Gold Loans of HDFC Bank

TABLE OF CONTENT
PARTICULARS Page No.

Chapter 1: Introduction of the Topic
1.1 Rationale of the Study
1.2 Introduction to the Industry
1.3 Introduction of the Company
1.4 Justification of the topic
Chapter 2: Review of Literature
2.1 National Reviews
2.2 International reviews
Chapter 3: Research methodology
3.1 Objectives of the Study
3.2 Research Hypothesis
3.3 Scope of the study
3.4 Data collection method
3.5 Sample design

3.6 Types of research
3.7 Limitations of the Study
Chapter 4: Data Representation and Analysis
4.1 Data Representation and Interpretation
4.2 Hypothesis Testing
Chapter 5: Results and Discussions

5.1 Major Findings
5.2 Discussions and Suggestions
5.3 Conclusion
Bibliography
Annexure
Chapter-1
INTRODUCTION OF THE TOPIC

1.1 RATIONALE OF THE STUDY
Among the entire asset class, gold is one of the most valuable commodities. Gold has
sentimental and social importance in India. It has been used as a collateral asset for
borrowing money since ancient times. Previously, the gold loan industry was dominated
by unorganized players. The structured gold loan company is now one of the fastest-
growing lending segments Private banks, which offer a wide range of financial goods and
services, are essential in the dynamic terrain of the modern banking business for
influencing economic growth. Among these options, loan schemes stand out as a crucial
tool that fills the gap between a person's or a business's financial demands and the
resources that are available. The expansion of loan programs within private banks has
drawn a lot of attention because of the possible effects it could have on the banking
industry as well as the overall economy. The purpose of this study is to offer a thorough
analytical investigation of the variables influencing the expansion of loan programs in
private banks, as well as their effects and the tactics used to promote this growth.
Private banks, which are essential to the modern financial environment, have a significant
impact on economic growth thanks to their wide range of financial services and products.
The expansion of loan programs among these options is a key factor in bridging the gap
between business and individual financial needs and capital availability. Due to the
possible effects on the banking industry as well as the overall economy, the expanding
use of lending programs by private banks has attracted a lot of attention. This paper
conducts a thorough analytical investigation of the factors driving the growth of loan
programs within private banks, their ramifications, and the strategic approaches used to
foster this supremacy.
Loan programs are crucial in today's banking environment for promoting financial
inclusion and accelerating economic growth. In this study, one of India's top financial
organizations, HDFC Bank, explores the dynamic world of loan program growth.
Through its wide selection of lending products, strong customer base, and strategic
market positioning, HDFC Bank has carved out a unique character. This study sheds light
on the tactics and methods sustaining HDFC Bank's sustained growth by exploring the
elements that have contributed to the achievement and growth of its loan portfolio.
Banks play a critical role in directing money for a variety of uses, from personal
aspirations to business endeavors, in an economic climate that is continually changing. At
the heart of this function are loan programs, which serve as accelerators for both personal
and societal development. With its wide-ranging reach and large array of loan options,
HDFC Bank has experienced substantial growth in recent years. It is crucial for the
banking sector, as well as policymakers, analysts, and potential borrowers, to
comprehend the dynamics underlying this rise. Numerous goods and services are offered
by HDFC Bank, such as wholesale and retail banking, treasury, vehicle, motorcycle, and
personal loans, as well as loans secured by real estate, consumer durable loans, lifestyle
loans, and credit cards. Payzapp and SmartBuy are two additional digital goods that go
along with this assortment.
1.2 INTRODUCTION TO THE INDUSTRY
Scheduled Banks in India refer to those banks which have been included in the Second
Schedule of Reserve Bank of India Act, 1934. Reserve Bank of India (RBI) in turn
includes only those banks in this Schedule which satisfy all the criteria laid down vide
section 42(6)(a) of the said Act. Banks not under this Schedule are called Non-Scheduled
Banks
Facilities
Every Scheduled bank enjoys two types of principal facilities: it becomes eligible for
debts/loans at the bank rate from the RBI; and, it automatically acquires the membership
of clearing house.
Types of banks
There are two main categories of scheduled banks in India, namely:
 Scheduled Commercial banks
 Scheduled Co-operative banks
Scheduled commercial Banks are further divided into six types, as below:
1. Scheduled Public Sector Banks

2. Scheduled Private Sector Banks
3. Scheduled Small Finance Banks
4. Regional Rural Banks
5. Foreign Banks
6. Payment banks (currently four banks Airtel Payments Bank, Fino
Payments Bank, India Post Payments Bank, Paytm Payments Bank have
been granted Scheduled bank status).
Scheduled Co-operative banks are further divided into 2 types namely:
1. Scheduled State Co-operative banks

2. Scheduled Urban cooperative banks
HISTORY OF SCHEDULED BANK IN INDIA
The history of scheduled commercial banks operating in India is intertwined with the
country's economic development and financial evolution. Here's a brief overview:
1. Pre-Independence Era: Prior to India's independence in 1947, the banking sector was
dominated by a few large private banks, primarily serving the interests of the colonial
rulers and the elite. Some notable banks during this period included the Imperial Bank of
India (later reorganized as the State Bank of India), the Punjab National Bank, and the
Allahabad Bank.
2. Post-Independence Reforms: After independence, the Indian government embarked on

a series of reforms aimed at expanding the banking sector and promoting financial
inclusion. The Banking Regulation Act of 1949 was enacted to regulate the functioning of
banks and ensure their stability and solvency.
3. Nationalization of Banks: In 1969, the Indian government undertook a historic measure

by nationalizing 14 major banks, including the State Bank of India and its subsidiaries, as
well as several other private banks. This move aimed to democratize access to banking
services and channel credit to priority sectors such as agriculture, small-scale industries,
and rural development.
4. Rise of Scheduled Commercial Banks: Following nationalization, the banking

landscape in India saw the emergence of scheduled commercial banks operating under
the regulatory oversight of the Reserve Bank of India (RBI). These banks were classified
as scheduled banks based on their inclusion in the Second Schedule of the Reserve Bank
of India Act, 1934.
5. Liberalization and Private Sector Banks: In the 1990s, India initiated economic
liberalization measures to open up its economy to foreign investment and competition. As
part of this process, the government allowed for the entry of private sector banks, leading
to the establishment of new banks such as HDFC Bank, ICICI Bank, and Axis Bank,
among others.
6. Expansion and Diversification: Over the years, scheduled commercial banks in India
have expanded their operations, diversified their product offerings, and embraced
technological innovation to meet the evolving needs of customers. They provide a wide
range of services including savings and current accounts, loans, credit cards, wealth
management, and digital banking solutions.
7. Regulatory Framework: The RBI plays a central role in regulating scheduled

commercial banks in India, overseeing their operations, prudential norms, and
compliance with regulatory guidelines. The Banking Regulation Act, 1949, along with
subsequent amendments and guidelines issued by the RBI, govern the functioning of
these banks.
Today, scheduled commercial banks form the backbone of India's banking sector, catering
to the financial needs of individuals, businesses, and the economy at large. They play a
vital role in mobilizing savings, allocating credit, facilitating transactions, and fostering
economic growth and development.
1.3 INTRODUCTION TO THE COMPANY
HDFC BANK .Ltd
HDFC Bank Limited (also known as HDFC) is an Indian banking and financial services
company headquartered in Mumbai. It is India's largest private sector bank by assets and
the world's sixth-largest bank by market capitalization as of January 2024, following
its takeover of parent company HDFC. The Reserve Bank of India (RBI) has identified
the HDFC Bank, State Bank of India, and ICICI Bank as Domestic Systemically
Important Banks (D-SIBs), which are often referred to as banks that are “too big to fail”.
The bank was incorporated in August 1994 after its erstwhile parent HDFC received an
'in principle' approval from the RBI to set up a bank in the private sector, as part of
its liberalization of the Indian banking industry, and commenced operations in January
1995. With a market capitalization of $145 billion (as of April 2024), HDFC Bank is the
third-largest company on Indian stock exchanges. It is also the sixteenth largest employer
in India with nearly 1.73 lakh employees.
As a division of the Housing Development Finance Corporation, HDFC Bank was

established in 1994 and has its registered office in Mumbai, Maharashtra, India. The
company's first corporate office and a full-service branch were opened by Manmohan
Singh, who was the Union Finance Minister at the time, in Sandoz House in Worli. Few
of us are aware that HDFC Bank was once a corporate banker before it became well-
known as a retail lender. However, these bankers have always been risk-averse; therefore,
they would only lend to top blue-chip corporations where safety was guaranteed despite
lower margins.
The bank's distribution network consisted of 8,344 branches and 19,727 ATMs spread
over 3,811 cities as of June 1, 2023. In FY 2017, it set up 4,30,000 point-of-sale terminals
and produced 2.35 billion (23.5 million) debit cards and 1.2 billion (12 million) credit
cards. As of June 1, 2023, it had a base of 1,77,000 permanent employees.
For the purchase or building of residential homes, the corporation offers housing
financing to both private individuals and businesses. Loans for the purchase and
construction of residential units, loans for the purchase of land, loans for home
improvements, loans for home extensions, loans for non-residential premises for
professionals, and loans secured by property are among the types of loans offered by the
company. Repayment options: step-up repayment facility and flex loan. It is among
India's largest lenders of housing loans. The organization reported in its Annual Report
for the fiscal year 2012–13 that over the course of its 35-year existence, it has disbursed
over INR 456,000 crore for the construction of 4.4 million housing units.
Through its subsidiary, HDFC Standard Life Insurance Company Limited, the business
has been offering life insurance since the year 2000. 33 individual products and 8 group
products are available. By providing products, it cross-sells via the network of the HDFC
group. It serves more than 965 sites from its 451 offices spread over India. As of
September 30, 2013, their market share for life insurance in India was 4.6%. HDFC Life
employs more than 15,000 people.
The business provides general insurance products like property, marine, aviation, and
liability in the corporate segment and automobile, health, travel, home, and personal
accident insurance in the retail segment, which accounts for 47% of the company's
overall revenue. The company offers various types of general insurance, including:
In the corporate segment, insurance products include property, marine, aviation, and
liability; in the retail segment, which generates 47% of the company's overall income,
insurance products include auto, health, travel, home, and personal accident insurance.
HDFC Bank owns 26.14% of the stock. For a fee, HDFC Bank sources mortgages for
HDFC. Retail and wholesale banking, as well as treasury functions, makeup HDFC
Bank's main business segments. With a market value of 941,386 crore ($120 billion) as
of April 2023, it was the third-largest publicly traded corporation in India.
To help vulnerable segments of society, HDFC Bank takes part in government-sponsored
programs. The Bank takes part in a number of federal and state government initiatives.
Several programs run by the federal and state governments in which the bank is involved:
1. Prime Minister's Employment Generation Programme (PMEGP)

2. PM Street Vendor Atma Nirbhar Nidhi (PM SANNidhi)
3. Chief Minister Employment Generation Programme (CMEGP)
4. National Urban Livelihoods Mission (NULM)
5. Mukhyamantri Swarojgar Yojna (MSY)
6. Unemployed Youth Employment Generation Programme (UYEGP)
Additionally, the Bank takes part in state and federal government programs.
With the introduction of new technology, the banking industry has developed very
quickly in recent years. Today, it is not only limited to depositing and lending but also
includes a variety of loans and advances, digital services, insurance plans, cards, broking
services, etc. As a result, the banks face fierce competition from their rivals. As
a reminder, these insights are based on the situation as of September 2021. Changes may
have occurred since then, and for the most current and accurate information regarding
HDFC Bank's loan offerings, terms, and conditions, it's recommended to visit the official
HDFC Bank website or directly contact their customer service. Certainly, let's delve
deeper into the details of each loan scheme offered by HDFC Bank as of September 2021
History
HDFC Bank was incorporated in 1994 as a subsidiary of the Housing Development
Finance Corporation, with its registered office in Mumbai, Maharashtra, India. Its first
corporate office and a full-service branch at Sandoz House, Worli were inaugurated by
the then Union Finance Minister, Manmohan Singh.
The Bank's distribution network included 8,192 branches and 20,760 ATMs (cash
recyclers; cash deposit and withdrawal) spread throughout 3,836 cities and villages as of
February 29, 2024. The distribution network of HDFC Ltd., which consists of 737
locations and includes 214 offices of HDFC Sales Private Limited, has been integrated
into the network of the Bank. HDFC Bank is now the sole private bank operating in the
Union Territory after opening a branch on Kavaratti Island in Lakshadweep.
Products and services
A branch of HDFC Bank in Hyderabad

HDFC Bank provides a number of products and services including wholesale
banking, retail banking, treasury, auto loans, two-wheeler loans, personal loans, loans
against property, consumer durable loan, lifestyle loan and credit cards. Along with this
various digital product are Payzapp and SmartBUY.
Mergers and acquisitions

HDFC Bank merged with Times Bank in February 2000. This was the first merger of two
private banks in the New Generation private sector banks category, Times was
established by Bennett, Coleman and Co. Ltd., commonly known as The Times Group,
India's largest media conglomerate.
In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank. HDFC Bank's
board approved the acquisition of CBoP for ₹95.10 billion in one of the largest mergers
in the financial sector in India.
In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata
Group, to operate a pan-India umbrella entity for retail payment systems, similar to
the National Payments Corporation of India.
In September 2021, the bank partnered with Paytm to launch a range of credit cards
powered by Visa.
On 4 April 2022, HDFC Bank announced a merger with the Housing Development
Finance Corporation. Upon the completion of the merger, HDFC became the fourth-
largest bank in the world by market capitalization. The effective date of the merger was
set to be 1 July 2023. After the merger takes place, HDFC, a housing financing
corporation, will transfer its home loan portfolio to HDFC Bank. Also, the bank is giving
home financing company depositors the choice of either withdrawing their money or
renewing their deposits with the private sector bank at the interest rate that the bank is
currently offering
Investments
In March 2020, Housing Development Finance Corporation, parent company of HDFC
Bank, made an investment of ₹10 billion in Yes Bank. As per the scheme of
reconstruction of Yes Bank, 75% of the total investment by the corporation would be
locked in for three years. On 14 March, Yes Bank allotted 100 crore shares of the face
value of ₹2 each for consideration of ₹10 per share (including ₹8 premium) to the
corporation, aggregating to 7.97 percent of the post-issue equity share capital of Yes
Bank.
Listings and shareholding
HDFC Bank branch in Pune

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and the National
Stock Exchange of India. Its American depositary receipts are listed on the NYSE issued
through JP Morgan Chase Bank.[35]
Its global depository receipts (GDRs) were listed on the Luxembourg Stock Exchange but
were terminated by the board of directors following its low trading volume.[36]
As per their shareholding pattern, the top shareholders are
Shareholders (as of 30 September 2023)
[38] Shareholding
1
Promoter group (HDFC) 0%
.
2
Foreign institutional investor (FII) 52.13%
.
3
Individual shareholders 13.66%
.
30.6%
Domestic Institutional Investors
19.7
4 Mutual funds
1%
.
Insurance companies
8.74
(Including LIC)
%
5 NPS (HDFC Pension Management Scheme

1.50
. E)
6
Central/State government 0.001%
.
1.4JUSTIFICATION OF THE TOPIC
What Is Gold Loan? Meaning & How It Works, Gold Loan Interest Rate
One of the world's biggest users of gold is India. According to the World Gold Council
(WGC), India's annual demand for gold surged by 804% between 1987 and 2016. It can
be used as collateral for gold loans, which are frequently used to get funds for both long-
and short-term purposes. The gold loan is actually one of the simplest and quickest ways
to get money when you need it.
The gold loan may be your best financial option, even if you have lots of unused gold in
your safe but a low credit score. With the growing popularity of gold loan every year, it is
necessary to know not only what a gold loan is but also how it operates, gold loan interest
rates, and other associated data.
Gold Loan
The meaning of a gold loan is a secured loan taken by borrowers seeking to meet their
immediate or long-term cash demands against gold. Lenders typically approve you for a
loan in an amount that corresponds to a particular portion of the gold's value. You can
receive your gold items back after paying them back in monthly installments. In this case,
the borrower guarantees their gold jewellery as security. According to the Reserve Bank
of India, the amount of the loan allowed may not exceed 90% of the gold's current market
value. The gold that can be pledged ranges in carat weight from 22 to 24.
Thus, it's a terrific option to meet your urgent financial demand, whether it's for a
wedding, a family trip, or your child's school. In addition, many commercial and
nationalized banks as well as NBFCs provide gold loans at low-interest rates.
How does a gold loan work?
The entire gold loan process is very comparable to other secured loans. In this scenario,
you deliver your gold items and the necessary paperwork to a lender. The lender assesses
the gold items and examines the submitted paperwork. The lender approves the loan
amount based on the evaluations. According to the loan agreement, you repay the
principal and interest payments and receive the returned gold items.
What is the interest rate on which lenders give the gold loan?
Since a loan given against gold is secured, it has a lower interest rate. The interest rates
charged on these loans vary from one lender to another and rely on a number of variables,
including the term of the loan, its size, etc. Also, it depends on where you are borrowing
the gold: from a bank or an NBFC. In general, banks charge lower interest rates on loans
against gold compared to NBFCs. Hence, if you intend to apply for a gold loan, resist the
need to take the first offer you are given. Make your decision after comparing gold loan
offers from at least two to three lending institutions.
How to get a gold loan?
You must first have your gold jewellery, coins, biscuits, or other tangible forms of gold
on hand in order to apply for a gold mortgage loan. Choose a bank or NBFC that provides
loans against gold products in India after that. The interest rate might vary from 7 to 29%
annually, depending on your creditworthiness and CIBIL score.
The lender (a bank or an NBFC) will examine your gold at home or in a physical branch
of the business to ensure its purity. Identity and address evidence are two forms of
paperwork needed for a gold mortgage loan. A PAN card, Aadhar card, current passport,
or voter ID card are examples of acceptable government-issued documents.
You are qualified to collect the money once the personal verification and the gold have
both cleared. But, if the loan is not paid back, the gold that was pledged might not be
recovered. If the lender offers online loan applications, you can do so as well.
What is the gold loan tenure?
One lending institution may have a different prepayment policy or tenure from than
another. The typical range is 3 to 12 months. Some lenders may even let you renew it so
you can extend the tenure, depending on the circumstances. Be sure you repay the loan
amount on time because the gold loan has a shorter term than other sorts of loans.
Defaulting on gold could result in the permanent loss of your gold possessions.
Benefits of Gold Loan
 Quick and Easy Access to Funds
One of the most significant advantages of a gold loan is its quick processing.
Financial emergencies often require immediate access to funds, and gold loans
offer just that. The simple process involves minimal paperwork, ensuring
borrowers can get the required funds swiftly. This speed can be crucial during
medical emergencies, education expenses, or business needs.
 No Credit Checks and Flexible Eligibility
Gold loans do not require a credit check, unlike other types of loans. This makes
them accessible to individuals with poor credit histories or those without a stable
income. You are eligible for a gold loan as long as you own gold. This flexibility
in eligibility widens the scope of people who can benefit from this financial
option.
 Lower Interest Rates
Gold loans generally have lower interest rates than unsecured loans like personal
loans or credit cards. This is because the gold you pledge serves as collateral,
reducing the risk for the lender. Lower interest rates mean reduced financial
burden on the borrower, making it a cost-effective borrowing option.
 High Loan Amounts Based on Gold Value
The loan amount you receive is directly proportional to the value of the gold you
pledge. This means you can secure substantial amounts, making it suitable for
significant expenses like business investments, education abroad, or debt
consolidation. The value of gold is determined by its purity and current market
rates, ensuring a fair evaluation.
 No Prepayment Penalties and Versatile Usage
Gold loans offer the flexibility of repaying the loan amount anytime during the
tenure without incurring prepayment penalties. Additionally, there are no
restrictions on how you use the loan amount. Whether for a wedding, home
renovation, or any other purpose, the funds can be utilized according to your
needs.
Eligibility Criteria for Gold Loan
 Individuals between 18 and 75 years can apply for a gold loan.

 The applicant must own gold jewelry, coins, or bars to pledge as collateral for the
loan.
 The gold items being pledged should meet the lender’s specified purity criteria,
often ranging from 18 to 24 carats.
 The sanctioned loan amount depends on the pledged gold's weight and current
market value.
 Applicants must provide government-issued identification documents such as an
Aadhar card, PAN card, passport, or voter ID.
 Lenders require proof of residence, which can be established through utility bills,
ration cards, or driver's licenses.
 While some lenders do not require proof of income, a stable income can enhance
the borrower's credibility and loan approval chances.
 Individuals with a good repayment history of previous loans are often considered
favorably.
Documents Required for Gold Loan
 Proof of Identity (Any One):
Aadhar Card, PAN Card, Passport, Voter ID, Driving License.
 Proof of Address (Any One):
Aadhar Card, Passport, Voter ID, Utility Bills (electricity, water, gas), Ration Card, Driving
License.
 Passport-size Photographs:
Recent passport-sized photographs of the applicant.
 Proof of Ownership:
Invoice or receipt of the pledged gold item (if available).
 Form of Gold:
Details about the form of gold being pledged (jewelry, coins, bars) and its purity level (in
carats).
 Duly Signed Application Form:
A filled and signed application form provided by the lending institution.
 Income Proof (Optional):
Some lenders may require income proof, although gold loans are often granted without this
requirement.
 Borrower’s Signature Proof:
Signatures on the application form should match those on the identification

documents.
 Witness Letter:
Sometimes, a witness letter from a known person in the locality must confirm the
applicant's identity and address.
 Bank Account Details:
Some lenders may ask for the borrower's bank account details for loan disbursal
and repayment purposes.
Scheduled cooperative banks, like other financial institutions, may offer gold
loans as part of their product portfolio. Here's how they typically handle gold loan
investments:
1. Acceptance of Gold as Collateral: Scheduled cooperative banks accept gold

ornaments, jewelry, or gold coins as collateral from customers seeking gold loans.
The value of the loan is determined based on the purity and weight of the gold
pledged.
2. Loan Processing: Customers interested in availing gold loans approach the bank
with their gold assets. The bank evaluates the purity and weight of the gold and
assesses its current market value to determine the loan amount that can be disbursed.
3. Loan Disbursement: Upon approval, the bank disburses the loan amount to the
customer. The loan can be provided as a lump sum or in installments, depending on
the terms agreed upon by the borrower and the bank.
4. Interest Rates and Repayment Terms: Scheduled cooperative banks charge interest
on gold loans, which may vary based on factors such as the loan amount, tenure, and
prevailing market conditions. The repayment terms, including the tenure and
repayment schedule, are agreed upon between the bank and the borrower.
5. Security and Documentation: As with any loan, borrowers need to provide

identification and address proof documents as per the bank's requirements. The gold
pledged serves as collateral to secure the loan. The bank retains possession of the gold
assets until the loan is repaid in full.
6. Risk Management: Scheduled cooperative banks implement risk management

practices to mitigate the risk associated with gold loans. This includes assessing the
creditworthiness of borrowers, conducting due diligence on the pledged gold assets,
and monitoring repayment behavior.
7. Loan Servicing: Throughout the tenure of the loan, borrowers are expected to make
regular repayments as per the agreed schedule. Scheduled cooperative banks typically
provide multiple repayment options, including monthly installments or a single bullet
payment at the end of the loan tenure.
8. Loan Closure and Gold Retrieval: Once the loan is fully repaid, the bank releases
the pledged gold assets to the borrower. If the borrower defaults on the loan, the bank
has the right to auction the gold assets to recover the outstanding loan amount.
Overall, scheduled cooperative banks manage gold loans as a part of their lending
activities, leveraging the value of gold assets to provide liquidity to customers while
managing associated risks.
Growth and significance of Gold loan business

The yellow metal or the Gold, is recognized as a widespread currency and has been the
foremost dependable fluid resource customarily. India, which is one among the biggest
market of gold and is a nation where gold is preserved traditionally. This wonderful metal
is considered as a promising resource within the nation. Not at all like the outside nations,
Indians have the practice of protecting gold within the frame of jewellery and assumed to
be a tried-and-true asset amid financial crunches.
In any case, with the section of organized NBFCs and other financial segments changed
the entire scenario by bringing in more mindfulness among the buyers. Nowadays, the
NBFCs command more than 25 rate of the gold loan market. Besides, the situation of
organized gold loan sector has changed, where it has it has seen huge growth of 40 to 50
rate CAGR within the past decade. Some of the genuine realities behind the development
of organized Gold loan lending practices are underneath mentioned:
1. Awareness among consumers
2. Transparency in Transaction
3. Reduce Gold Credit Interest
4. Quick Processing
5. Extensive Network
6. Fast Turnaround Time
7. Apt Administrations Advertised to Non-Bankable Patrons
8. Advanced Loan-To-Value Ratios
9. Involvement of Technology
10. Implementation of New Product Highlights and Services Convenient
working hours
11. Both little loans/large advances are advertised
Of late, NBFCs and other non-banking divisions have improved their administrations by
lessening intrigued charges, observing and scrutinizing of lending practices. With
exceptional highlight of the business model, non-banking financial segments and NBFCs
have out developed quickly over the final decades.
Coronavirus and the Gold Loan Market

With the pandemic hit, several employments were misplaced and to meet the costs, the
households begun depending on pawning. As per the estimation of The World Gold
Chamber the Indian families have a $1.5 trillion accumulate of gold, made up of gems
that families acquired from their ancestors and as reserve funds. For this reason, the gold
heated advances are on higher side permitting families to urge bigger sum of advance
against gold.
During this coronavirus widespread hit, lower middle-class families are depending on
gold loaning advertise more than any other sections. The banking division involvements
seem offer assistance the gold credits advertise to develop by 20% to 25% this financial
year as the little businesses and rural clients have a part of family possessed gold. Once
regularity returns, this make might anticipate enormous jump since of the capital
prerequisite of small business.
Future of gold loan Business
India being the biggest market of gold with add up to of 65 rate rural gold and 10 percent
of total world gold stock as of 2010, our nation has developed from 18,000 to 32, 000
million tons amid the year 2002 to 2010. The researches show that India's gold loan
market is approximately to touch Rs 4,617 billion by the year 2022 with a development
rate of 13.4 per cent (KPMG report). Last year 2018-2019, the gold advance lending
market has seen a huge development owing to the brilliant extending strategies.
Future prospects of NBFCs
NBFC division plays an amazingly vital part within the improvement of the country’s
center framework. By advertising speedier stores and credit to the Indian exchange and
commerce industry, these substances are empowering the nation-wide development of
expansive foundation ventures. Besides, small businesses, start-ups, and MSMEs/SSIs
are dependent on reserves offered by NBFCs. As these small businesses grow their
operations, their need for talented and incompetent labor goes up to fulfil the increment
in operations. In this way, in a roundabout way, each unused NBFC enrolment makes
more work openings at the macroeconomic level.
NBFCs Effecting on HDFC Bank
As of my last update in January 2022, I can provide insights into the general future
prospects of Non-Banking Financial Companies (NBFCs), including those associated
with HDFC Bank. However, please note that specific details about the future prospects of
HDFC Bank's NBFCs may require up-to-date information beyond my last training data.
Non-Banking Financial Companies play a crucial role in India's financial ecosystem,

providing a wide range of financial services such as loans, investment products, asset
financing, and wealth management. Here are some potential future prospects for NBFCs,
including those affiliated with HDFC Bank:
1. Growth Opportunities: NBFCs, including those associated with HDFC Bank, are well-
positioned to capitalize on India's economic growth trajectory. As the country continues
to urbanize and witness rising disposable incomes, there is a growing demand for
financial products and services, presenting ample growth opportunities for NBFCs to
expand their customer base and product offerings.
2. Digital Transformation: The digital revolution has transformed the way financial
services are delivered and consumed. NBFCs are increasingly leveraging technology to
enhance customer experiences, streamline operations, and offer innovative digital
financial solutions. Embracing digital transformation will be critical for NBFCs to stay
competitive and capture market share in the future.
3. Regulatory Environment: The regulatory landscape for NBFCs in India continues to
evolve, with regulators focusing on strengthening governance, risk management, and
transparency in the sector. NBFCs associated with HDFC Bank will need to navigate
regulatory changes effectively to ensure compliance and mitigate regulatory risks while
seizing growth opportunities.
4. Diversification and Risk Management: Diversifying product portfolios and customer

segments can help NBFCs mitigate risks associated with concentration and economic
cycles. NBFCs affiliated with HDFC Bank may explore diversification strategies to
expand into new geographies, sectors, and customer segments while maintaining robust
risk management practices.
5. Partnerships and Collaborations: Collaborations with banks, fintech companies, and

other stakeholders can enable NBFCs to enhance their product offerings, distribution
networks, and market reach. NBFCs associated with HDFC Bank may explore strategic
partnerships and collaborations to drive innovation, expand their customer base, and
create value for stakeholders.
6. Focus on ESG and Sustainability: Environmental, Social, and Governance (ESG)

factors are increasingly influencing investment decisions and business practices globally.
NBFCs affiliated with HDFC Bank may integrate ESG considerations into their business
strategies, risk management frameworks, and product offerings to meet evolving
stakeholder expectations and contribute to sustainable development.
In summary, NBFCs associated with HDFC Bank have promising future prospects driven
by India's economic growth, digital transformation, regulatory environment,
diversification strategies, partnerships, and focus on ESG and sustainability. However,
they will need to adapt to changing market dynamics, navigate regulatory challenges, and
embrace innovation to capitalize on growth opportunities and create long-term value for
stakeholders.
CHAPTER-2
REVIEW OF LITERATURE
2.1NATIONAL REVIEWS
 By Preeti Singh and Saikat Das: HDFC Bank wants to ride India's consumer
boom after home loan dominance: -The sixth-largest lender in the world, HDFC
Bank Ltd., aims to utilize house lending as a vehicle to attract more borrowers for
its consumer financing products, including loans for TVs, cars, and air
conditioners. In the upcoming months, the Mumbai-based bank will transform
around 530 offices that were previously focused on mortgages into locations
offering full-fledged banking services, according to Kaizad Bharucha. The merger
between HDFC Ltd. and HDFC Bank has allowed their company to offer house
loans at over three times as many locations, and that's just the beginning,
according to the deputy managing director of HDFC Bank.
 By Paresh Sukthankar, July 21: The second-largest private sector lender in the
nation, HDFC Bank, has allayed concerns about the possibility of bad loans by
claiming that an increase in non-performing assets is not "unrealistic" given the
current state of the economy. Executive director Paresh stated, "To some extent,
some increase in non-performing assets (NPAs) is something we don't see as
unrealistic.
 By Nupur Anand on 30 april: The second-largest private sector bank in the nation,
HDFC Bank, which has hitherto been mostly recognized for its retail banking, is
now aggressively expanding its corporate loan book. With this effort, the book
has increased by more than a factor of two over the past three years, going from
47,000 crore to more than 1 lakh crore at the end of FY16. Executive director at
HDFC Bank Kaziad Bharucha noted that a variety of strategies, including a
greater emphasis on term loans, better product customization, and providing a
wide range of products to customers with whom the lender already has a
relationship, have helped the firm reach milestones.
 By HDFC: June 16 2022: In Uttar Pradesh, the bank has 170 gold loan desks:
Today, HDFC Bank revealed that it had expanded its branch network in Uttar
Pradesh by 51 gold loan desks. 170 bank locations in the state will now be able to
offer gold loans thanks to the installation of 51 new gold loan desks. In the current
fiscal year, the bank is trying to enable all of its branches in the state to conduct
gold loans. With few paperwork and clear fees, this institution will enable
consumers to maximize their idle gold. There are gold loans available with terms
ranging from three months to three years.
 By Andy Mukherjee on 7.04.2022: A financial mega merger that's all in the
family: - after 45 years in business the underwriter of homes for millions of
Indians is moving in with its 28-year-old banking offspring. The joint family
arrangement makes sense for both housing development finance Corp and HDFC
Bank Ltd. mortgages will get more competitive as lenders come under pressure to
beg interest rates to benchmark not in their control, such as the central bank’s
repo rate.
 By Sangeeta Ohja on 10.07.2023: HDFC Bank extends special fixed deposit (FD)
scheme for senior citizens. Interest rate, other details here: HDFC Bank senior
fixed deposit program: HDFC Bank has once more extended the senior fixed
deposit program, which offers higher interest rates. Senior citizen-specific FD
from HDFC Bank. In May 2020, Senior Citizen Care FD was introduced amid the
covid epidemic. According to the bank's website, the deadline for investments in
the Senior Citizen Care FD plan has been extended until November 7, 2023.
 By Paresh on December 7: There is room for future rate reductions, according to
HDFC Bank, as loan growth is lagging behind deposit growth. A modest uptick
has occurred, but more critically, deposit growth is now surpassing loan growth.
Deposit rates will be reduced as a result, and deposit rate reductions typically
precede lending rate reductions. Banks cannot reset their base rate until they
lower their deposit rates. The general trend of the rates is downward, thus
increases in deposit rates would need to be followed by meaningful changes in
base rates.
 By Money Today on 1. 07. 2023: What current HDFC home loan customers need
to know about the merging of HDFC and HDFC Bank: Housing Development
Finance Corporation (HDFC), a mortgage lender, and HDFC Bank, the biggest
private sector bank in the country, officially merged on July 1. The merger
received final clearance from the boards of HDFC Ltd. and HDFC Bank on June
30. The record date has been set for July 13, according to the private lender.
HDFC branches will stay operating after the merger, although HDFC Bank will
be displayed on the signboards. Therefore, as of July 1, the mortgage lender
Housing Development Finance Corporation will be no more.
 By Kethvi Jadhav on 03.07.2023: What Changes for the Existing Home Loan
Borrowers of HDFC Ltd. After Merger with HDFC Bank: Banks and Non-
Banking Finance Companies have different benchmarking processes for house
loans. Since October 2019, banks have been required to tie the interest rates of all
floating-rate consumer loans to an external benchmark-based lending rate, NBFCs
are not required to tie their retail loans to a third-party benchmark. The Reserve
Bank of India (RBI), which oversees all banks in India, regulates HDFC Ltd.,
which is presently doing business as HDFC Bank. Prior to the merger, HDFC Ltd.
operated as an NBFC and established its own interest rate standards. However, the
switch to EBLR has improved transparency and market responsiveness by tying
house loan interest rates to an external benchmark rate selected by the RBI.
 By Ajay Ramanathan on 01.09.2023: Bank loans rose 19.8% in July on HDFC
merger impact on-food credit stood at Rs 147.8 trillion as on July 29. In
comparison, non-food credit had risen 15.1% y-o-personal loan growth has
coincided with the RBI's increased vigilance over the rise in the proportion of
unsecured personal loans. Loans to this sector increased 6% year over year to Rs
34 trillion as of July 29. Loans specifically to micro and small businesses
increased by 10.2% year over year. Loans to large and medium-sized businesses
increased by 4.3% and 9.7% year over year, respectively. As of July 29, loans to
NBFCs have increased by 24% year over year to Rs 13.8 trillion.
 Arora, Usha & Sharma, Bhavna & Bansal, Monica. (2009). An Analytical Study
of Growth of Credit Schemes of Selected Banks. The ICFAI University Journal of
Services Marketing. Vol. VII. 52-65. This study has been conducted to analyze
and compare the performance (in terms of loan disbursement and non-performing
assets) of credit schemes of selected banks for the last five years. A positive
relationship is also found between total loan disbursement and total Non-
Performing Assets Outstanding (NPA O/S) of selected banks. This paper is
divided into two parts. In the first part, bank-wise as well as year-wise
comparisons are done with the help of Compound Annual Growth Rate (CAGR),
mean and standard deviation; and in the second part, a positive relationship is
found between total loan disbursement and total NPA O/S of selected banks with
the help of a correlation technique.
 By Tandon Deepak and Batra Dharminder Kumar, on 5th March 2022 Deepak
Parekh made a statement that Gruh Finance (NBFC) was like his own daughter
and that he intended to merge the same with Bandhan bank which would be like a
proverbial bridegroom. This would provide synergies with the Housing sector,
which was on a growth path, while NBFC ‘Gruh Finance’ was not into the
Housing domain. This would require that HDFC Bank’s promoter holding would
be diluted. He envisaged that with the merger of India’s most valuable lender and
the nation’s largest mortgage financier will be able to create what could be the
world’s fifth-most valuable bank. Since the steps have been taken, the merger
process is almost complete, albeit one key step remains about the listing in
bourses that investors would be watching closely. The likely announcement
awaited the nod on or before July 2023. Parekh knew that with just one step away,
his own creation was on the anvil of becoming a bank worth US $ 168 billion
serving millions of investors and customers across the world!!
 By Dr Jadhav Babasaheb R and Mr. Sajida Tushar: “A Study on Factors affecting
the growth of personal loan as a product at HDFC Bank”. Objectives of this study
were to understand the different factors affecting the growth of personal loan.
This study therefore sought to find out the factors affecting the growth of personal
loans in HDFC Bank. Personal loans are the fastest growing products of
unsecured credit facilities in spite of high interest rates, due to smart positioning
of the product by financial institutions. Personal loans are the easy option of
people for financial requirements as they do not attract collateral and with a little
practical formality to obtain them. The research focuses on the current trend of
personal loans and the factors that influence the trend from different perceptions
of borrowers.
 Tandon, Anjum and Julee, 2014 The Banks plays a vital role in any economy and
to sustain with negative shocks and fuel the growth of the economy it is important
that banks should be profitable. A study was based on financial performance of
selected Indian Banks. 5 banks based on market capitalization have been taken as
sample size and period of study was 2009-10 to 2013-14. Ratio analysis, Mean
and Standard deviation tools were used for data analysis purpose. Based on results
it was found that Punjab National Bank had the highest return on capital
employed (mean). State bank of India had highest Dividend Pay-out Ratio
(Mean). Bank of Baroda had the highest Return on Assets (mean) which is a sign
that management of Bank was using Assets fund more efficiently to increase
earning capacity. It was also suggested that Bank of India had lowest Divided per
share and earning per share, so bank had improved its profit accordingly and
increase in its Dividend per Share, Earning per Share. (., Anjum, & Julee, 2014)
 Singla conducted a comparative study to analyze the productivity of among the
selected private banks in India. ICICI Bank, HDFC Bank and Axis Bank were
taken as sample and period of study was 2007-08 to 2001-12. Ratio analysis was
used as a financial tool for the data analysis purpose. Employee Productivity and
Branch Productivity was used as a major productivity indicator and various sub-
parameters were used to analyze the productivity. The study revealed that based
on employee productivity ICICI Bank was better than other selected private banks
and as per branch productivity of ICICI bank is less than the other selected banks.
(Singla, 2013)
 Singh and Tandon analyze the financial performance Stat Bank of India (SBI) and
ICICI Bank. Period of study was considered from 2007-08 to 2011-12. Financial
ratio, mean and compound annual growth rate tools were considered for data
analysis purpose. The study revealed that SBI is performing well and financially
sound as compared to ICICI 3+bank, but in context of deposits and expenditure
ICICI bank has better managing efficiency than SBI. (Singh & and Tandon, 2012)
 Dhanabhakyam M. and Kvitha M examined the financial performance of selected
public sector banks in India. Study period considered for research was from 2001-
2010. Six public sector banks i.e., Bank of India, Indian bank, Indian overseas
bank, Canara bank, Union bank of India and State bank of India were considered
as sample for the study. Results revealed that selected public sector banks have
performed well on the sources of growth rate and financial efficiency during the
study period. The old private sector banks and new private sector banks play a
vital role in marketing of new type of deposits and advances schemes.
(Dhanabhakyam & and Kavitha, 2012).
 Hasriman Kaur A. and Dr. Bhawdeep Singh Tanghi (2013) analyzed that NBFCs
played an essential role in terms of macroeconomic prospective as well as
strengthening the structure of the Indian monetary system. Consolidation in the
sector and better regulatory structure has become more focused. (Tanghi, 2013)
 Prasanta Paul (2011) stated on the Financial Performance Evaluation – Some of
the selected NBFCs are taken for the comparative study. In the study, five of the
listed NBFCs are considered for the analyzation of comparative financial
performance. Different type of statistical tools like standard deviation, arithmetic
mean, correlation etc. are used extensively. (Paul, 2011)
 Sheela Christina (2011) reported on Financial Performance of Wheels India Ltd.
Secondary data collection method is used for the analytical type of research
design. Before conducting the study, validity and reliability is checked for the past
five years where the researcher used this for the purpose of study. (Sheela, 2011)
 Ghosh Santanu Kumar and Mondal Amitava (2009) study on the relationship of
intellectual capital and finance performances for a period of 10 years from 1999
to 2008 of 70 Indian banks. The measurement of financial performance used in
this analysis were return on equity, return on assets and assets turnover ratio of
Indian Banks. (Amitava, 2009).
The research also reviews that the recent growth in personal loan is healthier in the
banking system and at the same time, the consumers are utilizing it for the right purposes.
This study observed that there is a growth in dispersal of personal loans by HDFC Bank.
The report provides comprehensive analysis of the trend, information and insight on to
the driver supporting the growth of personal loans in HDFC Bank. The study adopted a
descriptive design in its methodology. The target population was personal loan customers
of HDFC Bank. A random sample method is used to collect data from customers using
questionnaires.100 respondents; i.e. 20 each from 5 branches. Randomly 20 customers
from each branch having personal loans were picked to complete a questionnaire.
Primary data was collected by questionnaire method. The outcome was that the level of
interest rate was found to have influenced the decision on where to borrow to a great
extent and the respondents suggested its reduction. It was also evident that competition
from other banks affected the respondents' demand for personal loans in HDFC. The
conditions and procedures are the least important factor affecting the demand for personal
loans.
Sharma & Singh, 2017: Researchers have evaluated the financial performance of HDFC
Bank in relation to its loan portfolio growth. They have examined the contribution of loan
schemes to the bank's profitability and overall financial health.
By (Chopra & Agarwal, 2018): Researchers have assessed how regulatory changes, such
as the introduction of the Goods and Services Tax (GST) and changes in lending rate
calculation methods, have affected HDFC Bank's loan products and pricing strategies.
2.2 INTERNATIONAL REVIEWS
 There is universal agreement that a properly functioning financial system is required

for a thriving modern economy (Kroszner, 2010). In all advanced economies, for
instance, sophisticated financial systems efficiently deliver a broad range of financial
services and act as a critical pillar in contributing to macroeconomic stability and
sustained economic growth and prosperity (World Bank, 2003). Moreover, the well-
developed financial markets facilitate mobilization of savings, by offering savers and
investors wider choice of instruments. With NBFCs coming up on the financial system,
investors could park their funds at more lucrative returns in comparison to the bank
deposits. (Kroszner, 2010)
 Referring to NBFIs, Greenspan (1999) had stated: “enhance the resilience of the
financial system to economic shocks by providing it with an effective ‘spare tyre’ in
times of need”. Moreover, while short term loans needed by the industry and agriculture
are offered by the banking system, the other forms of services needed by industry as well
as other segments of economy are offered by NBFCs and other similar financial
institutions, like factoring, venture finance and so on. (Greenspan, 1999)
 Brigham and Ehrhardt (2010) stated “financial ratios are designed to help evaluate
financial statements”. Financial ratios are used as a planning and control tool. Financial
ratios analysis is used to evaluate the performance of an organization: it aims to
determine the strong and weak points and it offers solutions by providing appropriate
plans. (Ehrhardt, 2010)
 Toshiyuki Sueyoshi (2005) Financial ratio analysis of the electric power industry. This
approach compares 147 nondefault firms with 24 default firms of US power/energy
market in terms of the financial performance and this is a type of non-parametric
discriminant analysis which provides the weights of linear discriminant function.
(Sueyoshi, 2005)
 G.E. Halkos (2004) Efficiency measurement of the Greek commercial banks with the
use of financial ratios: a data envelopment analysis approach. This paper studied about
the application of the non-parametric analytic technique in respect of the DEA (Data
Envelopment Analysis) to measure the performance of Greek banking sector. (Halkos,
2004)
 Keith A Houghton, David R Woodliff (1987) Financial Ratios: The Prediction of

corporate success and failure. This paper investigated about the financial ratios to predict
the business failure. This has done from both the Human Information Processing (HIP)
and from the prediction from environmental predictability. (Keith A Houghton, 1987)
 R.J. Taffler (1982) Forecasting company failure in the UK using discriminant analysis
and financial ratio data. This paper reported on the discriminant model of operational for
the purpose of identification of the British companies which was under the risk of failure
and discussed the results from their application since from their development. (Taffler,
1982)
 M Kumbirai, R Webb (2010) A financial ratio analysis of commercial bank

performance in South Africa. This paper investigated the South Africa’s performance of
commercial banking sector period for 2005-2009.this financial ratio is used to measure
the liquidity, profitability and credit quality performance of large five commercial banks
of South Africa. (M Kumbirai, 2010)  Frederick D.S. Choi et al (1983) Analysing
foreign financial statements: The use and misuse of International ratio analysis. The
foreign companies are often misused the measurement of financial risk and return. This
paper used to explain the differences in the international accounting principles. (al, 1983)
 Query-Jen Yeh (1996) The application of Data Envelopment analysis in conjunction

with financial ratios for bank performance evaluation. This paper demonstrated the
application of DEA in respect to the conjunction with financial ratios to help the bank
regulators in Taiwan to gain the insight of various financial dimensions which is link to
the financial operational decisions of banks. (Yeh, 1996)
CHAPTER-3
RESEARCH METHODOLOGY
3.1 OBJECTIVES OF THE STUDY
1. To know and understand about the concept of financial analysis.

2. To compare the financial performance of HDFC Finance Ltd.
3. To study the profitability and liquidity position of HDFC BANK Ltd.
4. To identify the long-term solvency position of chosen NBFCs in the study.
3.2 RESEARCH HYPOTHESIS
"Hypothesis: The introduction of innovative investment products within HDFC Bank's

gold loan system will attract a greater number of investors seeking diversification and
yield, leading to increased assets under management (AUM) and profitability for the
bank."
1. Independent Variable: The independent variable in this hypothesis is the "introduction

of innovative investment products" within HDFC Bank's gold loan system. This variable
represents the change or intervention introduced by the bank to enhance its gold loan
investment offerings.
2. Dependent Variable : The dependent variables are "assets under management (AUM)"
and "profitability." These variables measure the outcomes or effects of introducing
innovative investment products. AUM reflects the total value of assets managed by the
bank within its gold loan investment system, while profitability pertains to the financial
gains generated by the bank from these investments.
3. Directionality: The hypothesis suggests that the introduction of innovative investment

products will lead to an increase in both AUM and profitability. This implies a positive
relationship between the independent variable (innovative investment products) and the
dependent variables (AUM and profitability).
4. Testing: The hypothesis can be tested through empirical research methods, such as data
analysis of AUM trends, profitability metrics, and investor preferences before and after
the introduction of innovative investment products. Researchers can analyze the impact
of these changes on the bank's financial performance and investor participation to
determine if the hypothesis holds true.
5. Significance: If the research findings support the hypothesis, it would imply that
diversifying HDFC Bank's gold loan investment offerings with innovative products can
attract more investors, enhance AUM, and improve profitability. This insight could guide
strategic decision-making within the bank and help optimize its gold loan investment
system for better returns and customer satisfaction.
3.3 SCOPE OF STUDY
The study's focus is restricted to gathering financial information that is annually released
in the company's annual reports. The analysis is carried out to offer potential fixes. The
study ran from 2011 to 2014 for a total of 4 years. The past, present, and future
performance of firms can be examined using the trend analysis, and this study has been
divided into short-term and long-term analyses. The company should make enough
money to grow its operations in addition to meeting the owner's expectations.
3.4 Data Collection Method
 Primary Data:
Information collected from internal guide and finance manager. Primary data is
first-hand information. Secondary Data: Company balance sheet and profit and
loss account.
 Secondary Data:
ANNUAL HDFC REPORT: As on March 31, 2023, your Bank’s Total Balance Sheet
stood at ` 2,466,081 crore, an increase of 19.2 per cent over ` 2,068,535 crore on March
31, 2022. Total Deposits rose by 20.8 per cent to ` 1,883,395 crore from ` 1,559,217
crore. Savings Account Deposits grew by 9.9 per cent to ` 562,493 crore while Current
Account Deposits rose by 14.3 per cent to ` 273,496 crore. Time Deposits stood at `
1,047,406 crore, representing an increase of 29.6 percent. CASA Deposits accounted for
44.4 per cent of Total Deposits. Advances stood at ` 1,600,586 crore, representing an
increase of 16.9 per cent. Domestic Loan Portfolio of ` 1,572,454 crore grew by 17.6 per
cent over March 31, 2022.
The Personal Loans segment has experienced strong growth, with the overall portfolio
touching ` 171,676 crore by the end of the year. The Bank's increased focus on the
Government segment and top corporates has contributed to improved portfolio quality.
The launch of Xpress car loans, offering seamless end-to-end digital disbursement, has
driven a 17 per cent year-on-year growth in the Auto Loan portfolio. Your Bank has
exhibited significant growth in gold loans, surpassing other gold financiers, thanks to an
expanded branch network. The Home Loan portfolio has exhibited significant growth,
surpassing industry growth rates and capturing a larger market share.
HDFC Securities Limited (HSL) synopsis of its performance across key parameters is as
below:
KEY PARAMETERS FY 23 (` crore) FY 22 (` crore) % Increase
Net Interest Income 5416 5037 7.9
Profit after Tax 1959 1011 93.7
Loan Disbursements 44802 29033 64.8
Assets under 70084 61444 14

Management (AUM) as
at year end
3.4 Sample Design
1. Demographic Census covers all banks located in the Bhopal area of Madhya
Pradesh
2. Model Framework All Customers and Bankers.
3. ANOVA Model Technology: It is possible a technology used that is deliberately
designed ready to identify respondents to a study. Equivalent
feedback providers from all groups of people are guaranteed to minimize sample
error.
4. The Elements Model is a learning feature for each respondent
5. Sample Size 425 Question papers are still being distributed but 415 are returned
with the correct answer from the Bhopal respondents. The researcher collected
data after building positive relationships with respondents.
6. Secondary Data Researcher collects second data from various research essays
and journals, books, journals, reports (government / company, newspaper,
television) in print format and online from various sources.
7. Collecting Tools to be used for data collection the questionnaire will be used to
measure all variables. Data will be collected in terms of 1-5 LIGERT,
measurement process and test type (Y / N).
8. Tools used for data analysis:
a. Internal stability
b. Honesty
c. Facts analysis
d. Testing
e. Frequency analysis
f. Postponement
g. CFA (Modeling Equation Modeling) by AMOS
9. Software used for statistical analysis Data collected with the help of various
statistics using SPSS software is analyzed by the researcher. The
Social Science (SPSS) version 20.0 version of Windows 7 will be used for
data analysis and hypothesis testing. The data collected will be processed using
Microsoft Excel 2010 with the help of various types of puzzles, charts
and charts for Windows 7
3.5 TYPES OF RESEARCH
FINANCIAL STATEMENT ANALYSIS
Study sample
HDFC Bank Finance Ltd., gold loan bank financial firms, were chosen as the
study's sample.
Data collection
Over a five-year period, secondary data and relevant information were collected
from the Research portal, annual reports, financial statements, and balance sheets
of the selected scheduled commercial bank. Furthermore, information was
gathered from a variety of blogs, specialized international journals, and relevant
previous studies. Methods of Data analysis Financial Ratios and Mean were used
to analyze and compare the financial performance of the listed gold loan
scheduled commercial banks in India.
3.6 Limitations Of The Study

1. The study is restricted to only the five financial years i.e.2015,2016,2017,2018
and 2019.
2. The study is completely based on secondary data and the accuracy of the analysis
depends on the data obtained.
CHAPTER-4
DATA REPRESENTATION AND ANALYSIS
4.1 DATA REPRESENTATION & INTERPRETATION
Ratio analysis is a quantitative method of determining a company's liquidity,

operating performance, and profitability by examining financial statements like
the balance sheet and income statement. Fundamental equity research relies
heavily on ratio analysis. In order to evaluate the economic position of the listed
companies under consideration, the following ratios are calculated:
1. Current Ratio
2. Quick Ratio
3. Debt to Equity Ratio
4. Interest coverage ratio
5. Gross Profit Ratio
6. Operating profit Ratio
7. Net Profit Ratio
8. Return on Capital Employed
9. Return on Assets
10. Return on equity
Current Ratio
The relationship between current assets and current liabilities is known as the
current ratio. It signifies a company's ability to satisfy its current obligations. A
higher current ratio implies a more robust dependency on long-term sources,
greater liquidity but lower profitability. This current ratio falls into the category of
liquidity ratios, which comprise a variety of other financial measures. All of these
ratios measure a company's activities in terms of its financial stability in relation
to its outstanding debt. A company's investors, creditors, and suppliers all need to
know the current ratio when making decisions. The current ratio is a critical
criterion for determining the viability of a commodity.
Here's an overview of ratio analysis with formulas:

1. Liquidity Ratios:
- Current Ratio: $ \frac{{\text{Current Assets}}}{{\text{Current
Liabilities}}} $
- Quick Ratio (Acid-Test Ratio): $ \frac{{\text{Current Assets - Inventory}}}
{{\text{Current Liabilities}}} $
2. Profitability Ratios:
- Gross Profit Margin: $ \frac{{\text{Gross Profit}}}{{\text{Revenue}}} \times
100 $
- Net Profit Margin: $ \frac{{\text{Net Profit}}}{{\text{Revenue}}} \times 100
$
- Return on Assets (ROA): $ \frac{{\text{Net Income}}}{{\text{Average Total
Assets}}} $
- Return on Equity (ROE): $ \frac{{\text{Net Income}}}{{\text{Average
Shareholders' Equity}}} $
3. Solvency Ratios:
- Debt-to-Equity Ratio: $ \frac{{\text{Total Debt}}}{{\text{Total Equity}}} $
- Debt Ratio: $ \frac{{\text{Total Debt}}}{{\text{Total Assets}}} $
- Interest Coverage Ratio: $ \frac{{\text{EBIT}}}{{\text{Interest
Expense}}} $
4. Efficiency Ratios:
- Inventory Turnover Ratio: $ \frac{{\text{Cost of Goods Sold}}}{{\
text{Average Inventory}}} $
- Accounts Receivable Turnover: $ \frac{{\text{Revenue}}}{{\text{Average
Accounts Receivable}}} $
- Asset Turnover Ratio: $ \frac{{\text{Revenue}}}{{\text{Average Total
Assets}}} $
5. Market Valuation Ratios:
- Price-to-Earnings (P/E) Ratio: $ \frac{{\text{Market Price per Share}}}{{\
text{Earnings per Share (EPS)}}} $
- Price-to-Book (P/B) Ratio: $ \frac{{\text{Market Price per Share}}}{{\
text{Book Value per Share}}} $
Ratio analysis involves calculating these ratios using financial data from a
company's financial statements (such as the income statement, balance sheet, and
cash flow statement) and interpreting them to assess the company's financial
performance, health, and valuation.
CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITIES
INTERPRATITION
Certainly! Interpretation of financial ratios involves analyzing the calculated
ratios to gain insights into various aspects of a company's financial performance
and health. Here's a brief interpretation of each category of financial ratios:
1. Liquidity Ratios:
- Current Ratio: A ratio greater than 1 indicates that the company has more
current assets than current liabilities, suggesting good short-term liquidity. A ratio
below 1 may indicate liquidity concerns.
- Quick Ratio (Acid-Test Ratio): This ratio excludes inventory from current
assets, providing a more stringent measure of liquidity. A ratio greater than 1
indicates good ability to meet short-term obligations without relying on inventory.
2. Profitability Ratios:
- Gross Profit Margin: Indicates the percentage of revenue retained after
deducting the cost of goods sold. Higher margins are generally favorable as they
indicate efficient cost management.
- Net Profit Margin: Reflects the percentage of revenue retained as net income
after all expenses, including taxes and interest. A higher net profit margin
indicates better profitability.
- Return on Assets (ROA): Measures the company's ability to generate profits
from its assets. A higher ROA indicates efficient asset utilization.
- Return on Equity (ROE): Indicates the return generated for shareholders'
equity investment. A higher ROE suggests better profitability and efficient use of
equity capital.
3. Solvency Ratios:
- Debt-to-Equity Ratio: Indicates the proportion of debt financing relative to
equity financing. A higher ratio may indicate higher financial risk and leverage.
- Debt Ratio: Measures the proportion of total assets financed by debt. A higher
ratio may indicate higher financial risk and dependency on debt financing.
- Interest Coverage Ratio: Indicates the company's ability to cover interest
expenses with operating income. A higher ratio suggests better ability to meet
interest obligations.
4. Efficiency Ratios:
- Inventory Turnover Ratio: Measures how efficiently inventory is managed. A
higher ratio indicates faster inventory turnover, which may signify efficient sales
and inventory management.
- Accounts Receivable Turnover: Measures how efficiently receivables are
collected. A higher ratio indicates faster collection of receivables.
- Asset Turnover Ratio: Indicates how efficiently assets are used to generate
revenue. A higher ratio suggests better asset utilization.
5. Market Valuation Ratios:

- Price-to-Earnings (P/E) Ratio: Indicates how much investors are willing to pay
per rupee of earnings. A higher ratio may indicate higher growth expectations or
overvaluation.
- Price-to-Book (P/B) Ratio: Compares the market value of a company's shares
to its book value per share. A ratio higher than 1 may indicate the stock is
overvalued, while a ratio below 1 may indicate undervaluation.
Interpretation of financial ratios should be done in conjunction with industry

benchmarks, historical trends, and qualitative analysis of the company's business
model, competitive position, and market dynamics to draw meaningful
conclusions about its financial performance and prospects.
DEBT EQUITY RATIO = LONG TERM LIABILITY *100

SHAREHOLDERS FUND
PAT net of P&E as % of NFA excel reveal
Table shows current assets and current liabilities over a period of 10 years from 2012-
2013 to 2021- 2022. The PAT net of P&E as % of NFA excel reveal mean 161.39 and its
Standard Deviation is 151.39 Coefficient of Variation is 136.43 and CAGR is 147.37fPAT
net of P&E as % of NFA excel reveal is high during period 2013 – 2014. It indicates the
firm is fluctuation trend in this ratio during the whole study period 2013-14 -2021- 2022.
PAT as % of NFA excel reveal
2013 to 2021- 2022. The PAT as % of NFA excel reveal mean 193.64 and its Standard
Deviation is 185.62 Coefficient of Variation is 173.03 and CAGR is 188.48 PAT as % of
NFA excel reveal is high during period 2013 – 2014. It indicates the firm is fluctuation
trend in this ratio during the whole study period 2013-14 -2021- 2022. PBDITA net of
P&E&OI&FI as % of NFA excel reveal
2013 to 2021- 2022. The PAT as % of NFA excel reveal mean 193.64 and its Standard
Deviation is 185.62 Coefficient of Variation is 173.03 and CAGR is 188.48 PAT as % of
NFA excel reveal is high during period 2013 – 2014. It indicates the firm is fluctuation
trend in this ratio during the whole study period 2013-14 -2021- 2022.
2013 to 2021- 2022. The PBDITA net of P&E&OI&FI as % of NFA excel reveal is -411
and its Standard Deviation is -418.99 Coefficient of Variation is - 423.63 and CAGR
follows a negative trend. PBDITA net of P&E&OI&FI as % of NFA excels reveal is high
during period 2017 – 2018. It indicates the firm is low in this ratio during the whole study
period 2012-13.
International Journal of Science and Research Archive, 2023, 08(02), 343–350

4.2 HYPOTHESIS TESTING
Two sample z-test, using Normal distribution (two-tailed) (validation)
1. CURRENT RATIO:
H0 hypothesis Since p-value > α, H01 is accepted.
The average of Group-1's population is considered to be equal to the

average. of the Group-2's population.
In other words, the difference between the average of the Group-1 and
Group-2 populations is not big enough to be statistically significant.
P-value
p-value equals 0.329447, ( p(x≤Z) = 0.835276 ). This means that if we
would reject H0, the chance of type I error (rejecting a correct H0) would
be too high: 0.3294 (32.94%).The larger the p-value the more it supports
H0.
The statistics
The test statistic Z equals 0.975228, is in the 95% critical value accepted
range: [- 1.9600 : 1.9600]. x1-x2=4.07, is in the 95% accepted range: [-
8.1800 : 0.9600].The statistic S' equals 4.173
Effect size
The observed standardized effect size is large (0.62). That indicates that
the magnitude of the difference between the average and average is large.
2. QUICK RATIO:
H0 hypothesis
Since p-value > α, H01 is accepted.

P-value

be too high: 0.3294 (32.94%). The larger the p-value the more it supports
H0.
The statistics
8.1800 : 0.9600]. The statistic S' equals 4.173
Effect size
3. DEBT TO EQUITY RATIO:
H0 hypothesis

P-value

H0.
The statistics
Effect size
The observed standardized effect size is small (0.26). That indicates that
the magnitude of the difference between the average and average is small.
4. INTEREST COVERAGE RATIO:
H0 hypothesis

P-value

H0.
The statistics
range: [- 1.9600 : 1.9600].x1-x2=0.13, is in the 95% accepted range: [-
Effect size
The observed standardized effect size is medium (0.44). That indicates

that the magnitude of the difference between the average and average is
medium.
5. GROSS PROFIT RATIO:
H0 hypothesis
Since p-value > α, H03 is accepted. The average of Group-1's population

is considered to be equal to the average. of the Group-2's population.
P-value

H0.
The statistics
10.0800 : 0.9600]. The statistic S' equals 5.141.
Effect size
6. OPERATING PROFIT RATIO:
H0 hypothesis Since p-value < α, H03 is rejected.
The average of Group-1's population is considered to be not equal to the

Group-2 populations is big enough to be statistically significant.
P-value
p-value equals 0.000344892, ( p(x≤Z) = 0.999828 ). This means that the

chance of type1 error (rejecting a correct H0) is small: 0.0003449
(0.034%). The smaller the p-value the more it supports H1.
The statistics
The test statistic Z equals 3.579015, is not in the 95% critical value
accepted range: [- 1.9600 : 1.9600]. x1-x2=7.54, is not in the 95%
accepted range: [-4.1300 : 0.9600]. The statistic S' equals 2.107
Effect size
7. NET PROFIT RATIO:

P-value

H0.
The statistics
Effect size
8. RETURN ON CAPITAL EMPLOYED:
H0 hypothesis Since p-value > α,
H03 is accepted. The average of Group-1's population is considered to be

equal to the average. of the Group-2's population.
Group2 populations is not big enough to be statistically significant.
P-value

H0.
The statistics
range: [-1.960: 1.9600]. x1-x2=4.99, is in the 95% accepted range: [-
13.2300: 0.9600]. The statistic S' equals 6.750
Effect-size
The observed standardized effect size is medium (0.47). That indicates

that the magnitude of the difference between the average and average is
medium.
9. RETURN ON ASSETS:

Group2 populations is not big enough to be statistically significant.
P-value

H0.
The statistics
Effect size
The observed standardized effect size is small (0.27). That indicates that
the magnitude of the difference between the average and average is small.
CHAPTER-5
RESULTS AND SUGGESTIONS
5.1 MAJOR FINDINGS
Here's a summary conclusion highlighting the major findings of HDFC

Bank:
"HDFC Bank stands as a beacon of strength and innovation in India's

banking sector, as evidenced by its stellar financial performance, robust
operational efficiency, and unwavering commitment to customer
satisfaction. Through a comprehensive suite of banking products and
services, HDFC Bank has established itself as a leader in retail banking,
corporate banking, and digital banking solutions.
Key findings reveal HDFC Bank's consistent revenue growth, driven by

strong lending operations, fee income, and a diversified asset portfolio.
The bank's focus on prudent risk management and efficient cost control
measures has resulted in healthy profitability metrics, with impressive net
interest margins and return on assets.
Furthermore, HDFC Bank's strategic investments in digital banking

technologies have positioned it as a frontrunner in the digital
transformation of India's banking landscape. With innovative digital
platforms and personalized customer experiences, HDFC Bank has
successfully enhanced customer engagement and retention while driving
operational efficiencies.
Moreover, HDFC Bank's strong asset quality, prudent provisioning

practices, and adequate capitalization underscore its resilience to
economic uncertainties and credit risks. The bank's prudent approach to
asset-liability management and adherence to regulatory guidelines have
strengthened its financial stability and sustainability.
In conclusion, HDFC Bank's success story is characterized by its relentless

pursuit of excellence, customer-centric approach, and adaptability to
evolving market dynamics. As it continues to innovate and expand its
footprint, HDFC Bank remains well-positioned to navigate future
challenges and seize opportunities for growth, reaffirming its status as a
cornerstone of India's banking industry."

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TABLE OF CONTENT

PARTICULARS Page No.

1.1 Rationale of the Study

1.2 Introduction to the Industry

1.3 Introduction of the Company

1.4 Justification of the topic

Chapter 2: Review of Literature

2.1 National Reviews

2.2 International reviews

Chapter 3: Research methodology

3.1 Objectives of the Study

3.2 Research Hypothesis

3.3 Scope of the study

3.4 Data collection method

3.5 Sample design

Chapter 4: Data Representation and Analysis

4.1 Data Representation and Interpretation

4.2 Hypothesis Testing

Chapter 5: Results and Discussions

INTRODUCTION OF THE TOPIC

1.2 INTRODUCTION TO THE INDUSTRY

1. Scheduled Public Sector Banks

Scheduled Co-operative banks are further divided into 2 types namely:

1. Scheduled State Co-operative banks

HISTORY OF SCHEDULED BANK IN INDIA

2. Post-Independence Reforms: After independence, the Indian government embarked on

3. Nationalization of Banks: In 1969, the Indian government undertook a historic measure

4. Rise of Scheduled Commercial Banks: Following nationalization, the banking

7. Regulatory Framework: The RBI plays a central role in regulating scheduled

HDFC BANK .Ltd

As a division of the Housing Development Finance Corporation, HDFC Bank was

1. Prime Minister's Employment Generation Programme (PMEGP)

A branch of HDFC Bank in Hyderabad

Mergers and acquisitions

Listings and shareholding

HDFC Bank branch in Pune

5 NPS (HDFC Pension Management Scheme

How does a gold loan work?

How to get a gold loan?

What is the gold loan tenure?

Benefits of Gold Loan

 Quick and Easy Access to Funds

 Lower Interest Rates

 High Loan Amounts Based on Gold Value

 No Prepayment Penalties and Versatile Usage

Eligibility Criteria for Gold Loan

 Individuals between 18 and 75 years can apply for a gold loan.

Documents Required for Gold Loan

 Proof of Identity (Any One):

Aadhar Card, PAN Card, Passport, Voter ID, Driving License.

 Proof of Address (Any One):

Recent passport-sized photographs of the applicant.

Invoice or receipt of the pledged gold item (if available).

 Duly Signed Application Form:

A filled and signed application form provided by the lending institution.

 Income Proof (Optional):

 Borrower’s Signature Proof:

Signatures on the application form should match those on the identification

 Bank Account Details: