Page 1 of 5
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 12
November 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 250
A Study on Importance of Assets and Libilities
Dr.I.Satyanarayana1
, N.B.C. Sidhu*2
, Perumandla Harish 3 (15X31E0024)
Abstract:
My project title is “A study on assets and liabilities
of HDFC Bank”. DFC deals with various types of products
in the industry and it also offers flexible services to the
customers. My study involves in knowing about the products
under assets and liabilities and analyzing those products
offered by bank. Assets are the applications of the bank in
the industry. The loans are the main assets to the bank.
Liabilities are the sources to the bank. The accounts and
deposits are considered to be the liabilities of the bank.
Liabilities play a key role in the banking industry when
compared to assets. Through this project, I have learned the
features and benefits of the assets and liabilities. And I have
done the analysis part of assets and liabilities of bank using
some mathematical tools to know the financial performance
of the bank. In assets, I have learnt various types of loans,
credit cards and in liabilities, various types of accounts &
deposits, debit cards, insurance and mutual funds. In this
project the data is collected through direct interaction with
bank officials, bank information brochures and official
websites.
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1.Principal, Sri Indu institute of Engineering & Technology, Sheriguda, Ibrahimpatnam,Telangana, India.
2.Assoc. Prof & HOD, Dept. of Master of Business Administration, Sri Indu Institute of Engineering & Technology,
Sheriguda, Ibrahimpatnam, Telangna, India.
3.Student, Dept. of Master of Business Administration, Sri Indu Institute of Engineering & Technology, Sheriguda,
Ibrahimpatnam, Telangna, India.
Key words: Financial Markets and functions, financial Policy, Asset management, Asset Accounting, Liabilities.....
Introduction:
The project “assets and liabilities of HDFC Bank”
primarily concentrates on the assets and liabilities of
the bank. There are different types of products and
services which come under assets and liabilities of
the bank.
The assets are those which are owned by the business or
they are the applications of the business. There are
different types of products facilitated by the bank as the
assets. The assets of HDFC Bank are credit cards, auto
loans, personal loans, car loans, education loans, loans
against rental receivables, loans against properties, loans
against securities, gold loans, two wheeler loans, express
loans, trade finance, business banking mortgage, home
loans and smart draft.,etc.
The liabilities are those owes by business or they are the
sources of the business. There are also different products
belong to liabilities. Those are savings account, current
account, Demat account, fixed deposits, term deposits, safe
deposit lockers, prepaid cards, debit cards, insurance,
mutual funds, Forex etc.
The liabilities are more important when compared to the
assets of the bank as they are taking high interest to the
bank than the assets.
Banking sector is the big boom to the Indian financial
system in recent times. Without a sound and effective
banking system in India it cannot have a healthy economy.
A large number of new players have entered the market and
trying to gain market share in this rapidly improving
market. The assets are those which are owned by the
business or they are the applications of the business. There
are different types of products facilitated by the bank as the
assets. The assets of HDFC Bank are credit cards, auto
loans, personal loans, car loans, education loans, loans
against rental receivables, loans against properties, loans
against securities, gold loans, two wheeler loans, express
loans, trade finance, business banking mortgage, home
loans and smart draft.,etc. Banking sector is the big boom to
the Indian financial system in recent times. Without a sound
and effective banking system in India it cannot have a
healthy economy. A large number of new players have
entered the market and trying to gain market share in this
rapidly improving market.
I have completed my project work successfully in HDFC
Bank. I have carried on my project in Banjarahills branch
which is one of the well- known branches of HDFC Bank.
My project title is assets and liabilities of HDFC Bank.
So, my study is on assets products and liabilities products
offered by HDFC Bank.
This study helped me to know the performance of assets
and liabilities of HDFC Bank.
The word “Bank” is of Germanic origin though some persons
trace its origin to the French word “Banqui” and Italian word
“Banca”. It referred to a bench for keeping, lending and
exchanging money or coins in the market place by
moneylenders and money changers. The first bank called the
“Bank of Venice” was established in Venice, Italy in 1157 to
finance the monarch in his wars. The modern banking began
with the English goldsmith only after 1640.
The first bank in India was the “Bank of Hindustan” started in
1770 by Alexander and company an English agency house in
Calcutta which failed in 1782 with the closure of the agency
Page 2 of 5
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 12
November 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 251
house. The first bank in the modern sense was established in
the Bengal Presidency as the Bank of Bengal in 1806.
3.2 History of banks:
It was the „Merchant Banker‟ who first evolved the system of
banking by trading in commodities than money.
Their trading activities required the remittance of money from
one place to another. For this they issued “Hundis” to remit
funds. In India, such merchant bankers are known as “Seths”.
The next stage in the growing of banks was goldsmith. If he is
honest person, merchants in the neighborhood started leaving
their bullions, money and ornaments in his care.
As evidence for receiving valuables, he issued a receipt. Since
gold and silver coins had no marks of the owner, the goldsmith
started lending them. As the goldsmith was prepared to give
the holder of the receipt an equal amount of money on
demand, the goldsmith receipt became like cheque as a
medium of exchange and means of payment. The next stage in
the growth of banking is the moneylender. The goldsmith
found that on an average the withdrawals of coins were much
less than the deposits with him. So, he started advancing the
coins on loan by charging interest. As a safeguard, he kept
some money in the reserve. Thus the goldsmith – moneylender
became a banker who started performing the two functions of
modern banking that of accepting deposits and advancing
loans.
Definition of bank:
„Institution for keeping, lending and exchanging of money‟ –
By Chamber twentieth century dictionary.
„An organization whose principal operations are concerned
with the accumulations of the temporarily idle money of the
general public for the purpose of advancing to others for
expenditure‟ - By Kent.
Thus bank is an institution which accepts deposits from public
and in turn advances loans by creating credit.
3.3 History of banking in India:
Without a sound and effective banking system in India it
cannot have a healthy economy. The banking system of India
should not only be hassle free but it should also be able to
meet new challenges posed by the technology and any other
external and internal factors.
For the past three decades India‟s banking system has several
outstanding achievements to its credit. The most striking is its
extensive reach. It is no longer confined to only metropolitans
or cosmopolitans in India. Infact, Indian banking system has
reached even to the remote corners of the country. This is one
of the main reasons of the India‟s growth process.
The government‟s regular policy for Indian bank since 1969
has paid rich dividends with the nationalization of 14 major
private banks of India. Not long ago, an account holder had to
wait for hours at the bank counters for getting a draft or for
withdrawing his own money. Today, he has a choice. Gone are
days when most efficient bank transferred money from one
branch to another in two days. Now it is simple as instant
messaging or dial a pizza. Money has become the order of the
day. The first bank in India, though conservative, was
established in 1786.
From 1786 till today, the journey of Indian banking system can
be segregated into three distinct phases.
They are as mentioned below:
Early phase from 1786 to 1969 of Indian banks.
Nationalization of Indian banks and up to 1991 prior
to Indian Banking Sector Reforms.
New phase of Indian Banking system with the advent
of Indian Financial and Banking Sector Reforms
after 1991.
Phase- I:
The General Bank of India was set up in the year 1786. Next
came Bank of Hindustan and Bengal Bank. The East India
Company established Bank of Bengal (1809), Bank of
Bombay (1840) and Bank of Madras (1843) as independent
units and called it Presidency Banks. These three banks were
amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly
European shareholders.
In 1865 Allahabad Bank was established and first time
exclusively by Indians, Punjab National Bank Ltd.was setup in
1894 with headquarters at Lahore. Between 1906 and 1913,
Bank of India, Central Bank of India, Bank of Baroda, Canara
Bank. Indian Bank and Bank of Mysore were setup. Reserve
Bank of India came in 1935. During the first phase the growth
was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100
banks, mostly small. To streamline the functioning and
activities of commercial banks, the Government of India came
up with the Banking Companies Act, 1949 which was later
changed to Banking Regulation Act 1949 as per amending Act
of 1965 (Act No.23 of 1965). Reserve Bank of India was
vested with extensive powers for the supervision of banking in
India as the Central Banking Authority. During those days
public has lesser confidence in the banks. As an aftermath
deposit mobilization was slow. Abreast of it the savings bank
facility provided by the postal department was comparatively
safer. Moreover, funds were largely given to traders.
Phase- II:
Government took major steps in this Indian Banking Sector
Reforms after independence. In 1955, it nationalized Imperial
Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank
of India to act as the principal agent of RBI and to handle
banking transactions of the Union and State Governments.
All over the country seven banks forming subsidiary of State
Bank of India was nationalized in 1960. On 19th July, 1969
major process of nationalization was carried out. It was the
effort of the Prime Minister of India, Mrs. Indira Gandhi, 14
major commercial banks in the country were nationalized.
Second phase of nationalization Indian Banking Reform was
carried out in 1980 with seven more banks. This step brought
Page 3 of 5
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 12
November 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 252
80% of the banking segment in India under Government of
India to Regulate Banking Institutions in the country:
1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SEBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits
over 200 crores.
After the nationalization of banks, the branches of the public
sector bank India rose to approximately 800% in deposits and
advances took a huge jump by 11,000%. Banking in the
sunshine of Government ownership gave the public implicit
faith and immense confidence about the sustainability of these
institutions.
Phase- III:
This phase has introduced many more products and facilities in
the banking sector in its reforms measures. In 1991, under the
chairmanship of M. Narasimham, a committee was set up by
his name which worked for the liberalization of banking
practices. The country is flooded with foreign banks and their
ATM stations. Efforts are being put to give a satisfactory
service to customers. Phone banking and net banking is
introduced. The entire system became more convenient and
swift. Time is given more importance than money. The
financial system of India has shown a great deal of resilience.
It is sheltered from any crisis triggered by any external
macroeconomics shock as other East Asian Countries suffered.
This is all due to a flexible exchange rate regime, the foreign
reserves are high, the capital account is not yet fully
convertible, and banks and their customers have limited
foreign exchange exposure.
3.4 Nationalization of banks in India:
The nationalization of banks in India took place in 1969 by
Mrs. Indira Gandhi the Prime Minister. It nationalized 14
banks then. These banks were mostly owned by businessman
and even managed them. Before the steps of nationalization of
Indian banks, only State Bank of India (SBI) was nationalized.
It took place in July 1955. Nationalization of seven State
Banks of India (formed subsidiaries) took place on 19th July,
1960. The state bank of India is India‟s largest commercial
bank and is ranked one of the top five banks world wide, it
serves 90 million customers through a network of 9,000
branches ad it offers either direct or through subsidiaries a
wide range of banking services. The second phase of
nationalization of Indian banks took place in the year 1980.
Seven more banks were nationalized with deposits over 200
crores. Till this year, approximately 80% in deposits and
advances took a huge jump by 11000%.
1955: nationalization of state bank of India.
1959: nationalization of SBI subsidiaries.
1969: nationalization of 14 major banks.
1980: nationalization of seven banks with deposits
over 200 crores.
3.5 Scheduled commercial banks in India:
The commercial banking structure in India consists of:
Scheduled banks in India.
Unscheduled banks in India.
Scheduled banks in India constitute those banks which have
been included in the second schedule of Reserve Bank of India
(RBI) Act, 1934. RBI in turn includes only those banks in this
schedule which satisfy the criteria laid down vide section 42
(6) (a) of the Act.
Unit linked plans:
Unit Linked Life Insurance Plans are different from traditional
insurance plans & are subject to different risk factors. Here the
customer has the opportunity to invest his premium, net of
charges in his chosen funds in the proportion he specifies.
1. HDFC Unit linked young star plus II:
This plan provides security for policyholder‟s child and makes
those savings on his behalf in policyholder‟s absence. It is an
outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments.
Features and benefits:
There is facility of regular Loyalty Units to boost fund
value every year.
Flexible benefit combinations, payment options and
flexible additional benefit options such as critical
illness cover are available.
In case of unfortunate demise of the parent, HDFC Standard
Life will
Pay the Sum Assured parent had chosen to his child.
For Double benefit continue to pay the 100% original
premiums customer had chosen towards policy
For Triple Benefit continue to pay the 50% of original
premiums customer had chosen in the policy and 50% of the
premium to the child.
At the time of maturity, policyholder‟s child will receive
the accumulated value of his funds.
2. HDFC Unit linked endowment plus II:
The customer can choose premium and the investment fund or
funds. HDFC Standard Life will then, invest that premium, net
of premium allocation charges, in his chosen funds in the
proportion he specifies.
Features and benefits:
In the event of policyholder's unfortunate demise before
the end of the policy term, HDFC Standard Life will pay the
greater of the Sum Assured (less any withdrawals made during
the two-year period immediately preceding the intimation of
death) and the total fund value to policyholder's family. The
policy will terminate thereafter.
On the chosen maturity date, the policyholder will get
the fund value. However the policyholder has the choice of
"Settlement Option" means he can take fund in periodical
installments over the period, which may extend up to 5 years.
3. HDFC Unit linked enhanced life protection II:
