The services of cash management and transactional banking have been provided to corporate clients, shareholders, recipients, banks, and private banks such as HDFC banks at an early stage. HDFC Bank has always been an extremely promising bank and the largest private sector bank in India.
In this case study, we will explore the outstanding Business Model of HDFC Bank and how it operates. Let’s start! But first, let’s learn more about the company.
About HDFC Bank
Headquartered in Mumbai, Maharashtra, HDFC Bank Limited is a Metropolitan India bank and financial services firm. HDFC Bank, by its assets and market capitalization as of April 2021, is India’s largest private sector bank. It is the third-largest corporation in the Indian stock exchanges through market capitalization. It also is India’s 15th biggest employer, employing around 120,000 people.
Mr. HT Parekh, HDFC’s founder, had a vision for a dynamic organization that was the client’s primary service. This vision also made HDFC one of the most important participants in the home financing business, starting from humble beginnings. HDFC’s broad network of networked offices throughout India and outreach activities in numerous locations ensure that home buyers and existing clients have a seamless experience.
Where are branches of banks established?
- HDFC Bank is India’s first private bank to be approved by the Reserve Bank of India (RBI).
- The Bank has very broadly expanded its network and has a vast customer base throughout the entire country.
- HDFC Bank today has a network of more than 5608 branches with 14 897 ATMs in over 2902 cities.
Business Model of HDFC Bank
In India, the main financial company has always guaranteed and delivered its services. The HDFC corporation as a financial company is quite well established in the market. Furthermore, its deposit and loan disbursement terms have been revolutionary, which keeps it at the forefront of finance.
HDFC Bank has a highly subtle business model plan that generates universal banking synergy by selling its products across India to its subsidiaries with no commodities. The Bank has gained a huge customer base and enormous finance handling. The bank has become the first-ever most trustworthy and exclusive private banking in India with exceptional customer care, and is currently the HDFC model for business, achieving hundreds more.
HDFC Bank Industry Analysis
There are twelve PSU banks and twenty-two private sector banks. There are 1,485 urban cooperative banking banks, 56 regional rural banks. There had been a steady increase in the total number of ATMs in India, with 209,110 by August 2020 and a further increase of 407,000 by 2021. The credit demand increased as a credit to the GDP ratio advanced to 56 per cent because of strong economic activity and expansion, higher wages, and greater access to credit. But it’s much less than the world’s advanced economies. It is roughly 150-200 per cent even in China.
HDFC Bank Products and Services Offered
HDFC has divided customers based on an income group such as formulating classic, preferred, and imperial structures and also using the financial needs of its customers, to segment markets such as those in need of general banking services and those customers in need of investment consultancies who are HNI’s.
1. Payment Facilities
- Money transfer.
- Debit and Credit cards.
- Bill payment system.
- Savings accounts.
- Savings deposits
- Safe deposit locker
- High Network Banking
3. Investment Facilities
- Mutual funds
- Bonds and Securities
4. Borrowing Facilities
- Loans against assets.
- Other loans.
- Credit cards.
5. Insurance Facilities
- Health and accident
- Social Security Schemes
Moreover, This Bank also offers various digital products including SmartBUY and Payzapp.
Distribution strategy of HDFC Bank
HDFC has decentralized a majority of business activities as a Tech-Savvy commercial banking organization, making it an online interface that is accessible and user-friendly.
With over 12,500 ATMs, the HDFC Bank operates an on a shoreside and offshore physical distribution network of over 4,700 branches in more than 2,600 cities. “EVA” has been an artificial intelligence Chatbot Assistant recently created by this Bank, which assists consumers in giving product information and in answering customer requests in real-time.
Further, the bank facilitates its services through various alternate delivery channels such as mobile banking, net banking, SMS banking, phone banking, ATMs, etc.
Customer analysis of HDFC Bank
HDFC Bank has separated its clients based on MAB (Monthly average balance)/QAB (Quarterly average balance). It has been categorized as General, Classic, Preferred, and Imperia. General customers are those who do day-to-day banking activities and have to maintain the minimum required balance as prescribed by the Bank from time to time.
1 lakh of savings account or 5 lakh of savings account combination with fixed deposit. Prefixed clients are the one-lag, or five lakhs of a current QAB, or 15 lakh in a combination of a Savings Account, Fixed Deposit, and current account, whereas Imperia is the 10 lakh, Fixed Deposit, MAB, or 15 lakh, or 15 lakh, Savings, Fixed, Savings Account, Master.
How does HDFC Bank operate?
All banks are considered the safest house for people to conserve their money and funds. Hereby growing technology, private banks are putting everything in their power to provide the best services to their customers and gain their loyalty.
HDFC Bank operates various segments, they are:
1. Retail Banking
In an HDFC branch or ATM or via other digital channels, including telephone, net banking, or mobile banking, HDFC Bank provides its customers with a range of financial goods and services.
Over the Treasury services, the Bank guides businesses in generating great outcomes on their funding and financial management risk. It includes the product services of the local currency market and debt securities, foreign derivatives and exchange, and capitals.
3. Wholesale Banking
The bank provides a broad spectrum of transactional and commercial banking services to various businesses and organizations regardless of their size. These employees are trade services, cash management, working capital finance, and transactional services.
With this, we come to the end of the Business Model of HDFC Bank. Let’s conclude this case study in the section below.
This Bank has provided tons of promising services to its customers. Bank of HDFC as a private bank, its customers have earned perfect confidence and has a significant customer base across the country. Several financial and banking services are available to the Bank, such as treasury and commercial banking activities. This Bank facilitates the banking services of various upper and middle-income people and organizations across India. HDFC bank has a very strong position in the market and is considered the most reliable and reasonable private bank in India. HDFC bank pursued a pretty heroic as well as a subtle business model which has brought tremendous growth and development to the bank and its services.
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