CHAPTER 1

INTRODUCTION

1
INTRODUCTION

Provide Service with a smile:

Today’s finicky banking customers will settle for nothing less. The customer has come to realize somewhat
belatedly that he is the king.
Better quality of services provided by the bank has a positive influence on satisfaction of
itscustomers and it directly contributes to profitability of banking industry. Good quality
ofservice provides numerous benefits to banking industry like better corporate
image,enhancement in customer satisfaction, cross-selling opportunities, and increased
chances ofword to mouth recommendation and facilitates the maintenance of log term and
goodcustomer relationships.
The customer’s choice of one entity over another as his principal bank is determined by
considerations of service quality rather than any other factor. He wants competitive loan rates but
at the same time also wants his loan or credit card application processed in double quick time.

He/she insists that he promptly informed of changes in deposit rates and service charges and he
bristles with „customary rage‟ if his bank is slow to redress any grievance he may have.

He/she cherishes the convenience of impersonal net banking but during his occasional visits to the branch he
also wants the comfort of personalized human interactions and facilities that make his banking experience
pleasurable.

In short he wants financial house that will more than just clear his cheque and updates his passbook: he wants
a bank that cares and provides great services.

So does HDFC bank meet these heightened expectations?

What are the customers‟ perceptions of service quality of the banks?

Which dimension of service quality of HDFC bank is performing well?

To find out answers to these questions I undertook a survey of 2 branches of HDFC bank.

A lot of surveys have been done in the past to understand the aspect of customer satisfaction and to find out the
service quality that customer friendly banks try to offer to clients.

My research is conducted to find out “SERVICE QUALITY OF HDFC BANK”

Service Sector is the lifetime for the social economic growth of a country. It is today the largest and fastest
growing sector globally contributing more to the global output and employing more people than any other
sector.

The real reason for the growth of the service sector is due to the increase in urbanization, privatization and
more demand for intermediate and final consumer services. Availability of quality services is vital for the well
being of the economy.

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In advanced economics the growth in the primary & secondary sectors are directly dependent on the growth of
services like banking, insurance, trade, commerce, entertainment etc.

The service sector is going through almost revolutionary change, it dramatically affects the way in which we
live and work. New services are continually being launched to satisfy consumers existing needs & to meet the
needs that they do not even know they had. Ten years ago people did not anticipate the need for emails, online
banking, web hosting, online reservation and many other new services, but today many of us feel we cannot
survive without them. Similar transformations are happening in Business to business marketing. Service
organisations very widely in size. At one end are the huge international corporaations operating in industries
such as tourism, airlines, banking, telecommunication etc whereas on the others end of the scale is a vast array
of locally owned and operated small businesses including parlour, hotels, laundry a numerous business to
business services.

How important is the sevice sector in an company?

▪ In most countries services add more economic value than agriculture, raw material and
manufacturing combined.
▪ In developed economics employment is dominated by service jobs and most new jobs growth comes
from services.
▪ Jobs range from high paid professionals and technicians to minimum wage positions.
▪ Service organisations can be any size, from huge global corporations to local small business.
▪ Most activities by govt, agencies and non-profit orgs involve service.

Service Sector in India

In alignment with the global trends, Indian service sector has witnessed a major boom and is one of the major
contributors to both employment and national income in recent times. The activities under the preview of the
service sector are quite diverse. Trading, transportation and communication, financial, real estate and business
services, community, social and personal services come within the gambit of the service industry. Service
sector in India’s GDP. According to data for the financial year 2008, the share of services, industry and
agriculture in India’s GDP is 53.7% 29.1% and 17.2% respectively.

The various sectors that combine together to constitute service industry in India are
stated as under:

▪ Trade
▪ Hotels & restaurants
▪ Railways
▪ Other transport & storage
▪ Communication (post & telecom)
▪ Banking
▪ Insurance
▪ Dwellings, real estate
▪ Business services
▪ Public administrations, defence
▪ Personal services
▪ Community services
▪ Other serevice

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BANKING SECTOR

Banking and financial services funds are equity funds that primarily invest in equities and
equity related securities of banks and companies that cater to the financial services sector.
The banking sector is akin to the backbone of the economy – people deposit money in banks
and banks in turn provide a steady stream of credits to businesses and individuals. Banks
form the fulcrum of the financial machinery of the country and it is only due to the financing
provided by banks that firms can set up factories, manufacturing units, expand operations and
new businesses can avail capital to start running.

India’s banking infrastructure is fairly well-established – there are 12 public sector banks and
21 private sector banks, as per the Reserve Bank of India. Besides, we also have a network of
thousands of rural and urban co-operative banks and 46 foreign banks which have operations
in India. Several reforms were ushered in the banking sector when the Indian economy was
liberalized in 1991 and in the last seven years too, reforms have been brought about in public
sector banks including mergers, recapitalization, recognition of NPAs and recoveries.

The financial services sector encompasses not just banks but other non-banking finance
companies such as term lending institutions, NBFCs, housing finance, commercial vehicle
financing, leasing and hire purchase and also life insurance and general insurance companies
and asset management companies. There are five banks including one PSU among the 20
banks that form the Nifty Financial Services Index while the rest are non-banking financial
services firms.

Why should you invest in the banking and financial services sector?
The RBI is the country’s apex banking body which is tasked with regulating all financial
operations across the length and breadth of the country’s financial apparatus. The country’s
monetary policies are drafted and set down by the RBI and banks and financial institutions
align their operations with those policies. With RBI governing banking and financial
institutions, the chances of unethical and fraudulent practices are lesser in the companies of
these sectors.

With fast paced digitization of banking and financial services and an increasing number of
citizens being brought into the folds of financial inclusion, the banking and financial services
sector has been witnessing steady growth and the trend is expected to continue. Also,
increased infrastructure spending and a slew of government reforms will facilitate the ascent
of the sector and a steady pace of economic growth will also act as a catalyst with more
businesses relying on financing provided by banks and financial services firms to expand
operations.

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Banking in India

Modern banking in India originated in the mid of 18th century. Among the first banks were
the Bank of Hindustan, which was established in 1770 and liquidated in 1829–32; and
the General Bank of India, established in 1786 but failed in 1791.

The largest and the oldest bank which is still in existence is the State Bank of India (SBI). It
originated and started working as the Bank of Calcutta in mid-June 1806. In 1809, it was
renamed as the Bank of Bengal. This was one of the three banks founded by a presidency
government, the other two were the Bank of Bombay in 1840 and the Bank of Madras in
1843. The three banks were merged in 1921 to form the Imperial Bank of India, which upon
India's independence, became the State Bank of India in 1955. For many years, the
presidency banks had acted as quasi-central banks, as did their successors, until the Reserve
Bank of India was established in 1935, under the Reserve Bank of India Act, 1934.

In 1960, the State Banks of India was given control of eight state-associated banks under the
State Bank of India (Subsidiary Banks) Act, 1959. However the merger of these associated
banks with SBI went into effect on 1 April 2017. In 1969, the Government of
India nationalised 14 major private banks; one of the big banks was Bank of India. In 1980, 6
more private banks were nationalised. These nationalised banks are the majority of lenders in
the Indian economy. They dominate the banking sector because of their large size and
widespread networks.

The Indian banking sector is broadly classified into scheduled and non-scheduled banks. The
scheduled banks are those included under the 2nd Schedule of the Reserve Bank of India Act,
1934. The scheduled banks are further classified into: nationalised banks; State Bank of
India and its associates; Regional Rural Banks (RRBs); foreign banks; and other Indian
private sector banks. The SBI has merged its Associate banks into itself to create the largest
Bank in India on 1 April 2017. With this merger SBI has a global ranking of 236 on Fortune
500 index. The term commercial banks refers to both scheduled and non-scheduled
commercial banks regulated under the Banking Regulation Act, 1949.

Generally the supply, product range and reach of banking in India is fairly mature-even
though reach in rural India and to the poor still remains a challenge. The government has
developed initiatives to address this through the State Bank of India expanding its branch
network and through the National Bank for Agriculture and Rural Development (NABARD)
with facilities like microfinance.

Types of Banks
There are various types of banks which operate in our country to meet the financial requirements
of different categories of people engaged in agriculture, business, profession, etc. On the basis of
functions, the banking institutions in India may be divided into the following types:

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Types

a) Central Banks
b) Development banks
c) Specialized bank (EXIM, SIDBI, NABARD)

(d)Commercial Banks
a. Public sector banks
b. Private sector banks
(e) Co-operative Banks
a. Primary co-operative banks
b. Central co-operative banks
c. State co-opreative banks
Central Bank

The Reserve Bank of India serves as the central bank for India. There is a central bank in
each nation that regulates the rest of the banking system. The primary function of the central
bank is to act as the government’s bank and to monitor and control all other financial
institutions in the nation. It is sometimes referred to as the banker’s bank since it provides
support to commercial banks and manages the country’s overall financial system on behalf of
the government.
Here are some of the things a country’s central bank does:

• Supporting the efforts of other financial institutions

• Creating currency and enforcing fiscal policies
• The regulator of the financial system

Commercial banks

Its foundation may be traced back to the Banking Companies Act of 1956. They are business
enterprises with profit as their major motivation. They have a standardised framework and
may be held by the federal government, a state, or a private firm. They oversee the rural as
well as the metropolitan areas. These financial institutions do not provide subsidised interest
rates unless specifically instructed to do so by the RBI. Deposits from the general public are
these banks’ main sources of funding. Three subcategories of commercial banks exist

Public sector: When the government or the central bank of a nation has a significant
stake in a financial institution, we call it a public sector bank. More than 75% of the
nation’s financial activity is handled by these nationalised banks. The government owns
the lion’s share of the stock in these financial institutions. After merging with its 5

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 affiliate banks (as of 1st April 2017), SBI has gained a place among the top 50 banks in
the world and is now the biggest public sector bank in India.

Private sector: Private banks are those in which the majority of shares are held by a
nongovernmental organisation, a person, or a small group of investors. Among these
institutions are financial institutions in which private investors retain a significant stock
position. Private sector banks must adhere to all of the RBI’s banking laws and
regulations.

Foreign sector: Banks headquartered in other countries but operating U.S. branches fall
under the heading “foreign banks.” These financial institutions must adhere to the rules of
both their home nation and the country in which they are doing business.

Development Banks

Business often requires medium and long-term capital for the purchase of machinery and
equipment, for using the latest technology, or for expansion and modernization. Such financial
assistance is provided by Development Banks. They also undertake other development measures
like subscribing to the shares and debentures issued by companies, in case of under subscription
of the issue by the public. Industrial Finance Corporation of India (IFCI) and State Financial
Corporations (SFCs) are examples of development banks in India.

Co-operative Banks

People who come together to jointly serve their common interest often form a co-operative
society under the Cooperative Societies Act. When a co-operative society engages itself in
banking business it is called a Co-operative Bank. The society has to obtain a licence from the
Reserve Bank of India before starting banking business. Any cooperative bank as a society is to
function under the overall supervision of the Registrar, Co-operative Societies of the State. As
regards banking business, the society must follow the guidelines set and issued by the Reserve
Bank of India.

Types of Co-operative Banks

Here are three types of co-operative banks operating in our country. They are primary credit
societies, central cooperative banks and state co-operative banks. These banks are organized at
three levels, village or town level, district level and state level.

Primary Credit Societies:

These are formed at the village or town level with the borrower and non-borrower members
residing in one locality. The operations of each society are restricted to a small area so that the
members know each other and are able to watch over the activities of all members to prevent
frauds.

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Central Cooperative Banks:
These banks operate at the district level having some of the primary credit societies belonging to
the same district as their members. These banks provide loans to their members (i.e., primary
credit societies) and function as a link between the primary credit societies and state co-
operative banks.

State Co-operative Banks:

These are the apex (highest level) co-operative banks in all the states of the country. They
mobilise funds and help in its proper channelisation among various sectors. The money reaches
the individual borrowers from the state cooperative banks through the central co-operative banks
and the primary credit societies.

Specialised Banks

There are some banks, which cater to the requirements and provide overall support for setting up
business in specific areas of activity. EXIM Bank, SIDBI and NABARD are examples of such
banks. They engage themselves in some specific area or activity and thus, are called specialised
banks. Let us know about them.

Export-Import Bank of India (EXIM Bank):

If you want to set up a business for exporting products abroad or importing products from
foreign countries for sale in our country, EXIM bank can provide you with the required support
and assistance. The bank grants loans to exporters and importers and also provides information
about the international market. It gives guidance about the opportunities for export or import, the
risks involved in it and the competition to be faced, etc.

Small Industries Development Bank of India (SIDBI):

If you want to establish a small-scale business unit or industry, loan on easy terms can be
available through SIDBI. It also finances the modernisation of small-scale industrial units, use of
new technology and market activities. The aim and focus of SIDBI are to promote, finance and
develop small-scale industries.

National Bank for Agricultural and Rural Development (NABARD):

It is a central or apex institution for financing agricultural and rural sectors. If a person is
engaged in agriculture or other activities like handloom weaving, fishing, etc. NABARD can
provide credit, both short-term and long-term, through regional rural banks. It provides financial
assistance, especially, to co-operative credit, in the field of agriculture, small-scale industries,
cottage and village industries handicrafts and allied economic activities in rural areas.

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COMPANY PROFILE

HDFC BANK

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.

HDFC Bank comprises of a dynamic and enthusiastic team determined to accomplish the
vision of becoming a World-class Indian bank. HDFC bank’s business philosophy is based on
our 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 people and their extraordinary efforts. They are committed to hiring,
developing, motivating and retaining the best people in the industry.

HISTORY OF HDFC BANK

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HDFC BANK LTD 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.

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and
Chairman-Emeritus, of HDFC Group. HDFC BANK LTD was amongst the first to set
up a bank in the private sector. The bank was incorporated on 30th August 1994 in the name
of ‘HDFC Bank Limited’, with its registered office in Mumbai. It commenced operations as a
Scheduled Commercial Bank on 16thJanuary 1995. The bank has grown consistently and is
now amongst the leading players in the industry.
.
HDFC is India's premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1977, the Corporation has
maintained a consistent and healthy growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units.
HDFC has developed significant expertise 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 strong market reputation, large shareholder
base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the
Indian environment In a milestone transaction in the Indian banking industry, Times Bank
was merged with HDFC Bank Ltd., effective February 26, 2000.

HDFC Bank Ltd is one of India's premier banks. Headquartered in Mumbai HDFC Bank is a
new generation private sector bank providing a wide range of banking services covering
commercial and investment banking on the wholesale side and transactional/branch banking
on the retail side. As of 30 September 2017 the bank's distribution network was at 4729
branches and 12259 ATMs across 2669 cities and towns. HDFC Bank also has one overseas
wholesale banking branch in Bahrain a branch in Hong Kong and two representative offices
in UAE and Kenya. The Bank has two subsidiary companies namely HDFC Securities Ltd
and HDB Financial Services Ltd. The Bank has three primary business segments namely
banking wholesale banking and treasury. The retail banking segment serves retail customers
through a branch network and other delivery channels. This segment raise deposits from
customers and makes loans and provides other services with the help of specialist product
groups to such customers. The wholesale banking segment provides loans non-fund facilities
and transaction services to corporate public sector units government bodies financial
institutions and medium-scale enterprises. The treasury segment includes net interest earnings
on investments portfolio of the Bank.
The 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. The Bank's shares are listed on the Bombay Stock Exchange Limited and The
National Stock Exchange of India Ltd. TheBank's American Depository Shares
(ADS) are listed on the New York Stock Exchange (NYSE) and the Bank's Global
Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange. HDFC Bank Ltd
Was incorporated on August 30 1994 by Housing Development Finance Corporation Ltd. In
the year 1994 Housing Development Finance Corporation Ltd was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India to set up a bank in the
private sector as part of the RBI's liberalization of the Indian Banking Industry. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995. Ramon House Churchgate

10
branch was inaugurated on 16 January 1995 as the first branch of the bank. In March 1995 HDFC Bank
launched Rs 50-crore initial public offer (IPO) (5 crore equity shares at Rs 10 each at par)
eliciting a record 55 times oversubscription. HDFC Bank was listed on the Bombay Stock
Exchange on 19 May 1995. The bank was listed on the National Stock Exchange on 8
November1995.In the year 1996 the Bank was appointed as the clearing bank by the NSCCL.
In the year1997 the launched retail investment advisory services. In the year 1998 they
launched their first retail lending product Loans against Shares. In the year 1999 the Bank
launched online real-time Net Banking. In February 2000 Times Bank Ltd owned by Bennett
Coleman & Co. / Times Group amalgamated with the Bank Ltd. This was the first merger of
two new generation private banks in India. The Bank was the first Bank to launch an
International Debit Card in association with VISA (Visa Electron). In the year 2001
they started their Credit Card business. Also they became the first private sector bank to be
authorized by the Central Board of Direct Taxes (CBDT) as well as the RBI to accept direct
taxes. During the year the Bank made a strategic tie-up with Bangalore-based business
solutions software developer Tally Solutions Pvt Ltd for developing and offering products
and services facilitating on-line accounting and banking services to SMEs. On 20July 2001
HDFC Bank's American depositary receipt (ADR) was listed on the New York Stock
Exchange under the symbol HDB. Also they made the alliance with LIC for providing online
payment of insurance premium to the customers. During the year 2002-03 the Bank increased
the number of branches from 171 Nos to 231 Nos and the size of the Bank's ATM network
expanded from 479 Nos to 732 Nos. They also expanded their presence in the 'merchant acquiring'
business. During the year 2003-04 the Bank expanded the distribution network with the
number of branches increased from 231 Nos to 312 Nos and the size of the Bank's ATM
network increased from 732 Nos to 910 Nos. In September 2003 they entered the housing loan business
through an arrangement with HDFC Ltd whereby they sell HDFC Home Loan product.
During the year 2004-05 the Bank expanded the distribution network with the number of
branches increased from 312 Nos to 467 Nos and the size of the Bank's ATM network
increased from 910 Nos to 1147 Nos. During the year 2005-06 the Bank launched the 'no-
frills account' a basic savings account offering to the customer. Also the distribution network
was expanded with the number of branches increased from 467 Nos (in 211 cities) to 535 Nos
(in 228 cities) and the number of ATMs from 1147 Nos to 1323 Nos. During the year 2006-
07 the distribution network was expanded with the number of branches increased from 535
Nos (in 228 cities) to 684 Nos (in316 cities) and the number of ATMs from 1323 Nos to 1605
Nos. They commenced direct lending to Self Help Groups. Also they opened a dedicated
branch for lending to SHGs in Thudiyalur village (Tamil Nadu). In September 28 2005 the
Bank increased their stake in HDFC Securities Ltd from 29.5% to 55%. Consequently HDFC
Securities Ltd became a subsidiary of the Bank. During the year 2007-08 the Bank added 77
Nos new branches take the total to 761 Nos branches. Also 372 Nos new ATMs were also added
taking the size of the ATM network from1605 Nos to 1977 Nos. HDB Financial Services Ltd
became a subsidiary company with effect from August 31 2007. In June 2 2007 the Bank
opened 19 branches in a day in Delhi and the National Capital Region (NCR).During the year
2008-09 the Bank expanded their distribution network from761 branches in 327 cities to
1412 branches in 528 Indian cities. The Bank's ATMs increased from 1977 to 3295 during
the year. As per the scheme of amalgamation Centurion Bank of Punjab Ltd was
amalgamated with the Bank with effect from May 23 2008. The appointed date for the
merger was April 01 2008. The amalgamation added significant value to HDFC Bank in

11
terms of increased branch network geographic reach and customer base and a bigger pool of
skilled manpower.

BUSINESS FOCUS

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer
franchises across distinct businesses so as to be the preferred provider of banking services for
target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent
with the bank's risk appetite. 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.

MISSION STATEMENT OF HDFC BANK

o World Class Indian Bank.

o Benchmarking against international standards.

o To build customer franchises across distinct business

o Best practices in terms of product offerings, service levels, risk management

and audit and compliance

VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards, professional integrity and
regulatory compliance. HDFC Banks business philosophy is based on four core values such
as:-

1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.

The objective of the HDFC Bank is to provide its target market customers a full range of financial products
and banking services, giving the customer a one-step window for all his/her requirements.
The HDFC Bank plus and the investment advisory services programs have been designed
keeping in mind needs of customers who seeks distinct financial solutions, information and
advice on various investment avenues.

BUSINESS STRATEGY

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 Increasing market share in India‟s expanding banking

Delivering high quality customer service

Maintaining current high standards for asset quality through disciplined credit risk
management

Develop innovative products and services that attract targeted customers and address
inefficiencies in the Indian financial sector.

DISTRIBUTION NETWORK

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over1229
branches spread over 444 cities across India. All branches are linked on an online real-time
basis. Customers in over 120 locations are also serviced through Telephone Banking. The
Bank's expansion plans take into account the need to have a presence in all major industrial and commercial
centers where its corporate customers are located as well as the need to build a strong retail customer
base for both deposits and loan products. Being a clearing/settlement bank to various leading
stock exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and
active member base.
The Bank also has a network of about over 2526 networked ATMs across these cities.
Moreover, 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.

PROMOTER

HDFC is India's premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1977, the Corporation has maintained a
consistent and healthy growth in its operations to remain a market leader in mortgages. Its outstanding
loan portfolio covers well over a million dwelling units. HDFC has developed significant
expertise 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 strong market
reputation, large shareholder base and unique consumer franchise, HDFC was ideally
positioned to promote a bank in the Indian environment.

MANAGEMENT

Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from
6th July2010 subject to the approval of the Reserve Bank of India and the shareholders. Mr. Vasudev
has been a Director of the Bank since October 2006. A retired IAS officer, Mr. Vasudev
has had anillustrious career in the civil services and has held several key positions in India
and overseas, including Finance Secretary, Government of India, Executive Director,
World Bank and Government nominee on the Boards of many companies in the financial sector.

13
The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years,
and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia. The
Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public
policy, administration, industry and commercial banking. Senior executives representing
HDFC are also on the Board.
Senior banking professionals with substantial experience in India and abroad head various businesses and
functions and report to the Managing Director. Given the professional expertise of the
management team and the overall focus on recruiting and retaining the best talent in the
industry, the bank believes that its people are a significant competitive strength.

TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms of information technology

and communication systems. All the bank's branches have online connectivity, which enables
the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is
also provided to retail customers through the branch network and Automated Teller Machines
(ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology available
internationally, to build the infrastructure for a world class bank. The Bank's business is supported by
scalable and robust systems which ensure that our clients always get the finest services we offer.

The Bank has prioritised its engagement in technology and the internet as one of its key goals and has already
made significant progress in web-enabling its core businesses. In each of its businesses, the Bank has
succeeded in leveraging its market position, expertise and technology to create a competitive
advantage and build market share.

QUALITY POLICY

• SECURITY: The bank provides long term financial security to their policy. The bank does this by
offering life insurance and pension products.

• TRUST: The bank appreciates the trust placed by their policy holders in the bank. Hence, it will aim
to manage their investments very carefully and live up to this trust.

• INNOVATION: Recognizing the different needs of our customers, the bank offers
arrange of innovative products to meet these needs.

• INTEGRITY
• CUSTOMER CENTRIC
• PEOPLE CARE “ONE FOR ALL AND ALL FOR
• ONE TEAM WORK

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 • JOY AND SIMPLICITY

BUSINESS

HDFC 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:

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to
small & mid-sized corporates and agri -based businesses. For these customers, the Bank
provides a wide range of commercial and transactional banking services, including working capital
finance, trade services, transactional services, cash management, etc. The bank is also a leading
provider of structured solutions, which combine cash management services with vendor and distributor
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 has made
significant inroads into the banking consortia of a number of leading Indian corporates
including multinationals, companies from the domestic business houses and prime public
sector companies. It is recognised as a leading provider of cash management and
transactional banking solutions to corporate customers, mutual funds, stock exchange
members and banks 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 banking
requirements. The products are backed by world-class service and delivered to customers
through the growing branch network, as well as through alternative delivery channels like ATMs, Phone
Banking, Net Banking and Mobile Banking. The HDFC Bank Preferred program for high net worth
individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been
designed keeping in mind needs of customers who 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 marketable securities, Personal Loans and Loans for Two-wheelers. Itis
also a leading provider of Depository Participant (DP) services for retail
customers, providing customers the facility to hold their investments 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 Master card Maestro debit card as well. The Bank launched its credit
card business in late 2001. By March 2010, the bank had a total card base (debit and credit cards) of over 14
million. The Bank is also one of the leading players in the
“merchant acquiring” business with over 90,000 Point
-of-sale (POS) terminals for debit /credit cards acceptance at merchant establishments. The Bank is well
positioned as a leader in various net based B2C opportunities including a wide range of internet banking
services for Fixed Deposits, Loans, Bill Payments, etc.

Treasury

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 Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalisation of the financial markets in India, corporates need more sophisticated risk
management information, advice and product structures. These and fine pricing on various
treasury products are provided through the bank's Treasury team. To comply with statutory
reserve requirements, the bank is required to hold 25% of its deposits in government securities. The Treasury
business is responsible for managing the returns and market risk on this investment portfolio.

SERVICE QUALITY IN BANKS

In the days of intense competition, the banks are no different from any other consumer marketing company. It
has become essential for the service firms in general and banks in particular to identify what the
customer's requirements are and how those customer requirements can be met effectively. In
the days where product and price differences are blurred, superior service by the service
provider is the only differentiator left before the banks to attract, retain and partner with the
customers. Superior service quality enables a firm to differentiate itself from its competition, gain a
sustainable competitive advantage, and enhance efficiency .The benefits of service quality
include increased customer satisfaction, improved customer retention, positive word of
mouth, reduced staff turnover, decreased operating costs, enlarged market share, increased
profitability, and improved financial performance. The construct of service quality has therefore
been a subject of great interest to service marketing researchers.

Service quality has been defined by various experts in various ways as: 'Service Quality is the difference
between customers' expectations for service performance prior to the service encounter and
their perceptions of the service received.' According to Gefan „Service quality is the
subjective comparison that customers make between the qualities of service that they want to
receive and what they actually get.' Parasuraman says, 'Service quality is determined by the
differences between customer's expectations of services provider's performance and their
evaluation of the services they received.

Service quality is 'the delivery of excellent or superior service relative to customer

expectations‟.

Service quality is recognized as a multidimensional construct. While the number of

dimension often varies from researcher to researcher, there is some consensus that service quality consists of
three primary aspects: outcome quality, interaction quality, and physical service environment
quality. Outcome quality refers to the customer's assessment of the core service which is
the prime motivating factor for obtaining the services (e.g. money received from ATM).
Interaction quality refers to the customer's assessment of the service delivery process, which
is typically rendered via a physical interface between the service provider, in person, or via
technical equipment, and the customer. It includes, for instance, the consumer's evaluation of
the attitude of the service providing staff. The physical service environment quality
dimension refers to the consumer's evaluation of any tangible aspect associated with the
facilities or equipment that the service is provided in/ with. It includes, for example, the
physical conditions of an ATM machine.

16
 The most popular dimensions of service quality-features five dimensions: tangibles, reliability,
responsiveness, emphaty and assurance. The tangibles dimension corresponds to
the aforementioned physical environment aspect, the reliability dimension corresponds to the
service outcome aspect, and the remaining three represent aspects of interaction quality. Both
the costs and the revenue of firms are affected by repeat purchases, positive word-of-mouth
recommendation, and customer feedback. Moreover, there is strong evidence that service
quality has either a direct influence on the behavioral intentions of customers and/or an
indirect influence on such intentions, mediated through customer satisfaction.

RATER is an instrument that might be used to define and measure banking service quality and to create
useful quality-assessment tools.

The RATER may finally provide the following benefits to the HDFC bank:

1. It is the first approach to add and mix the customers religious beliefs and cultural values with
other quality dimensions.

2. It provides for multi-faced analysis of customer satisfaction.

3. It links quality with customers satisfaction and service encounter.

4. It provides information at several levels, already organized into meaningful

groupings.

5. It is a proven approach, which results in usable answers to meet customers‟ needs.

6. It is empirically grounded, systematic and well documented.

Banks managers can use the RATER model and its dimensions first to identify the following issues:

To identify those areas where improvement should be made and resources can be allocated.
For instance, they need to know the level of quality in their banks and they can manipulate to make bank-
wide improvement in quality performance. Also they can use benchmarking to compare their
performance and other banks which have already implemented quality program that will help
to prioritise the quality management efforts.

IMPORTANCE OF SERVICE QUALITY

Service quality is considered as the most critical determinant of competitiveness

forestablishing and sustaining satisfying relationship with customers (Lewis, 1989).
Businessfirms including banks have recognized the fact that the only one best way to manage
thecompetition is the quality differentiation. Advance technology, customer oriented
corporateculture, a well designed service-system and excellent information system are the
majorfactors that decide the superior quality of service of an organization. Providing
excellentservice quality and maintaining the high customer satisfaction is the important issue
and thechallenge facing contemporary service industry (Hung, 2003). Thus Service Quality is

17
animportant subject in both public and private sectors business firms and service
industries.Banking sector is not an exception to this. Before independence the banking system
in Indiawas in private sector and in very weak position. To strengthen the banking system
thengovernment established Reserve Bank India (RBI) in 1935 and empowered to
regulate banking companies by issue of directive, inspection, amalgamation, mergers etc.
Majoraction was taken 1949 by passing the Banking regulation Act which was very
important inrespect of structural reforms in the banking sector. This act had given extensive
regulatory powers to RBI over the banks in India. Nationalization of banks was another major
step ofthe government (14 banks on 19th July, 1969 and 6 banks on 15th April, 1980) to
constitutethe public sector banks. These public sector banks occupied a vital role in Indian
economy ingeneral and banking sector in particular. Government implemented many social
welfareschemes through these banks. Prior to globalization there was very little competition
in thebanking sector and the public sector banks played dominating role in terms of size of
assets?Due to changing global scenario, the government recognized the need to introduce
reforms tomake banking industry more competitive. Thus, the government had made policy
changeslike deregulation of interest rates and dilution of consortium lending requirement.
Moreover, banking sector had been opened up to the private sector. With this, new banks
have been setup in private sector, called as new private sector banks, foreign banks have
entered the Indian banking sector and existing banks in private sector (old private sector
banks) changed theirlevel of operations. All these increased the competition among the banks
and efficiency of the banking industry.

DIMENSIONS OF SERVICE QUALITY

TANGIBILITY: This dimension deal with modern looking equipments and visual appealing
part of banks.

RELIABILITY: This dimension has a direct positive effect on perceived service quality and
customer satisfaction in banking institutions. Banks must provide error free service and
secure online transactions to make customers feel comfortable.

RESPONSIVENESS: Customers expect that the banks must respond their inquiry promptly.
Responsiveness describes how often a bank voluntarily provides services that are important
to its customers. Researchers examining the responsiveness of banking services have
highlighted the importance of perceived service quality and customer satisfaction.

ASSURANCE: Customer expects that the bank must be secured and the behavior of the
employees must be encouraging.

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EMPATHY: individual attention, customized service and convenient banking hours are very
much important in today’s service.

In order to achieve better understanding of service quality in banking sector, the

proposed five service quality dimensions are conceptualized to illustrate the overall service
quality of the banking in relation to customers‟ and providers perspective.

Banking was in the sector featuring medium goods and higher customer producer interactions, since in
banking, consumers and service providers interact personally and the use of goods is at a medium level.
Hence, in banking, where there are high customer-producer interactions, the quality of
service is determined to a large extent by the skills and attitudes of people producing the
service.

In the case of services, because customers are often either direct observers of the
production process or active participants, how the process is performed also has a
strong influence on the overall impression of the quality of service. A well-performed service
encounter may even overcome the negative impression caused by poor technical quality as
well as generate positive word-of-mouth, particularly if customers can see that employees
have worked very hard to satisfy them in the face of problems outside their control. Employees are part of
the process, which connects with the customer at the point of sale, and hence employees remain
the key to success at these service encounters or “moments of truth”. It is these encounters
withCustomer during a service that are the most important determinants of overall customer
satisfaction, and customer’s experience with the service will be defined by the brief
experience with the firm’s personnel and the firm’s systems. The rudeness of the bank’s
customer service representative, the abruptness of the employee at the teller counter, or the lack of
interest of the person at the check deposit counter can alter one’s overall attitude towards the
service, perhaps even reversing the impression caused by high technical quality.
Another important service quality factor, competence, is defined by whether the bank
performs the service right the first time, whether the employees of the bank tell customers exactly when
services will be performed, whether the bank lives up to its promises, whether customers feel safe in their
transactions with the bank and whether the employees show a sincere interest in solving the customers‟
problems. In short, this dimension is related to the banks‟ ability to perform the promised
service accurately and dependably. Performing the service dependably and accurately is the heart
of service marketing excellence. When a company performs a service carelessly, when it makes avoidable
mistakes, and when it fails to deliver on promises made to attract customers, it shakes customers‟
confidence in its capabilities and undermines its chances of earning a reputation for service
excellence.

It is very important to do the service right the first time. In case a service problem does crop up, by resolving
the problem to the customer’s satisfaction, the company can significantly improve customer
retention. However, companies fare best when they prevent service problems altogether and
fare worst when service problems occur and the company either ignores them or does not
resolve them to the customer’s satisfaction.

Performing the service accurately is perhaps the most important factor in service quality excellence. The
cost of performing the service inaccurately includes not only the cost of redoing the service
but also the cost associated with negative word-of-mouth generated by displeased customers. In

19
case of services, the factory is the field. Again, services are intangible and hence the criteria for flawless
services are more subjective than the criteria for defect-free tangible goods. Hence for most services,
customers‟ perceptions of whether the service has been performed correctly,and not provider-
established criteria, are the major determinants of reliability.

The service quality factor tangible is defined by whether the physical facilities and materials
associated with the service are visually appealing at the bank. These are all factors that customers notice before
or upon entering the bank. Such visual factors help consumers form their initial impressions. A crucial
challenge in service marketing is that customers cannot see a service but can see the various tangibles
associated with it - all these tangibles, the service facilities , equipment and communication materials
are clues about the intangible service. If unmanaged, these clues can send to the customer’s
wrong messages about the service and render ineffective the marketing strategy of the
company. On the other hand, improving quality through tangibles means attention to the smallest
details that competitors might consider trivial. Yet, these visible details can add up for customers and
signal a message of caring and competence. Customers may reveal new aspects of service quality in
banking that are important to them, and these would have to be incorporated in the scale so as to further
explore the concept of service quality in the banking arena.
Marketing Mix of HDFC Bank
Marketing Mix of HDFC Bank analyses the brand/company which covers 4Ps (Product,
Price, Place, Promotion) and explains the HDFC Bank marketing strategy. The article
elaborates the pricing, advertising& distribution strategies used by the company.

Product:

HDFC Bank is one of the leading banks in India. HDFC offers a wide range of products in its
marketing mix strategy, namely in personal and enterprise sector. The various services offered by HDFC
Bank are summarized as follows. Accounts and deposits which covers savings accounts,
salary accounts, current accounts, deposits, safe deposit lockers, rural accounts and pension
accounts. HDFC Bank offers loans to meet the diverse needs and it cover personal loans, car
loans, business loans etc. HDFC offers cards which includes credit cards, debit cards, prepaid cards, credit
card reward programs and loan on credit card. Demat options for investors which
includes demat account, 2 in 1account, 3 in 1 account and investment assist. Investment
options covering Invest Track, investment products, investment advisory group reports,
PPF (public provident fund) and sukanya samriddhiaccount are provided to HDFC
customers. Insurances for various options like life, health, motor insurance, travel, home, two
wheeler and student travel - suraksha. Forex includes travel solutions, remittance products,
other forex services for help and purchase.

Price:

HDFC Bank follows a competitive pricing strategy in its marketing mix but maintains a
premium level at the same time. It is clearly visible that it enjoys maximum market capital
in terms of shares in India. The other domestic competitors are either PSUs or national bank,
HDFC Bank is always priced higher in terms of minimum cap required to open a new
account. RBI controls and regulates the pricing policies, like for any other bank in India.

Place:

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HDFC banks have got a strong presence all across India. Till 2016, HDFC outreached 4500+
branches in approx. 2600 cities/towns with 12000 ATMs. HDFC Bank makes sure that its
presence is felt in each and every corner of the nation and every individual should avail its
facilities equally. HDFC has its major offices in cities and towns for smooth operation
process. Its website is well designed and well maintained. It facilitates ease of net banking,
online payment options, etc.

Promotion:

HDFC Bank focuses a lot on the promotional strategy in its marketing mix. HDFC is
involved in large number of CSR activities for sustainable livelihood, financial literacy,
education, training and community initiatives. HDFC has always made its presence feel in
the media through advertisements, hoardings, posters, ads in newspapers, magazines,
promotional events, sponsorships, etc. HDFC also has shareholdings in corporate bodies,
mutual funds, financial institutions, etc. which creates a sense of value and trust amongst the
shareholders and customers towards this particular brand.

Corporate Banking
Corporate Banking reflects HDFC Bank's strengths in providing our corporate clients in
India, a wide array of commercial, transactional and electronic banking products. We achieve this through
innovative product development and a well-integrated approach to relationship management.

We offer blue chip companies in India, a full range of client-focused corporate banking services, including
working capital finance, trade and transactional services, foreign exchange and cash
management, to name a few. The product offerings are suitably structured taking into account a
client's risk profile and specific needs. Based on our superior product delivery, industry benchmark
service levels and strong customer orientation, we have made significant inroads into the formal
banking consortia of a number of Indian companies including multinationals, domestic business houses and
prime public sector companies. The corporate banking segment of banks typically serves a diverse range of
clients, ranging from small- to mid-sized local businesses with a few million in revenues to large
conglomerates with billions in sales and offices across the country. Commercial banks offer the following
products and services to corporations and other financial institutions:
Loans and other credit products this is typically the biggest area of business within corporate banking, and as
noted earlier, one of the biggest sources of profit and risk for a bank.
Treasury and cash management services used by companies for managing their working
capital and currency conversion requirements.
Equipment lending commercial banks structure customized loans and leases for arrange of equipment used
by companies in diverse sectors such as manufacturing, transportation and information technology.
Commercial real estate services offered by banks in this area include real asset analysis, portfolio
evaluation, and debt and equity structuring.
Trade finance involves letters of credit, bill collection, and factoring.

21
 Employer services services such as payroll and group retirement plans are typically offered by
specialized affiliates of a bank. Through their investment banking arms, commercial banks
also offer related services to their corporate clients, such as asset management and
securities underwriters.
HDFC Bank, at the time of starting out a little more than two decades ago, had decided to
serve the top end of the market. The space was crowded then with government banks
dominating project finance and foreign banks catering to multinationals with their superior
products and service. HDFC Bank never built a large project finance book. Even today,
despite having a large balance sheet, it is predominantly into working capital loans. In
contrast, most banks' corporate portfolio is skewed towards project finance or term loans,
which are more risky. The bank moved towards emerging as well as small and medium
enterprises only in early 2000 after learning to serve big companies, the most demanding
customers in the market. "We now have a broad spectrum of products in wholesale banking
such as cash management, custodial services, investment banking , LCs (letters of credit) and
guarantees," says Kaizad Bharucha, Executive Director, HDFC Bank.

Digital Strategy of HDFC Bank

The bank has been using the developments in the digital world to streamline operations. "The changes in the
operating model have brought in efficiencies in terms of faster turn around and lower cost as transactions are
processed concurrently rather than sequentially," says Puri. The bank has been investing a lot
in data warehousing, social media linkages, data analytics and mobile-based innovations. In
retail banking, it now promises personal loans to existing customers in 10 seconds and car loans in 30
minutes. There is also an instant top-up car loan. It has also been tying up with ecommerce merchants for
direct transactions. The ATM strategy involves doing multiple things. For instance, it is increasingly using
its ATM machines for communication, especially for getting across messages on new offerings.

"There is nothing like competition to keep you on your toes," says Sukthankar, who also
heads the retail banking division. Puri pitches in by saying they are changing the banking experience for
retail customers. "Things that used to take days or hours now take minutes or seconds. We
have stemmed the tide of disrupters," he says.

HDFCB’s digital strategy is centered around (a) increasing efficiency, (b)

accelerating geographic expansion, (c) raising customer convenience and ease, and (d)
competing against disruptive technology. It is already seeing strong success in 10- second personal loans
(20% of incremental sourcing through this channel), preapproved auto loans (8-10%of
disbursements), and Smart Buy (10%
of Amazon’s volumes). It plans to use artificial intelligence for routine work and most
initiatives are likely to be launched by December 2016.With these initiatives gaining
traction and incremental business coming from these channels, the management is confident
of reducing the cost-to-income ratio.

Asset Quality of HDFC Bank

The asset quality of some of the country's best banks has been worsening for years now. HDFC Bank is an
exception to this. Its strong credit appraisal process is reflected in net non-performing assets, or
NPAs, which, at 0.25 per cent, are the lowest among all banks. The figures are 2.12 per cent for State

22
Bank of India and 1.61 per cent for ICICI Bank. This makes HDFC Bank the winner on the
asset quality front too.

One reason for this is guidance provided by the parent, HDFC Ltd, and the second is the strong systems
and processes introduced by Puri who, before joining HDFC Bank, was heading Citibank in
Malaysia.

"We have a clear system. Any portfolio exhibiting signs of delinquency or delayed payments not in line with
the programme is slowed or cut down," says Puri. The bank, for instance, made early exit from small-
ticket personal loans where the industry suffered huge losses after the 2008 slowdown. Also,
it first started offering credit cards to its existing customers, and that too after a detailed analysis of
their creditworthiness. More recently, it stayed from infrastructure loans, a cause of stress at many
banks. "It was difficult to evaluate all the components that go into infrastructure projects,"
says Kaizad. Last, but not the least, it forayed into semi-urban and rural areas after a lot of
testing of products and pilot launches to check for credit losses. The bank's seriousness about
asset quality can be gauged from the fact that the risk staff don't report to business heads and
all the information about risk converges at the CEO level.

But are there risks to asset quality if the economy plunges further due to the slowdown in
China? "As of now, there are no such signs," says Puri.

The bank has also beefed up its board by adding former Reserve Bank of India Deputy Governor
Shyamala Gopinath as chairman. Sukthankar was made deputy managing director two years
ago. Puri's term has been extended till 2020.

Challenges For HDFC Bank

The bank has a strong liabilities franchise. Its deposits have been growing at more than 20per cent a year. The
slowdown in the economy and competition for the low-cost current and savings account (CASA)
deposits from new generation private sector banks is impacting the established players. The
bank's CASA deposits have also not moved up from the mid-40 percent range for the past
five-six years. CASA is a source of low-cost funds for banks. A high CASA number indicates
high margins and profitability. One of the reasons for CASA notimproving is also the high
proportion of fixed deposits, especially foreign currency deposits,raised after September 2013, when Reserve
Bank of India Governor Raghuram Rajan had opened the window to stem the depreciation of the rupee. The
banking sector had mobilized over $30 billion through this window.

The bank, however, has a different take on this. "CASA is going up in absolute terms. In fact,
our CASA market share has gone up by 15-20 per cent," says Sukthankar. Analysts say if the country's
economy deteriorates and competition from payments and small finance banks intensifies, the decline in
CASA as a proportion of total deposits will hit the bank's cost of funds. "There is going to be a fight for CASA
when the new banks are operational," says ananalyst. Sukthankar, however, says the market is big enough.

The second challenge is the high cost-to-income ratio of 0.45 per cent. The figure for ICICI Bank is 0.37
per cent. The bank says this is due to its bigger retail portfolio. "There is high transaction
intensity in retail because of smaller loan sizes," says Sukthankar. The other reason is the huge
investments the bank has undertaken in branch expansion and digitisation. "We should gain in terms of cost in
the next three-five years as digital banking picks up. Our proportion of digital transactions is growing in a big

23
way," says Sukthankar. Puri believes the reasons for the high cost-to-income ratio are not bad per se as
"consumer or retail businesses also generate higher earnings and margins".

Lastly, banks will always be exposed to people, governance, fraud as well as technology risks.
A frank Puri says cyber security risk will always remain a major concern. "The only way to safeguard
oneself is putting up more checks and balances," he says. In fact, the bank was recently under
the lens of regulators for violation of KYC norms and anti-money laundering guidelines after a media expose
that entangled some other banks too. "You can never eliminate people fraud. Technology is not God.
No management system is God. So, it is wrong to presume that frauds will go away just because you
have gone hi-tech," he says.

SWOT analysis of HDFC Bank

Strengths in the SWOT analysis of HDFC Bank

• HDFC bank has 5326 branches and 14996 ATMs and is the second largest private bank in
India.
• HDFC bank operates in 2825 Indian cities and has more than 800 telephone banking
locations to service customers.
• The bank’s ATM is available in Plus/cirus, Visa Electron/ Maestro, Visa/Master, and
American Express domestic and international cards. That’s also another reason why the
most famous card for shopping and online purchases is HDFC cards.
• In contrast to other private banks, HDFC Bank has a high degree of customer loyalty.
• HDFC has a low turnover rate and is one of the best places to work in the private banking
industry.
• HDFC has many recognition and awards by various financial ranking institutions such as
Dun and Bradstreet, Financial Express, Euromoney awards for innovation, Finance Asia
country awards, etc., it has won ‘Best Bank’ awards.
• HDFC has large number financial advisors guiding customers for good investment
options.
• Financial position: HDFC Bank has a solid financial position with consecutive earnings
over the last 5 years, along with accumulated income reserves that can be used to fund
potential capital spending.
• Has a broad asset base offering greater solvency.
• Return on Capital Expenditure: In the past, HDFC Bank was able to effectively produce
positive returns on the capital expenditure it spent on different ventures.
• Trained Workforce: HDFC has a employee base of 104154 permanent full time
employees. HDFC Bank has invested heavily in its workforce training, which has resulted
in it hiring a significant number of professional and motivated workers.
• Has a diverse workforce, with people of many ethnic, racial, cultural and educational
backgrounds who help the organization bring in various ideas and methodologies to do
things.
• Revenue of HDFC Bank is 21 US billion Dollars.
• Has trained and certified competent teamworkers.
• Entering new markets: Creative teams from HDFC Bank have helped it to come up with
new products and reach new markets. In the past it was successful, in most of the
initiatives it took in new markets.

24
• Social Media: HDFC Bank has a strong social media presence with over millions of
followers on the three most prominent social networking platforms : Facebook , Twitter
and Instagram. It has a high degree of customer engagement with low customer response
time on those channels.
• Website: HDFC Bank has a well-functioning and engaging website that attracts a huge
amount of traffic and sales on the internet.
• Product Portfolio: HDFC Bank has a broad selection of products and services.
• HDFC Bank’s geography and location give it a cost advantage in serving its customers as
compared with the competition. HDFC Bank products and services including retail
banking, wholesale banking, auto loans, treasury, personal loans, two-wheeler loans, loans
against property, lifestyle loan, consumer durable loan, pand credit cards.Payzapp and
SmartBUY are HDFC Bank digital products.

Weaknesses in the SWOT analysis of HDFC Bank

• HDFC bank has no good presence in rural markets, where its direct competitor is
expanding in the rural market as ICICI bank.
• In rural areas, HDFC does not enjoy first-mover privileges. With respect to banking
institutions, rural residents are hard-core loyalists.
• HDFC lacks methods for effective marketing, such as ICICI.
• The bank mainly works on high end consumers.
• Any of the commodity groups in the bank lack performance and have very little market
presence.
• HDFC’s share prices frequently fluctuate, causing investors to feel confused.

Opportunities in the SWOT analysis of HDFC Bank

• HDFC banks have stronger criteria of asset quality than government banks, so it is
possible that earnings growth will accelerate.
• Big enterprises and SMEs are rising at a very rapid rate. In terms of managing corporate
salary accounts, HDFC has a strong record.
• HDFC Bank has increased its portfolio of bad debts and, relative to government banks, the
recovery of bad debts is high.
• HDFC has really good overseas opportunities.
• Greater scope due to a good financial role for investments and strategic partnerships.

Threats in the SWOT analysis of HDFC Bank

• The non-performing assets (NPA) of HDFC rose from 0.18% to 0.20%. While it is a small
improvement, it is not a positive indication for the bank’s financial health.
• Non-banking financial firms and banks of the modern era are rising in India.
• The HDFC is unlikely to increase its market share when a significant challenge is levied
by ICICI.
• In order to deal with private banks , government banks are seeking to restructure.
• RBI has opened up to 74% to invest in the Indian market for overseas banks

SERVICES OF HDFC BANK:-

25
 1. Insta Alerts
2. Net Banking
3. Mobile Banking
4. Bill Pay
5. Merchant Services
6. Net Safe
7. Ngpay
8. Prepaid Mobile Refile

Insta Alerts

Now you can regular updates on your bank account on your mobile phone or
email ID.
Just register for our InstaAlert service and receive updates on your account as
and when the select transactions happens-all this without visiting the branch or
ATM.

You can register for any or all the following alerts:-

• Debit transactions greater than Rs.5,000/ Rs.10,000/ Rs.20,000/ Rs.50,000

• Credit in account greater than Rs5,000/ Rs.10,000/ Rs.20,000/ Rs.50.000
• Account Balance below Rs.5,000/ Rs.10,000/ Rs.20,000/ Rs.50,000
• Weekly account balance
• Salary Credits
• Utility bill payment due Alert

Net Banking

NetBanking is HDFC Bank’s Internet Banking service. Providing up-to-the-

second account information, NetBanking lets you manage your account from the
comfort of your mouse-anytime, anywhere.

Introducing a simpler way to register for NetBanking

Say goodbye to long queues and paper work. Presenting one more reason to
register for NetBanking. You can now call the PhoneBanking numbers in your
city to register for NetBanking.

Features & Benefits:-

• View Account Balances & Statements

• Transfer Funds between accounts
• Create Fixed Deposits Online
• Request a Demand Draft
• Pay Bills

26
 • Order a Cheque Book
• Request Stop Payment on a Cheque
• And lots more

Mobile Baking

Your Mobile is now your bank! Now access your bank account and conduct
a host of banking transactions and inquiries through your mobile, with our
unique Mobile Banking service.
Features & Benefits

• Get your balance details

• Obtain your last 3 transaction details
• Request a cheque book
• Stop a cheque payment
• Enquire cheque status
• Request an account statement
• Get Fixed Deposit details
• Request for Internet PIN re-generation
• Pay your bills

Phone Banking

Features & Benefits:-

Check your account balance–Get up-to-the-seconds details of your Savings or

Current Account and your Fixed Deposits.You can also get the details of the last
5 transactions on your account, or have a mini statement of last 9 transactions
fixed across to you.

Enquire on the cheque status- You can use Phone Banking to check on the
status of cheques issued or deposited from anywhere in India.

Order a Cheque Book/Account Statement-Just call Phone Banking and get

your Cheque Book or lastest Account Statement delivered at your doorstep.
Stop Payment- Stop payment of a single cheque or a series of cheques, 24hours a
day.

Loan Related queries-Get details of the outstanding loan amount, enquire about
your loan account, request for an interest certificate and repayment schedule,etc.
Just call Phone Banking in your city and dial 4 to speak to our PhoneBanker
Open a Fixed deposit or Enquire on your Fixed deposits/TDS-Talk to our
Phonebanker to easily open a Fixed Deposit over the phone, by simply
authorising a transfer of funds from your Savings Account.

27
Transfer Funds between accounts- You can also transfer money from one of
your accounts to another.Both accounts must be linked to your Customer ID,You
can transfer amounts upto Rs 1 lac in a single day.

Pay your bills- Pay your cellular, telephone, electricity and HDFC Bank
credit Card bills through Phone banking using BillPay, a Comprehensive bill
payments solution.

Repory loss of your ATM/ Debit Card/forexPlus Card-if your

ATM/Debit/ForexPlus Card is lost,call any PhoneBanking number to
deactivate your card(s)

Learn about all our other products-Get details on HDFC Bank products &
sevices by taking tp our Phone Banker.

Enquire about latest Interest/Exchange rates-Get latest Interest rates on

Deposits and Foreign Exchange rates by talking to our Phone Banker.

Request a Demand Draft/Manager’s Cheque-Call Phone Banking and get a

demand draft/Manager’s Cheque delivered to your doorstep.

Demat Related Queries-Get the Account holding details, Transaction

details,ISIN Number of a scrip, Status of Depository Slips, details of client
master list(Dividend account, Charges Debit account,PAN etc.)& others.

Bill Pay

Now,you have the luxury of paying your telephone, electricity & mobile phone
bills at your convenience through the interest,ATMs, your mobile phone or
telephone – using BillPay, a comprehensive bill payments solution.What’s more
you can check the bill amount before you make any payments ensuring you
always pay the right amount, BillPay has made all your bill payments easy.

Key Benefits:-

Convenience at its best- No queuing at collection centres or writing cheques

any more!

A variety of payment modes available- ATMs,Net Banking,Mobile Banking &

Phone Banking.

Payments can be made right up to the due date.

Check your bill amount before you make any payments- ensuring you pay the
exact amount you wish to.

Merchant Services

28
For Merchants, the world over, accepting payments through cards; both debit &
credit, is an easy & cost effective way to enhance business, increase revenue, &
improve efficiency.

An acquire, HDFC Bank makes accepting credit and debit cards. Our valued
merchant establishments can now accept all credit and debit cards issued under
the Visa, Visa Electron, MasterCard and Maestro brands. Our service is backed
by superior technology infrastructure and personalised support from a designated
relationship officer.
We offer card acceptance solution both om EDC machine and on the Interest
through our Payment Gateway product.

Key Benefits:-

Reduce transaction time

Have freedom of accepting exact amounts- e.g.an amount of 1297.67 can be

easily accepted on card but is quite inconvenient to accept in cash.

Reduce manual errors in cash counting & collection.

Increase customer retention by offering customers standing instructions payment

option on their cards to make recurring payments. Customer do not need to come
to your billing centre every month for making recurring payments

Options of accepting payments on regular EDU (Electronic Data Capture)

Terminals, through your ECR(Electronic Cash Register) or through the website.

Net Safe

Net Safe, the latest technology offering from HDFC Bank, is a unique service which
makes online shopping completely secure. With NetSafe you create a virtual card
(NetSafe Card) from your HDFC Bank Visa Credit / Debit Card or Mastercard
Credit/Debit Card number that provides you with complete security while shopping
online.

Key benefits:-

1. Your HDFC Bank credit / debit card number is never used on the merchant website.
2. The NetSafe card you create is a one time use card.
3. You can set your own limit for the NetSafe cards you generate.
4. You can use it on any merchant website that accepts VISA/Mastercard cards

29
5. All purchases you make with NetSafe Cards will appear on your statement, just like
any other transact ion.

Ngpay

Key Benefits:-

It is our endeavour to simplify the world of banking for you. You can
now request cheque books, stop cheques,request Demand Drafts,
access Account statements and more from wherever you are-with
ngpay-a revolutionary application that allows you to transact on your
mobile phone an easily as you can on our website.

Then again,there’s more to ngpay than just MobileBanking! Gpay

offers a range of services from it’s network of partners. In a simple,
consolidated menu,you can discover and choose merchants or services
providers with whom you want to transact.
Banking with HDFC Bank: Full suite of Mobilebanking and Payment
services including Fund Transfer facility. You can transfer funds to
any HDFC Bank Account or any Visa Card (Debit or Credit) within
India using ngpay.

Entertaining at Fame Cinemas,INOX Cinemias: Search for

shows,select /view scats & pay for tickets.

Travel through IRCTC,Deccan,Make-my-trip, Yatra,redbus: Search for

options,price trips & book tickets.

Shopping from Ferns N Petals,Archies,FutureBazaar: Search buy and

ship products to anymore, anywhere in India.
Telecom services with BPL Mobile: Manager your accounts, top-up
the prepaid balance and pay your monthly postpaid bills.

Prepaid Mobile Refill

30
HDFC Bank offers - Prepaid Mobile Refill, which allows you to recharge your prepaid
mobile phone anytime from anywhere and pay directly from your Bank account. Avoid
hassles of withdrawing cash orsearching for a retailer for buying the recharge card.

You can avail of this service in two convenient ways:

Prepaid Mobile Refill on Internet

Prepaid Mobile Refill on ATM

HDFC Banking introduces refill of prepaid card through SMS

All you need to have is an HDFC Bank Account and be a prepaid customer.

Prepaid Refill through SMS

Prepaid Refill through ATM

Prepaid Refill through SMS :

You need to be registered for this service. But don’t worry, no long forms to be filled just
walk in to an HDFC Bank ATM and do the following:

• Select Prepaid Refill Bill Pay option

• Select SMS refill registration
• Enter your 10 + digit mobile number and confirm

Within seconds you will receive an SMS confirming your registration. The SMS will contain
a code number, the syntax of the message that you need to send for getting a refill done.

The number to which the message needs to be sent will also be a part of this message that
you receive.

So now a refill is just an SMS away.

How much does it cost ?

This service is absolutely free from HDFC Bank.You only have to pay the
regular SMS charge for your SMS request.

Prepaid Refill throughATM :

31
Its actually very easy to refill your prepaid card. You just need to walk into an
ATM.

• Select Prepaid Refill/Bill Pay

• Then select Prepaid Refill
• Enter the 10 digit mobile number & confirm
• Fill the amount you want your card to be re-filled for

Within seconds you will get an SMS confirming the refill for the asked amount!

How much does it cost ?

This service is absolutely free from HDFC Bank.You only have to go to the ATM &
use your card. It’s a service that has been introduced for the first time in india, just to make
your world easier.

Forex Plus Card:-

HDFC Bank Regalia ForexPlus Card is the most premium prepaid forex card by the bank.
The card comes with a membership fee of Rs. 1,000 per annum and offers complimentary
lounge access at international airports across India. Apart from the lounge access benefit,
another benefit that you get with the Regalia ForexPlus Card is a comprehensive insurance
cover including multiple travel-related insurance benefits like cover against loss of check-in
luggage, loss of personal documents (during air travel) and loss of cash in transit, personal air
accident cover and insurance against misuse of the card due to counterfeiting/skimming.

You can load the card in USD and transact in any currency without being charged any foreign
currency exchange mark-up. All the transactions on the HDFC RegaliPlus Forex Card are
processed over the Visa payment network and therefore, the card is accepted at all major e-
commerce portals for online transactions. Read on to learn more about the Regalia ForexPlus
Card by HDFC Bank.

Mutual Funds

A Mutual Fund brings together a large number of investors, who pool their resources to invest collectively
for their mutual benefit. The money is managed by a fund manager, who is supported by a team of analysts
and experts to help him invest the money. A fund could have many objectives such as capital growth,
steady income, capital protection, tax saving, etc. Depending on its objectives, the fund manager will
allocate money to different financial instruments such as equity and debt.

32
 Mutual Fund are ideal for those who are not financially savvy or adept at managing their investments. A
Mutual Fund is managed by experts who determine where and how the money will be invested. As such,
MFs help investors build their financial wealth slowly and steadily.

• Diverse options: Mutual Funds offer investors a wide range of options, spanning the entire risk-return
profile. Investors may choose a Mutual Fund that meets their specific objectives.
• Long-term wealth: Mutual Funds help investors create long-term wealth by investing small amounts
regularly (through systematic investment plans or SIPs). Over the long-term, SIP investments in Mutual
Funds deliver good returns while lowering the risk.
• Easy to invest: Investors can choose to invest in Mutual Funds online or offline. They can invest in a lump
sum or small amounts at a time. They can instruct their banks and automate their Mutual Fund
investments..
• Easy to track: You can easily track your mutual portfolio online.

Insurance

HDFC Life Insurance Company was earlier called HDFC Standard Life Insurance Company
but it has been recently renamed. The company was formed in the year 2000 as a joint
venture between HDFC Limited and Standard Life Aberdeen. While HDFC Limited is one of
the leading financial institutions of India, Standard Life Aberdeen is an international
investment company that is present in various countries.

Ever since its inception HDFC Life Insurance has offered a range of life insurance solutions
to customers. The company enjoys a good market reputation and is present across India with
390 branches, over 300 multi-tie distribution partners, 39 non-traditional financial
partnerships. In the year 2016, the company entered the reinsurance business by establishing
a wholly-owned subsidiary called HDFC International Life and Re Company Limited in the
United Arab Emirates.

HDFC Standard Life Insurance Company Limited was incorporated as a Public Limited Company at
Mumbai on 14th August 2000. The Company obtained the Certificate of Commencement of Business on
October 12 2000. Further Company obtained Certificate of Registration from Insurance Regulatory and
Development Authority of India (IRDAI) to undertake the life insurance business on 23rd October 2000.

33
CHAPTER 2

34
RESEARCH METHODOLOGY

35
OBJECTIVE

The objective of the study is as follows:

To examine the essential dimensions of service quality i.e. RATER- Reliability, assurance,
tangibles, empathy and responsiveness of HDFC bank and its effect on customer’s
satisfaction.

To find out the level of perception of the customers from the service quality offered by the
banks.

To know which service quality dimension of the bank is performing well.

To identify which dimension of service quality needs improvement so that the quality of
service of HDFC banks is enhanced

IMPORTANCE OF STUDY

The study would try to throw some insights into the existing services provided by the
banks, perceptions and the actual service quality of the bank. The results of the study would
be able torecognize the lacunae in the system and thus provide key areas where improvement is requiredfor
better performance and success ratio. In the days of intense competition, superior service
isthe only differentiator left before the banks to attract, retain and partner with the
customers.Superior service quality enables a firm to differentiate itself from its competition, gain
asustainable competitive advantage, and enhance efficiency.

SCOPE OF STUDY

The scope of this research is to identify the service quality of HDFC bank. This research is
based on primary data and secondary data. This study only focuses on the dimensions
of service quality i.e. RATER. It aims to understand the skill of the company in the area of service quality
that are performing well and shows those areas which require improvement. The study was
done taking two branches of HDFC bank into consideration. The survey was restricted to the
bank customers in Delhi only.

DATA SOURCES

Primary Data:

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

36
Secondary Data:

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

RESEARCH DESIGN

The research design is exploratory till identification of service quality parameters. Later
it becomes descriptive when it comes to evaluating customer perception of service quality of
the banks.

Descriptive research, also known as statistical research, describes data and characteristics about
the population or phenomenon being studied. Descriptive research answers the questions who,
what, where, when and how.

Although the data description is factual, accurate and systematic, the research cannot describe
what caused a situation. Thus, descriptive research cannot be used to create a causal
relationship, where one variable affects another. In other words, descriptive research can be
said to have a low requirement for internal validity. The description is used for frequencies, averages
and other statistical calculations. Often the best approach, prior to writing descriptive
research, is to conduct a survey investigation. Qualitative research often has
the aim of description and researchers may follow-up with examinations of why the
observations exist and what the implications of the findings are.

RESEARCH SAMPLE
SAMPLING PLAN: Since it is not possible to study whole universe, it becomes necessary to take sample
from the universe to know about its characteristics.

Sampling Units: Customers of HDFC bank

Sample Technique: Random Sampling.
Research Instrument: Structured Questionnaire.
Contact Method: Personal Interview.
SAMPLE SIZE:
The work is a case of HDFC Bank, one of the largest bank of Indian banking industry together
representing over 25 per cent of the market share of Indian banking space. The survey was
conducted in the city of Delhi with two branches of HDFC Bank, with 50 customers as respondent.

37
DATA COLLECTION TOOL
Data was collected through a structured questionnaire. Likert scale technique is used. The format of a
typical five-level Likert item is:
1. Strongly disagree
2 .Disagree
3. Neither agree nor disagree
4. Agree
5. Strongly agree
Likert scaling is a bipolar scaling method, measuring either positive or negative response to
a statement. The questionnaire consists of two parts. The first part consists of three questions
concerning the demographic information of the respondent such as the name, age, educational
qualifications and income. The second part consisting of 18 questions exploring the
respondent’s perception about the service quality of HDFC. For evaluation of service quality
of HDFC bank service quality dimension of reliability, assurance, tangibility, empathy and
responsiveness is used in order to evaluate the actual service quality of HDFC bank.

RESEARCH LIMITATIONS
• The study is only for the HDFC Bank confined to a particular location and a very small sample of
respondents. Hence the findings cannot be treated as representative of the
entire banking industry.

• The study can also not be generalized for public and private sector banks of the country.
• Respondents may give biased answers for the required data. Some of the respondents
did not like to respond.

• Respondents tried to escape some statements by simply answering “neither agree nor
disagree to most of the statements. This was one of the most important limitation faced, as it
was difficult to analyse and come at a right conclusion.

• In our study we have included 50 customers of bank

because of time limit.

HYPHOTHESIS
H1: Tangibles are positively related with perceived service quality.
H2: Reliability is positively linked with perceived service quality.
H3: Assurance is positively related with perceived service quality.
H4: Service Quality has a positive impact on customer loyalty.

38
 CHAPTER 3
REVIEW OF LITERATURE

39
It is relevant to refer briefly to the previous studies and research in the related areas of the
subject to find out and to fill up the research gaps. The following are the some studies
conducted by the eminent authors and practitioners on the area of service quality of banks.

(Dhandabani, 2010) Examined the nature of linkage between service quality and customer
loyalty in Indian retail banking. Study used confirmatory factor analysis to identify the
service quality dimension. The resulted dimensions are Reliability, Responsiveness,
Knowledge and recovery; and Tangibles. The service quality dimensions lead to customer
satisfaction and the customers' satisfaction leads to customer's loyalty. The structural
equation model reveals that there is no significant direct linkage between service quality and
customers loyalty. At the same time, the service quality has a significant indirect impact on
customer's loyalty especially through customer's satisfaction.

(Maya Basant Lohani, 2012) Examined on service quality in selected banks and measured
in five dimensions by using SERVQUAL scale developed by Parasuraman et al (1988 and
revealed that there exist a small perceptual difference regarding overall service quality with
the respective banks. The study of found that banks have more concentration on the tangible
factor like a computerization, physical facilities, etc. to attract the customers.

(Jain, 2012)In their study “Customer Perception on Service Quality in Banking Sector: With
Special Reference to Indian Private Banks in Moradabad Region” try to learn and understand
the customer perception regarding service quality and to learn and understand the different
dimension of service quality in banks.

(Thakur, 2011) has presented that how service quality and customer satisfaction is related to
customer’s loyalty in Indian Banking sector’s perspective. He found that customer
satisfaction is significantly and positively related with customer loyalty and customer
satisfaction is an important mediator between service quality and customer loyalty. In the last
of the study he have discussed that banking service providers should follow right course of
action to win customer satisfaction by providing better service quality in order to create loyal
customer base.

(Desta, 2011)Studied by assessing and measuring the banking service quality perception of the
SBI branch customers; and examining the relationship between service quality, customer
satisfaction and positive word of mouth and found that the expectations of bank customers
were not met and that the largest gap was found in the reliability dimension. This dimension
also had the largest influence on customer satisfaction and overall satisfaction of bank
customers had a positive effect on their word-of-mouth. The study also suggested that input
from employees on what constitutes “service excellence” will be beneficial. The bank need to
reassess “what customers expect from the bank” and provide client specific services. It needs
to invest on employee training programs that will provide employees with an understanding
of service culture and service excellence particularly at front line levels. Employee
training programs should focus on interpersonal communication and customer care factors in
order to be able to meet the customers' need for personalized service.

(Kheng, et al. 2010) studied on the impact of service quality on customer loyalty of the banks
customers in Penang, Malaysia. They opined that a lot of competitive factors in the form of
substitutes are forcing bankers to explore the importance of customer loyalty. Therefore,

40
studies need to focus on the changing role of the banking system. They also found that
improvement in service quality can enhance customer loyalty.

(Dr. Rupa Rathee, 2014), studied the service quality gaps in banks after nationalization of
commercial banks. With the entry of new generation, tech-savvy, private banks the banking
sector has become too competitive. Gap analysis was applied to find the gaps between
expected and performed service in private banks to find the difference between male and
female perception and expectation. This study provided an insight into which attributes of
service quality in private bank were most important in providing satisfaction to customers
and areas where significant gaps existed. It concluded that the highest gap was found in the
dimension of reliability and empathy and suggested that the banks have to reduce this gap
giving individual personal attention to understand customer specific needs. The customers
trust the public sector banks. These banks have existed in the market for a longer period than
the private sector banks. The reliability factor is a positive factor for these banks.
Therefore private banks should position themselves in the market on the basis of this
dimension and promote themselves aggressively. It becomes imperative for the private sector
banks to train their employees to treat the customers with empathy. Statement of Problem
Extensive research has been done by eminent scholars, academicians and practitioners on
service quality in the banking industry. All these studies have concentrated on urban
areas only. No concrete study found out the perceptions of rural customers about the quality
of banks' services in India. There is a need for an extensive study on the rural customers'
perceptions on the service quality in banking service offered in rural areas. Hence this
research study was undertaken.

Mosahab, et al. (2010) presented a research that was conducted in a bank in Tehran, Iran. This
report aimed to determine the quality of services offered by Sepah Bank, and also to study the
relationship between the service quality, satisfaction and loyalty. The results of this research
showed that in all aspects, customers’ expectation, are higher than their perceptions of the
Bank’s operation, and in fact the quality of offered services is low. Besides, this research
findings show that the customer satisfaction plays the role of a mediator in the effects of
service quality on service loyalty.

Afsar, et al. (2010) worked on the determinants of customer loyalty in the banking sector of
Pakistan. They argued that banking industry needs high interaction with the customers and
that’s why managers must understand the factors which influence the loyalty. They attempted
to find the factors of customer loyalty and their relationships with the banking industry in
developing countries. They examined and found that perceived quality, satisfaction, trust,
switching cost and commitment are the factors which influence the loyalty of the customers.

J. Joshua Selvakumar (2010) studies the impact of Service Quality on Customer

Satisfaction in Public Sector and Private Sector Banks. The study examines the effect of
service quality determinants on the degree of customer satisfaction in public and
private banks in India. By realizing the gap between the perceived and actual service quality,
customer satisfaction can be extremely improved.

Dr. Manasa Nagabhushanam (2010) conducted a research study on service quality of banks in
India. The study encompasses the service quality of all the banks i.e., public sector, private
sector, and foreign banks and measures the attributes on SERVQUAL scale. The study was
conducted to analyze the expected and perceived gap among customers and bankers.

41
Mukta Dewan and Dr. Sadhana Mahajan (2009) studied the study of the perceived Service
Quality and its Dimensions in Private Sector Banks. The study examines that there was a
significant difference in the perception of service quality and its dimensions for the private
sector bank customers for different categories of demographic factors. The perception of
male and female customers varied significantly for the overall service quality and its
dimensions reliability, responsiveness, assurance and empathy. It was found that the male
customers had a more positive perception of service quality as compared to the female
counterparts.

Maya Basant Lohani and Dr. POOJA Bhatia (2011) studied the Assessment of Service Quality in
Public and Private Sector Banks of India. The study was conducted to ascertain service
quality variations across selected banks by demographic variations and to measure the
customer satisfaction in selected public and private sector banks by analyzing the
gap between expectations and their perceptions of banking services.

Vibhor Jain, Dr. Sonia Gupta and Smrita Jain (2014) studied customer perception of
service quality in banking sector with special reference to India private banks. The study
examines to learn and understand the customer perception regarding service quality and
understand the different dimension of service quality in banks. The customers trust the public
sector banks. These banks have existed in the market for a longer period than the private
sector banks. There is an urgent need for the banking services to reaffirm themselves in view
of the cut-throat competition, which is close on the anvil.

Ms. Nisha Malik and Mr. Chand Prakash Saini (2011)studied Private Sector Banks
Service Quality and Customer Satisfaction by conducting an Empirical Study of two Private
Sector Banks. The aim of proposed study was to find out perception of HDFC and
ICICI bank customers regarding to the service quality parameter and gap analysis of expected
and acknowledged quality parameters, and also revels the relationship between
psychographic factors and satisfaction levels of rural and urban customers

Dr. Manasa Nagabhushanam (2010) conducted a research study on service quality of banks in
India. The study encompasses the service quality of all the banks i.e., public sector, private
sector, and foreign banks and measures the attributes on SERVQUAL scale. The study was
conducted to analyze the expected and perceived gap among customers and bankers.

Mukta Dewan and Dr. Sadhana Mahajan (2009) studied the study of the perceived Service
Quality and its Dimensions in Private Sector Banks. The study examines that there was a
significant difference in the perception of service quality and its dimensions for the private
sector bank customers for different categories of demographic factors. The perception of
male and female customers varied significantly for the overall service quality and its
dimensions reliability, responsiveness, assurance and empathy. It was found that the male
customers had a more positive perception of service quality as compared to the female
counterparts.
Maya Basant Lohani and Dr. POOJA Bhatia (2011)studied the Assessment of Service Quality in
Public and Private Sector Banks of India. The study was conducted to ascertain service
quality variations across selected banks by demographic variations and to measure the
customer satisfaction in selected public and private sector banks by analyzing the
gap between expectations and their perceptions of banking services.

42
Vibhor Jain, Dr. Sonia Gupta and Smrita Jain (2014)studied customer perception of
service quality in banking sector with special reference to India private banks. The study
examines to learn and understand the customer perception regarding service quality and
understand the different dimension of service quality in banks. The customers trust the public
sector banks. These banks have existed in the market for a longer period than the private
sector banks. There is an urgent need for the banking services to reaffirm themselves in view
of the cut-throat competition, which is close on the anvil.

Ms. Nisha Malik and Mr. Chand Prakash Saini (2011)studied Private Sector Banks
Service Quality and Customer Satisfaction by conducting an Empirical Study of two Private
Sector Banks. The aim of proposed study was to find out perception of HDFC and
ICICI bank customers regarding to the service quality parameter and gap analysis of expected
and acknowledged quality parameters, and also revels the relationship between
psychographic factors and satisfaction levels of rural and urban customers.

Akte S. and Ghosh S.K. (2006)examine the gap between expectations and perceptions of
customers in Dhaka city of Bangladesh regarding banking services with a special focus on
SERVQUAL model. The study concludes that in four dimensions like reliability, empathy,
tangibility, assurance, the gap between perceptions and expectations is significant except
responsiveness where it is insignificant means banks do not extent that level of services
which will satisfy the customers expectations. The study also suggests some
recommendations to minimize this gap.

43
 CHAPTER 4
DATA ANALYSIS AND
INTERPRETATION

44
Ques. Age

AGE CATEGORY FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE
18-23 Years 10 20 20
24-29 Years 17 34 54
30-35 Years 15 30 84
35 Years and above 8 16 100
TOTAL 50 100

Age
16%

30%

34%
20%

INTERPRETATION

From the table and graph above it can be seen that

20% respondent’s age are 18 to 23 years.
34% respondent’s age are 24 to 29 years.
30% respondent’s age are 30 to 35 years.
16% respondent’s age are 35 to above years.

45
 Ques. Educational qualifications

CATEGORY FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
UNDERGRADUATE 13 26 26
GRADUATE 20 40 66
POST GRADUATE 17 34 100
TOTAL 50 100

Educational qualifications

34%
40%

20%

INTERPRETATION

From the table and graph above it can be seen that

26% respondents are under graduate.
40% respondents are Graduate.
34% respondents are Post graduate.

46
 TANGIBILITY DIMENSION OF SERVICE QUALITY

Physical facilities equipments and appearance of personnel

Ques.1 HDFC bank has modern looking equipment.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE
STRONGLY 5 10 10
DISAGREE
DISAGREE 25 50 60
UNCERTAIN 16 32 92
AGREE 4 8 100
TOTAL 50 100

HDFC bank has modern looking equipments

8%

32%

50%
10%

STRONGLY DISAGREE DISAGREE UNCERTAIN AGREE

INTERPRETATION

HDFC bank has modern-looking and hi-tech equipments. Here analysis show that most of the respondents
disagreed with this statement. Among the total respondents 50% disagreed, 32%were neutral
and 8% agreed. After analysis I found that majority of the respondents think that HDFC Bank do not have
modern looking equipments or no hi-tech equipments.

47
 Ques.2 The bank's physical features are visually appealing.

SCALE FREQUENCY PERCENTAGE CUMULATIVE PERCENTAGE

DISAGREE 4 8 8

UNCERTAIN 29 55 66

AGREE 17 34 100

TOTAL 50 100

Bank's physical features are visually appealing

30
25
20
29
15
10 17
5 4
0
DISAGREE UNCERTAIN AGREE

INTERPRETATION

HDFC bank’s physical facilities are visually appealing. From this statement I found that
17 persons agreed. 29 persons were uncertain and 4 persons disagreed. This means 58%
people were uncertain about this statement. Out of the total respondents only 4% disagreed
and no one strongly agreed or disagreed with the statement. 17% people agreed that HDFC
bank’s physical facilities are visually appealing.

48
 Ques.3 The bank's reception desk employees are neat appearing.
SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE
DISAGREE 5 10 10
UNCERTAIN 21 42 52
AGREE 18 36 88
STRONGLY 6 12 100
AGREE
TOTAL 50 100

The banks reception desk employees are neat appearing

DISAGREE 5

UNCERTAIN 21

AGREE 8

STRONGLY AGREE 6

0 5 10 15 20 25

INTERPRETATION

HDFC bank’s employees appear neat. Here analysis shows that majority were neutral.
Among the total respondent 21 respondents were neutral, 18 people agreed and 6
respondents strongly agreed. The rest disagreed. From analysis I found that some respondents
agreed with this statement but most of the respondents think the employees of the HDFC
bank appear neat.

49
 Ques.4 Materials associated with the service (such as pamphlets or statements) are
visually appealing at the bank.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE
DISAGREE 7 14 14
UNCERTAIN 22 4 58
AGREE 18 36 94
STRONGLY AGREE 3 6 100
TOTAL 50 100

Materials associated with the services are visually

appealling at the bank

50%
40%
30%
44%
20% 36%

10% 14%
6%
0%
DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

Materials associated with the service are visually appealing at HDFC bank. Here
36%respondents agreed with this statement and 6% strongly agreed with this statement. 44%
were neutral that is most and 14% disagreed. There was no respondent who strongly
disagreed. Hence, in general it can be concluded that materials associated with the services such as
pamphlets or statements are visually appealing.

50
 RELIABILITY DIMENSION OF SERVICE QUALITY
Ability to perform the promised service dependably and accurately
Ques.5 When the bank promises to do something by a certain time, it does so.
SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE
STRONGLY 2 4 4
DISAGREE
DISAGREE 26 52 56
UNCERTAIN 5 10 66
AGREE 14 28 94
STRONGLY AGREE 3 6 100
TOTAL 56 100

When bank promises to do something by certain time, it does

so

STRONGLY DISAGREE

DISAGREE

UNCERTAIN

AGREE

STRONGLY AGREE

0 5 10 15 20 25 30

INTERPRETATION

51
 My sample size was 50. Here analysis shows that among the total respondents 26
respondents disagreed and14 respondents agreed with this question. Also I found that 5
people were neutral and 2 people strongly disagreed. Hence I concluded that majority of them
disagreed that the bank when promises to do something by certain time, it does so.

Ques. 6 When you have a problem, the bank shows a sincere interest in solving it

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE
DISAGREE 3 6 6
UNCERTAIN 14 28 34

AGREE 26 52 86
STRONGLY AGREE 7 14 100
TOTAL 50 100

When you have a problem,banks shows interest in solving it

30
25
20
15 26
10 14
5 7
3
0
DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

When you have a problem, HDFC bank shows sincere interest in solving it. After analysing this statement I
found that most of the respondents agreed i.e. 52% respondents agreed. Also I found that 28% were neutral

52
 with this statement and 6% were committed with disagree. There was no one who strongly disagreed.
Hence HDFC bank can be said to be reliable.

Ques.7 The bank performs the service right the first time.
SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE

STRONGLY 2 4 4
DISAGREE

DISAGREE 8 16 20
UNCERTAIN 17 34 54
AGREE 17 34 88
STRONGLY 6 12 100
AGREE

TOTAL 50 100

Bank performs the service right the first time

20

15

10 17 17

5 8 6
2
0
STRONGLY DISAGREE UNCERTAIN AGREE STRONGLY
DISAGREE AGREE

53
INTERPRETATION
Total sample size was 50. Here analysis shows that among the total respondents 17 people
agreed with this statement. They think that HDFC bank performs the services right the first time.6 people
strongly agreed with this statement. Also 17 people were neutral and the rest of the
respondents disagreed and strongly disagreed.

Ques.8 The bank insists on error free records.

SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE

DISAGREE 5 10 10
UNCERTAIN 10 20 30
AGREE 23 46 76
STRONGLY 12 24 100
AGREE

TOTAL 50 100

Bank insist in error free records

24%

46%
10%

20%

STRONGLY AGREE DISAGREE UNCERTAIN AGREE

54
INTERPRETATION

Bank insists on error free records. HDFC bank has proved from my analysis that it surely insist on error free
records as 46% respondents agreed with this statement and 24% strongly agreed. Only 10%
respondents disagreed and no one strongly disagreed.

RESPONSIVENESS DIMENSION OF SERVICE QUALITY:

Willingness to help customers and provide prompt services

Ques. 9 Employees in the bank tell you exactly when the services will be performed.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE

STRONGLY 6 12 12
DISAGREE

DISAGREE 8 16 28
UNCERTAIN 13 26 54
AGREE 18 36 90
STRONGLY 5 10 100
AGREE

TOTAL 50 100

Employees tell you exactly when the service will be

performed

STRONGLY DISAGREE 6

DISAGREE 8

UNCERTAIN 13

AGREE 18

STRONGLY AGREE 5

0 2 4 6 8 10 12 14 16 18

55
INTERPRETATION
Employees in the bank tell you exactly when the services will be performed. Majority of the
respondents agreed with this statement. 26% respondents were uncertain. At the same time
16%disagreed and 12% Strongly disagreed with this statement.

Ques. 10 Employees in the bank give you prompt service.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE

DISAGREE 5 10 10
UNCERTAIN 16 32 42
AGREE 27 54 96
STRONGLY 2 4 100
AGREE

TOTAL 50 100

Employees in the bank give you prompt services

30

25

20

15
27
10
16
5
5
0 2
DISAGREE UNCERTAIN AGREE STRONGLY AGREE

56
INTERPRETATION
Most of the respondents agreed with this statement. According to my analysis, employees in
HDFC Bank give prompt service. Among the total respondents agreed respondents were 27
and strongly agreed were 2. 16 people were neutral and 5 disagreed. There was no respondent who
strongly disagreed with this statement.

Ques.11 Employees in the bank are always willing to help you

SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE

UNCERTAIN 12 24 24
AGREE 29 58 82
STRONGLY 9 18 100
AGREE

TOTAL 50 100

Employees in bank are willing to help you

30
25
20
29
15
10
12
9
5
0
UNCERTAIN AGREE STRONGLY AGREE

57
INTERPRETATION
Employees in HDFC bank are willing to help you. With this statement no one disagreed or
strongly disagreed. Strongly agreed were 9 people i.e. 18% respondents strongly agreed,
29 people agreed i.e. 58% respondents agreed and 24% respondents were neutral.

Ques.12 Employees in the bank are never too busy to respond to your request.
SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE

DISAGREE 1 2 2
UNCERTAIN 11 22 24
AGREE 27 54 78
STRONGLY 11 22 100
AGREE

TOTAL 50 100

58
 Employees at bank are never to busy to respond to your
request

DISAGREE 1

UNCERTAIN 11

AGREE 27

STRONGLY AGREE 11

0 5 10 15 20 25 30

INTERPRETATION

Employees in HDFC Bank ltd are never too busy to respond to your request. After analyzing this statement I
found that most of the respondents agreed with this statement. Among the total respondents 22%
strongly agreed and 54% agreed. 11 respondents were neutral and 1 respondent disagreed. No
one strongly disagreed.

ASSURANCE DIMENSION OF SERVICE QUALITY

Knowledge and courtesy of employees and their ability to inspire trust and confidence

Ques.13 The employees of the bank are trustworthy.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE

DISAGREE 4 8 8
UNCERTAIN 13 26 34
AGREE 28 56 90
STRONGLY 5 10 100
AGREE

TOTAL 50 100

59
 Chart Title
30

25

20

15
28
10
13
5
4 5
0
DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION
The employees of the bank are trustworthy. According to my findings, 54% respondents
agreed that employees at HDFC bank are trustworthy. 13% respondents were neutral and 4%respondents
disagreed with this statement.

Ques.14 The behavior of employees in the bank in stills confidence in you.

SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE

DISAGREE 28 56 56
UNCERTAIN 4 8 64
AGREE 13 26 90
STRONGLY 5 10 100
AGREE

TOTAL 50 100

60
 Chart Title

30
25
20
15 28

10
13
5 4 5
0
DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

The behavior of employees in HDFC bank in stills confidence in you. Here analysis shows that most of the
people disagreed. Among the total respondents 28 respondents disagreed, 13 agreed and 5
strongly agreed. There was no respondent who strongly disagreed. This means 56%respondent disagreed
with this statement.

61
Ques.15 You feel safe in your transactions with the bank.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE
DISAGREE 5 10 10
UNCERTAIN 16 32 42
AGREE 23 46 88
STRONGLY 6 12 100
AGREE

TOTAL 50 100

You feel safe inn your transaction with the bank

10%

32%

1.2 46%

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

With this statement most of the respondents agreed. Among the total respondents 23 agreed
with this statement and 6 strongly agreed. 32% respondents were neutral and 10%
respondents disagreed. But there no one who strongly disagreed.

62
Ques.16 Employees in the bank have the knowledge to answer your questions.
SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE
DISAGREE 2 4 4
UNCERTAIN 9 18 22
AGREE 26 52 74
STRONGLY 13 26 100
AGREE

TOTAL 50 100

Employees in the bank have knowledge to answer your

questions

DISAGREE 2

UNCERTAIN 9

AGREE 26

STRONGLY AGREE 13

0 5 10 15 20 25 30

INTERPRETATION

From my analysis I found that 54% respondents agreed that employees of HDFC bank have
complete knowledge to answer their questions. 26% respondents strongly agreed to this
statement and only 4% disagreed. 18% neither agreed nor disagreed.

63
EMPATHY DIMENSION OF SERVICE QUALITY

Caring and individualized attention that firm provides to its customers

Ques.17 The bank gives you individual attention.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE
DISAGREE 26 52 56
UNCERTAIN 12 24 76
AGREE 10 20 96
STRONGLY 2 4 100
AGREE

TOTAL 50 100

Bank gives you individual attention

30

25

20

15
26
10

5 12
10

0 2
DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

HDFC bank is not able to give individual attention to its customers as out of the total respondents 54%
disagreed with this statement. 12% of the respondents were neutral and only12% agreed and 2%
strongly agreed. From this finding it can be concluded that it is unable to give individual attention to its
customers.

64
Ques.18 The bank has operating hours convenient to all its customers.
SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE
DISAGREE 2 4 4
UNCERTAIN 14 28 32
AGREE 27 54 86
STRONGLY 7 14 100
AGREE

TOTAL 50 100

Bank has operating hours convenient to all its customers

DISAGREE 2

UNCERTAIN 14

AGREE 27

STRONGLY AGREE 7

0 5 10 15 20 25 30

INTERPRETATION

HDFC bank has operating hours convenient to all its customers. Out of 50 respondents,
27respondents agreed with this statement and only 2 respondents disagreed. Also 7
respondents strongly agreed that the bank has operating hours convenient to its customers.

65
Ques.19 The bank has your interests best at heart.

SCALE FREQUENCY PERCENTAGE CUMULATIVE

PERCENTAGE
STRONGLY 3 6 6
DISAGREE

DISAGREE 5 10 16
UNCERTAIN 10 20 36
AGREE 25 50 86
STRONGLY 7 14 100
AGREE

TOTAL 50 100

Bank has your interests best at heart

30

25

20

15
25
10

5 10
5 7
3
0
STRONGLY DISAGREE DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

HDFC bank has your best interests at heart. Here analysis shows that 25 respondents agreed
and7 respondents strongly agreed with this statement. 20% were neutral and the rest
disagreed and strongly disagreed.

66
Ques.20 The employees of the bank understand your specific needs.
SCALE FREQUENCY PERCENTAGE CUMULATIVE
PERCENTAGE
DISAGREE 5 10 10
UNCERTAIN 21 42 52
AGREE 20 40 92
STRONGLY 4 8 100
AGREE

TOTAL 50 100

Employees of the bank understand your specific needs

25

20

15

10 21 20

5
5 4
0
DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPREATION

Employees of HDFC bank understand specific needs. With this statement most of the respondents
were neutral. Among the total respondents 20 respondents agreed and 4 respondents strongly
agreed. 5 respondents disagreed with this statement.

67
MEASURING SERVICE QUALITY DIMENSIONS
Measuring the quality of a service can be a very difficult exercise. Unlike product where
there are specific specifications such as length, depth, width, weight, colour etc. a service can have
numerous intangible or qualitative specifications.

Parasuraman, Zeithaml, and Berry (1985) provide a list of determinants of service quality:
access, communication, competence, courtesy, credibility, reliability, responsiveness,
security, understanding, and tangibles. A total of five consolidated dimensions of service
quality are: Tangibles (ques.1 to 4) - Physical facilities, equipments and appearance of
personnel Reliability (ques.5 to 8) - Ability to perform the promised service dependably and
accurately Responsiveness (ques.9 to 12) -Willingness to help customers and provide prompt
services Assurance (ques.13 to 16) (including competence, courtesy, credibility and
security)Knowledge and courtesy of employees and their ability to inspire trust and
confidence Empathy (ques.17 to 20) – (including access, communication and understanding the
customer) Caring and individualized attention that firm provides to its customer.

In order to calculate which dimension of service quality is performing well, a sample of the
questions are used in the questionnaire. Using the questionnaire, obtain the score for each of
the20 statements. After analysis of the data, Overall score to each statement is given on a
scale of 1to 5 i.e. 1 is given to strongly disagreed i.e. the lowest score, then 2= disagreed, 3= uncertain,
4=agreed and 5= strongly agreed.

Sum the score for each dimension of service quality to obtain a final score which tells which dimension is
performing well and which dimension needs improvement.

68
The scores are shown in the following table:
Statement Score
1. HDFC bank has modern looking equipment. 2

2. The banks physical features are visually appealing. 3

3. The banks reception desk employees are neat appearing. 3

4. Materials associated with the service (such as pamphlets or statements) 3

are visually appealing at the bank.
5. When the bank promises to do something by a certain time, it does so. 2
6. When you have a problem, the bank shows a sincere interest in solving it. 4
7. The bank performs the service right the first time. 3.5
8. The bank insists on error free records 4
9. Employees in the bank tell 4
you exactly when the services will be performed.
10. Employees in the bank give you prompt service. 4
11. Employees in the bank are always willing to help you. 4
12. Employees in the bank are never too busy to respond to your request. 4
13. The employees of the bank are trustworthy. 4
14. The behavior of employees in the bank instills confidence in you. 2

15. You feel safe in your transactions with the bank. 4

16. Employees in the bank have the knowledge to answer your questions. 4
17. The bank gives you individual attention. 2
18. The bank has operating hours convenient to all its customers. 4
19. The bank has your best interests at heart. 4
20. The employees of the bank understand your specific needs. 3

The scores for each dimension are summed up and a final score is obtained:

SERVICE QUALITY DIMENSION Points

1. TANGIBILITY (1 TO 4) 11
2. RELIABILITY (5 TO 8) 13.5
3. RESPONSIVENESS (9 TO 12) 16
4. ASSURANCE (13 TO 16) 14
5. EMPATHY (17 TO 20) 13

69
 SERVICE QUALITY OF HDFC BANK
18
16
14
12
10
8 16
13.5 14 13
6
11
4
2
0
TANGIBILITY RELIABILITY RESPONSIVENESS ASSURANCE EMPATHY

70
 CHAPTER 5

CONCLUSION AND SUGGESTIONS

71
FINDINGS

The Reliability dimension of service quality is better as compared to empathy and tangibility. Still
the score is low. For most services, customer’s perceptions of whether the service has been
performed correctly, and not provider-established criteria, are the major determinants
of reliability. Customers of the bank hesitate to rely on the bank. Whenever they have a
problem, the bank shows sincere interest in solving it but the services are not performed by a certain time
as promised. The employees should take this problem seriously and take steps to remove this.

As score for Assurance is at second place after responsiveness, so the customers of HDFC bank
are very confident and feel safe while transacting with the bank. Moreover the employees of the bank
have proved to be trustworthy. Employees are also educated enough to answer all the
questions.

The score of Tangibility dimension of service quality of HDFC bank is the lowest. The service
quality factor tangible is defined by whether the physical facilities and materials associated with the service are
visually appealing at the bank. These are all factors that customers notice before or upon entering the
bank. Customer expectations regarding visual appealing of HDFC is very high. From my study I
found that Physical facilities and modern looking equipment are not sufficient in HDFC bank. Respondents
were uncertain about the neat appearance of the reception desk employees. So they should work on that and
try to fulfill the gap.

According to my findings, the score of Empathy is not satisfactory but not unsatisfactory also.
HDFC bank is unable to give individual attention to its customers and is unable to understand specific needs of
its customers. But still bank has taken steps to satisfy its customers by keeping operating hours
convenient to its customers and keeping their interest best at heart.

In HDFC bank, the score of Responsiveness is highest so they are focusing on prompt service,
employees are willing to help the customers and say the exact time when the services will be
performed. Employees at bank give their customers first preference and are always ready to
help them. Overall HDFC bank’s responsiveness dimension of service quality is the highest.

According to the customer perception, HDFC bank is highly responsive. Customers are
assured while transacting with the bank. The reliability dimension is lower than the first to dimension. They
feel that the bank is unable to give them individual attention and its equipments are not modern
and sufficient for the bank.

There is not much gap between all the dimensions, this shows that HDFC BANK is a better service
provider in all the dimensions i.e. reliability, assurance, tangibility, responsiveness and
empathy. As a result of which, the customers are satisfied with the service offered
by HDFC bank.

72
CONCLUSION
Based on the study conducted it can be concluded that responsiveness, assurance and
reliability are the critical dimensions of service quality of HDFC bank and they are directly
related tooverall service quality. The factors that may delight customers tend to be concerned more withthe
intangible nature of the service, commitment, attentiveness, friendliness, care, and courtesy.
The employees give prompt services, always are ready to answer the questions and
aretrustworthy. The main sources of dissatisfaction appear to be cleanliness, up to date technologymodern
equipments, and neatly dressed up employees. The Tangibility dimension of servicequality of
HDFC bank is highly disappointing and serious steps are needed to be taken toenhance this
dimension. Customers of the bank are dissatisfied with the empathy dimension. Tosatisfy
these customers, the management can take some attempts, noted earlier as
recommendations.The study brings about the areas which require urgent attention of the
employees, themanagement, and the policy makers of the industry. These are areas in which
customers arehugely dissatisfiedwith the services of the banks against their expectation. This
high degree ofdissatisfaction resulting from the services received clearly questions the design
of services orsubsequent response of the bank employees. These limitations are too serious to
be avoided asthese question the front-line people dealing with the customers and the
approach of themanagement in taking customers seriously.The management
should understand the benefits of service quality. It include increased customer
satisfaction, improved customer retention, positive word of mouth, reduced staff
turnover,decreased operating costs, enlarged market share, increased profitability,
and improved financial performance. In the days of intense competition, superior service is
the only differentiator left before the banks to attract, retain and partner with the customers.
Superior service qualityenables a firm to differentiate itself from its competition, gain a sustainable
competitiveadvantage, and enhance efficiency. Thus, improving service quality leads to the
customersatisfaction and, ultimately, to customer loyalty.

SUGGESTIONS

▪ More stress should give on the advertisement and promotional activities.

▪ The Bank should make some efforts to improving good relationship with customer.

▪ The Bank should enhance their services according to the needs of the customer.

73
 ▪ The bank makes its procedure less time consuming.

▪ The bank should make effort to aware the customers about their all the extra services.

RECOMMENDATIONS

Reliability is an obvious place to start. Customers of the bank want to know theirresources are safe and
within trustworthy institutions. A way to ensure this peace of mind would be to take steps to ensure bank
employees are well trained, so each bank associate is able to offercomplete and
comprehensive information at all times. Consistent policies combined with aknowledgeable
staff will foster a high degree of institutional cohesion and reliability.

Responsiveness, again when associated with a well-trained staff and timely answers
toservice-related questions, would make significant inroads into causing HDFC bank be
regardedas responsive. Staff should be encouraged to present relevant options to banking
customers in amanner that does not resemble salesmanship so much as a desire to serve.

Intangibles please customers just as much as tangibles in the banking industry. Peopletend
to visit the same branch of a bank over and over again. Usually, this is a location close to their
home or their workplace. It is natural that customers become comfortable and habituated tothese branch
banks, for the same reason they develop familiarity with a neighborhoodsupermarket or
convenience store. It makes sense that bank employees would be encouraged tolearn
to recognize these regular customers, learn their names, and begin to identify their
basicservice requirements.

Learning to understand customers‟ needs will allow bank associates to offer enhanced
services, perhaps lowering customers‟ banking costs and increasing their investment
potential. This could also open up the possibility of increased profits for banks, for
when perceived asmore service and customer oriented, they will, in effect, become a useful
and pleasant way to “shop.”

Keeping the bank with up-to-date technologically are important factors. Modern equipments, new
improved technology should be replaced with the old ones. If the staff inside is pleasant and well-
informed, in an aesthetically pleasing environment, then customer satisfactionwill be high.

The five-dimensional structure could possibly serve as a meaningful framework for tracking a bank‟s
service quality performance over time and comparing it against the performance of competitors.
Items on some dimensions should be expanded if that is necessaryfor reliability.

Thus, the banking industries must continuously measure and improve these dimensions inorder to gain cus
tomers‟ loyalty.

74
BIBLIOGRAPHY

References

Kotler Philip, marketing management, (Pearson education, 12th edition)

Malhotra K. Naresh, marketing research (An applied orientation), Research design,

(Prentice hall of India pvt. 5thedition)

Zeithmal V. A., Grembler D.D., Bitner M.j., and Pandit A.: Service Marketing Integrated

customer Focus across the Firm” (4th Edition)

M.K. Rampal : Service Marketing

Websites

www.google.com
www.hdfcbank.com
www.hdfcindia.com
www.wikipedia.org
www.marketresearch.com

75
ANNEXURE

QUESTIONNAIRE

The following statements relate to your feelings about the HDFC bank. Please show the extent to
which you believe HDFC bank has the featuredescribed in the statement. I reques t you to √ the option which
in your opinion are believed to be true. All data will be kept confidential.

Name:

Age:

Educational Qualifications:

1.HDFC bank has modern looking equipment ?

• Yes
• No

2.The bank's physical features are visually appealing ?

• Yes
• No

3. The bank's reception desk employees are neat appearing ?

• Yes
• No

4.Materials associated with the service (such as pamphlets or statements) are visually
appealing at the bank ?
• Yes
• No

5.When the bank promises to do something by a certaintime, it does so ?

• Yes
• No

76
6.When you have a problem, the bank shows a sincereinterest in solving it ?
• Yes
• No

7.The bank performs the service right the first time ?

• Yes
• No

8.The bank insists on error free records ?

• Yes
• No

9.Employees in the bank tell you exactly when theservices will be performed ?
• Yes
• No

10.Employees in the bank give you prompt service ?

• Yes
• No

11.Employees in the bank are always willing to help you ?

• Yes
• No

12.Employees in the bank are never too busy to respond to your request ?
• Yes
• No

13.The employees of the bank are trustworthy ?

• Yes
• No

14.The behavior of employees in the bank instills confidence in you ?

• Yes
• No

15.You feel safe in your transactions with the bank ?

• Yes
• No

16.Employees in the bank have the knowledge to answeryour questions ?

• Yes
• No

17.The bank gives you individual attention?

• Yes

77
 • No
18.The bank has operating hours convenient to all its customers ?
• Yes
• No

19.The bank has your best interests at heart ?

• Yes
• No

20.The employees of the bank understand your specific needs ?

• Yes
• No

78
79