; service unbundling; and beating the clock. (T.P.A.Carey)(year: 1998) the revolution experienced in the banking industry over the last decade has led to aconstant series of changes with banks attempting to adjust their internal organisation to suit the ever-changing external environment. The author includes edited extracts from his research into this

process of strategic formulation and the translation of marketing and planning concepts to meet theneeds and character of the corporate market in Britain. Major issues influencing the development of acompetitive strategy are examined, topics of strategic formulation, differentiation and the nature oftransactions between banks and their customers are discussed, and the findings of market andindustry analysis, outlining the practical use to which research findings have been put, is illustrated.Findings reveal that banks have been forced to identify the profitability and content of the constituent

parts of their total business, and market segmentation is now seen as a necessary discipline. Thecurrent economic environment requires not only a more rapid adjustment to change, but to be

effective must create within the organisation a culture which induces managers to act as agents ofchange. (Ed Chung, Eileen Fischer) (Year: 1999) Reports a study of 214 Chinese Canadianconsumers across eight product categories. This study shows that intercultural differences inconsumer behavior are inadequately explained by the psychological construct of ethnicidentification, and that additional explanatory power is achieved when incorporating the ethnichomogeneity of social ties. The results of the study support the proposition that the ethnichomogeneity of strong social ties exerts significant influence over an individuals consumption ofethnic products, and is a much more robust predictor variable than ethnic identification. Also callsfor a more theory-based measure for the construct ethnic identification. (Madhukar G. Anger,Rajan Nataraajan, John S. Jahera Jr) (Year: 1999)Examines the applicability of alternativemeasures of service quality in the developing economy of India and assesses related issues in that

context. Based on data gathered from customers of two major banks, overall results support amultidimensional construct of service quality and suggest that the SERVQUAL scale providesgreater diagnostic information than the SERVPERF scale. However, the five-factorconceptualization of SERVQUAL does not seem to be totally applicable, and no significantdifference was found in the Predictive ability of the two measures. Further, although SERVQUALand SERVPERF have identical convergent validity, SERVPERF appears to have higher discriminatevalidity than SERVQUAL. (G .S. Sureshchandar, Chandrasekhar an Rajendran, R. N.Anantharaman) (Year: 2001) Total quality service (TQS) is a socio-technical approach forrevolutionary and effective management. However, the contemporary quality management literatureis overridingly manufacturing oriented and there seems to be a dearth of comprehensive studies(from the managements perspective) addressing the critical dimensions of TQS that will depict a

holistic TQM philosophy in service organizations. The present study is an earnest endeavour to fillthis void. Based on a thorough review of the prescriptive, practitioner, conceptual and empiricalliterature, the study has identified 12 dimensions as crucial for the inculcation of a TQM ambience ina service set-up. The criticality of each of these dimensions from a service perspective iscorroborated in detail. An instrument for measuring TQS with specific reference to the bankingsector has been developed. Data have been collected from executives from banks in a developingeconomy. The instrument has been empirically tested for unidimensionality, reliability andconstructs validity using a confirmatory factor analysis approach. A model for TQS has also been

proposed, illustrating the relationships between the various dimensions. The present research workoffers a systematic framework for the conceptual and empirical understanding of TQS and its criticalfactors. (Avinandan Mukherjee, Prithwiraj Nath, Manabendra Nath Pal) (Year: 2002)Explores

the linkage between performance benchmarking and strategic homogeneity of Indian commercialbanks. Devises a method of benchmarking performance of Indian commercial banks using theirpublished financial information. Defines performance by how a bank is able to utilize its resources togenerate business transactions and is measured by their ratio, which is then called the efficiency. The

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concept of efficiency is critical from a marketing perspective. Methodologically, in order toovercome some of the shortcomings of simple efficiencies obtained through self-appraisal ofindividual banks, a more democratic concept of cross-efficiency evaluated with the process of

peer-appraisal has been brought in to benchmark the banks. Clusters banks based on similarity inbusiness policy which offers a framework for competitive positioning in the target market and servesas a basis for long-term strategic focus. Finds that the public sector banks generally outperform the

private and foreign banks in this rapidly evolving and liberalizing sector. (G.S Sureshchandar,Chandrasekhar and Rajendran, R.N. Anantharaman) ( year : 2003 )Focuses on investigatingthe critical factors of customer perceived service quality in banks of a developing economy India.Compares and contrasts the three groups of banks in India with respect to the service quality factorsfrom the perspective of the customers. There seems to be a great amount of variation with respect tothe level of service quality offered by the three groups of banks. Identifies the factors thatdiscriminate the three groups of banks. Customers in developing economies seem to keep thetechnological factors of services such as core service and systematization of the service delivery asthe yardstick in differentiating good and bad service while the human factors seem to play a lesserrole in discriminating the three groups of banks. The service quality indices with respect to the three

groups and the Indian banking industry as whole, offer interesting information on the level of servicequality delivered by banks in India. (Babu P. George, Purva G.) (Year: 2004)The article is one ina series that offers a fresh look at the paradigmatic shifts being experienced by the traditional;government supported banking establishments, especially those in the erstwhile socialist and mixedeconomies, in the newly embraced context of liberalization- privatization-globalization. It attemptsto fill a great void in debates that consistently neglected every voice except that of the triumphantcustomer by giving some room for the managerial viewpoint as well. This mission is undertaken inthe context of customer complaints regarding failure in the delivery of banking services. The articlemakes a case for the delicate aspect of employees' attitudes, their satisfaction and motivation, whichare posited as prerequisites for customer satisfaction, which is, again, sine qua non for thecompetitive sustenance of the organization. It argues that sustainable advantage is possible only

through people and any normative proposal to rework the apprehension traditionally attached tocomplaints should begin with a radical shift away from perceiving service production andconsumption as isolated systems to an altogether new conception of the product as symbolic of anetwork relationship defined among the stakeholders and co-evolved in an environment whose

parameters are potentially altered through recurrent inter-party negotiations involved in the contract.Everything, including the formation of appropriate policies and training for the frontline personnel tocope up with the irate customers, should be properly informed from this perspective, it advocates.(NizarSouiden, Rahman) (Year: 2004)In today's competitive market, the purpose of a firm should

be read as creating loyal customers. Therefore, for sustainable competitive advantage, a firmshould be able to create and retain customers. One of the necessary conditions for this is that a firm'sofferings must be able to meet customers' needs and wants. For product planning and development, a

firm needs to know what customers want from a product. The objective of this paper is to analyze thenotion of customer satisfaction and to discuss the viability of quality as a source of sustainablecompetitive advantage. Further, how a well-known quality technique can be adopted for use inservice environment and for development of customer focused service is also demonstrated. (BabuP. George, Purva G. Hegde) (Year: 2004)The article is one in a series that offers a fresh look at the

paradigmatic shifts being experienced by the traditional; government supported bankingestablishments, especially those in the erstwhile socialist and mixed economies, in the newlyembraced context of liberalization- privatization-globalization. It attempts to fill a great void indebates that consistently neglected every voice except that of the triumphant customer by givingsome room for the managerial viewpoint as well. This mission is undertaken in the context ofcustomer complaints regarding failure in the delivery of banking services. The article makes a case

for the delicate aspect of employees' attitudes, their satisfaction and motivation, which are posited asprerequisites for customer satisfaction, which is, again, sine qua non for the competitive sustenanceof the organization. It argues that sustainable advantage is possible only through people and anynormative proposal to rework the apprehension traditionally attached to complaints should begin

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with a radical shift away from perceiving service production and consumption as isolated systems toan altogether new conception of the product as symbolic of a network relationship defined among thestakeholders and co-evolved in an environment whose parameters are potentially altered throughrecurrent inter-party negotiations involved in the contract. Everything, including the formation ofappropriate policies and training for the frontline personnel to cope up with the irate customers,should be properly informed from this perspective, it advocates. (Zillur Rahman) (Year: 2004)Intoday's competitive market, the purpose of a firm should be read as creating loyal customers.Therefore, for sustainable competitive advantage, a firm should be able to create and retaincustomers. One of the necessary conditions for this is that a firm's offerings must be able to meetcustomers' needs and wants. For product planning and development, a firm needs to know whatcustomers want from a product. The objective of this paper is to analyze the notion of customersatisfaction and to discuss the viability of quality as a source of sustainable competitive advantage.Further, how a well-known quality technique can be adopted for use in service environment and fordevelopment of customer focused service is also demonstrated (Zillur Rahman) (year: 2004) Thediversity of the service sector makes it difficult to come up with managerially useful generalizationsconcerning marketing practice in service industry, but IT and the Internet are causing fundamental

changes in the economics of service industry. The Internets influence in creating e-services has beenrevolutionary for providers and their customers. This paper argues for a focus on specific categoriesof services and proposes a two-dimensional model. For classifying services in ways that transcendsnarrow industry boundaries. This model has been developed using non-metric discreet attributes andcontains examples of services that fall under different groups. (Rick Ferguson, Kelly Havana)(Year: 2007)They believe their deeper look into relationship banking reveals that, far from a magic

bullet approach, banks are customizing their relationship-building strategies to create valuepropositions as unique as the institutions and customers they serve. When banks use loyaltyprograms to engender trust and build confidence in the brand, the customer relationship will developorganically, and so will profits

(Lynette M. Mcdonald, Sharyn Rundle Thiele) (Year: 2008)By understanding the likely impact

on customer satisfaction of CSR initiatives vis--vis customer-centric initiatives, the academicresearch community can assist managers to understand how to best allocate company resources insituations of low customer satisfaction. Such endeavours are managerially relevant and topical.Researchers seeking to test the propositions put forward in this paper would be able to gain linkswith, and possibly attract funding from, banks to conduct their research. Such endeavours may assistresearchers to redefine the stakeholder view by placing customers at the centre of a network ofstakeholders.

(3.2)RESEARCH METHODOLGY

RESEARCH: - It means search for facts, answers to questions and solutions to problems.

RESEARCH METHODOLOGY: - Method is a way of doing something and methodology is a setof methods used in a particular area of activity. The purpose of our study is to evaluate thecustomers response towards the study of the difference between the services given by the public

bank and private bank... This is an informative survey as it evaluates the customers of the bothbanks.

METHOD OF SAMPLING

RANDOM SAMPLING: - In random sampling samples are taken randomly without any priority.

Research Design

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Research design constitutes the blue print for the collection, measurement and analysis of data. Thepresent study seeks to identify the extent of preference of services of which bank either HDFC or

SBI . The research design is descriptive in nature...

Data design

The data design involves different aspects like the nature of the data, the data sources, the datafrequency and the tools used for the analysis of data.

Nature of data

Secondary data has been used to achieve the objectives of the study.

Data Collection

Keeping in mind the objectives of the study, the data collected from BUSINESS MAGAZINES ,NEWSPAPERS, internet sites etc.

CHAPTER -2

(2.1) HISTORY OF HDFC BANK:-

HDFC Bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its

registered office in Mumbai, India. The Bank commenced operations as a Scheduled

Commercial Bank in January 1995.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 theIndian Banking Industry in 1994.Headquartered in Mumbai, HDFC Bank, has a network of

over 531 branches spread over 228 cities across India. All branches are linked on an online

real-time basis. Customers in over 120 locations are serviced through Telephone Banking. The

TYPES OF RESEARCH

DESIGN

EXPLORATORYRESEARCHDESIGN

DESCRIPTIVE&

DIAGNOSTIC

EXPERIMENTALRESEARCH DESIGN

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Bank also has a network of about over 1054 networked ATMs across these cities. HDFC

Bank's ATM network can be accessed by all domestic and international Visa / MasterCard,

Visa Electron / Maestro, Plus / Cirrus and American Express Credit / Charge cardholders .

HDFC Bank has won many awards for its excellent service. Major among them are "Best Bank inIndia" by Hong Kong-based Finance Asia magazine in 2005 and "Company of the Year" Award forCorporate Excellence 2004-05.Currently HDFC Bank has 758 branches, 1,716 ATMs, in 325 citiesin India, and all branches of the bank are linked on an online real-time basis. The bank offers manyinnovative products & services to individuals, corporate, trusts, governments, partnerships, financialinstitutions, mutual funds, insurance companies. It is a path breaker in the Indian banking sector. In2007 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000.Though, the official license was given to Centurion Bank of Punjab branches, to continue working asHDFC Bank branches, on May 23, 2008.

GROWTH:-HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic teamdetermined to accomplish the vision of becoming a world-class Indian bank. Our business

philosophy is based on four core values - Customer Focus, Operational Excellence, ProductLeadership and People. We believe that the ultimate identity and success of our bank will reside in

the exceptional quality of our people and their extraordinary efforts. For this reason, we arecommitted to hiring, developing, and motivating and retaining the best people in the industry. Ourmission is to be "a World Class Indian Bank", benchmarking ourselves against internationalstandards and best practices in terms of product offerings, technology, service levels, riskmanagement and audit & compliance. The objective is to build sound customer franchises acrossdistinct businesses so as to be a preferred provider of banking services for target retail and wholesalecustomer segments, and to achieve a healthy growth in profitability, consistent With the Bank's riskappetite. We are committed to do this while ensuring the highest levels of ethical standards,

professional integrity, corporate governance and regulatory compliance. Our business strategyemphasizes the following:

Increase our market share in Indias expanding banking and financial services industry byfollowing a disciplined growth strategy focusing on quality and not on quantity and deliveringhigh quality customer service.

Leverage our technology platform and open scaleable systems to deliver more products to morecustomers and to control operating costs.

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

Develop innovative products and services that attract our targeted customers and addressinefficiencies in the Indian financial sector.

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

Focus on high earnings growth with low volatility.

LANDMARKST IS becoming increasingly clear that the private banking (and perhaps the sector as a whole, barringa couple of public sector banks) arena is becoming a two-bank play, at least as far as the stock

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market goes. The two in question are HDFC Bank and ICICI Bank. What is interesting is that eventhese two are taking a divergent path to growth. Divergent strategy: Even their parents have acompletely different strategy. The entire gamut of their growth strategy was unveiled in clear termsin the past week. Both the banks are clear in one aspect: The need to become big through acquisitionand organic growth. For instance, the Housing Development Finance Corporation chairman, Mr.Deepak Parekh, stated the group's views in no uncertain terms: HDFC is not involved in acquiringany bank; it would be interested in new private sector banks if the price is right; it would concentrateon organic growth as it presented fewer problems than integration; promoters' price expectations arehigh and a disincentive; size matters and acquisition of new private sector banks is always an option.Making a merger: While HDFC has confined itself to articulating its growth strategy, the ICICI Bankhit the deck running. It announced a merger with an `old' private sector bank -- Bank of Madura(BoM). Though the swap ratio is prima facie liberal for BoM shareholders, ICICI Bank is effectively

buying the bank at book value. This is the first instance of an old and a new generation private sectorbank coming together. Through mergers -- HDFC Bank acquired Times Bank and now ICICI Bank,BoM -- and good organic growth, the two banks have emerged as big players. Following the mergerwith BoM, ICICI Bank would have an asset base of close to Rs 16,000 crores.

Paper power: What is more important is that these two banks are also well-placed to go move furtheron the acquisition path. Their stocks are highly fancied and held by many institutional investors.Both have a high level of market capitalization and that gives them the power of stock as a currencyto pursue the acquisition path.

With both stocks trading at a considerable premium in terms of price-earnings multiple compared totheir peers, the cost involved may not be high. Even in the case of the ICICI-BoM merger, the swapratio would mean only an addition of 2.38 crores shares to the equity of ICICI Bank.

As a percentage of its existing equity of Rs 196.8 crores, the equity expansion would be around 12per cent. Considering the strengths BoM would add in the medium-to-long term, this is not too stiff aprice for existing shareholders as well. HDFC Bank too possesses a similar advantage and that was

clear in 1998-99 when it acquired Times Bank.

New-new dalliance: Even now, HDFC Bank is likely to look at new private sector banks. This maymake sense as most of the residual old generation banks may not offer a good fit to it. It may nothave to spend too much time or money integrating the operations of such banks. Of the latter lot,BoM was among the bigger players and had good upgrade on technology too.

Even then, it may not be easy for ICICI Bank to replicate its own technology and employee-levelstructure. The process may take some time but it may be worth it from a long-term perspective in this

particular case, as far as old generation private sector banks go.

While these two banks are going strong in terms of organic growth, size and acquisitions (done andwould-be), the other private sector banks appear destined to be sideline players before they are

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gobbled up by one of the two. None of them has shown the alacrity to grow big though Global TrustBank is ahead in this pack.

Mumbai, Jan. 21 HDFC Bank posted net profit of Rs 429 crores for the quarter ended December 31,2007, up 45 per cent from Rs 296 crores in the same quarter last year. The increase in profits was dueto increase in net interest income as well as other income.

Mr. Parish Sukhtankar, Executive Director, HDFC Bank, said the third quarter was a fairly strongone on all fronts. Our balance sheet growth has been strong in both retail and corporate assets aswell as in deposits.

Other income increased by 82 per cent, to touch Rs 679 crores (Rs 373 crores). The maincontributors to other income were fees and commissions of Rs 460 crores; foreign exchange andderivatives revenues of Rs 74.2 crores and profit or loss on revaluation or sale of investments of Rs131.5 crores.

Top HDFC Bank Players

Company Location

Canada Bank Bangalore, India

ICICI Bank Mumbai, India

State Bank of India Mumbai, India

The Banks above are also the major players.

Profile of the organization

http://www.hoovers.com/company-information/--ID__138397--/free-co-factsheet.xhtmlhttp://www.hoovers.com/company-information/--ID__100483--/free-co-factsheet.xhtmlhttp://www.hoovers.com/company-information/--ID__58548--/free-co-factsheet.xhtmlhttp://www.hoovers.com/company-information/--ID__138397--/free-co-factsheet.xhtmlhttp://www.hoovers.com/company-information/--ID__100483--/free-co-factsheet.xhtmlhttp://www.hoovers.com/company-information/--ID__58548--/free-co-factsheet.xhtml

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HDFC BANK COMPANY - PROFILE

Company Profile: HDFC Bank Limited

Ticker: HDB

Exchanges: NYSE

2009 Sales: 3,094,900,000

Major Industry: Financial

Sub Industry: Commercial Banks

Country: INDIA

PROFILE

Incorporated in August 1994 as HDFC Bank Limited, the bank now has a wide network of over 531branches across 228 cities in India, and over a thousand networked ATM's.

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive anin principle approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as

part of the RBIs liberalization of the Indian Banking Industry. The bank was incorporated in Aug1994 in the name of HDFC Bank Limited, with its registered office in Mumbai. The bankcommenced operations as a Scheduled Commercial Bank in Jan 1995.

HDFC is Indias premier housing finance company and enjoys an impeccable track record in India aswell as in international markets. Since its inception in 1997, the Corporation has maintained aconsistent and healthy growth in its operations to remain the clear market leader in mortgages inIndia. Its outstanding loan portfolio covers a Million dwelling units. HDFC has developed significant

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expertise in retail mortgage loans to different market segments and also has a large corporate clientbase for its housing related credit facilities. With its experience in the financial markets, a strongmarket reputation, large shareholder base and unique customer franchise, HDFC was ideally

positioned to promote a bank and the Indian Environment.

Promoter

HDFC is India's premier housing finance company and enjoys an impeccable track record in India aswell as in international markets. Since its inception in 1977, the Corporation has maintained aconsistent and healthy growth in its operations to remain the market leader in mortgages. Itsoutstanding loan portfolio covers well over a million dwelling units. HDFC has developed significantexpertise in retail mortgage loans to different market segments and also has a large corporate client

base for its housing related credit facilities. With its experience in the financial markets, a strongmarket reputation, large shareholder base and unique consumer franchise, HDFC was ideally

positioned to promote a bank in the Indian environment.

MISSIONHDFC Banks began operations in 1995 with a simple mission to be a World Class Indian Bank. Werealized that only a single-minded focus on product quality and service excellence would help us getthere. Today, the bank is on the way towards that goal. It is extremely gratifying that its effortstowards providing customer convenience have been appreciated both nationally and internationally.

The banks aim is to build a sound customer franchise across distinct businesses so as to be thepreferred provider of banking services in the niche segments that the bank operates in and to achievehealthy growth in profitability, consistent with the banks risk appetite. The Bank aims to assure thehighest level of ethical standards, professional integrity and regulatory compliance.

BUSINESSHDFC Bank offers a wide range of commercial and transactional banking services and treasury

products to wholesale and retail customers. The bank has three key business segments:

WHOLE SALE BANKING SERVICES

The Bank's target market ranges from large, blue-chip manufacturing companies in theIndian corporate to small & mid-sized corporate and agri-based businesses. For these customers, theBank provides a wide range of commercial and transactional banking services, including workingcapital finance, trade services, transactional services, cash management, etc. The bank is also aleading provider of structured solutions, which combine cash management services with vendor anddistributor finance for facilitating superior supply chain management for its corporate customers.Based on its superior product delivery / service levels and strong customer orientation, the Bank hasmade significant inroads.Into the banking consortia of a number of leading Indian corporateincluding multinationals, companies from the domestic business houses and prime public sectorcompanies. It is recognized as a leading provider of cash management and transactional bankingsolutions to corporate customers, mutual funds, stock exchange members and banks.

RETAIL BANKING SERVICES

The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her bankingrequirements. The products are backed by world-class service and delivered to the customers through

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the growing branch network, as well as through alternative delivery channels like ATMs, PhoneBanking, Net Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus andthe Investment Advisory Services programs have been designed keeping in mind needs of customerswho seek distinct financial solutions, information and advice on various investment avenues. The

Bank also has a wide array of retail loan products including Auto Loans, Loans against marketablesecurities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of DepositoryParticipant (DP) services for retail customers, providing customers the facility to hold theirinvestments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in association with

VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank launched itscredit card business in late 2001. By September 30, 2005, the bank had a total card base (debit andcredit cards) of 5.2 million cards. The Bank is also one of the leading players in the "merchantacquiring" business with over 50,000.

MAJOR PLAYERAndhra Bank

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

Citibank

Deutsche Bank

HSBC etc.

In private sector bank ICICI Bank. Axis Bank. HSBC. Standard charted. Citi bank. Is the maincompetitor of HDFC bank where as in public sector bank its main competitor is SBI? Punjab national

bank is the main competitor

CHAPTER 3

Company history

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Mr. Hasmukhbhai Parikh

Mr. Hasmukhbhai Parikh

If ever there was a man with a mission it was Hasmukhbhai Parikh, the Founder and Chairman-Emeritus, who left this earthly abode on November 18, 1994.

Born in a traditional banking family in Surat, Gujarat, Mr. Parikh started his financial career atHarkisandass Lukhmidass - a leading stock broking firm. The firm closed down in the late seventies,

but, long before that, he went on to become a towering figure on the Indian financial scene.

In 1956 he began his lifelong financial affair with the economic world, as General Manager of thenewly-formed Industrial Credit and Investment Corporation of India (ICICI). His vision formortgage finance for housing gave birth to the Housing Development Finance Corporation - it was a

trend-setter for housing finance in the whole Asian continent.

He was a true development banker. His building up HDFC without any government assistance isitself a brilliant chapter in financial history. His wisdom and warmth drew people from all walks oflife to him, for advice, guidance and inspiration. And now his dream comes true .the bank is not onlythe branches in India but also have the international branches.

Board of directors

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Sr.No.

Name of Director Category*No. ofDirectorship**

No. of Committees***

Member Chairperson

1. Mr. Deepak S. ParikhExecutive

Chairman

11 7 5

2. Mr. Keshub Mahindra Independent 6 1 1

3. Mr. Shirish B. Patel Independent 1 0 0

4. Mr. B. S. Mehta Independent 14 9 5

5.Mr. D. M.

SukthankarIndependent 4 1 1

6. Mr. D. N. Ghosh Independent 4 1 1

7. Dr. S. A. Dave Independent 11 9 0

8.Mr. S.

Venkitaramanan^Independent 3 1 0

9. Dr. Ram S. Tarneja Independent 13 7 2

10. Mr. N. M. Munjee Independent 14 10 4

11 Dr. Bimal Jalan Independent 0 0 0

12 Dr. J. J. IraniNon-

executive10 2 0

13 Mr. D. M. SatwalekarNon-

executive6 2 2

14Ms. Renu Sud

Karnad

Joint

ManagingDirector

13 5 3

15 Mr. Keki M. Mistry

Vice-

Chairman &

Managing

Director

11 8 3

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PRODUCTS

ACCOUNTS & DEPOSITS LOANS INVESTMENT& INSURANCE

Savings accounts personal loan mutual funds

Saving plus account two wheeler loan insurance

Saving max account new car loan general health insurance

Regular saving account used car loan bonds

Education loan knowledge centre

Salary account loan against property

Classic health care finance

Regular

Defense cards payments services

Kids advantage account silver plus credit card prepaid premium

Pension saving bank account gold credit card bill pay

Family saving group womens gold credit card direct pay

Health plus card business credit card excise & servicetax payment

Current account corporate credit card religious offering

Plus current account donation to charityTrade current account debit card

Premium current account easy shop international debit card other services

Fixed account easy shop gold debit card netbanking

Regular fixed deposit easy shop womens advantage debit card insta alerts

5 year tax saving fixed deposit mobilebanking

Super saver facility ATM

Phonebanking

Demat account

Safe deposit locker

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Balance

sheet of

HDFC bank Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Sources of funds

Owner's fund

Equity share

capital 457.74 425.38 354.43 319.39 313.14

Share application

money - 400.92 - - 0.07

Preference share

capital - - - - -

Reserves &

surplus 21,064.75 14,226.43 11,142.80 6,113.76 4,986.39

Loan funds

Secured loans - - - - -

Unsecured loans1,67,404.4

4

1,42,811.5

8

1,00,768.6

0 68,297.94 55,796.82

Total1,88,926.9

3

1,57,864.3

1

1,12,265.8

3 74,731.09 61,096.42

Uses of funds

Fixed assets

Gross block 4,707.97 3,956.63 2,386.99 1,917.56 1,589.47

Less : revaluation

reserve - - - - -

Less : accumulateddepreciation 2,585.16 2,249.90 1,211.86 950.89 734.39

Net block 2,122.81 1,706.73 1,175.13 966.67 855.08

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Capital work-in-

progress - - - - -

Investments 58,607.62 58,817.55 49,393.54 30,564.80 28,393.96

Net current assets

Current assets,

loans & advances 5,955.15 6,356.83 4,402.69 3,605.48 2,277.09

Less : current

liabilities &

provisions 20,615.94 22,720.62 16,431.91 13,689.13 7,849.49

Total net current

assets -14,660.79 -16,363.79 -12,029.22 -10,083.65 -5,572.40

Miscellaneous

expenses not

written - - - - -

Total 46,069.63 44,160.49 38,539.45 21,447.82 23,676.64

Notes:

Book value of

unquotedinvestments - - - - -

Market value of

quoted

investments - - - - -

Contingent

liabilities 4,87,176.37 4,14,533.93 5,99,928.79 2,09,338.61 1,44,137.86

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Number of equity

shares

outstanding(Laces) 4577.43 4253.84 3544.33 3193.9 3131.42

ANALYSIS: - IN HDFC BANK investments more in year 2010 are more as compared to last 5

years. I.e. are 58607.62 in year 2010 up to march. That means hdfc bank encoring profit as comparedto last 5 years.

Profit loss

account Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Income Operating

income

19,958.7

6

19,770.7

2

12,354.4

1

8,303.3

4 5,567.67

Expenses

Material

consumed - - - - -

Manufacturin

g expenses - - - - -

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Personnel

expenses 2,289.18 2,238.20 1,301.35 776.86 486.82

Selling

expenses 83.12 108.68 114.73 74.88 80.85

Administrative

expenses 4,936.73 4,583.86 2,247.48

1,519.3

2 1,424.59

Expenses

capitalized - - - - -

Cost of sales 7,309.02 6,930.74 3,663.56

2,371.0

6 1,992.26

Operating

profit 4,863.44 3,928.87 3,803.73

2,752.8

3 1,645.91

Other

recurring

income 17.72 - 43.04 102.96 31.38

Adjusted

PBDIT 4,881.17 - 3,846.77

2,855.7

9 1,677.29

Financial

expenses 7,786.30 8,911.10 4,887.12

3,179.4

5 1,929.50

Depreciation 394.39 359.91 271.72 219.6 178.59

Other writeoffs - - - 241.09 245.16

Adjusted PBT 4,486.77 3,568.97 3,575.05

2,395.1

0 1,253.54

Tax charges 1,340.99 1,054.92 690.9 497.7 383.03

Adjusted PAT 2,944.68 2,240.75 1,589.48

1,142.5

0 870.51

Nonrecurring

items 4.02 4.19 0.7 -1.05 0.27

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Other non

cash

adjustments -0.93 -0.59 -0.06 -0.35 -

Reported net

profit 2,947.77 2,244.35 1,590.12

1,141.1

0 870.78

Earnings

before

appropriation 6,403.33 4,818.98 3,522.15

2,596.1

2 1,473.12

Equity

dividend 549.29 425.38 301.27 223.57 172.23

Preference

dividend - - - - -

Dividend tax 91.23 72.29 51.2 38 24.16

Retained

earnings 5,762.81 4,321.31 3,169.68

2,334.5

5 1,276.73

ANALYSIS:-Operating profit in year march 2010 is 4,863.44 which are more than last 5 years itmeans position of hdfc bank is good in market. Cost of sales is 7,309.02.which is quite more thanother years. Financial expenses are also less in year march 2010.Due to these reasons we can say thathdfc banks encore profit during last years.

CASH FLOW OF HDFC:-

Cash flow

Mar ' 10 Mar ' 09 Mar ' 08

Mar '

07

Mar '

06

Profit

before tax 4,289.14 3,299.25 2,280.63

1,638.7

5 1,253.51

Net cash

flow-

operating

activity 9,389.89 -1,736.14 3,583.43 666.63 1,724.76

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Net cash

used in

investing

activity -551.51 -663.78 -619.82 -311.4 -381.97

Net cash

used in

fin.

Activity 3,598.91 2,964.66 3,628.34

1,637.8

8 1,104.87

Net

inc/de. incash and

equivalent

12,435.7

8 564.74 6,591.95

1,993.1

1 2,447.66

Cash and

equivalent

begin of

year

17,506.6

2

14,778.3

4 8,074.54

6,188.6

6 3,741.00

Cash andequivalent

end of

year

29,942.4

0

15,343.0

8

14,666.4

9

8,181.7

7 6,188.66

ANALYSIS:-Hdfc also takes place tax benefit advantage. They have encored profit before tax inMarch 2010 is 4,289.14 which are more than last five years. Because net cash used in investingactivity is very lassie is -551.51

CAPITAL STRUCTURE OF HDFC BANK:-

From

Year

To

Year

Class

Of

Share

Authorize

d Capital

Issued

Capital

Paid Up

Shares

(Nos)

Paid

Up

Face

Value

Paid

Up

Capital

2009 2010

Equity

Share 550 457.74 4.6E+08 10 457.74

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2008 2009

Equity

Share 550 425.38 4.3E+08 10 425.38

2007 2008

Equity

Share 550 354.43 3.5E+08 10 354.43

2006 2007

Equity

Share 450 319.39 3.2E+08 10 319.39

2005 2006

Equity

Share 450 313.14 3.1E+08 10 313.14

2004 2005

Equity

Share 450 309.88 3.1E+08 10 309.88

2003 2004

Equity

Share 450 284.79 2.8E+08 10 284.79

2002 2003

Equity

Share 450 282.05 2.8E+08 10 282.05

2001 2002EquityShare 450 281.37 2.8E+08 10 281.37

2000 2001

Equity

Share 300 243.6 2.4E+08 10 243.6

1999 2000

Equity

Share 300 243.28 2.4E+08 10 243.28

1998 1999

Equity

Share 300 200 2E+08 10 200

1997 1995

Equity

Share 300 110 1.1E+08 10 110

ANALYSIS

The authorized capital of HDFC bank is RS 4.5 bn the paid up capital is RS 3.1 bn The HDFC bankhold 22.1% of the bank equity and 19.4% of equity is held by ADS depository (in respect of the bankAmerican depository shares (ADS) issue .Roughly 31.3% of equity is held by foreign institutionalinvestor (FIIs) and the bank has about 1, 90,000 share holders .The share are listed on the stockexchange Mumbai and national stock exchange. The bank American depository shares are listed on

New York stock Exchange under the symbol (HDB)

RatiosMar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Per shareratios Adjusted EPS

(Rs) 64.33 52.68 44.85 35.77 27.8

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Adjusted cash

EPS (Rs) 72.95 61.14 52.51 50.2 41.33

Reported EPS

(Rs) 64.42 52.77 44.87 35.74 27.81

Reported cashEPS (Rs) 73.03 61.24 52.53 50.16 41.34

Dividend per

share 12 10 8.5 7 5.5

Operating

profit per share

(Rs) 106.25 92.36 107.32 86.19 52.56

Book value (excl

rev res) per

share (Rs) 470.19 344.44 324.38 201.42 169.24

Book value (inc

rev res) per

share (Rs.) 470.19 344.44 324.38 201.42 169.24

Net operating

income per

share (Rs) 436.03 464.77 348.57 259.98 177.8

Free reserves

per share (Rs) 363.55 252.37 269.89 155.69 132.01

Profitability

ratios Operating

margin (%) 24.36 19.87 30.78 33.15 29.56

Gross profit

margin (%) 22.39 18.05 28.58 30.5 26.35

Net profit

margin (%) 14.76 11.35 12.82 13.57 15.55

Adjusted cash

margin (%) 16.71 13.15 15.01 19.07 23.11

Adjusted return

on net worth

(%) 13.68 15.29 13.82 17.75 16.42

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Reported return

on net worth

(%) 13.7 15.32 13.83 17.74 16.43

Return on long

term funds (%) 56.08 83.31 62.34 74.91 60.06

Leverage

ratios Long term

debt / Equity - - - - -

Total

debt/equity 7.78 9.75 8.76 10.62 10.53

Owners fund as

% of total

source 11.39 9.3 10.24 8.6 8.67

Fixed assets

turnover ratio 4.24 5 5.18 4.33 3.5

Liquidity

ratios Current ratio 0.28 0.27 0.26 0.26 0.29

Current ratio

(inc. st loans) 0.03 0.03 0.03 0.04 0.03

Quick ratio 7.14 5.23 4.89 4.07 5.18

Inventory

turnover ratio - - - - -

Payout

ratios Dividend

payout ratio

(net profit) 21.72 22.16 22.16 22.91 22.55

Dividend

payout ratio

(cash profit) 19.15 19.1 18.93 16.32 15.17

Earningretention ratio 78.25 77.79 77.83 77.11 77.44

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Cash earnings

retention ratio 80.82 80.87 81.07 83.69 84.83

Coverageratios Adjusted cash

flow time total

debt 50.13 54.91 54.14 42.6 43.11

Financial

charges

coverage ratio 1.63 1.44 1.79 1.9 1.87

Fin. chargescov.ratio (post

tax) 1.43 1.29 1.38 1.5 1.67

Component

ratios

Material cost

component (%

earnings) - - - - -

Selling cost

Component 0.41 0.54 0.92 0.9 1.45

Exports as

percent of total

sales - - - - -

Import comp. in

raw mat.

Consumed - - - - -

Long term

assets / total

Assets 0.91 0.9 0.91 0.89 0.92

Bonus

component in

equity capital

(%) - - - -

ANALYSIS:-: dividend per share ratio in year March 2010 is 12% Gross profit margin (%) is 22.39and Net profit margin (%) is 14.76 along year march 2010. Debt-equity ratio is 7.78% but current

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ratio is 0.28% and its ideal ratio is 2:1. Means current ratio is very less as compared to its idealratio.due to this liquidity position of the bank is not good. But according to payouts ratios thefinancial position of the company is good. Long term asset or total ratio in year march 2010 is 0.91.Which nearly same about past five years. That means if hdfc encoring profit from past five years butalso bearing loss.

INTRODUCTION OF SBI

The State Bank of India, popularly known as SBI, is one of the leading banks in India. The banktraces its origin to the first decade of the 19th century. Later on, it was merged with the ImperialBank. In the year 1955, the Government of India nationalized the Imperial Bank along with theReserve Bank of India. Ever since that time, the bank acquired its present name that is SBI.The State Bank of India is India's largest commercial bank. The bank has been striving sincerely toadhere to the efforts of providing utmost customer satisfaction to the best possible extent .

HISTORY OF STATE BANK OF INDIA

Not many financial institutions in the world today can claim the antiquity and majesty of the

State Bank of India. Founded nearly two centuries ago with the primary intent of imparting

stability to the money market, the Bank from its inception mobilized funds for supporting both

the public credit of the Company's Governments in the three presidencies of British India and

the private credit of the European and Indian merchants.

From about the 1860s, when the Indian economy took a significant leap forward under the

impulse of quickened world communications and ingenious methods of industrial and

agricultural production, the Bank became intimately involved in the financing of practically

every trading, manufacturing and mining activity of the sub-continent. Although large

European and Indian merchants and manufacturers were undoubtedly the principal

beneficiaries, the small man' was never ignored as loans as low as Rs.100 were disbursed in

agricultural districts against gold ornaments. Added to these the Bank till the

Creation of the Reserve Bank in 1935 carried out numerous central-banking functions.

In the post-Depression era, for instance, when business opportunities became extremely

restricted,rules laid down in the book of instructions were relaxed to ensure that good businessdid not go past. Yet seldom did the Bank contravene its rules or depart from sound banking

principles to retain or expand its business. An innovative array of offices, unknown to the

world then, was devised in the form of branches, sub-branches, treasury pay-offices, pay

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offices, sub-pay offices and outstations toexploit the opportunities of an expanding economy.

New business strategies were also evolved way back in 1937 to render the 'best banking service'

through 'prompt and courteous' attention to customers.

A highly efficient and experienced management, functioning in a well-defined organizational

structure

Did not take long to place the Bank on an exalted pedestal in the areas of business,profitability, internal discipline and above all credibility. An impeccable financial status,

consistent maintenance of the lofty traditions of banking and observance of a high standard of

integrity in its operations helped the Bank gain a pre-eminent status. No wonder the

admiration for the Bank was universal as key functionaries of the India Office and

Government of India, successive finance ministers of independent India, Reserve Bank

governors and representatives of the chambers of commerce showered encomiums on it.

Modern day management techniques were also very much evident in the good old days. Years

before corporate governance had become a buzzword; the Bank's board functioned with a high

degree of responsibility and concern for the shareholder. An unbroken record of profits and a

fairly high rate of dividend all through ensured satisfaction. Prudential management and asset-liability management not only protected the interests of the Bank but also ensured that the

obligations to customers were met. The traditions of the past continue to be upheld even to this

day as the State Bank gears itself to meet the emerging challenges of the new millennium.

MISSION STATEMENT

To retain the bank's position as the Premier Indian Financial Services Group, with world classstandards and significant global business committed to excellence in customer, shareholder andemployee satisfaction and to play a leading role in the expanding and diversifying financial services

sector while continuing emphasis on its development banking role.VISION STATEMENT (QUALITATIVE)

Premier Indian Financial Services Group with global perspective, world class standards of efficiencyand professionalism and core institutional values.

Retain its position in the country as a pioneer in development banking.

Maximize shareholder value through high sustained earnings per share.

An institution with a culture of mutual care and commitment, a satisfying and exciting workenvironment and continuous learning opportunities.

VALUES Excellence in customer service.

Profit orientation

Belonging and commitment to the bank.

Fairness in all dealings and relations.

Risk-taking and innovation.

Team-playing.

Learning and renewal. Integrity.

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Balance Sheet of State Bank

of India

------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

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Capital and Liabilities: Total ShareCapital 526.3 526.3 631.47 634.88 634.88 Equity ShareCapital 526.3 526.3 631.47 634.88 634.88 ShareApplicationMoney 0 0 0 0 0 PreferenceShareCapital 0 0 0 0 0 Reserves 27,117.79 30,772.26 48,401.19 57,312.82 65,314.32 RevaluationReserves 0 0 0 0 0

Net Worth 27,644.09 31,298.56 49,032.66 57,947.70 65,949.20 Deposits

3,80,046.0

6

4,35,521.0

9

5,37,403.9

4

7,42,073.1

3 8,04,116.23 Borrowings 30,641.24 39,703.34 51,727.41 53,713.68 1,03,011.60 Total Debt

4,10,687.30

4,75,224.43

5,89,131.35

7,95,786.81 9,07,127.83

OtherLiabilities &

Provisions 55,538.17 60,042.26 83,362.30

1,10,697.5

7 80,336.70

TotalLiabilities

4,93,869.56

5,66,565.25

7,21,526.31

9,64,432.08

10,53,413.73

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths

Assets Cash &Balances

with RBI 21,652.70 29,076.43 51,534.62 55,546.17 61,290.87

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Balance withBanks,Money atCall 22,907.30 22,892.27 15,931.72 48,857.63 34,892.98 Advances

2,61,641.53

3,37,336.49

4,16,768.20

5,42,503.20 6,31,914.15

Investments1,62,534.2

41,49,148.8

81,89,501.2

72,75,953.9

6 2,85,790.07 Gross Block 7,424.84 8,061.92 8,988.35 10,403.06 11,831.63

Accumulated

Depreciation 4,751.73 5,385.01 5,849.13 6,828.65 7,713.90 Net Block 2,673.11 2,676.91 3,139.22 3,574.41 4,117.73 CapitalWork InProgress 79.82 141.95 234.26 263.44 295.18 Other Assets 22,380.84 25,292.31 44,417.03 37,733.27 35,112.76 Total Assets

4,93,869.54

5,66,565.24

7,21,526.32

9,64,432.08

10,53,413.74

ContingentLiabilities

1,91,819.34

2,59,536.57

7,36,087.59

6,14,603.47 4,29,917.37

Bills forcollection 57,618.44 70,418.15 93,652.89

1,52,964.06 1,66,449.04

Book Value(Rs) 525.25 594.69 776.48 912.73 1,038.76

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ANALYSIS: - Total assets are less i.e. 1053413.74 in year march 2010 as compared to past fiveyears .There is increase in total assets as compared to year 2009 i.e. 88981.7.Total liabilities are1,053,413.73.In year march 2010. That is quite large as compared to past 5 years. But liabilities aremore also assets are more. That means more the risk more will be the profit.

Cash Flow of State

Bank of India------------------- in Rs. Cr. -------------------

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Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before

Tax 6837.36 7625.08 10438.914180.6

4 13926.1

Net Cash From

Operating

Activities 6039.14 -1776.07 -856.87 29479.7 -1804.99

Net Cash (used

in)/from

-1134.18 -284.56 -2798.01 -1651.93 -1761.52

Investing

Activities

Net Cash (used

in)/from Financing

Activities 461.98 9494.1119371.1

2 5097.38 -3359.67

Net

(decrease)/increase

In Cash and Cash

Equivalents 5366.94 7433.4915716.2

4

32925.1

8 -6926.18

Opening Cash &

Cash Equivalents 39322.1 44535.251968.6

9

71478.6

2 103110

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Closing Cash &

Cash Equivalents44689.0

4

51968.6

9

67466.3

4

104403.

8

96183.8

4

ANALYSIS:-Net profit before interest and tax is 13926.10 in year march 2010 which is quitemore than past five years. That means SBI bank also encoring profit as compared to past five years

Key Financial Ratios of

State Bank of India------------------- in Rs. Cr. -------------------

Mar'06 Mar'07 Mar'08 Mar '09 Mar '10InvestmentValuation Ratios Face Value 10 10 10 10 10

Dividend

Per Share 14 14 21.5 29 30

OperatingProfit Per

Share (Rs)124.7

7

147.7

2

173.6

1 230.04 229.63

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Net

Operating

Profit Per

Share (Rs)719.5

4

833.3

8

899.8

3

1,179.4

5 1,353.15

Free

Reserves Per

Share (Rs)178.3

3

184.4

3

356.6

1 373.99 412.36

Bonus in

Equity

Capital -- -- -- -- --

Profitability Ratios Interest

Spread 4.31 4.2 4.32 4.34 3.82

Adjusted

Cash

Margin (%) 13.06 11.43 12.81 13.04 -42.79

Net Profit

Margin 11.21 10.12 11.65 12.03 10.54

Return on

Long Term

Fund (%) 97.89 99.2 86.83 100.35 23.26

Return on

Net Worth(%) 15.94 14.5 13.72 15.74 13.89

Adjusted

Return on

Net Worth

(%) 15.93 14.47 13.7 15.74 -57.84

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Return on

Assets

Excluding

Revaluations525.2

5

594.6

9 0.93 912.73 1,038.76

Return on

Assets

Including

Revaluations525.2

5

594.6

9 0.93 912.73 1,038.76

ManagementEfficiency Ratios Interest

Income /

Total Funds 7.94 8.27 8.82 8.88 8.52

Net Interest

Income /

Total Funds 3.71 3.85 3.87 3.79 3.82

Non Interest

Income /

Total Funds 0.3 0.19 0.14 0.11 0.1

Interest

Expended /Total Funds 4.23 4.42 4.96 5.09 4.69

Operating

Expense /

Total Funds 2.34 2.39 2.16 2.06 2.38

ProfitBefore

Provisions /

Total Funds 1.52 1.54 1.74 1.75 1.46

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Net Profit /

Total Funds 0.92 0.86 1.04 1.08 0.91

Loans

Turnover 0.16 0.15 0.15 0.16 0.15

Total

Income /

Capital

Employed

(%) 8.24 8.46 8.96 8.99 8.62

Interest

Expended /Capital

Employed

(%) 4.23 4.42 4.96 5.09 4.69

Total Assets

Turnover

Ratios 0.08 0.08 0.09 0.09 0.09

Asset

Turnover

Ratio 5.1 5.44 6.32 7.2 7.26

Profit And Loss

Account Ratios

Interest

Expended /

Interest

Earned 56.32 59.35 65.23 67.28 66.66

Other

Income /Total

Income 3.6 2.25 1.56 1.18 1.21

Operating

Expense /

Total

Income 28.37 28.19 24.13 22.91 27.61

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Selling

Distribution

Cost

Composition 0.28 0.2 0.3 0.33 \0.26

Balance Sheet

Ratios Capital

Adequacy

Ratio 11.88 12.34 13.47 14.25 13.39

Advances /

Loans Funds(%) 65.66 76.16 78.31 78.34 74.22

Debt Coverage

Ratios Credit

Deposit

Ratio 62.11 73.44 77.51 74.97 75.96

Investment

Deposit

Ratio 48.14 38.22 34.81 36.38 36.33

Cash

Deposit

Ratio 5.15 6.22 8.29 8.37 7.56

Total Debt

to Owners

Fund 13.75 13.92 10.96 12.81 12.19

Financial

Charges

Coverage

Ratio 1.4 1.37 1.37 1.36 0.33

Financial

Charges

Coverage

Ratio Post

Tax 1.25 1.22 1.23 1.23 1.21

Leverage Ratios

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Current

Ratio 0.05 0.05 0.07 0.04 0.04

Quick Ratio 5.5 6.52 6.15 5.74 9.07

Cash Flow

Indicator Ratios

Dividend

Payout

Ratio Net

Profit 19.06 18.98 22.64 22.9 23.36

DividendPayout

Ratio Cash

Profit 16.35 16.75 20.56 21.1 21.2

Earning

Retention

Ratio 80.93 80.97 77.33 77.11 105.61

Cash

Earning

Retention

Ratio 83.64 83.21 79.41 78.88 78.82

Adjusted

Cash Flow

Times 74.03 84.87 72.64 75.05 79.54 Mar'06

Mar

'07

Mar

'08 Mar '09 Mar '10

Earnings

Per Share 83.73 86.29106.5

6 143.67 144.37

Book

Value525.2

5

594.6

9

776.4

8 912.73 1,038

ANALYSIS MEANING:

Absolute figures expressed in financial statements by themselves aremeaningfulness.

These figures often do not convey much meaning unlessexpressed in relation to other figures.

Thus, it c can be say that the relationship between two figures, expressed in

arithmetical terms is called a ratio.

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ANALYSIS:-Book value in year 2010 is 1038 which is quite more than last five years. Dividendpayout Ratio Cash profit 21.20.Net profit ratio is 0.91 which is less than last five years.

Capital Structure

Period Instrument Authorized Capital Issued Capital - P A I D U P -

From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital

2009 2010 Equity Share 214.75 214.75 634882644 10 214. 75

2008 2009 Equity share 214.75 214.75 634880222 10 214.75

2007- 2008 Equity Share 214.75 214.75 631470376 10 214.75

2006 2007 Equity Share 214.75 214.75 526298878 10 214.75

2005 2006 Equity Share 214.75 214.75 526298878 10 214.75

2004 2005 Equity Share 214.75 214.75 526298878 10 214.75

2003 2004 Equity Share 214.75 214.75 526298878 10 214.75

2002 2003 Equity Share 214.75 214.75 526298878 10 214.75

2001 2002 Equity Share 214.75 214.75 526298878 10 214.75

2000 2001 Equity Share 214.75 214.75 526298878 10

214.75

1999 2000 Equity Share 214.75 214.75 526298878 10

214.75

1996 2000 Equity Share 214.75 214.75 526298878 10

214.75

1995 1996 Equity Share 214.75 214.75 474009872 10

214.75

1994 1995 Equity Share 214.75 214.75 474009189 10

214.75

1993 1994 Equity Share 214.75 214.75 473828726 10214.75

1991 1993 Equity Share 214.75 200 20000000 100 200

ANALYSIS:- Face value is same during the years i.e. 10 .paid up shares changes which are more in

year 2009-2010 i.e. 634882644 as compared to past years.

COMPARISION BETWEENHDFC BANK SBI BANK

Increase in owners value i.e. 32.36 increase in reserves is 800.15 in year march 2010 asIn year march 2010 as compared compared to year 2009To year 2009.that means it is beneficialFor hdfc bank.

Increase in reserve & surplus increase in net worth i.e. 62043.1I.e. are 6838.32 as compared year 2009

Increase in gross block i.e. 751.34 increase in bal.RBI i.e. 5744.53Increase in total assets i.e. 1909.14 increase in investments i.e. 9836.11

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Account opening balance is account opening balance is500RS5200Rs

ANALYSIS:

As we know that SBI is a Public Sector Bank. So its Brand image is much higher than any otherprivate Competing Bank. And under this analysis also the SBI has very strong financial position incomparison to HDFC bank on the basis of (Total Assets and Reserves, Net Worth, The futureInvestments.) are 51,429.00. Which are quite more than SBI bank? So from the above information Ianalyzed that liabilities are high in public sectors but assets are also. And the satisfaction level is alsomore. in public sectors normal person that have low income can invest .but in private bank like hdfconly that person invest which have high income because its account opening balance is 5200Rs.This is too high as compared to state bank of India.

COMPARISION OF SHARE CAPITAL OF HDFC& SBI:-

ANALYSIS;-

SWOT ANALYSIS OF HDFC BANK

STRENGTH

Right strategy for the right products.

Superior customers services vs. competitors

Great brand image

Product have required accreditations

Good place to work

Dedicated workforce aiming at making a long term career in the field.

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WEAKNESS

Some gaps for range in certain sectors

Customer service staff needs training. Management cover insufficient.

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

OPPORTUNITIES:-

Profit Margin will be good.

Could extend to overseas broadly

New specialist applications

Could seek better customer deals

THREATS

Legislation Could impact

Great risk involved

Very high completion prevailing in the industry

Vulnerable to reactive attack by competitors.

Lack of infrastructure in rural areas could constrain investment.

SWOT ANALYSIS OF SBI BANK

STRENGTH

Brand name

Market Leader

Wide Distribution Network

Government Owned

Diversified Portfolio

WEAKNESS

Minor hindrances

Hierarchical management

Lags modernization

Opportunities

Merger of associate banks with SBI

Opportunities for public sector banks

New Branches and ATM's

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Expansion on Foreign soil

Threats Advent of MNC banks

CRM Private banks venturing into the rural

Employee Strike

COMBINED SWOT ANALYSIS OF HDFC AND SBI

Strength of Bank is Direct Banking channels. As Direct banking channels saves time andmoney both as a customer does not need to go to bank for any kind of transaction exceptcash withdrawal and cash deposits all other things are done sitting anywhere in the world.

State Bank of India (SBI) is the leading commercial bank in India, offering services such as

retail banking, commercial banking, international banking and treasury operations. The bankis an integral part of State Bank Group, which includes seven other banks and offersadditional services such as mutual funds and insurance. The bank primarily operates in India.It is headquartered in Mumbai, India and employs about 205,896 people. The bank recordedrevenues of INR335, 639.3 million (approximately $6,484.6 million) in the financial year(FY) ended March 2009, an increase of 30.5% over FY2008. The operating profit of thecompany was INR179, 152.3 million (approximately $3,461.2 million) in FY2009, anincrease of 36.7% over FY2008. The net profit was INR91,212.4 million (approximately$1,762.2 million) in FY2009, an increase of 35.5% over FY2008.All services or products ofHDFC

Bank is available through direct banking channels. Free ATM, Net Banking, Mobile Banking, Phone Banking and 24 hours services.

Very easy to access and use.

A highly personalized services provided by the bank.

HDFCs Direct Banking channels provide real time and accurate information.

HDFCs Direct Banking is user friendly any one can easily operate it.

Now International Debit Card is Free for one year.

The Bank has strategic business alliance with Chase Manhattan Bank, largest bank of USA.

WEAKNESS:

Unawareness about all Direct Banking Channels due to less advertisement.

Other private banks have started direct banking channels it may put some competition toHDFC Bank in near future. Resistance to Change.

One should have the knowledge of the operations of the computers and of course the Internet.

OPPURTUNITIES:

As Nationalized Banks and Co-operative Banks do not provide Direct Banking services, soHDFC Bank can attract more customers.

Centralized banking makes easy for HDFC Bank to provide services to customers.

Huge market of shareholders.

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INTERNET BANKING

He Internet banking portal of our bank enables its retail banking customers to operate theiraccounts all across India, removing the restrictions imposed by geography and time. It's a platform

that enables the customers to carry out their banking activities from their desktop, aided by the powerand convenience of the Internet.

Availing the Internet banking services, you can do the following normal banking transactionsonline:

Self-account funds transfer across India.

Third party transfers in the same branch

New account opening

Demand Draft requests

Standing instructions

New Cheques-book request and much more.

Apart from these, the other salient value-added features available are:

Railway tickets booking,

Utility bill payments

LIC and other insurance premia payments,

SBI Mutual funds Investments

Remit Subscription to PPF account,

Credit card dues payments,

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Deposit your taxes,

Donations to your religious inspirations

Donations to Red Cross and such other organizations

Setting up SMS alerts for transaction information.

Truly smart services to cover most of your banking transactions. Above all, you can transferfunds between your accounts held at several locations. All this and much more from your desktop.

TERMS OF SERVICE:-

General Information:

1. The registration form(s) should be addressed and sent directly to the Branches where theapplicant(s) maintain his/her/their account(s).

2. Separate registration is required in case the accounts are maintained at different branches.Separate registration is allowed for single and joint accounts at the option of the user.3. Normally the account holders can access his accounts through the only after he/she acknowledges

to the respective Branch (es) the receipt of the User-Id and Password sent to him/her.

Banks Terms:

1. All requests received from the USERS are logged and transmitted to the Users Branch for theirfulfillment. The requests become effective from the time these are recorded/ registered at therespective branch. While registering the request, the USER is informed about the time normallytaken by the Bank for fulfillment such requests.

2. The rules and regulations applicable to the banking transactions done in the traditional way inIndia will be applicable mutatis mutandis for the transactions done through the service.3. Disputes between the registered USER of this service and the Bank with regard to the transactionsdone the jurisdiction of the competent Courts where the branch maintaining the relative account ofthe user is located and will be governed by Indian Laws in force from time to time.4. The Bank will take reasonable care to make use of the available technology for ensuring security

and preventing unauthorized access to any of the services offered

5. The service is a VeriSign certified secure site. It assures that during the session user is dealingwith web-site of SBI. The two-way communication is secured with 128-bit SSL encryptiontechnology, which ensures the confidentiality of the data during transmission. The access-controlmethods designed on the site afford a high level of security to the transactions conducted.

6. It is proposed to implement, in due course, the PKI (Public Key Infrastructure)/Digital Signaturetechnology for the Service.

7. The Bank reserves the right to modify, change, add or cancel any of the services offered throughor the Terms of Service listed in this Document without prior notice to the Users. The changes will

be notified to the users / customers through a notification on the site.

Users Obligations:

1. The User-Id and the Password given by the Bank must be replaced by User Name and Password ofthe USER if free to choose at the time of FIRST log-in. This is Mandatory.

2. The registered USER is free to choose a User Name and Password of his choice as per theguidelines on the site. However, he/she is advised to avoid choosing a password that is generic in

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Purchase of computers considered necessary for completion of course

Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc.

Amount of Loan

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 20 laces

3) FOREIGN CURRENCY NON-RESIDENT DEPOSIT ACCOUNTS

FCNR accounts can be opened only by an NRI.

Can be opened jointly with another NRI.

Nomination Facility available. (Nominee can be a resident Indian also).

Deposits can be opened in US$, Euro, Sterling Pounds Canadian Dollars AustralianDollars and Japanese Yen.

The minimum period of deposit is one year and maximum period is 5 years.

Premature withdrawal permissible subject to 1% penal interest.

No interest is payable if the deposit is closed within a year.

Rupee loans can be taken in India against the security of the deposit.

By the depositor(s)

By third parties

Foreign currency loans can be availed abroad against the security of FCNR deposits

4) E-RAIL

Book your Railways Ticket Online.

The facility has been launched Its September 2003 in association with IRCTC. The schemefacilitates Booking of Railways Ticket Online. The salient features of the scheme are as under:

1. All Internet banking customers can use the facility.

2. You are required to register on. You can select your train depending on your journey and bookyour ticket online.

3. On giving payment option as SBI, the user will be redirected to onlinesbi.com. After logging on tothe site you will be displayed payment amount, TID No. and Railway reference no.

4. On selecting the payment amount your account will be debited... The ticket with PNR No. will bedisplayed.

5. The ticket can be delivered or collected by the customer.

6. The user can collect the ticket personally at New Delhi