ABSTRACT

The project report was carried on at HDFC Bank, Dilsukhnagar on the topic “The Study of
Credit Risk Management”.

The research mainly focused on the risk involved that the bank need to be faced while
lending loans to the customers and bank have to frame the strategies and methods to reduce
the risk that arises out of lending.

The information regarding the finance is been derived from financial statement such as
Balance sheet and profit and loss account of HDFC bank. Analysis of data is made for four
years that is from 2019 to 2023 is been collected from the annual report of the bank.

It can be found that the bank manages its credit risk in appropriate manner which is clear by
the amount of loss of NPA. There exists some non performing assets but in the last four years
bank have never experienced any loss arising out of such loans.

The bank manages its credit risk in appropriate manner can be found as there is there is no
much loss to the bank because of lending. Bank has a well planed mechanism and strategies
for managing the credit risk.

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 CHAPTER-1

INTRODUCTION

INTRODUCTION

The program consisting of 10 weeks helps a student to understand the particular entity’s
ethics, nature and type of the work they are indulged in and also helps in understanding the
performances of that entity in a broader perspective. It helps the students in learning outside
the classroom.

The study is done on the topic Credit Risk Management of HDFC Bank. The study
mainly focus on the measures to be taken by the Bank in order to reduce the risk associated
with the credit and regarding the background check that has to conducted by the bank to
know their customers credit worthiness by considering credit rating.

The study may reveal that the risk factor which the bank faces can be minimized by
considering some important factor before lending any kind of loan to its customers or any
advances.

The purpose of the internship is:

1. To enrich classroom learning through exposure to related on-the-job experiences.

2. To assist in the determination of career goals.

3. To provide experience in the field for those just entering the criminal justice field.

4. To broaden that experience and the students’ perspective on criminal justice issues for
those who have prior experience in the criminal justice field.

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 RESEARCH

DESIGN

STATEMENT OF THE PROBLEM

Credit risk continuous to be the leading source of problem in HDFC bank. The exposure to
the credit dangers massive in case of economic establishments such industrial banks, while
firms borrow cash they in flip reveal lenders to credit score risk. As a result borrowing
exposes the firm owners to the danger that firm may be unable to pay its debt and as a result
be forced to Bankruptcy Banks Should have a eager consciousness of the want to become
aware of, measure and manage credit score danger as well as to determine that they keep ok
capital against these risks and that they're competently compensated for dangers incurred..

The profits of the bank are too dependent on loans and advances which lead to both
economic and industrial growth. If the borrower fails to make the payment for the amount
borrowed by him, the credit risk for the bank increases. For most of the banks, loans and
advances are the essential source of credit risk exists through the operations of the bank.
Bank are progressively confronting credit risk in different budgetary instruments other than
advances, including acknowledgment, interbank exchanges, exchange financials, remote
trade exchanges, money related fates, swaps, securities, equities, options and in the expansion
of duty and ensures, and the settlement of transactions.

Hence, there is a need to study the reasons for the credit risk and the process to manage or
minimize the credit risk.

NEED FOR THE STUDY

There is need to understand the risk involved in the process of lending hence, the
process involved in credit risk must be undertaken to reduce the default . The analysis was on
the topic Credit Risk at HDFC bank, Dilsukhnagar branch. The study mainly concentrate on
the various process to examine credit worthiness, installment repayments and clearance of
non- performing assets and to find out the necessary measures that how the bank can
minimize the risk in lending.

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OBJECTIVES OF THE STUDY
 To find out the Credit risk management position in HDFC bank. To study the RBI norms
regarding Credit risk management.
 To handle the effect of high NPAs.
 To avail the creditworthiness criteria of customer. To make suggestions on the basis of the
analysis.3
 To study various types of loans and advances for the last 4year
 To study various credit risk management strategies adopted by the HDFC Bank. To offer
suggestions to HDFC based on the study.

SCOPE OF THE STUDY

The study throws light on the factors influencing Credit risk management of the bank
and the steps taken by the bank to minimize the Credit risk management and guidelines
issued by the Reserve Bank of India. This study is confined to HDFC Bank.

The information collected will be very useful to the bank, students and to the
customer. The project will help the bank to take steps based on the suggestions and
recommendations given at the end of the project.

RESEARCH METHODOLOGY
By considering the annual report provided by the company, Analytical Research can
be used in the study. The activity includes the examination of the data collected and critical
skills adopted for decision making. It provides an outline for the purpose the study.

Analytical Research Design is been used in the project because the study and inference
drawn on the topic is mainly based on the secondary data collected through analytical
technique in fetching the inference.

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Source of Data
Secondary Data
The reviewing of the data of relevant to the topic which is been already collected and
drawing the inference based on the information gathered.
The secondary data used in the study are:
1. Financial records of HDFC Bank.
2. Annual report of HDFC Bank.
3. Text book and journals.
4. Websites.

Sampling Design

Last four years financial statements is been considered in the study that is from 2020 to 2023

Tools and Techniques

1. Ratios.

Significance of the study

Before Indian population used to face numerous till the development in the banking
system took place. But in these days the Banks are facing the problem of default. The
borrowers are failing to repay their debt they owe to the bank and this may even lead to
increase in non-performing assets of the bank.
The main purpose of the study on credit appraisal is to reduce non-performing assets
and the default is by having a proper background study of the customer and knowing the
creditworthiness by considering the credit rating and risk which is involved in lending would
reduce.

LIMITATIONS
 The study is limited to the extent of available data.
 An in depth study cannot be done because of time constraint.
 Owing the confidentially enforced by the bank, all the data could not be obtained.
 Since the area wise Credit risk management data are not available for study, overall
concept is taken for the study

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 CHAPTER-2
CONCEPTUAL BACKGROUND AND LITERATURE REVIEW

Theoretical Background RISK

MANAGEMENT
Risk management is a tremendous management it should pick out the variety of
dangers that the corporation as a complete is uncovered to and additionally the dangers that
individual things to do are exposed to. Risk management, identify the chance and controls or
measures that can effectively mitigate each of the recognized risks.

Features of Risk

 Risk is an uncertainty of occurrence of loss and it when seen from a tremendous angle,
risk is a chance to act on and earn profits.
 Risk is no longer a peril however its likelihood. It pervades all human activities.
Need of danger management
 Risk administration in a position to manipulate the credit score risk. It introduces special
products, methods, techniques, and strategy in the bank.
 Proper danger management machine helps in forecasting losses.
Theoretical background of deposit danger management

CREDIT
The word ‘credit’, comes from the Latin word ‘credere’, which means ‘trust’, when
marketers transfer his wealth to a customer who has agreed to pay later, there is a clear
implication of two believe that the fee will be made at the two agreed date. The deposit
period and the quantity of deposit depend upon the diploma of trust. Credit is an imperative
advertising and marketing tool. It bears a cost, the cost of the seller having to borrow till the
customer’s fee arrives.

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RISK
The phrase threat is derived from an Italian phrase “Risicare” which potential to
“Dare”.
Risk is defined as uncertain ensuing in negative outcomes, unfavorable in relation to
deliberate goal or expectation. It is very challenging to discover a hazard free investment.
Risk is the risk that an match or action will adversely affect an organization’s capacity to reap
its objective and successfully execute its strategies.

There are mainly three types of risk. They are,

1. Market Risk:
It is the risk of deviation which is incompatible in nature of the market estimation of the
exchanging portfolio, because of market development, amid the period required to sell the
exchanges.

2. Operational Risk:
It is one area of risk that is confronted by all associations. More unpredictable association
more uncovered it would be operational hazard. This hazard emerges because of deviation
from arranged and typical working of the innovation, framework strategies and human
disappointment of exclusion and commission. Aftereffect of deviation from ordinary working
is reflected in the income of the association, either by the method for extra costs or by method
for loss of chance.

3. Credit Risk:
It is characterized as the potential that a bank borrower will neglect to meet its
commitment as per concurred terms.

Credit danger arise

 Lending
 Hedging settlement
 Other financial transactions like pledge, personal loan etc…

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CREDIT RISK

Credit risk is described by means of “the losses in the match of a default of the borrower or
counterparty will fail to meet its duty or in the event of a deterioration of the borrower’s
credit quality.

CREDIT RISK MANAGEMENT

Introduction
Credit chance confronted by the banks requires exclusive therapy in future. It is nothing
however possibility of default due to non- payment or delayed payment. Banks are
acquainted with the chance on non-payment in the performs period due to failure of the task
or willful default. Banks cover it partly by means of taking the guarantees from savings
Guarantee Corporation.

The main concern of present day banks is to minimize the share of non-performing advances
to complete advances therefore by enhancing efficiency by means of the management of
banks and by adopting appropriate techniques of deposit management.
Investors sift thru a company’s strategic graph to recognize how pinnacle leadership manage
company affairs especially when it comes to evaluating business partners solvency change
players may also strike a defiant tone if they consider administration is now not administering
savings danger effectively. A refrain of complaints from financial market contributors may
also arise if corporate leadership does now not control liquidity level adeptly.

Personnel Involvement
In the corporate and banking placing a number of experts recognize that the hassle of deposit
losses wishes attention. These personnel consist of portfolio managers, investment analysts
and credit reviews, financial accountants, alternate credit supervisors and corporate treasury
analysts also combine their enterprise acumen to suggest sufficient danger administration
policies.
Internal receivers and external auditors additionally pitch in credit threat administration
strategies, advising top management on methodologies fundamental to rein in inadequate
credit score extension.

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Meaning of credit score threat management

It refers to the procedure of hazard evaluation that comes in an investment; danger often
comes in investing and in the allocation of capital. The chance ought to be assessed so as to
derive a sound funding choice likewise, the evaluation of hazard is additionally fundamental
in coming up with the position to balance danger and returns.

Credit Risk Management Process:

Following process explain the steps that are taken before lending any credit.
 Appraisal of Credit
Before lending credit to any customer, the information related the soundness and
capability of that particular customer needs to be collected and it should be properly
analyzed. In any case the customer proved not to have any soundness in his incomes then
the loan can be discarded at any time.

 Sanctioning of credit:
A proper guideline for the sanction of credit needs to be maintained. Only after the
customer is proven with adequate incomes, the further procedure takes place. Customer
needs to follow the rules, regulations and guidelines related to the credit that he is
availing. Need to know the terms and conditions of the particular bank and the type of the
loan.

 Collecting the documents related to credit:

Financial institution collects the information regarding the properties or the collateral
securities against which the loan is raised. Analyses the real worth of such collateral
securities and understands the legality of those assets or properties.

 Administration of credit:
Financial Institutions must guarantee that their credit portfolio is appropriately managed
that is, advance understandings are properly arranged, reestablishment notification are
sent deliberately and records identified with credit are frequently refreshed. An
establishment may assign its credit organization capacity to an office or to assigned

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 people in credit operations, contingent upon the size and multifaceted nature of its credit
portfolio.

 Disbursement:
Loan amount can be discharged to the customers after the offer given by the bank is duly
signed and authorized by the customer and its one copy is returned to the banks or
financial institution. Loan amount, collateral securities, insurance any on such collateral
securities everything should be in favor of the institution.
 Having a control over the individual credit and monitoring it by time to time:
Continuous monitoring of the individuals loan whether the loan granted is utilised fully to
its purpose or not. The decision of granting loan is correct or wrong can be identified. If
any loss arises out of such credit, how much credit loss can be expected is to be
ascertained.

 Maintaining a credit portfolio:

The basket of the credit created should be properly maintained in order to identify the loss
making units in the portfolio. Such loss making units needs to be properly administered
and measures to recover from such losses can be identified.

 Classifying the credit:

Credit which is making high amount of profit and which is incurring losses needs to be
identified and classified for further valuation. The loss making credits amounts of loan
can be reduced in future course and the reasons for such loss are determined and certain
corrective measures are implemented. Where the profit making units need to be pulled
further with the intention of making further high profits.

 Facing the problems related to the recovery of credits:

In case the credits lent cannot be recovered, loss arises in such situation. Further the
necessary changes relating to the credit term is introduced to improve the quality of the
credit policies and strategies used to control the risk of the credit.

Importance of examining the deposit risk management

 It helps keep away from dealing with financially unstable companions and limit the risk
of dropping assets or badly impacting enterprise reputation.

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 It is related a high hazard two decision than a complete savings check supplying a unique
analysis of the business financial standing can be extra beneficial.
 It can give up to date records about the bank payment loan, leasing financial disaster
statistics about shareholders, cash go with the flow etc.
 It can assist to shield business from any financial risk and an useless hazard of dropping
your assets.

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 REVIEW OF LITERATURE

 Danjuman, Ibrahim, Kola, Ibrahim Abdullateef, Magaji, Badiya Yusuf,

Kumshe&HauwaModu (2022) explained the credit risk management and purchaser
pride. It suggests the nice relationship among credit score threat control and consumer
satisfaction and there is no want for banks control to be aware of other elements that
contributes closer to the patron delight apart from granting of credit. Bank desires to
consciousness on its credit score coverage in an effort to make greater earnings.

 Hameeda Abu, Hussain, Al Ajmi & Jasim(2012) exmined the management of danger
practices observed by using the ordinary banks and determined that the threat stages
confronted with the aid of banks are better in case of traditional banks. Hence,
nationwide, residual and agreement, operational, risks are visible to be higher if there
have to be an occasion to occur in conventional banks.

 AroraA(1197) assessed to review and examine the financial risk management machine
within the business banks. The foremost trouble that the economic banks face is that it
reveals it difficult to cope with shortcomings of the contemporary technique that's used to
analyse threat and factors which can be missing inside the contemporary hazard
management methods.

 Alfred Lehar(2005) discovered a brand new technique to measure and screen the threat
in the banking gadget that may assist the industrial banks. Standard tools and regulators
are required by means of the banks to manipulate their inner risks which might be applied
at the level of banking machine to degree the hazard of a regulators portfolio. Larger and
greater income making banks could have a decrease systematic danger simplest for banks
which can be lacked via regulatory capital necessities.

 Dr.AtulMehrotra (1999), Dean, Vishwakarma Institute of Management (forty five)

emphasizes the need for advertising and marketing of Corporate Governance in Banks in
those uncertain and unstable times. This paper noted at size Corporate Governance
associated components in Banks as additionally touches upon the requirements for
enhancing Corporate Governance in Banks as cautioned by means of using BCBS. The

12
 creator felt that regardless of the RBI’s tasks on the suggestions of the Consultative
Group of Directors of Banks/Financial Institutions underneath the Chairmanship of
Dr.A.S.Ganguly, member of the Board for Financial Supervision, there is greater ground
to be blanketed before Indian Banks are in a function to gain authentic Governance
Standards.

 Meighs & Frank E(1995)Analysed by utilizing conventional credit instruments with

regards to interest rate swaps which offers the credit officers to sufficiently deal with

another source of credit risk. End clients of financing interest rate swaps can

fundamentally decrease their credit chance by taking insurance. It acts as new instrument

to deal with the risk required in loaning credit to the clients.

 Lazarus Angbazo (1997) examined that the banks with extra unstable loans and higher
activity price danger exposure would pick out loan and savings fee in order to gain higher
internet hobby margins. Commercial bank reflects each default and activity charge danger
The net top class edges of the money center of attention is influenced just by using a
default hazard and no longer via interest rate risk. Cash center of attention is dependable
with their emphasis on quick time period belongings and off stability sheet hedging and
reeling sheet aiding instruments. Provincial managing an account corporations are subtle
just to mortgage price hazard and no longer to default chance.

 Parsley & Mark(1996) discovered that credit score and market dangers on my own
cannot explain the income volatility they revel in and against which they want to allocate
capital. Measuring operational danger will offer banks a way to charge a new and
profitable source of business. Hence financial institution wishes to concentrate more on
controlling its operational chance that allows you to growth its supply of business.
Meighs & Frank E(1995)Analysed by way of utilizing traditional credit score devices
with regards to interest rate swaps which gives the credit officers to sufficiently cope with
some other supply of credit hazard. End customers of financing hobby price swaps can
basically decrease their credit score risk by using taking insurance. It acts as new tool to
deal with the threat required in loaning credit score to the customers.

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 Ahmed, Sufi Fizan, Malik & QaisarAli(2021) assessed the credit score threat
administration and enhance execution of micro scale banks. The consequences of the
examination are demonstrating that there is a wonderful connection among the credit
score term and execution of develop. While, there is a fine connection between
accumulating approach and control of credit threat however they may be insignificantly
affecting the improvement.

 Gupta P K (1991) Reviewed that asset and legal responsibility administration has
extended to comprise into financing activity price risk, cash chance, liquidity danger and
operational risk. Modeling making use of all the hazard factors empowers traders to get
prepared for any instability. It is required for each and every bank to set their fixation
toward the credit showing which allows the broker to limit and face any possibility.

 Weber, Olaf, Fenchel, Marcus, Scholz & Roland W (2008) examined the
reconciliation of herbal risks into deposit dangers administration techniques and methods
of banks and discovering the massive contrasts in incorporating environmental dangers
between banks that are signatories of UNEP proclamation through the banks on the earth
and sustainable advancement in coordinating environmental risks and banks that had now
not consented to this arrangement so some distance may want to be found.

 Jobst, Norbert J, Zenios & Stavros A (2005) discovered that unfold hazard and hobby
rate risk are fundamental variables which might not broaden away in a sizable portfolio
putting and particularly when pinnacle notch contraptions are considered. Bank must
center of attention on limiting such risks preserving in mind the give up aim to
accomplish long run improvement in the business level.

 Sensarma, Rudra & Jaydev M (2009) determined a novel method for taking a glimpse
at banks monetary related components that is from the risk management perspective. This
assessment helps in growing outline scores of chance management capacities of banks.
As chance administration is appeared to be an crucial determinant of inventory return of
banks, financial institution ought to modify all round organized instrument to manipulate
credit score risk and push the stock comes again to every other level.

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 Ijaz & Maha (2021) found that examination in credit risk administration has extensively
moved from estimation of credit score risk to the evaluating of savings chance which is
more pivotal system for the bank. There is reliable increment in the zone of pastime fee
risk. In any case, distinct parts of the place are now not yet aware of its fullest potential.

 Waemustafa, Waeibroheem & Sukri&Sriani (2021) discovered that insecure quarter

financing regulatory capital and Contract are very essential to credit risk. For
Conventional Banks, provisions made equipment causing of loan, debt of the financial
institution to the whole assets, size, incomes administration and liquidity are the
important factors influencing savings risk.

 Freeman, Mark C, Cox, Paul R, Wright & Brain (2006) analyzed a number
fundamental and commonsense guides in which corporations can make use of deposit
subordinates to oversee hazard are exposed and the pragmatic qualities and shortcoming
of taking after such methodologies are underlined. What's more, this paper is of particular
incentive to company fortune.

 GhoshS K & Maji S G (2000) analyzed and included a threat administration primarily
based procedure evaluate into savings assessment function. It also emphasizes interest
closer to the risk and finds that threat is no longer a chance however is, instead an
opportunity to outperform the competition. And also made an rationalization of the
evolution of the credit overview function.

 Hussein A & Hassan Al Tamimi (2007) examined the level of threat management
strategies and equipment used by banks when it considers the exclusive kinds of risks
faced with the aid of banks are compared by taking seem into the questionnaire prepared
for the two units of bank. It can be concluded that commercial banks have to face greater
foreign change risk, operating threat and credit score risk. It shows that significant
relationship between the overseas and country wide banks.

 Ali Fatemi & IrajFooladi(2006) analysed the on-going practices and strategies for
managing the credit risk in the financial institution. Only few financial institution are able
to face counterparty migration risk. Minority banks use the seller based model for

15
 managing their risk. These models are utilized for managing the non-traded credit
portpolios.

 Sinan Cebenoyan& Philip E Strahan(2004) examined that how dynamic management

of financial institution credit danger exposes thru the advance deals promote it which
influences capital structure, loaning, blessings and chance. Banks that rebalance their
improve portfolio exposures by means of each buying and providing credits, banks that
usage the advance offers show off for administration functions in place of adjust their
property of advances within the financial institution. It recommends that banks that
decorate their capability to supervise well known hazard may fit for more outstanding use
and may loan extra cash to hazardous borrowers.

 Julpa Jagtaini, George Kaufman & Catharine Lemieux(2002)analysed irrespective of

whether the authorities wellness is seen by using market as it's far stretched out past.
Stores to different bank deposits or even the deposits of financial institution retaining
companies. Its final results provide verify that both bank and financial institution
conserving corporations securities are evaluated by using the auxiliary market in
connection shockingly threat for less promoted backers recommending that proposition
obliging banks to difficulty obligation may also beautify put it up for sale and valuable in
regulatory discipline.

 Prakash S, SoniG, Rathore&Singh(2010)tested the position of hazard management and

company governance as a matter of economic disaster. It examined that the banks failure
in applying well evolved hazard control ideas become a end result of hassle between
predominant and agent that is inner to the company and it breaks the corporate
governance machine which is designed to conquer the trouble among foremost and agent.

 Olaf Weber(2012) analysed the combination of environmental risks into the credit score
management. The quantitative and qualitative analyses made shows that Canadian
business banks, credit unions and export development Canada need to manipulate
environmental dangers in credit score management so that you can avoid the monetary
threat.

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 Evan Gatev, Tilschuermann & Philip E Strahan(2007) analysed the liquidity hazard
that the banks are dealing with which is attributed to transactions deposits and their
potential to spark runs. Instead of that transaction deposits assist banks to hedge liquidity
risk from loans that are not used. Banks inventory return volatility increases with the
commitments made which might be mendacity unused but most effective for the banks
with low stage of transaction deposits.

 Abul Hassan(2009) assessed the diploma to which Islamic Banks in Brunei Darussalam
uses threat control strategies and contains out the chance management practices in
managing specific type of risks. There exist risks which include forex chance, credit rate
danger and running threat. It discovered that Islamic banks are fairly efficient in dealing
with the threat.

 Jose M Pastor & Lorenzo Serrano(2006) analysed the performance and the credit risk
of the crucial banks inside the euro area using one degree parametric stochastic technique
which permits one to perceive whether or not the behaviour closer to danger of the banks
within the Euro area turned into more cautious all through the length of evaluation. The
end result indicates that the adjustment for danger is very crucial in case of earnings
efficiency but no longer in case of price performance.

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 CHAPTER -3

INDUSTRY PROFILE AND COMPANY PROFILE

INDUSTRY PROFILE

THE INDIAN BANKING SYSTEM

Scheduled banks of India

Scheduled Scheduled urban

Scheduled state
commercial co-operative bank
co-operative bank
banks

Public sector Regional Foreign Private sector

banks rural bank banks banks

State bank of New private

Nationalized Old private
India and
ban2 s bank bank
associate bank
k
3

Indian Banking system has a life of more than 200 years.It started its journey in 1786.
The drastic change in this sector took place only after the nationalization of banks in the year
1969. The policy of the government helped this industry to grow rapidly by taking into
consideration the liberalization, privatization and globalization. Liberalization policy and
economic reforms in India explored many opportunities for the banks from mere lending and
buying to other financial facilities. As a result of this banks begun to experience numerous
positive changes and successive growth. By this banks made a remarkable step in the Indian
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banking scenario. However at present, in the presence of the foreign banks, Indian
nationalized banks have a greater operation due to the size of the banks and the penetration of
their banking networks.

Origin of the word “BANK”

The word bank is derived from French word ‘BENQUE’ or the Italian word ‘BANCO’
which is referred to an office or the premises of monitory traction over the counter. In those
days banked are used to be called as desk which was the place of monitory transfer. During
the Barter system there was a trace of banking that is people use to deposit cattle and
agriculture product in specified places against the loan is raised in exchange of those. This
exists a solid proof found in the records of Mesopotamia showing some bank existence
around 1700BC and during this time barely, silver, gold, copper etc. were used as valuation
standard.

Establishment of Reserve Bank of India (1935)

The Reserve Bank of the country was found on 1st April, 1935 in consensus with the
necessities of the RBI Act, 1934. And the foundation of this central bank of the nation
concluded the quasi- central banking is the part of Imperial Bank. And the next to be
supporters to the government of the nation and in its place converted meditator of the
reserve bank for all the operation of the government business next to which central banks
was not formed.

Nature of the industry

Banks are mainly engaged in lending and accepting of deposits from the people.
Banks are also involved in safeguarding of valuables such as jewelers, documents, clears the
cheques and any of the negotiable instrument. Bank can be differentiated based on the
operations they involved in. The differences have reduced as the days passed and banks have
emerged and expanded their products and services in a wide range to their customers.

Functions of banking

Banks are mainly known by the functions they perform. The functions of bank are
classified into two categories.

1. Primary or fundamental functions.

2. Secondary or supplementary functions.
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Primary functions:

 Accepting deposits from the public.

 Lending of money or advancing of various types of loans which can be secured or
unsecured loans. The loans which are given against the collateral securities are known as
secured loans and on those loans where collateral securities are not considered for lending
are said to be unsecured loans. Unsecured loans involve huge risk.
 Banks provide safety lockers called vaults for valuables
 Acts as a intermediary in the exchange of foreign currency.
 Purchases and sells of bonds and any form of securities on behalf customers.

Secondary functions:
 The banks issue letter of credit and traveler’s cheque.
 Money transfer from one bank account to another bank account or from one branch.
 Collecting and supplying of business information
 The banks issue demand draft and pay order.
 Acts on behalf of the government or local authorities or any individual.
 Carrying on assurance and indemnity business.
 Manages to sell and get its realisation on any property or asset or any interest there on.
 Undertaking and executing of trusts.
 Granting pensions and allowances and making of payments towards pensions.
 Provides debit card, credit card, smart card and such other cards.
 Acts as attorney, correspondent and executor.

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COMPANY PROFILE

The Housing Development Finance Corporation Limited (HDFC) changed into a few of the
first to get hold of an ‘in precept’ approval from the Reserve Bank of India (RBI) to set up a
financial institution in the private area, as a part of the RBI’s liberalization of the Indian
Banking Industry in 1994. The Bank changed into incorporation in august 1994 in the name
of ‘HDFC Bank Limited’, with its registered office in Mumbai, India. HDFC Bank started
out its operation as a Scheduled Commercial Bank in January 1995.

HDFC Bank’s goal is to build sound customer franchises throughout distinct enterprise a
good way to be the desired issuer of banking offerings for goal retail and wholesale customer
segments and to gain healthful growth in profitability, regular with the financial institution’s
threat urge for food. I devoted to maintain the very best stage of ethical requirements,
professional integrity, corporate governance and regulatory compliance. HDFC Bank’s
commercial enterprise philosophy is primarily based on 5 middle values: Operational
Excellence, Customer Focus, Product Leadership, Sustainability and people.

PROMOTORES , VISION, MISSION AND QUALITY POLICY

 PROMOTORES
HDFC Bank became founded inside the year 1977 because the first specialised loan
business enterprise in India. HDFC turned into promoted by way of the Industrial Credit
and Investment Corporation of India. Mr.Hasmukhbhai Parekh performed a key role
within the basis of this organization

 VISION

“To build a World-Class Indian Bank”

By offering a wide variety of relevant product and service:

 Modified solution for customers

 Ensure unrivaled customer service
 Providing the right solution at the right price
 To provide a wide and extensive reach

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 MISSION

Use Enabling technology to offer valued products and provider to customers. The
objective is to build sound purchaser franchises across wonderful business a good way to be
the preferred company of banking offerings for target retail and wholesale customer segments
and to obtain healthful growth in profitability, regular with the bank’s danger urge for food.
The financial institution is committed to maintain the very best degree of ethical
requirements, professional integrity, company governance and regulatory compliance.

 QUALITY POLICY

HDFC Bank shall constantly try to innovate and supply overall financial solutions to meet
customers beyond their expectancies in their domestic and life-style needs. This might be
pushed by means of; Caring customer support, expecting requirements and handing over
proactive answers.

PRODUCT AND SERVICE PROFILE:

 Accounts And Deposit:

In today's world, it has become a necessity for every individual to have an extra cash
account. HDFC Bank offers various types of savings accounts with interest rate 4% which
is calculated daily on the end of day balance. The various types of savings account
schemes are as follows:

The main operations of the bank (customer service)

 Deposit Products:
22
 1. Savings for individual and non-trading organization/ institution.
2. Current accounts for business operations-traders, business man, corporate bodies.
3. Fixed deposit which is a secured way to earn high rate of return for individuals and
institutions.
4. Can flexi deposit which is a combination of savings and fixed deposit return instant
liquidity.
5. Recurring deposit scheme which inculcates saving, rewarding & recurring habits.
6. Floating rate deposit scheme which provides insurance against interest fluctuations.
7. Saving Suraksha is a group insurance scheme for its deposits clients.

LOAN:
HDFC Bank offers a number of styles of loans at minimal interest charges for all of the needs
of the individual. The specific varieties of loans on hand are:

 PERSONAL LOAN: This loan may be used for assembly any personal or commercial
enterprise-associated necessities.
 CAR LOANS: These loans furnish the crucial finance to shop for your very own car.
 TWO-WHEELER LOANS: those loans are supposed for buying two-wheelers.
 BUSINESS LOANS: the loan that is used for assembly any kind of enterprise related
fee is referred to as a enterprise loan.
 HOME LOAN: a very well-known mortgage, domestic loans are sanctioned in order
that human beings can buy or assemble a home for residential use.
 LOAN AGAINST ASSETS: that is a secured mortgage that's granted towards the safety
of assets like deposits, insurance plan coverage, saving certificates, and so forth.
 EDUCATIONAL LOANS: training loans are used for investment graduate or put up-
graduate education.
 GOLD LOAN: Loan granted in opposition to the fee of gold adorns and jewelry that's
secured for the loan is known as a gold mortgage.
Commercial Credit Cards

As stated earlier, HDFC Bank additionally offers especially designed industrial credit score
playing cards which cater especially to business-related requirements. The cards provided by
means of the bank include the following:
 Business Platinum Card: - a top rate enterprise savings card, this card offers different
lounge access, 1% money back on retail as properly as international spends, becoming a
member of and renewal charge reversal through spending a particular amount on the
23
 card and international acceptability.
 Business Money Back Credit Card: this savings card permits companies cash backs
through redemption of reward points earned on transactions executed using the card.
Other benefits include gas surcharge waiver, zero lost card liability and annual rate
reversal via exact transactions.

 Business Regalia Credit Card: this card is a first-rate top rate deposit card for businesses
which promise one-of-a-kind privileges and rewards. Benefits include up to 15% discount
on lifestyle spends, expert global concierge service, reward points on every transaction, a
complimentary Priority Pass Membership which gives free lounge get entry to across all
important international and domestic airports, charge Silver membership to Club Vistara,
a overseas currency mark-up of only 2% on global transactions, etc.

Infrastructure facilities.

The HDFC Bank, Dilsukhnagar Branch is outfitted with 24 hours CCTV Camera. The
department has acquired all the primary needs which are required to carry out the banking
activities. Core banking facility is been adopted in the bank branch.

Below cited are some of the offerings rendered with the aid of the bank:

 Multicity payable at par cheque facility.

 Anywhere banking facility
 Trade services.
 Phone banking facilities.
 Online tax account system
 Internet banking,
 Fund transfer
 Credit cards or any different sorts of loan.
 Debit or ATM cards.
 Mobile banking.
 RTGS or NEFT transfers.
 Locker facility.

24
COMPETITORS INFORMATION

 IDBI Bank.
 Oriental Bank.
 Canara Bank.
 Bank of India.
 Union Bank of India.
 Syndicate Bank.
 Apex Bank.
 Andhra Bank.
 Induslnd Bank.
 ICICI Bank
 Federal Bank
 Dhanalakshmi Bank
 Jummu &Kashmir Bank
 City Union Bank

25
SWOT ANALYSIS
The framework deposit goes to Albert Humphrey, tested the techniques in Sixties and
Seventies at Stanford Research Institute (SRI).

SWOT evaluation (Strengths, weakness, opportunities and threads analysis) is a framework

for identifying and analysing the variability of a projects, product, region or people of an
organisation. The evaluation has been adopted through all company of all type as an resource
to making decision.

STRENGTHS
 HDFC bank is the 2nd biggest private banking area in India having 2,201 branches and
seven, hundred and ten ATM’s
 HDFC financial group is placed in 1,174 cities in India and has greater than 800 places to
serve customers thru Telephone banking
 The bank’s ATM card is nicely suited with all home and worldwide Visa/Master card,
Visa Electron/ Maestro, Plus/cirus and American Express. This is one motive for HDFC
playing playing cards to be the most preferred card for buying and on line transactions
 HDFC bank has the immoderate diploma of consumer pleasure whilst compared to
different non-public banks.
 The attrition fee in HDFC is low and it's miles one of the excellent places to work in
non- public banking zone.
 HDFC has lots of awards and popularity, it has acquired ‘Best Bank’ award from a
number economic ranking institutions like Dun and Bradstreet, Financial explicit, Euro
money awards for excellence, Finance Asia U. S. Awards and many others.
 HDFC has properly financial advisors in phrases of guiding clients inside the path of
right investments

26
WEAKNESS:

 HDFC financial organization doesn’t have robust presence in Rural areas, the region as
ICICI economic organization its direct competitor is increasing in rural market.
 HDFC can't revel in first mover advantage in rural regions. Rural people are hard middle
loyals in terms of banking services.
 HDFC lacks in aggressive marketing strategies like ICICI.
 Some of the financial institution’s product lessons lack in performance and doesn’t have
obtain within the marketplace.
 The proportion costs of HDFC are often fluctuating and hence, inflicting uncertainty for
the traders

OPPORTHUNITIES:

 HDFC financial group has better asset outstanding parameters over authorities banks.
Hence, the earnings boom is probably to increase.
 The corporations in big and SME are growing at very brief pace. HDFC has remarkable
popularity in phrases of maintaining enterprise earnings accounts.
 HDFC financial institution has increased it’s lousy money owed portfolio and the
restoration of horrific debts are excessive while compared to government banks.
 HDFC has very specific opportunities in abroad.
 Greater scope for acquisitions and strategic alliances due to sturdy monetary role

THREATS:

 HDFC’s nonperforming property (NPA) extended from zero.18 percent to zero.20%.

Though it's miles a moderate variant it’s now not a correct signal for the economic health
of the bank.
 The non-banking economic corporations and new age banks are growing in India.
 The HDFC is no longer capable to increase its market percentage as ICICI imposes
predominant risk.
 The authorities banks are looking to modernize to compete with non-public banks.
 RBI has opened up to seventy four% for overseas banks to invest in Indian marketplace.

27
Hdfc bank stock value as on 15/03/2024

28
Financials

29
 The Board
HDFC Bank's Board of Directors are distinguished professionals with a wealth of experience in
public policy, administration, housing finance, healthcare, regulation, finance, law and banking.
The Board provides oversight on management’s performance and are committed to continue to
build on the organisation's strong corporate governance practices.

Mr. Sandeep Parekh

Independent Director
Mr. Atanu Chakraborty
Chairman

Dr. (Mrs.) Sunita Maheshwari

Independent Director
Mr. Keki M. Mistry
Non-Executive Director

Mrs. Lily Vadera

Independent Director
Mr. MD Ranganath
Independent Director

30
Mrs. Renu Sud Karnad Mr. Bhavesh Zaveri
Non-Executive Director Executive Director

Dr. (Mr.) Harsh Kumar Bhanwala Mr. V. Srinivasa Rangan

Independent Director Executive Director

Mr. Sashidhar Jagdishan

MD and CEO

Mr. Kaizad M Bharucha

Deputy Managing Director

31
Awards and rewards

 HDFC Bank adjudged 'Best Private Bank in India' at the Global Private Banking Awards
2021

 HDFC Bank adjudged Best for wealth transfer - succession planning in India 2021 by
Asiamoney Asia Private Banking Awards 2021

 HDFC Bank named ‘Best Bank in India’ at Euromoney Awards 2021

 HDFC Bank ranks No. 1 in Mass Affluent category at Euromoney Private Banking and
Wealth Management Survey 2021

 HDFC Bank has been adjudged ‘India’s Best Bank’ by Euromoney Awards for
Excellence 2020.

 HDFC Bank named India’s Best Domestic Bank by Asiamoney

 HDFC Bank has been adjudged Private Sector Bank of the Year at the 18 th Outlook
Money Awards 2019.

 HDFC Bank has been adjudged ‘India’s Best Bank’ by Euromoney Awards for
Excellence 2019.

 HDFC Bank has been featured in the latest edition of BrandZ Top 100 Most Valuable
Global Brands 2019 for the 5th consecutive year

 HDFC Bank has been adjudged ‘Best Private Bank in India’ at The Banker Global
Private Banking Awards 2018.

 HDFC Bank has been ranked no. 1 bank in India in the Forbes’ World’s Best Banks
report

 HDFC Bank ranks No. 1 in Asset Management category at Euromoney Private Banking
and Wealth Management Survey 2019

 Euromoney Survey 2018 - Best Private Banking services for Super Affluent Clients

 Best Bank For Financial Inclusion - UTI Mutual fund CNBC TV 18 Financial Advisory
Awards 2017

 UTI MF & CNBC- TV18 Financial Advisory Awards - Best Performing Bank – Private
2018-19
 *Our Bank has won this honour 7 times in the past 10 years since the inception of this
award in 2009.

 Euromoney Trade Finance Survey 2019 - Best Service ( Asian Banks only) – India &
Market Leader ( Asian Banks only) - India

 The Banker - Bank of the year TB 2018 - The Banker - Bank of the year award - Best
Private Bank in India 2018

 Euromoney Private Banking and Wealth Management Survey 2018* - Ranked No. 1 in
Super Affluent Clients (US$ 1 million to US$ 5 million)*
 HDFC Bank has been awarded by Euromoney 10 times in the last 11 years
FINANCIAL STATEMENTS

BALANCE SHEET AS ON 31 MARCH 2023 (Amt. in Rs.)

CAPITAL AND LIABILITIES 2023 2022 2021 2020

Capital 5,125,091 5,056,373 5012991 4798101
Reserves and surplus 889,498,416 721,721,274 615081174 429988169
Deposits 6,436,396,563 5,464,241,920 4507956425 3673374777
Borrowings 740,288,666 849,689,823 425135582 394389918
Other liabilities and provisions 567,093,181 367,251,338 324844559 413444042
Total 8,638,401,917 7,407,960,728 5905030731 4915995007
ASSETS
Cash and balances with RBI 378,968,755 300,583,087 275104536 253456277
Balances with banks and call money 110,552,196 88,605,293 88209982 142380101
and short notice
Investments 2,144,633,366 1,958,362,768 1664599477 1209510703
Advances 5,545,682,021 4,645,939,589 3654950477 3030002712
Fixed assets 36,267,379 33,431,573 31217343 29399180
Other assets 422,298,200 381,038,418 190949081 251246034
Total 8,638,401,917 7,407,960,728 5905030731 4915995007
Contingent liabilities 8,178,695,893 8,533,181,145 9752339539 7231549138

Bills for collection 308,480,352 234,899,997 223049263 209430623

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2023
(Amt. in Rs.)
I INCOME 2023 2022 2021 2020
Interest earned 693,059,578 602,214,451 484699044 411355336
Other income 122,964,990 107,517,233 89963521 79196415
Total 816,024,568 709,731,684 574662565 490551751
II EXPENDITURE
Interest expended 361,667,334 326,299,330 26742352 226528999
Operating expenses 197,033,442 169,797,000 139875416 120421981
Provisions and contingencies 111,827,380 90,673,223 17885608 58817010
Total 670,528,156 586,769,553 472503376 405767990
III PROFIT
Net profit for the year 145,496,412 122,962,131 102159189 84783761
IV APPROPRIATIONS
Transfer to Statutory Reserve 36,374,103 30,740,533 25539798 21195941
Proposed dividend _ 24,017,772 20051963 16433495

Tax on dividend - 4,889,453 4082107 2792873

Dividend (including tax / cess (16,909) (117,135) 8411 48462
thereon) pertaining to previous year
paid during the year, net of dividend
tax credits
Transfer to General Reserve 14,549,641 12,296,213 10215919 8478376
Transfer to Capital Reserve 3,134,100 2,221,532 2249166 582710
Transfer to / (from) Investment 42,934 (85,184) 275413 32218
Reserve Account
Balance carried over to Balance 326,689,434 235,276,891 186277944 146541532
Sheet
Total 380,773,303 309,240,075 248700721 196105607
 CHAPTER -4

DATA ANALYSIS AND INTERPRETATION

 Trend Analysis of Total Deposits

Table 4.1. Details of total deposits of HDFC Bank

(Amt. in Rs.)

Year Deposits Percentage (%)

2019-20 3673374777 100

2020-21 4507956425 122.72

2021-22 5,464,241,920 148.75

2022-23 6,436,396,563 175.22

(Source: financial statement)

Graph 4.1: showing the growth in percentage with respect to HDFC Bank

(Source: Table 4.1)

Analysis and interpretation:

The deposits of HDFC Bank has been increased significantly from 2020-21 is been
understood from the above graph.
Rs. 3673374777 was the deposit in the base year and has been increased to Rs.6436396563 in
the year 2023. The increase in the ratio of deposits shows the trust of the people towards the
bank.

 Trend Analysis of Growing Deposits

Table 2: showing growing deposits in the HDFC Bank from 2019-23
(Amt. in Rs.)
Year Deposits

2019-20 3,673,374,777

2020-21 4,507,956,425

2021-22 5,464,241,920

2022-23 6,436,396,563

(Source: financial statement)

Graph 2: showing growing deposits in the HDFC Bank from 2019-23

(Source: Table 4.2)

Findings and interpretation:

The increase in the deposits in the above diagram suggests that the financial institution is
having the high-quality sign in its operation. The trust among the human beings involving the
financial institution has been multiplied has there is a make bigger in the deposits. Deposits
are the legal responsibility that a financial institution owes to its customers which must be
repaid after certain length of time or on a demand.
 Trend Analysis of Investment Position
Table 4.3: The investment position of HDFC Bank from 2019-23
(Amt. in Rs.)

Year Reserve Fund Percentage

2019-20 429988169 100

2020-21 615081174 143.05

2021-22 721721274 167.85

2022-23 888498416 206.87

(Source: financial statement)

(Source: Table 4.3)

Graph 4.3: Showing position of reserve funds of HDFC Bank from 2019-23

FINDING AND INTERPRETATION:

The above format shows there is a steadily make bigger in reserve fund in HDFC Bank from
2020 to 2023. While calculating the ratio 2020 is been regarded as the base 12 months and
the calculations are performed. In the base year the share is a hundred which has been
accelerated to 143.05 in the yr 2021 and there is a in addition multiplied to 167.85 in the year
2022 and continued to amplify to 206.87 in the year 2023.
 Credit to Deposit Ratio:
Total cash lent to the patron by using the bank to the whole money acquired by way of the
financial institution in the shape of deposit. The loans lent by HDFC Bank and the savings
obtained by means of the financial institution is considered

𝒍𝒐𝒂𝒏𝒔
𝒄𝒓𝒆𝒅𝒊𝒕 𝒕𝒐 𝒅𝒆𝒑𝒐𝒔𝒊𝒕 𝒓𝒂𝒕𝒊𝒐 = ∗ 𝟏𝟎𝟎
𝒅𝒆𝒑𝒐𝒔𝒊𝒕𝒔
Table 4.4: Table showing the credit to deposit Ratio of HDFC Bank from 2019-23

(Amt. in Rs.)

credit to deposit
Year loans Deposits ratio
2019-20 807,833,960 3,673,374,777
21.99
2020-21 749,980,141 4,507,956,425
16.64
2021-22 5,464,241,920
1,216,941,161 22.27
2022-23 6,436,396,563
1,307,381,847 20.31
(Source: financial statement)
Graph 4.4: Graph showing the credit to deposit Ratio of HDFC Bank from 2019-23
(Source: Table 4.4)

Analysis and interpretation:

The base year credit to deposit ratio used to be 21.99 which reduced to 16.64 in 2021 and in
the 12 months 2022 used to be again multiplied to 22.27 and there was a decreased to 20.31.
According to the evaluation made from the above is a decrease in the credit to credit score
ratio of the HDFC Bank.
Investment to Deposit ratio:
The investment made by the bank is compared with the deposits made by using the customers
in the financial institution is compared to get funding to deposit ratio.

𝒊𝒏𝒗𝒔𝒕𝒎𝒆𝒏𝒕
𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕 𝒕𝒐 𝑫𝒆𝒑𝒐𝒔𝒊𝒕 𝑹𝒂𝒕𝒊𝒐 = ∗ 𝟏𝟎𝟎
𝒅𝒆𝒑𝒐𝒔𝒊𝒕

Table 4.5: Table showing the investment to deposit Ratio of HDFC Bank from 2019-23

(Amt. in Rs.)

Year investment to deposit

Investment Deposits ratio

2019-20 1209510703 3,673,374,777

32.93

2020-21 1664599477 4,507,956,425

36.93

2021-22 1,958,362,768 5,464,241,920

35.84

2022-23 2,144,633,366 6,436,396,563

33.32
(Source: financial statement)

Graph 4.5: Graph showing the investment to deposit Ratio of HDFC Bank
 (Source: Table 4.5)

Findings and interpretation:

In the above pill the investment made by means of the HDFC Bank is in contrast deposits
made by way of the clients in the bank to locate the funding to credit score ratio. Investment
to savings ratio in the base yr that is in the yr 2020 was once 32.93% which used to be
improved to 36.93% in the subsequent year. Then in the year 2022 the ratio slightly
decreased to 35.84% and persisted to reduce in the 12 months 2023 to 33.32%. the above
evaluation concludes that there is a limit in the funding to savings ratio from 2013 to 2023.
 LOANS AND ADVANCECS

Table 4.6 showing the details of loans and advances of HDFC Bank from 2019-23

(Amt. in Rs.)

Year Advances Percentage

100
2019-20 3030002712

120.63
2020-21 3654950477

2021-22 4,645,939,589 153.33

2022-23 5,545,682,021 183.03

(Source: financial statement)

 Graph 4.6: showing the position of loan and advances of HDFC Bank from 2019-23

(Source: Table 4.6)

Findings and Interpretation:

From the above evaluation we can decide that the advances lent through the bank have been
growing progressively over the years. Here 2020 is considered to be the base year and there is
a make bigger in the advances from 2020 to 2022 with the aid of a hundred percent to
183.03%. The advances that are lent by using the financial institution are the assets of the
bank
Current ratio

𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐚𝐬𝐬𝐞𝐭𝐬
𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐫𝐚𝐭𝐢𝐨 =
𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬

Table 4.7: Table showing the current ratio of HDFC Bank from 2019-23

(Amt. in Rs.)

year current assets current liabilities current ratio

2019-20 2634154317 413444042 6.37

2020-21 2347551148 324844559 7.23

2021-22 2027913995 367,251,338 5.52

2022-23 1605347081 567,093,181 2.83

(Source: financial statement)4

Graph 4.7: Graph showing the current ratio of HDFC Bank

(Source: Table 4.7)

Finding and Interpretation:

From the above we can evaluate that the liquidity position is good. The standard current ratio
is 1:1. The bank has the fluctuating current ratio which is greater the standard ratio. The
current ratio is 6.37 in the year 2019-20 which is been increased to 7.23 in the year 2020-21
but in the year 2021-22 the ratio is decreased to 5.52 and to 2.83 in the year 2022-23.

 Borrowings
Table 4.8: Table showing the position of borrowings of HDFC Bank from 2019-23

(Amt. in Rs.)

Year Barrowings
Percentage

2019-20 394,389,918 100

2020-21 425,135,582 107.80

2021-22 849,689,823 215.44

2022-23 740,288,666 187.70

(Source: financial statement)
 Graph 4.8: Graph showing the position of borrowings of HDFC Bank from 2019-23

(Source: Table 4.8)

Finding and Interpretation:

The borrowings of the HDFC bank is compared where year 2019-20 is considered to be the
base year and percent is 100 and in the year i.e. in the 2020-21 is been increased to 107.80and
further increased to 215.44 in the year 2021-22 but in the year 2022-23 there is a slightly
decreased in previous year i.e. to 187.70.
 Share Capital

Table 4.9: Table showing the percentage of share capital of HDFC Bank from 2019-23

(Amt. in Rs.)

year share capital Percentage

2019-20
4798101 100
2020-21
5012991 104.48
2021-22
5,056,373 105.38
2022-23
5,125,091 101.36
(Source: financial statement)

Graph4.9: Graph showing the percentage of share capital of HDFC Bank from 2020-21

(Source: Table 4.9)

Finding and Interpretation:
When the share capital of the HDFC bank is compared there is a consistency in the share
capital invested by the share holders. In the year 2019-20 the share capital is considered to be
100 then in the year 2020-21 the capital is increased to104.48 and in the year 2021-22 to
105.39 and in the year share capital was reduced to 101.36.

 Current Assets

Table 4.10: Table showing the percentage of current assets of HDFC Bank from 2019-23
(Amt. in Rs.)

Year
current assets percentage

2019-20 1605347081 100

2020-21 2027913995 126.32

2021-22 2347551148 146.23

2022-23 2634154317 164.09

(Source: financial statement)

 Graph 4.10: Graph showing the percentage of current assets of HDFC Bank from 2019-23

(Source: Table 4.10)

Finding and Interpretation:

The current assets of the bank considered by considering the year 2019-20 as the base year.
There is continuity in the increase of current assets of the bank. The banks current assets in
the year 2019-20 was 100 and in 2020-21 was increased to 126.32 further in the year 2021-22
was increased to 146.23 then in year 2022-23 was 164.09.
 current liabilities

Table 4.11: Table showing the percentage of current liabilities of HDFC Bank from 2019-23

(Amt. in Rs.)

Year
Current liabilities percentage
413,444,042 100
2019-20
324,844,559
2020-21 78.57
367,251,338
2021-22 88.83
567,093,181
2022-23 137.16
(Source: financial statement)

Graph 4.11: Graph showing the percentage of current liabilities of HDFC Bank from 2019-23

(Source: Table 4.11)

Finding and Interpretation:

There is a fluctuation in the current liabilities of the bank. The comparison is made by
considering 2019-20 as the base year. There is a decrease in the current liabilities for two
year that is in the year 2020-21 and 2021-22 but it was increased gradually in 2022-23 to
137.16.

 Sub Standard Assets Ratio

𝑺𝒖𝒃 𝒔𝒕𝒂𝒏𝒅𝒂𝒓𝒅 𝑹𝒂𝒕𝒊𝒐

𝑺𝒖𝒃 𝑺𝒕𝒂𝒏𝒅𝒂𝒓𝒅 𝑨𝒔𝒔𝒆𝒕𝒔 𝑹𝒂𝒕𝒊𝒐 = ∗ 𝟏𝟎𝟎
𝑮𝒓𝒐𝒔𝒔 𝑵𝑷𝑨

Table 4.12: Table showing the Ratio of Sub Standard Assets of HDFC Bank from 2019-23

(Amt. in Rs.)

Year Sub-Standard
Assets Gross NPA Ratio

79.803
2019-20 25389347.18 31815028.48

84.898
2020-21 32581288.48 38376980.00

86.037
2021-22 41970883.96 48782365.68

80.97
2022-23 47148556.69 58229661.22
(Source: financial statement)
 Graph 4.12: Graph showing the Ratio of Sub Standard Assets of HDFC Bank from 2019-23

(Source: table 4.12)

Analysis and Interpretation:

The Sub-standard assets ratio of HDFC bank was 79.80% in the year 2020 which was
increased to 84.89% in 2021 and further increased in 2022 and in the year 2023 showing the
decreasing trend i.e., 80.97. Hence, it indicates the negative sign for the bank demonstrating
a reduced amount of recovery of the Sub-standard as compared to that of last year.
 Doubtful Assets Ratio:

𝐓𝐨𝐭𝐚𝐥 𝐃𝐨𝐮𝐛𝐭𝐟𝐮𝐥 𝐀𝐬𝐬𝐞𝐭𝐬

𝐃𝐨𝐮𝐛𝐭𝐟𝐮𝐥 𝐀𝐬𝐬𝐞𝐭𝐬 𝐑𝐚𝐭𝐢𝐨 = ∗ 𝟏𝟎𝟎
𝐆𝐫𝐨𝐬𝐬 𝐍𝐏𝐀

Table 4.13: Table showing the Ratio of Doubtful Assets of HDFC Bank from 2019-23

(Amt. in Rs.)

Year Total Doubtful Assets Gross NPA Doubtful

Assets Ratio

6425681.30 20.20
2019-20 31815028.48

5795691.52 15.10
2020-21 38376980.00

6811481.72 13.96
2021-22 48782365.68

11081104.53 19.03

2022-23 58229661.22
(Source: financial statement)
 Graph 4.13: Graph showing the Ratio of Doubtful Assets of HDFC Bank from 2019-20 to
2022-23

(Source: table 4.13)

Analysis and Interpretation:

The doubtful Assets Ratio in the year 2020 was 20.19%, in the year 2021 it was reduced to
15.10% and continued with the same trend in the 2022 and in 2023 it was increased to
23.92%, which depicts that the recovery technique of the bank is not up to the mark. And
bank is under increased credit risk which is not a positive remark for the bank. Bank needs to
focus more on the credit risk mechanism.
 Chapter-5
SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUTION

Summary of findings

This study is carried out with the objective of analyzing the credit risk management of HCFC
bank to examine and understand the roll of finance is the growth of the company. This
chapter attempts to highlight the findings of the study.

 I come to know the importance of different management functions such as planning,

organizing, staffing, directing and controlling with guides the organization in facing staff
competitions from competitors.

 I learnt importance of leadership traits which guide in achieving personal as well as

organizational goals

 It helps me to understand that individual should be dynamic in the corporate sector which
help in career planning and development

 From the data analyzed balance sheet shows that fixed asset have been increased
marginally.

 The balance sheet shows that borrowing is fluctuating year by year.

Suggestions:
 Banks have to listen on diversifying its money in order to make ideal utilization of funds.
 Risk assessment of the purchaser should be made by using the banks before sanctioning
loan to them.
 The bank want to adopt the modernized of banking activities.
 Bankers have to go through the past credit history of the purchaser whilst sanctioning
loan.
 They should also think about the current earnings and property of the borrower.
 They need to examine the financial performance of the purchaser thoroughly.
 Proper coaching need to be given to the banking staff.
 Credit rating of the business enterprise or the clients should be up to date periodically.
 Banks observe the credit score management policies in order to avoid credit score risk.
 The performance and reviews have to be generally reviewed in order to notice errors.
Conclusion

Credit Risk management starts with the procedure and comes to an end by using repaying the
debt quantity in conjunction with hobby. For coping with the danger, banks wishes to
concentrate on credit score scoring and credit score components which improves technique of
credit lending and additionally facilitates in identifying the credit score worthiness of the
Bank. Bankers need to consciousness on the person credit worthiness earlier than lending
loans to the character with the intention to reduce the hazard and loss.
 BIBLIOGRAPHY

 Ahmed, S. F. (2021). collateral loan quality and bank risk . The RMA Journal , 101(12)
p-18.
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management , 32-45.

 Bank Specific And Macroecomonics Dynamic Determinants of Credit Risk In Islasmic

Banks And convertional Banks. (2021). International Journal of Economics and
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Modu. (2022). credit risk management. American journal of business finance , 25-30.

 Dr.AtulMehrotra. (1999). corporate governance in banks. journal of economics and

international finance , 45-52.

 Fooladi, A. F. (2006). Credit Risk Management :A Survery of practise. Journal of

Managerial Financial , 56-64.

 Freeman, M. C. (2006). linking Credit Culture and risk Management Strategy. journal of
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 Hameeda Abu, Hussain, Al Ajmi And Jasim. (2012). Tecria journal of management
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Management. journal of Business & economic Statistics , 465-474.

 K, G. P. (1991). Asset Liability Management . jouranl of united states Bankers , 21-24.

 Koteshwar, R. A. (2005). credit Risk Management in banks . journal of the Banker , 25-
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 Maha, I. &. (2021). Credit Risk Management . Journals Of Banking & Finance , 721-
742.

 Mumbai, B. c. (1972). nationalisation of banks. internanational jounal of economics and

financial issue , 27-33.
 Parsley And Mark. (1996). research on credit score and market denger. journal on
united states Bank , 65-79.

 Rangarajan, M. (1998). Indian Banking System. silver jubilee memorial lecture , 30-43.

 S.K.Bagchi. (2003). issue on operational hazad. American standred journal , 56-63.

 Sensarma, R. &. (2009). financial integration and the incorporating sustainability criteria
into Volume of credit sanction. journal of risk , 92-119.

 Tamimi, H. A. (2007). Risk Management :An emparical Analysis of the UAE

Commercial Banks. Journal Of Finance India , 45-57.

 V.Subbulaxmi and ReshmaAbraham. (2009). credit apprisal policy. The Accounting

world , 25-30.

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 ANNEXURE:

BALANCE SHEET AS ON 31 MARCH 2023

CAPITAL AND LIABILITIES 2023 2022 2021 2020

Capital 5,125,091 5,056,373 5012991 4798101

Reserves and surplus 889,498,416 721,721,274 615081174 429988169

Deposits 6,436,396,563 5,464,241,920 4507956425 3673374777

Borrowings 740,288,666 849,689,823 425135582 394389918

Other liabilities and provisions 567,093,181 367,251,338 324844559 413444042

Total 8,638,401,917 7,407,960,728 5905030731 4915995007

ASSETS

Cash and balances with Reserve 378,968,755 300,583,087 275104536 253456277

Bank of India

Balances with banks and money at 110,552,196 88,605,293 88209982 142380101

call and short notice

Investments 2,144,633,366 1,958,362,768 1664599477 1209510703

Advances 5,545,682,021 4,645,939,589 3654950477 3030002712

Fixed assets 36,267,379 33,431,573 31217343 29399180

Other assets 422,298,200 381,038,418 190949081 251246034

Total 8,638,401,917 7,407,960,728 5905030731 4915995007

Contingent liabilities 8,178,695,893 8,533,181,145 9752339539 7231549138

Bills for collection 308,480,352 234,899,997 223049263 209430623

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2023

I INCOME 2023 2022 2021 2020

Interest earned 693,059,578 602,214,451 484699044 411355336

Other income 122,964,990 107,517,233 89963521 79196415

Total 816,024,568 709,731,684 574662565 490551751

II EXPENDITURE

Interest expended 361,667,334 326,299,330 26742352 226528999

Operating expenses 197,033,442 169,797,000 139875416 120421981

Provisions and contingencies 111,827,380 90,673,223 17885608 58817010

Total 670,528,156 586,769,553 472503376 405767990

III PROFIT

Net profit for the year 145,496,412 122,962,131 102159189 84783761

IV APPROPRIATIONS

Transfer to Statutory Reserve 36,374,103 30,740,533 25539798 21195941

Proposed dividend _ 24,017,772 20051963 16433495

Tax on dividend - 4,889,453 4082107 2792873

Dividend (including tax / cess (16,909) (117,135) 8411 48462

thereon) pertaining to previous year
paid during the year, net of dividend
tax credits

Transfer to General Reserve 14,549,641 12,296,213 10215919 8478376

Transfer to Capital Reserve 3,134,100 2,221,532 2249166 582710

Transfer to / (from) Investment 42,934 (85,184) 275413 32218

Reserve Account

Balance carried over to Balance 326,689,434 235,276,891 186277944 146541532

Sheet

Total 380,773,303 309,240,075 248700721 196105607

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