A

Project Report

On

"FINANCIAL MANAGEMENT OF BANKS"

( A CASE STUDY OF HDFC BANK)

Submitted to University of Rajasthan

In lieu of Paper VI for the Award of Bachelor of Business

Administration Degree

2011-2012

Supervised By:Dr. N.M. Sharma Asst. Professor Department of Business Adm. University Maharani 's College

Submitted By : Monika YadavBBA Part III

MAHARANI COLLEGE

UNIVERSITY OF RAJASTHAN, JAIPUR

DECLARATION

I hereby declare that the Summer Training Report on the topic of "Financial Management of HDFC Bank Ltd." confined to search the subjective insight "Service Proliferation and Customer Satisfaction at HDFC Bank Ltd., Jaipur submitted by me to University of Rajasthan, Jaipur is of my own and it is not submitted to any other college or published any time before.

MONIKA YADAV

CERTIFICATE

This is to certify that Ms. Monika Yadav a

student of BBA Part 3rd of Maharani College, Jaipur has

prepared her project entitled "Financial Management

of HDFC Bank Ltd." under my supervision.

She has prepared the report on the basis of

training received at HDFC Bank Ltd., for a period of 45

days.

Date :

Dr. N.M. Sharma

Asst. Professor Deptt. of Business Adm.

University Maharani 's College

ACKNOWLEDGEMENT

Any job in this world, however trivial or tough cannot be accomplished without the assistance of other. I would hereby take the opportunity to express my indebtedness to people who have helped me to accomplish this task. With a deep sense of gratitude, I once express my sincere thanks to Dr. N.M. Sharma for their active support and continuous guidance without which it would have been difficult for me to sustain in this world. I would also like to thank Mr. MUKUL CHATURVEDI FINANCE DEVELOPMENT MANAGER, of HDFC Ltd., for providing me with the required data. And I am very much thankful to the whole staff of HDFC Bank for their support and suggestions.

At the very outset, I would like to extend my heart filled gratitude to MR. NavinMaheshwari, Branch Manager of HDFC Bank for giving me an opportunity to work on such an interesting topic. His directions and valuable inputs kept me motivated and inspired to keep working toward the objectives of the study.

MONIKA YADAV

PREFACE

The summer training project of management courses plays an important role for a management student to develop into a well groomed professional. It provides the theoretical concepts and practical exposure in the field of application. Summer training project also provides idea of dynamic and versatile professional world as well as an exposure to the details and complexities of the corporate world. During my BBA curriculum I studied many subjects, which if not applied properly are simply waste of time. At HDFC Bank Ltd. I got a chance to apply management theories to the latest competitive and marketing oriented environment. In my project study I tried to know about the real aspects of Financial management. My project study covers the different aspects of finance, introduction of financial, and financial analysis of HDFC BANK LTD. and so on.

Index

Sr. No.Contents

1Financial Management : An Introduction

2HDFC Bank : A Profile

3Financial Management of HDFC Bank

Data Analysis Interpretation

4Working Capital Management

5SWOT Analysis

6Conclusions and Suggestions

Appendix

Bibliography &Webliography

FINANCIAL MANAGEMENT

Meaning and definition

Financial means procuring sources of money supply and allocation of these sources

on the basis of forecasting monetary requirements of the business. The word

'Management' refers to planning, organization, co-ordination and control of human

activities and physical resources for achieving the objectives of an enterprise.

Thus, financial management is that part of business management which is

concerned with the planning and controlling of a firm's financial resources i.e.

management of finance function.

Financial management is the ways and means of managing money. i.e. the

determination, acquisition, allocation and utilization of financial resources usually

with the aim of achieving some particular goals or objectives.

Financial management is a functional area of business management. It is viewed as

an integral part of overall management. It relates mainly with the control of current

performance, acquisition and profitable use of these funds, planning for future

activities and employs economically most suitable methods such as financial

accounting, cost accounting, budgeting, statistics and so on. In nutshell, financial

management is the planning, organizing, directing and controlling of eh

procurement and utilization of funds and safe disposal of profit to the end that

individual, organizational and social objectives are accomplished.

SIGNIFICANCE OF FINANCIAL MANAGEMENT

The main objective of financial management is the maximum utilization of

financial resources with maximum profits. Therefore, the study of financial

management is important for both profit-earning and non-profit earning

institutions.

The Financial management, therefore, gained much important over the time. It has

now assumed such an important place in the business management that the success

of a business firm largely depends upon the financial policies developed and

followed by the financial management.

In the words of Ezra soloman "financial management is properly viewed as an

integral part of overall management rather than as a staff specially concerned with

production, marketing and other functions within an enterprise whether decisions

are made about the acquisitions or distribution of assets," The importance of

financial management is being discussed under the following heads:

1. Determinant of Business Success: Sound financial management is the

index of the success of an enterprise, its existence and growth. An analysis

of the causes of many sick units point out that sickness of these units is the

result of defective financial management. Sound financial management

makes possible the use of available resources in the form of men, materials

and machines more effectively. Thus, it helps in preparation of plans for

development and expansion and their successful execution.

2. Optimal Utilization of Resources: Sound financial management

emphasizes the optimum utilization of resources of the enterprise. In fact,

the failure of a business enterprise is not always the result of inadequate

finance but it is the result of defective management of funds. As Collin

Broods has observed. "bad production management and bad sales

management and bad sales management have slain their hundreds, but faulty

finance slains its thousands. "Financial management plays an important role

in the maximum exploitation and utilization of the resources of the

enterprise. Country like India, where capital is limited, effective utilization

of financial is of great significance. It gives maximum returns by increasing

the productivity of capital funds.

3. Focal Point of Decision-making :Earlier, financial decisions were based on

intuition, but in modern times, the basis of decision-making is scientific

financial analysis. Financial management provides scientific analysis of facts

and figures through various financial tools such as, comparative financial

statements, budgets, ratio analysis, variance analysis, cost-volume-profit

analysis etc. These tools help in evaluating the profitability of the project in

the given circumstances, so that a proper decision may be taken to minimize

the risk involved in the project.

4. Measurement of Performance : The performance of the firm can be

measured by its financial results i.e. by its size of earnings. Risk and

profitability are two major factors which jointly determine the value of the

firm. financial decisions which increase the profitability will reduce the

value of the firm, and on the other hand, financial decisions which increase

the profitability will enhance the value of the firm. Therefore, risk and

profitability are two essential ingredients of a business concern as Weston

and Briham have observed, "financialdecisions affect the size of earnings

stream or profitability and the riskness of the firm. Policy decisions affect

risk and profitability and these two factors jointly determine the value of the

firm.

CHAPTER- 2

HDFC Bank: A Profile

CHAPTER- 3

Financial Managemen

t of HDFC Bank

Data Analysis Interpretation

n

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