Summer Internship Project Report On “AWARENESS OF FINANCIAL PLANNING IN EMERGING INDIAN MARKET ON HDFC LIFE" Submitted in Partial Fulfillment of the Requirements for Award of the Master’s Degree in Business Administration SUBMITTED BY: NAME BATCH: 2011-2013 UNDER THE GUIDANCE OF: MRS. SHILPA PURI 1
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Summer Internship Project Report
On
“AWARENESS OF FINANCIAL PLANNING IN
EMERGING INDIAN MARKET ON HDFC LIFE"
Submitted in Partial Fulfillment of the Requirements for Award of
the Master’s Degree in Business Administration
SUBMITTED BY:
NAMEBATCH: 2011-2013
UNDER THE GUIDANCE OF:
MRS. SHILPA PURI
INTERNATIONAL MANAGEMENT CENTRE, NEW
DELHI
1
DECLARATION
I, Name have completed the project title “Awareness Of Financial Planning
In Emerging Indian Market on HDFC Life” in HDFC Life Insurance under
the guidance of Mrs Shilpa Puri (Faculty Guide) in the partial fulfillment of the
requirement for the award of Post Graduate Diploma in Management of
International Management Centre, New Delhi. This is an original piece of work
& I have neither copied and nor submitted it earlier elsewhere.
Signature
2
CERTIFICATE OF ORIGINALITY
This is to certify that the project titled “Awareness Of Financial Planning In
Emerging Indian Market on HDFC Life” is an academic work done by
Shweta Singh submitted in partial fulfillment for the award of the Diploma in
PGDM from “International Management Centre, New Delhi” under my
guidance and direction. To the best of my knowledge and belief the data &
information presented by her in the project has not been submitted earlier.
Shilpa Tandon
3
ACKNOWLEDGEMENT
On the successful completion of this project I would like to express my
gratitude to all the people who have helped me throughout the project.
At first, I owe my debt of thanks to HDFC Life, which gave me an opportunity
to do this project work.
I wish to extend my deep and sincere gratitude to Mr. Mukesh Srivastava
(SDM) and Mrs. Shweta Dhanuka (SDM) who provided me with their
guidance from day one and also helped me whole heartedly to achieve the
ultimate goal of the project.
I am also indebted to the Institute, International Management Centre, and its
staff members for providing me with this learning opportunity.
Name
4
TABLE OF CONTENTS
S.NO TOPIC PAGES NO
1. CHAPTER-1
INTRODUCTION
6
2. CHAPTER 2
RESEARCH METHODLOGY
39
3. CHAPTER-3
CONCEPTUAL DISCUSSION
42
4. CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
51
5. CHAPTER-5
CONCLUSION & SUGGESTIONS
63
6. APPENDICES 68
7. BIBLIOGRAPHY 73
5
CHAPTER 1
INTRODUCTION
INDUSTRY PROFILE
Overview
With largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. It’s a business growing at the rate of
15-20 per cent annually.
Together with banking services, it adds about 7 percent to the country’s
GDP .In spite of all this growth the statistics of the penetration of the insurance
in the country is very poor. Nearly 80 per cent of Indian population is without
life insurance cover while health insurance and non-life insurance continues to
be below international standards. And this part of the population is also subject
to weak social security and pension systems with hardly any old age income
security. This it-self is an indicator that growth potential for the insurance sector
is immense.
Historical Perspective
The insurance came to India from UK; with the establishment of the Oriental
Life insurance Corporation in 1818.The Indian life insurance company act 1912
was the first statutory body that started to regulate the life insurance business in
India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been
established in India. Then the central government took over these companies
and as a result the LIC was formed. Since then LIC has worked towards
spreading life insurance and building a wide network across the length and the
breath of the country.
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Important milestones in the life insurance business in India:
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1956: 245 Indian and foreign insurers and provident societies were taken over
by the central government and nationalized. LIC formed by an Act of
Parliament- LIC Act 1956- with a capital contribution of Rs.5 cr. from the
Government of India.
Important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up- the first company to transact
all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business
practices.
1972: The general insurance business in India nationalized through The General
Insurance Business (Nationalization) Act, 1972 with effect from 1st January
1973. 107 insurers amalgamated and grouped into four companies- the National
Insurance Company Limited, the New India Assurance Company Limited, the
Oriental Insurance Company Ltd. and the United India Insurance Company Ltd.
GIC incorporated as a company.
Insurance Sector Reforms
Prior to liberalization of Insurance industry, Life insurance was monopoly
of LIC.
In 1993, Malhotra Committee- headed by former Finance Secretary and RBI
Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry
and recommend its future direction. The Malhotra committee was set up with
the objective of complementing the reforms initiated in the financial sector. The
reforms were aimed at creating a more efficient and competitive financial
7
system suitable for the requirements of the economy keeping in mind the
structural changes currently underway and recognizing that insurance is an
important part of the overall financial system where it was necessary to address
the need for similar reforms. In 1994, the committee submitted the report and
some of the key recommendations included:
Structure
Government stake in the insurance Companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations.
Competition
Private Companies with a minimum paid up capital of Rs.1 billion should be
allowed to enter the sector. No Company should deal in both Life and General
Insurance through a single entity. Foreign companies may be allowed to enter
the industry in collaboration with the domestic companies.
Regulatory Body
The Insurance Act should be changed. An Insurance Regulatory body should be
set up. Controller of Insurance- a part of the Finance Ministry- should be made
independent
Investments
Mandatory Investments of LIC Life Fund in government securities to be
reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than
5% in any company (there current holdings to be brought down to this level
over a period of time)
Customer Service
LIC should pay interest on delays in payments beyond 30 days. Insurance
companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology is to be carried out in
the insurance industry.
8
STATISTICS (INDIAN & GLOBAL)
This section gives the users important and detailed statistics of the Indian as
well as the Global insurance industry. These statistics would give important
insights of where the respective markets are headed for.
The global life insurance market stands at $1,521.2 billion while the
non-life insurance market is placed at $922.4 billion.
The United States itself accounts for about one-third of the $2443.6
billion global insurance market and Japan stands next with a 20.62%
share.
India takes the 23rd position with US $9.933 billion annual premium
collections and a meager 0.41% share.
Out of one billion people in India, only 35 million people are covered by
insurance.
India's life insurance premium as a percentage of GDP is just 1.77 per
cent.
The income derived by GIC and its subsidiary companies through
investment was Rs.2491.76 crore and the investable fund generated was
Rs.2843 crore in 1999-2000.
Indian insurance market is set to touch $25 billion by 2010, on the
assumption of a 7 per cent real annual growth in GDP.
NATURE OF INDUSTRY
The insurance industry provides protection against financial losses resulting
from a variety of perils. By purchasing insurance policies, individuals and
businesses can receive reimbursement for losses due to car accidents, theft of
property, and fire and storm damage; medical expenses; and loss of income due
to disability or death.
The insurance industry consists mainly of insurance carriers (or insurers) and
insurance agencies and brokerages. In general, insurance carriers are large
9
companies that provide insurance and assume the risks covered by the policy.
Insurance agencies and brokerages sell insurance policies for the carriers.
Insurance companies assume the risk associated with annuities and insurance
policies and assign premiums to be paid for the policies. In the policy, the
companies states the length and conditions of the agreement, exactly which
losses it will provide compensation for, and how much will be awarded.
The premium charged for the policy is based primarily on the amount to be
awarded in case of loss, as well as the likelihood that the insurance carrier will
actually have to pay. In order to be able to compensate policyholders for their
losses, insurance companies invest the money they receive in premiums,
building up a portfolio of financial assets and income-producing real estate
which can then be used to pay off any future claims that may be brought.
There are two basic types of insurance carriers: Direct and Reinsurance.
Direct carriers are responsible for the initial underwriting of insurance policies
and annuities, while Reinsurance carriers assume all or part of the risk
associated with the existing insurance policies originally underwritten by other
insurance carriers.
Direct insurance carriers offer a variety of insurance policies.
Life insurance provides financial protection to beneficiaries—usually spouses
and dependent children—upon the death of the insured.
Disability insurance supplies a preset income to an insured person who is
unable to work due to injury or illness
Health insurance pays the expenses resulting from accidents and illness.
An Annuity (a contract or a group of contracts that furnishes a periodic income
at regular intervals for a specified period) provides a steady income during
retirement for the remainder of one’s life.
10
Property-casualty insurance protects against loss or damage to property
resulting from hazards such as fire, theft, and natural disasters.
Liability insurance shields policyholders from financial responsibility for
injuries to others or for damage to other people’s property. Most policies, such
as automobile and homeowner’s insurance, combine both property-casualty and
liability coverage. Companies that underwrite this kind of insurance are called
property-casualty carriers.
What is Life Insurance?
Human life is subject to risks of death and disability due to natural and
accidental causes. When human life is lost or a person is disabled permanently
or temporarily, there is a loss of income to the household. The family is put to
hardship. Risks are unpredictable. Death/disability may occur when one least
expects it. There are a number of life insurance products which offer protection
and also coupled with savings.
A Term insurance product provides a fixed amount of money on death during
the period of contract.
A Whole Life insurance product provides a fixed amount of money on death.
An Endowment Assurance product provided a fixed amount of money either
on death during the period of contract or at the expiry of contract if life assured
is alive.
A Money Back Assurance product provides not only fixed amounts which are
payable on specified dates during the period of contract, but also the full
amount of money assured on death during the period of contract.
An Annuity product provides a series of monthly payments on stipulated dates
provided that the life assured is alive on the stipulated dates.
11
A Linked product provides not only a fixed amount of money on death but
also sums of money which are linked with the underlying value of assets on the
desired dates.
There are a variety of life insurance products to suit to the needs of various
categories of people—children, youth, women, middle-aged persons, old
people; and also rural people, film actors and unorganized laborers.
Life insurance products could be purchased from registered life insurers notified
by the IRDA. Insurers appoint insurance agents to sell their products.
As per regulations, insurers have to give the various features of the products at
the point of sale. The insured should also go through the various terms and
conditions of the products and understand what they have bought and met their
insurance needs. They ought to understand the claim procedures so that they
know what to do in the event of a loss.
INDIAN INSURANCE SECTOR
12
REGULATORY BODY
Insurance is a federal subject in India. The primary legislation that deals with
insurance business in India is: Insurance Act, 1938, and Insurance Regulatory &
Development Authority Act, 1999.
The Insurance Regulatory and Development
Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA
Bill in Parliament in December 1999. The IRDA since its incorporation as a
statutory body in April 2000 has fastidiously stuck to its schedule of framing
regulations and registering the private sector insurance companies.
The other decision taken simultaneously to provide the supporting systems to
the insurance sector and in particular the life insurance companies was the
launch of the IRDA’s online service for issue and renewal of licenses to agents.
Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations.
MISSION-IRDA
“To protect the interests of the policyholders, to regulate, promote and
ensure orderly growth of the insurance industry and for matters connected
therewith or incidental thereto.”
IMPACT OF LIBERALISATION
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The introduction of private players in the industry has added to the colors in the
dull industry. The initiatives taken by the private players are very competitive
and have given immense competition to the on time monopoly of the market
LIC. Since the advent of the private players in the market the industry has seen
new and innovative steps taken by the players in this sector.
The new players have improved the service quality of the insurance. As a result
LIC down the years have seen the declining phase in its career. The market
share was distributed among the private players. Though LIC still holds the
79% of the insurance sector but the upcoming natures of these private players
are enough to give more competition to LIC in the near future. LIC market
share has decreased from 95% (2002-03) to 81 %( 2004-05).
LIC has the current market share of 79%.
Among the private players ICICI Prudential has the maximum of appx 5.60%
Followed by Bajaj Allianz (3.27 %) and HDFC Standard Life of about 3.11%.
Below is the table that shows the market share of various players of the
industry.
The following companies have the rest of the market share of the insurance
industry.
14
COMPANY NAME MARKET SHARE
LIC 79.30
ICICI PRUDENTIAL 5.63
BAJAJ ALLIANZ 3.27
HDFC STANDARD LIFE 3.11
BIRLA SUNLIFE 2.32
TATA AIG 1.45
SBI LIFE 1.24
MAX NEWYORK 0.90
AVIVA LIFE 0.82
ING VYSYA 0.66
OM KOTAK LIFE 0.54
AMP SANMAR 0.38
METLIFE 0.33
RELIANCE LIFE 0.05
The liberalization of the Indian insurance sector has opened new doors to
private competition and the new and improved insurance sector today promises
several new job opportunities. With private players now in the field, there will
be innovative products, better packaging, improved customer service, and, most
importantly, greater employment opportunities.
There are a number of options to choose from for a career in Insurance. Ideally
an insurance company will have openings in the following fields:
Actuaries
Underwriter
Surveyor
Investment
Marketing & Distribution
15
Actuaries
Evaluates the risk for companies to be used for strategic management
decisions.
Actuaries use their analytical skills to predict the risk of writing
insurance policies through the use of mathematical, statistical and
economic models.
An actuary not only fixes the premium rates for new products, but also
revises both products and prices. They calculate costs to assume risk
Underwriters
Insurance underwriters review insurance applications and decide
whether they should be accepted or rejected based on the degree of
risks involved in insuring the people or objects of concern.
In the life insurance business, an underwriter is expected to filter the
"bad or substandard lives". Whereas, in the general insurance segment,
he takes care of risk management.
Agents/Brokers:
Insurance agents may work for one insurance company or as
independent agents selling for several companies.
Insurance agents and brokers can find openings in the health insurance
sector, financial planning services, retirement planning counseling or
even provide other services, for e.g. sell mutual funds, annuities etc.
Surveyor/Loss Assessor:
Surveyors are professionals who assess the loss or damage and serve as
a link between the insurer and the insured.
16
They usually function only in non life business.
Their job is to assess the actual loss and avoid false claims.
Sales/Marketing:
And who can forget the guys who make and break a brand. They would be
required in a large number in order to promote the number of products that
will be launched by numerous companies in the insurance sector.
17
CURRENT SCENARIO OF THE INDUSTRY
INSURANCE MARKET IN INDIA
India with about 200 million middle class household shows a huge untapped
potential for players in the insurance industry. Saturation of markets in many
developed economies has made the Indian market even more attractive for
global insurance majors. The insurance sector in India has come to a position of
very high potential and competitiveness in the market.
Innovative products and aggressive distribution have become the say of the day.
Indians, have always seen life insurance as a tax saving device, are now
suddenly turning to the private sector that are providing them new products and
variety for their choice. Life insurance industry is waiting for a big growth as
many Indian and foreign companies are waiting in the line for the green signal
to start their operations. The Indian consumer should be ready now because the
market is going to give them an array of products, different in price, features
and benefits. How the customer is going to make his choice will determine the
future of the industry.
CUSTOMER SERVICE
Consumers remain the most important centre of the insurance sector. After the
entry of the foreign players the industry is seeing a lot of competition and thus
improvement of the customer service in the industry. Computerization of
operations and updating of technology has become imperative in the current
scenario. Foreign players are bringing in international best practices in service
through use of latest technologies. The one time monopoly of the LIC and its
agents are now going through a through revision and training programs to catch
up with the other private players. Though lot is being done for the increased
customer service and adding technology to it but there is a long way to go and
various customer surveys indicate that the standards are still below customer
expectation levels.
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DISTRIBUTION CHANNELS
Till date insurance agents still remain the main source through which insurance
products are sold. The concept is very well established in the country like India
but still the increasing use of other sources is imperative. It therefore makes
sense to look at well- balanced, alternative channels of distribution.
LIC has already well established and have an extensive distribution channel and
presence. New players may find it expensive and time consuming to bring up a
distribution network to such standards. Therefore they are looking to the diverse
areas of distribution channel to have an advantage. At present the distribution
channels that are available in the market are:
• Direct selling/Retail
• Corporate agents
• Group selling
• Brokers and cooperative societies
• Bancassurance
DIRECT SELLING/RETAIL
Direct selling or retail business is carried out by Agents of the company. This
is the main distribution channel due to the complexity of most insurance
products (Endowment, Whole of Life, Unit Linked). This tends to be the focus
of most companies due to its past success as well as its ability to deliver the
right advice. However, this channel can be expensive and it is a time consuming
sales process. An agent is the public face of an Insurance company. Hence it is
important that this face is always smiling and presentable and the facts and
figures at his/ her command are updated and correct.
An agent should be a pleasing personality with complete knowledge about the
various plans and solutions which the company has to offer and must also
understand the customer’s psychology well to deal in an efficient manner.
19
BANCASSURANCE
Bancassurance is the distribution of insurance products through the bank's
distribution channel. It is a phenomenon wherein insurance products are offered
through the distribution channels of the banking services along with a complete
range of banking and investment products and services. To put it simply,
Bancassurance, tries to exploit synergies between both the insurance companies
and banks.
Advantages to banks
Productivity of the employees increases.
By providing customers with both the services under one roof, they can
improve overall customer satisfaction resulting in higher customer retention
levels.
Increase in return on assets by building fee income through the sale of
insurance products.
Can leverage on face-to-face contacts and awareness about the financial
conditions of customers to sell insurance products.
Banks can cross sell insurance products e.g.: Term insurance products with
loans.
Advantages to insurers
Insurers can exploit the banks' wide network of branches for distribution
of products. The penetration of banks' branches into the rural areas can
be utilized to sell products in those areas.
Customer database like customers' financial standing, spending habits,
investment and purchase capability can be used to customize products
and sell accordingly.
Since banks have already established relationship with customers,
conversion ratio of leads to sales is likely to be high. Further service
aspect can also be tackled easily.
20
Advantages to consumers
Comprehensive financial advisory services under one roof. i.e.,
insurance services along with other financial services such as banking,
mutual funds, personal loans etc.
Enhanced convenience on the part of the insured
Easy accesses for claims, as banks are a regular go.
Innovative and better product ranges
21
WHAT DOES LIFE INSURANCE HAVE TO OFFER?
Life insurance is many different things to many different people. For some, it is
a premium to be paid on time. For others it offers liquidity since cash can be
borrowed when needed. For the investment-minded, it denotes a constantly
growing capital account and numerous other benefits.
The contractual guarantee is the promise to pay, backed by one of the oldest and
most stably regulated financial industry operating in the Indian sub-continent
today.
1) Insurance Buys Time and Money
People like to refer to life insurance as time insurance, the reason being that life
insurance proceeds are paid to the insured's beneficiaries in case of death. The
money proffered by life insurance helps buy time to adjust to the change of
circumstances. Insurance provides large amounts of cash that will keep the
lifestyle for the survivors the way it was before the insured's death.
2) Insurance Offers Peace of Mind
For the person who buys an insurance policy, it offers absolute and complete
peace of mind. He or she knows that the decision made by him will provide
sound benefits in the future, whether or not the individual may live to see it.
3) Multiple Applications
The future is uncertain for each and every one. No one knows how long he or
she will live. The investment benefit is paid to the insured's beneficiaries after
his death or it can be used during the life as well. Life insurance policy owners
can turn to the cash value of the policy in case of a financial emergency when
all avenues are either blocked or denied.
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4) Enduring Elasticity
Since life insurance is flexible enough to serve several needs, the insured can
keep several long-term goals in mind once he or she invests in the insurance
plan. The cash value of the policy can be allocated towards augmenting the
monthly income during the retirement years. Leisure years should be turned into
pleasure years. Permanent life insurance is designed on the concepts of long-
term flexibility.
5) Financial Security
The insurance policy offers contractual guarantees to people looking for peace
of mind when they buy life insurance. Life insurance offers complete financial
security. The purchase of life insurance demonstrates concern for a family's
future financial well being.
6) Regard for Family
The purchase of life insurance clearly displays care and concern for the people
the policy owner loves.
7) Insurance is Safer
No financial institution can do what life insurance does. No industry can back
its products with reserves and surplus as sound as those of the insurance
industry.
The proof of strength and safety that insurance companies have ensured even
under the most adverse of conditions is a matter of pride for the entire insurance
industry. For generation after generation, life insurance has been acclaimed as
the very benchmark of security against which the other industries are measured.
23
OPPORTUNITIES FOR INSURANCE COMPANIES
In the now open sector on insurance, the following is what I feel will determine
the success of the company in particular and the industry in general:
A change in the attitude of the population
Indians have always been wary of employing their hard-earned money in a
venture that will pay them on their death. Insurance has always been used as a
Tax saving tool. No more, no less. It is upon the insurers to educate the people
to secure/insure their future against any unknown calamity and make a shield
around their families and businesses.
An open and transparent environment created under the IRDA.
The reason for this being on the top of our understanding is that when ever we
have seen any sector open up in India there are always grey areas and unsure
policies. These are not exactly what any player, be it Indian or foreign, looks
for. It creates an air of uncertainty in all the decision making process. Insurance
as a sector requires players who are strong financially and are willing to wait for
returns. Their confidence can be bolstered only if there is an open and a
transparent policy guidelines. This will also help the consumers feel safe that
the regulatory is an active one and cares to do everything possible to keep
things under control and help the insurance environment grow maturely.
A well-established distribution network.
To cater to the largest democracy in the world is by no means a cakewalk.
Insurance profits are directly related to number of insured and this is in turn
related to the reach.
Trained professionals to build and sell the product.
It is said that the insurance agent is the best salesman in the world. He makes
you pay, regularly, an amount promising to pay back only on your death. Thus
24
the players will require an excellent sales team to sell their products in the now
competitive environment.
Encouragement of new and better products and letting the hackneyed
ones die out.
This will itself ensure the market grows. And that every class/society gets a
product that best suits them.
SPECIAL PROVISIONS
The Income Tax Act and Life Insurance policies
Under Section 10(10D), any sum received under a Life Insurance policy
(not being a Key Man policy) is also exempt from taxation. But it is wise to
remember that Pensions received from Annuity plans are not exempted
from Income Tax.
Section 80C provides a deduction up to Rs.1,00,000/- to an individual
assessee for any amount paid as a premium.
POLICYHOLDERS GRIEVANCES
Policyholders may have complaints against insurers either in respect of their
policies or their claims. As per Regulations for Protection of policyholders’
interests, 2002, every insurer should have in place, a grievance redressal system
to address the complaints of policyholders. The IRDA has a Grievance
Redressal Cell which plays a facilitative role by taking up complaints against
insurers with the respective companies for speedy resolution. The IRDA
however does not adjudicate on complaints.
25
SWOT ANALYSIS OF INSURANCE INDUSTRY
STRENGTH
1. Best returns with the added advantage of 100% life insurance coverage.
2. Good option for new investors into the market as all the money is invested
by best fund managers so with less knowledge also they can earn good
returns.
3. Best commission charges paid to the agents which vary from 12% to 35%
which is much higher as compared to mutual funds i.e. , only 2-2.5%.
WEAKNESS
1. HDFC SLIC could not able to match LIC in remote areas services.
2. Misleading facts given by life advisors about the returns of ULIPs.
3. Hidden charges taken by the companies.
4. Less Promotional Campaigns.
OPPORTUNITY
1. 80 percent of Indian population is still under insured. So
there is a big opportunity for insurance companies.
2. As the stock market can be under the mark any time so it can bring loss to
the investors but as in ULIPs there is proper mixture of debt securities and
equity so the loss is incurred during dark trading days also.
3. Unit-linked products are exempted from tax and they provide life insurance.
4. Increasing consumer awareness about Insurance and its use.
THREAT
1. Cannibalism within the industry by providing misleading figures to the
investors.
26
2. Govt.’s instability has a long term repercussions affecting company’s
policies and its growth.
27
COMPANY’S PROFILE
INTRODUCTION
Helping Indians experience the joy of home ownership.
Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since
emerged as the largest residential mortgage finance institution in the country.
The corporation has had a series of share issues raising its capital to Rs. 119
crores. HDFC operates through 75 locations throughout the country with its
Corporate Headquarters in Mumbai, India.
OBJECTIVES AND BACKGROUND
Background
HDFC was incorporated in 1977 with the primary objective of meeting a social
need – that of promoting home ownership by providing long-term finance to
households for their housing needs. HDFC was promoted with an initial share
capital of Rs. 100 million.
Business Objectives
The primary objective of HDFC is to enhance residential housing stock in the
country through the provision of housing finance in a systematic and
professional manner, and to promote home ownership. Another objective is to
increase the flow of resources to the housing sector by integrating the housing
finance sector with the overall domestic financial markets..
ORGANIZATION AND MANAGEMENT
HDFC is a professionally managed organization with a board of directors
consisting of eminent persons who represent various fields including finance,
taxation, construction and urban policy & development. The board primarily
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focuses on strategy formulation, policy and control, designed to deliver
increasing value to shareholders.
FOUNDER – Mr. Hasmukhbhai Parekh
BOARD OF DIRECTORS
Mr. D S Parekh – Chairman
Mr. Keshub Mahindra – Vice Chairman
Ms. Rene S. Karnad – Executive Director
Mr. K M Mistry – Managing Director
Mr. Shirish B. Patel
Mr. B S Mehta
Mr. D M Sukthankar
Mr. D N Ghosh
Dr. S A Dave
Mr. S Venketaraman
Dr. Ram S. Tarneja
Mr. N M Munjee
Mr. D M Satwalekar
HDFC has a staff strength of 1029, which includes professionals from the fields
of finance, law, accountancy, engineering and marketing.