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 Submitted By : Monika Yadav BBA Part III
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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