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 liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. [3]
Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. [4]
HDFC Bank deals with three key business segments. - Wholesale Banking Services, Retail Banking Services, Treasury. It has entered the banking consortia of over 50 corporates for providing working capital finance, trade services, corporate finance, and merchant banking. It is also providing sophisticated product structures in areas of foreign exchange and derivatives, money markets and debt trading And Equity research. [5]
HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (Visa Electron) and issues the MasterCard Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2009, the bank had a total card base (debit and credit cards) of over 13 million. The Bank is also one of the leading players in the "merchant acquiring" business with over 70,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is positioned in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc. With Finest of Technology and Best of Man power in Banking Industry HDFC BANK's retail services have become by and large the best in India and since the contribution to CASA i.e. total number of current and savings account of more than 50%, HDFC BANK has full potential to become India’s No.1 Private Sector Bank. [6]
As of June 30, 2012, the Bank’s distribution network was at 2,564 branches and 9,709 ATMs in 1,416 cities as against 2,111 branches and 5,998 ATMs in 1,111 cities as of June 30, 2011. [7]
The Bank’s total balance sheet size increased by 25.9% from ` 285,942 crores as of June 30, 2011, to ` 360,001 crores as of June 30, 2012. Total net advances as of June 30, 2012, were ` 213,338 crores, an increase of 21.5% over June 30, 2011. The mix of loans between the retail and wholesale segments was 52:48 as on June 30, 2012, as against 54:46 as on March 31, 2012. Total deposits were at ` 257,531 crores, an increase of 22.0% over June 30, 2011. Savings deposits grew 18.4% to ` 76,674 crores and current deposits grew 7.4% to ` 41,682 crores. With the term deposits growth at 29.4%, the CASA ratio was at 46.0% of total deposits as at June 30, 2012. [8]
BACKGROUND OF HDFC BANK
Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's leading housing finance company, HDFC Bank is one of India's premier banks providing a wide range of financial products and services to its over 18 million customers across hundreds of Indian cities using multiple distribution channels including a pan-India network of branches, ATMs, phone banking, net banking and mobile banking. Within a relatively short span of time, the bank has emerged as a leading player in retail banking, wholesale banking, and treasury operations, its three principal business segments. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values: Operational Excellence, Customer Focus, Product Leadership and People
The bank's competitive strength clearly lies in the use of technology and the ability to deliver world-class service with rapid response time. Over the years, the bank has successfully gained market share in its target customer franchises while maintaining healthy profitability and asset quality.
Leading Indian and international publications have recognized the bank for its performance and quality.
Awards & Milestones
HDFC Bank began operations with a simple mission: to be a "World-class Indian Bank" with single-minded focus on product quality and service excellence. Today, we are proud to say that we are well on our way towards that goal.
Some key milestones achieved along the way:
The Bank is listed on the Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE) with the approximate market capital of $18.3 Billion
One of the first Indian Bank to be listed on New York Stock Exchange (NYSE) (symbol 'HDB') in 2001 & also listed on the Luxembourg Stock Exchange (ISIN No US40415F2002) in 2008
Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "AAA (ind)" rating to HDFC Bank Ltd
HDFC Bank Ltd is also among the Fab 50 companies in Forbes list
HDFC Bank Ltd was also awarded as the "Best Domestic Bank" by Asia Money
India's 10 "Most Admired Company" by Wall Street Journal
FACTORS CRITICAL FOR SUCCESS OF HDFC BANK
1. Optimum use of new technology.
2. The ability to deliver world-class service with rapid response time.
3. Their business philosophy is based on four core values - Customer Focus, Operational Excellence, Product Leadership and People. They believe that the ultimate identity and success of their bank will reside in the exceptional quality of our people and their extraordinary efforts. For this reason, they are committed to hiring, developing, motivating and retaining the best people in the industry.
CORE COMPETENCY
• Innovative Practices and Solutions
• Customer given top priority, viewed as an "opportunity"
• Strong & Efficient Leadership both at formal and informal levels in the organization
SWOT ANALYSIS
Strength
1) Innovative practices followed – with respect to giving the front management the tools to deal with adverse situations efficiently, a formal and systematic feedback mechanism is followed which further helps in augmenting the capability and hassle free procedures help to win customers.
2) Customer oriented – customer given the top priority, all the systems, processes and even the personal involved are trained and designed to serve the customer better. Customer viewed as an "opportunity".
3) No employer- employee relationship – the working environment is such that all the issues are dealt with as if a family matter, going the extra mile to give that personal touch
Weakness
1) The major weakness being that HDFC being the largest financial institution has a weak advertising base. If it strengthens this base also its business will multiply manifold.
2) Should workout to cut down on its rate of interest in order to eliminate stiff competition from SBI, ICICI, and LICHF etc.
Opportunities
1) Immense opportunity lies in the field of extending its financial services and guidance to areas of construction like water supply, sanitation, roads etc as these will be generating huge businesses in the future
2) With migration of rural population to the urban areas, heavy investments will be required in the transport facilities and construction of additional dwellings
Threats
1) As the housing and finance industry is emerging as a promising industry, tough competition prevails in the industry. Competitors vary from already established huge institutions to the new but promising ones.
EMERGENCE OF SOCIAL MEDIA
The emergence of social media has changed modern day communication. [10] While that may sound like a cliché, it is a true fact and one that has disrupted the way that companies across a range of industries communicate with their customers and target audiences. While the establishment of sites like Facebook, which boasts close to 850 million users worldwide, as mainstream channels of communication has come more easily to some industries than others.
Banking is one of the oldest and most prestigious industries yet social is not yet a mainstream channel, in the same way that is in sports companies, the retail industry and other consumer-facing spaces have embraced social networks and the Internet. As adoption of social media is far from mainstream for banks, this article aims to focus at why that is the case, which brands are blazing a trail and how the rise of social media and the Web may influence the future of bank-consumer communications.
CHALLENGES OF BANKS FOR SOCIAL MEDIA
Banking is a notable industry because banks are a prerequisite for every adult in the world, although emerging markets do have a significantly lower ratio of usage.
The fact that most people need a bank account means half of the battle for consumers is won already as the demand is there. What is key for banks is an understanding of their customers and exactly what they are looking for; and that’s an area where social media can be hugely beneficial.
A tool for understanding customers
If there’s one key reason for banks jumping into social media it would the potential to understand customers.
Banks spend fortunes trying to get feedback and responses as they look gauge customer interest, yet all of that and more can be found online.
Social media is packed full of opinions, wishes and other comments. While it is true that a lot of that noise is irrelevant, if the data can be distilled, it has the potential to give banks vital insight and understanding of their existing and prospective customers and their wants and needs.
Challenge 1: Customers
The first challenge that presents itself is the caution of customers. While hundreds of millions of people have become comfortable with sharing their lives online — in a way that was almost unimaginable a few years ago — there are areas where they feel less safe online. Money and bank details are arguably among the more troubling areas, and for good reason. Stories of websites and databases being hacked and bank details being stolen, email scams, viruses from the Internet and other incidents have trained many web users to be wary of using money online. To the point that this reluctance has manifested itself in communicating with banks and discussing anything financial online. According to a recent report from Avaya and BT, 69 percent of customers in the UK would not use social media to interact with their bank. While that figure is lower in the US (62 percent), Germany (64 percent) and Spain (47 percent), it doesn’t represent an audience that is particularly open to being communicated to. But a key problem is that many banks just aren’t doing it right.
A survey into 50 banks by Assetinum.com concluded that, though banks are beginning to step up social media accounts, few are actively using them and that is dissuading their audiences. Though 42 of the banks used Twitter, just 26 were actively tweeting and engaging with customers. Two thirds of banks were found to be actively using Facebook, while just 15 banks made relevant use of You Tube. On average the banks only scored one third of the possible total of assessment points for Twitter usage. Facebook scored worse than Twitter however, as just 18 banks (55 percent) with an active Facebook profile reacted to a test friend request, which the firm sees as a clear sign of "insufficient interaction with the users". Reflecting the mixed efforts, Benjamin Manz, managing partner of Assetinum, called the strategies implemented by the banks "amateurish".
"For a surprisingly high amount of banks a convincing social media strategy is still not distinguishable," he says in the report, which analyzed the social media performance of leading private banks worldwide.
Though the confidence figures are low, banks must take a part of the blame here. The level of activity from banks on social media is one big factor that can put customers at ease and give them greater confidence, although it won’t convince them all, of course.
Challenge 2: Selling social media internally
Part of the problem is that banks do not understand how to strategically use social media, or have problems ‘selling’ the idea and benefits to senior executives.
"There is no return on investment for social media," says Singapore-based bank marketing specialist Rob Findlay, "but many senior executive just don’t get that. You can’t really measure it, it’s like trying to find the ROI of your mother."
Findlay, who has worked at Australia Nation Bank (NAB), one institution well know for embracing social media, explains that banks are beginning to embrace social media.
"Initially, many were fairly reluctant but now they are getting involved," he says. "It’s a little bit like watching a kid sit on the edge of the pool waiting to get it."
:.That's all for today guys, see you need week with same kind of knowledgable content. Till then stay safe and keep learning.
- Santhil Kherwal
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