EXECUTION AND ANALYSIS OF WORKING CAPITAL AS A

PRODUCT OF HDFC BANK

SUBMITED TO:

Branch Managers Name

Branch Manager
HDFC Bank Branch Name Branch

SUBMITED BY:

Write Your Name

College Name And Address

 ACKNOWLEDGEMENT

A blend of gratitude and great satisfaction is what we feel to convey our indebtedness to
all those who have contribute to the successful completion of our project work.

We feel greatly privileged to Mr. Branch Manager’s Name for all his support and
guidance through out the making of the project without which this piece would not
have been possible at all.

We are equall grateful to the staff of HDFC Bank, Branch Name Branch for their devoted
assistance and cooperation. Their keen interest in our endeavors gave us extra
energy to perform to the best of our abilities.
We are also thankful to the customers who spared their precious time for carrying out the
interviews and providing relevant information.
 TABLE OF CONTENTS

A BRIEF ABOUT BANKING INDUSTRY

MAJOR PLAYERS IN BANKING SECTOR IN LUCKNOW

PROFILE OF HDFC BANK

WORKING CAPITAL

WORKING CAPITAL FACILITIES PROVIDED BY HDFC BANK

 Current account
 Cash Credit Limit
 Overdraft
Letter of Credit
 Loan Against Property
Loan Against Securities/Gold

MARKET SCENARIO

CATOGERISATION OF CUSTOMERS IN MARKET AND THERE

MAJOR REQUIREMENTS

FOCUS AREAS FOR TAPPING THE MARKET

RESEARCH METHODOLOGY

QUESTIONS INTERVIEWED

RECOMMENDATIONS

CONCLUSION

BIBLIOGRAPHY
 A BRIEF ABOUT BANKING INDUSTRY

Today the Indian banking system is among the best in the world and the years to come
may see them taking on the global behemoths.

The Indian Banking Industry can be categorized into non-scheduled banks and scheduled
banks. Scheduled banks constitute of commercial banks and co-operative banks. There
are about 67,000 branches of Scheduled banks spread across India. During the first phase
of financial reforms, there was a nationalization of 14 major banks in 1969. This crucial
step led to a shift from Class banking to Mass banking. Since then the growth of the
banking industry in India has been a continuous process.

As far as the present scenario is concerned the banking industry in India is in a transition
phase. The Public Sector Banks (PSBs), which are the foundation of the Indian Banking
system account for more than 78 per cent of total banking industry assets. Unfortunately
they are burdened with excessive Non Performing assets (NPAs), massive manpower and
lack of modern technology.

On the other hand the Private Sector Banks are witnessing immense progress. They are
leaders in Internet banking, mobile banking, phone banking, ATMs. On the other hand
the Public Sector Banks are still facing the problem of unhappy employees. There has
been a decrease of 20 percent in the employee strength of the private sector in the wake
of the Voluntary Retirement Schemes (VRS). As far as foreign banks are concerned they
are likely to succeed in India.
Indusland Bank was the first private bank to be set up in India. HDFC Bank ltd, IDBI,
ING Vyasa Bank, SBI Commercial and International Bank Ltd, Dhanalakshmi Bank Ltd,
Karur Vysya Bank Ltd, Bank of Rajasthan Ltd etc are some Private Sector Banks. Banks
from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental
Bank, Allahabad Bank, Andhra Bank, etc.
 MAJOR PLAYERS IN BANKING SECTOR IN LUCKNOW

Top Performing Public Sector Banks.

• State Bank of India.

• Allahabad Bank.

• Vijaya Bank.

• Indian overseas Bank.

• Punjab National Bank.

• Bank of India.

• Andhra Bank.

Top Performing Private Sector Banks

• UTI Bank

• IDBI Bank

• ICICI Bank

• HDFC Bank

• Kotak Mahindra Bank

 PROFILE 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 the Indian 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 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 in India" by Hong Kong-based Finance Asia magazine in 2005 and "Company of
the Year" Award for Corporate Excellence 2004-05.

HDFC Bank is India s large housing finance company, with particular specialization in
the provision of mortgages nationwide. Its loan portfolio covers over a million dwelling
units. It has developed expertise in retail mortgage loans to different market segments,
and also has a large corporate client base for its housing related credit facilities.
The company operates through more than 170 branches in nearly 80 cities across India.
All the branches are linked on a real time online basis. Customers in about 23 of the
branches can be serviced through the company s telephone banking facilities. The bank
also has a network of nearly 500-networked ATMs across these cities.

HDFC Bank conducts its operations through three core business segments, which
include: wholesale banking, retail banking, and treasury.

Its wholesale banking business segment targets large, blue chip manufacturing companies
in the Indian corporate sector. The business segment provides a wide range of banking
services including working capital finance, trade services, transactional services and cash
management (Working Capital Services).

The objective of the retail bank business segment is to provide a full range of financial
products and services. It offers ATMs, telephone banking, Internet banking and mobile
banking facilities. Meanwhile, its third business segment, treasury, provides foreign
exchange, local currency money market and debt securities, and equities.

.
 WORKING CAPITAL

Cash is the lifeline of a company. If this lifeline deteriorates, so does the company's
ability to fund operations, reinvest and meet capital requirements and payments.
Understanding a company's cash flow health is essential to making investment decisions.
A good way to judge a company's cash flow prospects is to look at its working capital
management (WCM).

Working capital refers to the cash a business requires for day-to-day operations, or, more
specifically, for financing the conversion of raw materials into finished goods, which the
company sells for payment. Among the most important items of working capital are
levels of inventory, accounts receivable, and accounts payable. Analysts look at these
items for signs of a company's efficiency and financial strength.

Take a simplistic case: a magi sauce company uses 50000 to build up its inventory of
tomatoes, onions, garlic, spices, etc. A week later, the company assembles the ingredients
into sauce and ships it out. A week after the checks arrives from customers. That 50000,
which have been tied up for two weeks, is the company's working capital. The quicker
the company sells the magi sauce, the quicker the company can go out and buy new
ingredients, which will be made into more sauce sold at a profit. If the ingredients sit in
inventory for a month, company cash stays tied-up and can't be used to grow the magi
business. Even worse, the company can be left strapped for cash when it needs to pay its
bills and make investments. Working capital also gets trapped when customers do not pay
their invoices on time or suppliers get paid too quickly or not fast enough.

The better a company manages its working capital, the less the company needs to borrow.
Even companies with cash surpluses need to manage working capital to ensure that those
surpluses are invested in ways that will generate suitable returns for investors.
Some companies are inherently better placed than others. Insurance companies, for
instance, receive premium payments up front before having to make any payments;
however, insurance companies do have unpredictable outgoings as claims come in.

Normally a big retailer like Wal-Mart has little to worry about when it comes to accounts
receivable: customers pay for goods on the spot. Inventories represent the biggest
problem for retailers, who must perform rigorous inventory forecasting or they risk being
out of business in a short time.

Timing and lumpiness of payments can pose serious troubles. Manufacturing companies,
for example, incur substantial up-front costs for materials and labor before receiving
payment. Much of the time they eat more cash than they generate.
WORKING CAPITAL FACILITIES PROVIDED BY HDFC BANK

The basic requirement for a firm to acquire working capital services given by banks is to
open a current account at the chosen bank. The general working capital facilities provided
by banks are Cash Credit Limit, Letter of credit, different types of Loans, Bank
Guaranties, etc.
Working capital facilities offered by HDFC Bank are as follows:

 Cash Credit Limit

 Letter of credit
 Bank Guaranties
 Loan against Property
 Over Draft
 Loan against Gold
 Loan against Securities

These are generally provided to add a cushion for firm’s working capital. We will be
dealing this one by one in detail:

CURRENT ACCOUNT

A Current account is ideal for carrying out day-to-day business transactions.

There are three types of current account in HDFC. These are as follows:

 Regular (AQB: 10000)

 Premium (AQB: 25000)
 Trade (AQB: 40000)
 Plus (AQB: 100000)

These are so divide so as to suit different profile of firms. It depends according to the
facilities required by the same.
Regular A/c

With the HDFC Bank Regular Current Account, you can access your account anytime,
anywhere. Withdraw and deposit cash, issue and encash cheques, make balance-inquiries
or ask for mini statements, and even request for cheque books any time, anywhere.
With a vast network of branches in cities all over the country, and access to a multitude
of ATM's, you can keep track of all your transactions anytime.

Premium A/c

Business needs a partner who can manage your finances while you concentrate on
growing your business.

You can avail benefits of inter-city banking account with Premium Current Account, that
requires an average quarterly balance of only Rs. 25,000 per quarter-offers Payable-At-
Par cheque book facility & FREE inter-city finds transfer across our network upto Rs.10
Lacs per month.

A Current Account with the benefits of accessing account from a large network of
branches, and through direct access channels - the phone, mobile, Internet and through
the ATM.

Trade A/c

In today's changing busines requirements, you need to transfer funds across cities, and
time is of the essence. HDFC Bank Trade Current Account gives you the power of inter-
city banking with a single account.

From special cheques that get treated at par with local ones in any city where we have a
branch, to free collection of outstation cheques (payable at branch locations), to free
inter-city funds transfers of up to 25 lakhs, our priority services have become the
benchmark for banking efficiency.
Plus A/c

In today's fast-paced world, your business regularly requires you to receive and send
funds to various cities in the country. HDFC Bank Plus Current Account gives you the
power of inter-city banking with a single account and access to more than 316 cities.
From special cheques that get treated at par with local ones in any city where we have a
branch, to free collection of outstation cheques (payable at branch locations), to free
inter-city funds transfers of up to 100 lakhs, our priority services have become the
benchmark for banking efficiency.
Cash Credit Limit

This account is the primary method in which Banks lend money against the security of
commodities and debt. It runs like a current account except that the money that can be
withdrawn from this account is not restricted to the amount deposited in the account.
Instead, the account holder is permitted to withdraw a certain sum called "limit" or
"credit facility" in excess of the amount deposited in the account.
Cash Credits are, in theory, payable on demand. These are, therefore, counter part of
demand deposits of the Bank.

Overdraft

The word overdraft means the act of overdrawing from a Bank account. In other words,
the account holder withdraws more money from a Bank Account than has been deposited
in it.

The above two looks a bit similar but the difference is very subtle and relates to the
operation of the account. In the case of Cash Credit, a proper limit is sanctioned which
normally is a certain percentage of the value of the commodities/debts pledged by the
account holder with the Bank. Overdraft, on the other hand, is allowed against a host of
other securities including financial instruments like shares, units of mutual funds,
surrender value of LIC policy and debentures etc. Some overdrafts are even granted
against the perceived "worth" of an individual. Such overdrafts are called clean
overdrafts.
Letter of Credit

A letter of credit is a document issued mostly by a financial institution which provides an

irrevocable payment undertaking to a beneficiary against complying documents as stated
in the credit. Letter of Credit is abbreviated as an LC or L/C, and often is referred to as a
documentary credit, abbreviated as DC or D/C, documentary letter of credit, or simply as
credit. Once the beneficiary or a presenting bank acting on its behalf, makes a
presentation to the issuing bank or confirming bank, if any, within the expiry date of the
LC, comprising documents complying with the terms and conditions of the LC, the
applicable UCP and international standard banking practice, the issuing bank or
confirming bank, if any, is obliged to honour irrespective of any instructions from the
applicant to the contrary. In other words, the obligation to honour (usually payment) is
shifted from the applicant to the issuing bank or confirming bank, if any. Non-banks can
also issue letters of credit however parties must balance potential risks.

The LC can also be the source of payment for a transaction, meaning that an exporter will
get paid by redeeming the letter of credit. Letters of credit are used nowadays primarily in
international trade transactions of significant value, for deals between a supplier in one
country and a wholesale customer in another. They are also used in the land development
process to ensure that approved public facilities (streets, sidewalks, stormwater ponds,
etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to
receive the money, the issuing bank of whom the applicant is a client, and the advising
bank of whom the beneficiary is a client. Since nowadays almost all letters of credit are
irrevocable, (i.e. cannot be amended or cancelled without prior agreement of the
beneficiary, the issuing bank and the confirming bank, if any). However, the applicant is
not a party to the letter of credit. In executing a transaction, letters of credit incorporate
functions common to giros and Traveler's cheques. Typically, the documents a
beneficiary has to present in order to avail himself of the credit, are commercial invoice,
bill of lading, insurance documents. However, the list and form of documents is open to
imagination and negotiation and might contain requirements to present documents issued
by a neutral third party evidencing the quality of the goods shipped.

The Process of Letter of Credit

STEP-1

After a contract is concluded between buyer and seller, buyer's bank supplies a letter of
credit to seller.

STEP-2

Seller consigns the goods to a carrier in exchange for a bill of lading.

STEP-3

Seller provides bill of lading to bank in exchange for payment. Seller's bank exchanges
bill of lading for payment from buyer's bank. Buyer's bank exchanges bill of lading for
payment from buyer.

STEP-4

Buyer provides bill of lading to carrier and takes delivery of goods.

A bank guarantee and a letter of credit are similar in many ways but they're two different
things. The main difference between the two credit security instruments is the position of
the bank relative to the buyer and seller of a good, service or basket of goods or
services in the event of the buyer's default of payment. These financial instruments are
often used in trade financing when suppliers, or vendors, are purchasing and selling
goods to and from overseas customers with whom they don't have established business
relationships.

A bank guarantee is a guarantee made by a bank on behalf of a customer (usually

an established corporate customer) should it fail to deliver the payment, essentially
making the bank a co-signer for one of its customer's purchases. Should the bank accept
that its customer has sufficient funds or credit to authorize the guarantee, it will approve
it. A guarantee is a written contract stating that in the event of the borrower being unable
or unwilling to pay the debt with a merchant, the bank will act as a guarantor and pay its
client's debt to the merchant.

The initial claim is still settled primarily against the bank's client, and not the bank itself.
Should the client default, and then the bank agrees in the bank guarantee to pay for its
client's debts. This is a type of contingent guarantee. A bank guarantee is more risky for
the merchant and less risky for the bank. But this is not the case with a letter of credit.
While a letter of credit is a similar, the principal difference is that it is a potential claim
against the bank, rather than a bank's client. For example, a seller may request that a
buyer be provided with a letter of credit, which must be obtained from a bank and which
substitutes the bank's credit for that of its client. In the event that the borrower defaults,
the seller would go the buyer's bank for the payment. The seller's risk is mitigated
because it is unlikely that the bank will be unable to pay the debt. A letter of credit is less
risky for the merchant, but more risky for a bank.

Banks accept full liability in both cases. With a bank guarantee, a client can default and
the bank assumes the liability. With a line of credit, liability rests solely with the bank,
which then collects the money from its client.
Loan Against Property

HDFC Bank brings to you Loan Against Property (LAP). You can now take a loan
against your residential or commercial property, to expand your business, plans a
dream-wedding, fund your child's education and much more.

You can depend on us to meet all your business requirements even to purchase a new
shop or office for your business. Loan to purchase Commercial Property (LCP) is a
specially designed product to help you expand your business without reducing the
capital from your business.

Features & Benefits

1. Loans from Rs. 2 Lacs onwards depending on your needs.

2. Borrow up to 60% of market value of the property.

3. Flexibility to choose between an EMI based loan or an Overdraft - We also offer

to you overdraft against your self-occupied residential or commercial property
and you save money by paying interest only on the amount utilized!

4. High tenure loans for ease of repayment.

5. Attractive interest rates.

6. Simple and speedy processing.

Eligibility and Documents

For Salaried Individuals

 Proof of Residence - Any one of Ration Card / Telephone Bill / Electricity Bill /
Voters Card.
 Proof of Identity - Any one of Voters Card / Drivers License / Employers Card.
 Latest Bank Statement / Passbook (where salary / income is credited for past 6
months).
 Latest 3 Months Salary Slip with all deductions & last 2 years Form 16.
 Copies of all Property Documents.

For Self Employed

 Certified Financial Statement for the last 2 years.

 Proof of Residence - Any one of Ration Card / Telephone Bill / Electricity Bill /
Voters Card.
 Proof of Identity - Any one of Voters Card / Drivers License / Employers Card.
 Latest Bank Statement / Passbook (where salary / income is credited for past 6
months).
 Copies of all Property Documents
Loan Against Securities/Gold

These two products (las/lag) of HDFC Bank are very important especially for those
individuals who are not able to use facilities such as LAP and CC as either they do not
have their own land to mortgage or they don’t want their land to be mortgage.
With HDFC Bank's Loan against Securities, you can get an overdraft against your
securities like Equity Shares, Mutual Fund Units, GOI Relief Bonds, LIC Policies, NSC,
KVP, UTI Bonds (6.60% ARS & US64 Bonds) and Gold Deposit Certificates, while still
retaining ownership. And the best part is that you can continue to enjoy all your
shareholder benefits such as rights, dividends and bonuses.

With HDFC Bank's Gold Loan, you can get an instant loan against your gold jewellery
and ornaments. The procedure is simple, documentation is minimal and approval is
quick.
 MARKET SCENARIO

The area covered in Lucknow for this project was from Nishat Ganj to Chinhat
includining Gole Market, Indra Nagar, Gomti Nagar as this area comes under HDFC
Bank Lekhraj Indra Nagar Branch.

Gom ti
Gole Mkt
Nagar
Nishat Ganj
Chinhat

Indra Nagar Faizabad

Bhoot Nath Road
Mkt

Market segments identified for prospective business within these areas are as listed
below:
Nishat Ganj

The major market segments that where identified in Nishat Ganj area are:
Furnitures, White goods, departmental Store and Garments shops.

White
Others Goods
Garments

Departme
ntal Stores

Gole Market

Gole Market area is the major hub of Jewelries and Restaurants.

Others

Jewelries

Restraunts
Faizabad Road

This area has been identified as the bigger market area in comparison to other areas.
The major market segments that where identified in Faizabad Road area are:
Furnitures, Marbles/Tiles/Sand stones, White Goods, Wholesalers, Interior Decorators,
Paints and Construction Material Distributers (Cement/Steel/Hardware/Bricks).

Interior
Others White goods
Decoraters
Furnitures
Paints

Wholesalers Marbels/Tiles
Construction
Material

Bhoot Nath

Bhoot Nath area is the major hub of Garments and Departmental Store. It also includes
few Jewelries Shop.

Jewelries

Garments
Others

Departmental
Stores
Indra Nagar

The major market segments that where identified in Indra Nagar area are:
Schools and Construction Material Distributers(Cement/Steel/Hardware/Bricks).

Others

Schools

Construction
Material

Chinhat

In lucknow, Chinhat has been identified among the prime areas for the industrial location.
It mainly consists of ancillary vendors for TELCO and some other chemical and steel
industries.
This area further includes some of the renowned colleges of the city.

Others

Industries
Colleges
Gomti Nagar

Segments identified in Gomti Nagar area of Schools/Colleges, Hospitals, Multiplexes/

Real Estates, Garment Shops, International Traders, Construction Material Distributer
(cements/steels/hardware/bricks/marble/tiles/sandstones/paints/etc.).

Real
Estates/Multiplexes Schools/Colleges

International
Traders Distributer
Garm ents
Hospitals Others
 CATOGERISATION OF CUSTOMERS IN MARKET AND THERE
MAJOR REQUIREMENTS

SCAL
E3
CC /
LAP

SCALE 2
CC / LAP

SCALE 1
CC / LC / LAP / FD

After analyzing the Market Scenario we have categorized the customers in the market
into three scales on the basis of their turnovers and major requirements of working
capital. The three scales have been explained from the next page.
SCALE 1:

Scale 1 consists of the kinds of customers as follows

• Industrialists
• Importers / Exporters
• School/College Owners

Industrialists usually have the requirement of Cash Credit Limit or Loan against Property
as they require huge amount money for meeting their demands of working capital on
regular basis .So these two products are best suitable for them.

While businessmen dealing in Import / Exports require transactions in currencies across

the world for which Letter of Credits and Bank Guarantees are their basic amenities
which HDFC Bank can provide in shorter span of time as compared to other banks.
Schools/College owners are more interested in Fix Deposits as they have large unused
funds and they usually look out for banks which can provide them best rate of interests
(Example: St. Domenices School, Indra Nagar was interested in getting Fix Deposits
done in large amounts when the proposal was kept in front of them.) .

SCALE 2:

Scale 2 consists of the kinds of customers as follows

• Marble Traders
• Owners of Furniture Shops
• Owners of Jewelry Shops
• Construction Material Distributors

All the kinds of customers in this scale require large amount of loans for working capital
but not on regular basis. They require money only for maintaining the inventories in
advance.
SCALE 3:

Scale 3 consists of the kinds of customers owning business of:

• Garments
• Departmental Stores
• Traders of Construction Materials

All the kinds of customers in this scale require small amount of loans for working capital
but not on regular basis. They require money only for maintaining the inventories in
advance.
 FOCUS AREAS FOR TAPPING THE MARKET

 Chinhat(Industrial Area Opposite TELCO )

 Bhootnath
 Faizabad Road
 Gomti Nagar

Case:

It was early days of our training, when we were given a task to scan the potential of the
industrial area situated at Chinhat, Deva road.

To our surprise the area was having immense potential, with almost every firm having
turnovers in crores. The area mainly consists of venders of Telco, few industries of
chemicals, packaging, electrical equipments and many more.
The day dint started on a good note, but it was our fifth cold call when we entered the
premises of Nu Sriyam Hitech. While interacting with the owner we get to know the
following information.

This firm was manufacturing ancillary units only for Telco and most of his transactions
were in cheques with turnover around one crore. The problem, which the owner faced,
was that sometimes the queue of his cheques becomes too long, this leads to scarcity of
cash and hence he was not able to manage the working capital efficiently. The banking of
Nu Sriyam Hitech was from State Bank of India. The payment made by Telco in cheques
used to take from two to three days for clearing, hence the cash is blocked for that period.

This was our moment to hit and we got it clicked really well. We told how an account at
HDFC Bank can remove his present problem of cash blockage. The point made was that
the main account of Telco is in HDFC Bank, and if he opens an account in the same, the
payment made by Telco previously in cheques will now be transferred directly to their
account through net banking. This will take time in minutes while previously it used to
take days.

He was so impressed with us that not only he asked us to do the formalities of shifting his
current cc account from State Bank of India, but also to send a proposal for term loan
which he will be needing in two months time. He also told us that he will transfer his
personal account currently in ICICI Bank to our’s , if he is satisfied with the services
provided.
It was a humbling experience for us, which gave us lot of confidence for future.

Case:

Another case was of Azam Ali & Alam Ali Perfumers. They are one of the leading
perfume exporters in India, with their head office at Lucknow.
Their major requirements are of Letter of Credit and Bank Guarantees. The problem
which they were facing was delay in the process of getting remittances cleared by Bank
of Baroda, which took around one week, while HDFC Bank takes 48 to 72 hours in doing
the same. So we kept this proposal in front of them and are expecting positive response
from their side in future.

From these two experiences we learnt that first of all gather information from the
customer about his current banking relations and then try to hit on the week points which
he is facing from the same.
The same kind of situations was arising with some of the other customers present in the
market, specified above.
Chinhat

This is one of the most prospective area for the bank to tap. There are massive industries
with turnover in crores located in this area. HDFC Bank has the biggest advantage for
tapping this area as compared to other banks. This is so because around 60% of the
industries located in this area are doing business with Telco, as they are manufacturing
ancillary units for them. The main A/c of Telco is in HDFC Bank, and here is where
HDFC has an advantage over other banks. Telco mainly pays them in cheques , hence the
transaction time is greatly reduced for firms who are having A/c in HDFC Bank.
Hence for firms dealing with Telco and also having A/c in HDFC, the payment they get
from Telco are directly transferred to there A/c. This saves a lot of time and helps them in
managing working capital better.

This area mainly comprises of Scale 1 class industries. HDFC Bank has started
penetrating this area and has already captured a moderate portion. But still this area
consists of prospective potential customers who are still there to be tapped.

The major requirements of this area are that of Cash Credit limit and Term loans. Cash
Credit limit is required for efficient working capital management, while Term loan are
generally required by those firms who are planning for expansion in business.
Bhootnath

This area is the major shopping hub especially for people living in near by area’s, which
includes Indra Nagar, Rabindra Palli, Indra Puri and Munshiipullia. Bhootnath mostly
caters to Scale2 and Scale3 class of market. It includes Jewelries, Departmental stores,
Garments shops and restaurants.

There is a huge potential for HDFC in tapping this area. The biggest advantage, which
will help HDFC in capturing, is its proximity to the area, which is around 250 meters
away from HDFC Indra Nagar branch.

The major requirements of working capital in this area are managed by using services
like Cash Credit Limit and Loan against Property. Both these services are offered by
HDFC Bank, that to at a competitive rate of interest.

Faizabad Road

This area has the most diversified market and is spread over a large area. Both Scale2 and
Scale 3 class of market is present here. It includes shops of Interior Decorators, Furniture
Sanitary and Marble, Wholesalers and many more.

The major working capital requirement of this area is that of cash credit. Cash Credit
Limit is generally required by them for stocking inventories. In cases, where a cash credit
limit is not possible, customers can be convinced for taking an Over Draft facility against
the Property, which is similar to cash credit.
One of the biggest advantage HDFC Bank is having over others is it proximity to the
area, as the Indra Nagar branch is itself situated at Faizabad road. But taping the market
in this location is bit tough as mostly shopkeepers are maintaining the relationship with
nationalized banks since last 15 to 20 years(case related to this problem is on the next
page). But still there is a lot of potential in the market.
Case:
While doing the survey in the market on Faizabad road we came across a shop Awadh
Hardware & Co. there we approached for CC limit and kept the proposal of increasing
the limit on compatible rate of interests. But they denied as they were maintaining a good
relationships with Punjab National Bank since last 20 years and were able to get more
than the limit specified whenever required which is not possible in HDFC and other
Private Banks as everything is computerized and transparent which is not seen in the
Nationalized Banks.

Gomti Nagar

Gomti nagar is a huge area in itself. All three scales of market i.e. Scale1, Scale2, Scale3
are present here. The area includes colleges/schools, hospitals, real estate, multiplexes,
garments shops and a good number of international traders (importers and exporters).
Mainly all the banks are having their branches at Gomti Nagar except HDFC Bank; this
acts as a biggest disadvantage.

As HDFC Bank, Indra Nagar branch is not as near to this location as compared to other
bank branches, it’s a bit hard to crack the customers in this location. The major
requirements of this area are similar to other area’s that is of lap, cash credit and letter of
credit. Letter of credit is an additional service required here because of the presence of
international traders.

International traders require the use of Letter of Credit and Bank Guaranties, as they
have to both Import and Export commodities all over the world. The use of letter of credit
is increasing at a rapid pace in Lucknow as more and more business units are indulging
themselves in import / export business with china due to large profit margins. HDFC
Bank has an advantage over other banks when it comes to providing letter of credit
services to their customers. It is more time efficient and takes the least time in providing
the service.
Another area within Gomti Nagar is Vibhuti Khand, which is a commercial area and also
not very far from our branch. HDFC Bank has already made some inroads in this area by
capturing a few customers, but still lot of market is yet to be captured.

.
 RESEARCH METHODOLOGY

Research Design
It is the conceptual framework within which the research is to be conducted. The suitable
design will be one that minimizes the bias and maximizes the reliability of data collected
and analyzed. Now we will have a brief look on the different aspects of the research plan
and contact methods. The research design used in the project is Descriptive.

Data Sources
This research plan comprises of primary as well as secondary data sources. Primary data
are the data that were collected for a specific purpose or for a specific research project.
The primary was collected through focus interviews. Secondary data are the data that
were collected for another purpose and were already present, which were taken from the
bank.

Method of Collecting Primary data was:

Focus Interviews

Method of Collecting Secondary data was:

Data provided by the Bank
Websites of the Bank
Magazines and Newspapers
Promotional Activities
Sampling Design
The Sampling design for the study was based on convenience and easy accessibility. The
businessmen were taken into consideration and were asked about the services they are
availing for Working Capital from their respective Banks.

Sampling Unit
Businessmen coming in the area of HDFC Bank(Lekhraj Branch, Indra Nagar).

Sampling Size
How many people should be interviewed? So in this project the sample size is 100.
 QUESTIONS INTERVIEWED

Q1) Type of bank(s) you are holding Accounts for your Working Capital?
1) Nationalized Or 2) Private

Analysis

65% of the people responded to Nationalized Bank while 35% of people responded to
Private Banks. Reason behind having accounts in Nationalized Bank was that these were
established since past 15 to 20 years and the customers have built up a healthy
relationship with the same. While Private sectors banks have recently established there
branches in market in last 5 to 7 years.

Q2) What Factors influence you in opening an Account for Working Capital?

Analysis

All most all of the respondent’s first priority was Proximity of Bank Premises. While
other factors which influenced were:

• Good customer services

• Network of Bank
• Brand name
• Processing speed
• Charges deducted
• Fulfillments of commitments
• Phone Banking
• Advertisements
• Word of mouth

Q3) What All Services do you Avail for your Working Capital?

Analysis

Mostly the businessmen are availing the services of Cash Credit Limit or Over Draft
Limit or Loan against Property. While people having business Import/Export avail Letter
of Credit and Bank Guaranties.
Q4) How many times do you require Loan Limits from bank for your working
capital?

Analysis

Real Estates Businessmen and Industrialists usually have the requirement of Cash Credit
Limit on regular basis while Marble Traders, Owners of Jewelry Shops, Construction
Material Distributors, Owners of Furniture Shops, Garments, Departmental Stores,
Traders of Construction Materials require large amount of loans for working capital but
not on regular basis. They require money only for maintaining the inventories in advance.

Q6) Do you see any differences in the kind commitment made between pre and post
opening of account?

Analysis

60% of the respondents were in the favor of the question while 40% were not in favor.

Q7) What problems have you faced in your transactions?

Analysis

Mostly customers responded to problems regarding Charges Deducted in the

transactions of which they are not aware. While other problems which came into picture
were Delay in the services, Delay in updating account balance in Nationalized Banks.

Q8) Would you ever like to change your bank? If yes then on what basis are you
Willing or would you like to switch over?

Analysis

70% of respondents said that they were not willing to switch over as they are maintaining
their relationship with banks since last 10 to 20 years. But among these there were some
people who said that they might switch over in future if any major drawback occurs.
Rests of the respondents were in favor of switching over on the basis of Lesser Rate of
Interests and Increase in Cash Credit Limit.
Q9) What is your opinion about working capital services provided by HDFC Bank?

Analysis

Respondents having accounts in HDFC bank

70% of people are satisfied with the present services they are availing. Rests of them are
satisfied but they are facing few problems of delay in the services (Example: statements
not received, Charges Deducted, Lack of commitments).

Respondents not having accounts in HDFC bank

Some people have opinion that Private sector banks deducts many hidden charges which
do not happen in Nationalized banks so there is same problem in HDFC bank too. But
they were also in the favor that HDFC bank provides faster services than other banks.
 RECOMMENDATIONS

Strong need of Brand Building

As HDFC Lekhraj Branch is 3 years old the bank needs to make a lot of marketing
efforts. Whenever the branch comes into existence it is necessary that they announce
their birth. It should try to pull customers towards the bank. For this lot of promotional
activities should be performed which the bank is already performing by putting up
Banners and Posters. Further the bank can also do some awareness activities such as
conducting Competitions in near by Residential Apartments, organizing Medical Camps
in Conventional Parks or in Joggers Parks, etceteras.

Solid network required to develop the business further.

If we see the results of the survey, it is evident that people prefer strong networking
system to make their banking life as comfortable and reachable as possible.
For example as the Gomti Nagar is one of the prime locations of the city from Business
point of view. So setting up a unit of HDFC in the same location can be a good
opportunity for capturing the untapped market.

Need to focus more on the Quality than on the Quantity of Sales Force.

The present sales force of the branch is not up to standard. More over the sales force is
not able to represent the true picture of the services they are selling to the customers
which in future leads to dissatisfaction among the customers and spreads a negative word
of mouth. The false commitments made by sales force are unethical. So well trained sales
force should be kept and regular inspections should be made for avoiding such mischief.
 CONCLUSION

With years of banking experience, HDFC Bank is undoubtedly in a strong position to

help growing businesses sail through the complexities they may face.

HDFC Bank has always been market oriented and dynamic with respect to resource
mobilization as well as lending program. This renders it more capable to meet the new
challenges that have emerged. Over the years, HDFC Bank has developed a vast client
base of borrowers, depositors, shareholders and it hopes to capitalize on this loyal and
satisfied client base for future growth. Internal system have been developed to be robust
and agile, to take into account changes in the volatile external environment. Working
with the right bank can help one’s business sail more smoothly and HDFC Bank helps in
doing that as it understands today’s business requirements.
 BIBLIOGRAPHY

• http://www.BharatBookBureau.com

• http://www.Wikipedia.com

• http://www.Hdfcbank.com

• http://www.Investopedia.com

• http://www.Google.com

• HDFC Product Manual

• Brochures And Manuals of HDFC Bank