Assessment of Credit Worthiness of Customers

This project has been accomplished in the form of primary research being made. The responses of the respondents who were the officials of the banks have been taken as the basis of sources.
In this project the procedure of lending loans to the customers of the banks has been brought into. Not only one particular bank, rather the comparison of HDFC has been made with other leading banks like ICICI, HSBC and one state bank in Punjab i.e. Cooperative bank. But particularly focus has been given only on HDFC Bank.
As, HDFC works with CIBIL to assess the credit worthiness of the customers, so, this project shows that how HDFC has been very effective in assessing approaches of creditworthiness of its customers than other banks. There are very few numbers of non-performing assets (NPA) in HDFC than the other banks. Even, how, creditworthiness tool works and who benefits from it and one new mathematical concept of fuzzy logic, which tells uncertain or approximate data, has been clearly discussed in the project.
Conclusion:
With the help of the research work done, and by interpretations of the responses of the officials, the following conclusions have been made:
•    HDFC faces stiff competition from banks in the housing finance industry. It is possible that it may be pushed to the third position – behind ICICI Bank and SBI – in terms of market share.
However, the competition has not had any impact on the profitability of HDFC. In addition, the housing financing pie is large enough for three big players. HDFC’s disbursements grew by 37% in the ninth month period ended December 2005 notwithstanding the thrust from the competition.
•    It is clear that the bank’s house building loans are more popular than the other consumer, education loans and hence the customers taking these loans are more than the other customers.
•    Moreover, during the analysis it was also found that even the employees of the bank are the customers of the bank.
•    During interpretation it was found that as most of the customers are the middle income group having an average salary of Rs- 18000/- per month and there is a direct correlation between the income of the persons and the amount of loan taken, hence mostly people undertake a loan ranging between Rs. 150000/- to Rs. 400000/.
•    Most of the customers are regarded as good ones who can repay their loan amount on time.
•    Techniques like fico scoring, biometric smart cards, fuzzy logic concepts have averagely helped the institute in assessing the creditworthiness of the customers.
•    The bank is able to reach up to the satisfaction level of its customers through its reasonable rate of interests and easy payments.
•    The rate of interest of bank is reasonable which the most significant reason is for most of the customers for taking home loans from this institution.
•    The average processing time for the loan is 7- 14 days.
•    HDFC’s capital adequacy is also well above the minimum period required. These factors hold the potential to sustain growth rates in the next 12-24 months in the housing finance business. In the asset management business, they will be managing close to Rs.10, 000 crores at the end of March 2009.
•    The growth has been due to both organic growth and acquisitions. The increase in size of operations will only augment its contribution to HDFC’s profits. However, its importance as a growth engine for the future cannot be underestimated given the prospects for the housing finance industry.
Recommendations:
•    The institute should access to low cost funds.
•    It should develop itself into a mainstream financial institution.
•    HDFC should try to tap new segment such as package for professionals to motivate them.
•    Operations should be sustained on a larger scale.
•    Bank should try to cross sell by capitalizing on the networks of other banks.
•    More and more quality Human Resources should be attracted and retained.
•    The institute should go for diversification for lending methodologies / portfolio.
•    Asset quality should be maintained provide personalized services.
•    The bank should develop in-house talent and second line management.
•    HDFC should use ficco score and fuzzy logic, mathematical concept which will help in providing approximate data.
•    The bank should go for tie ups or joint ventures with the reputed financial institutes or well reputed builders and other development authorities.
•    HDFC should increase its reach in rural as well as in semi urban areas.
•    There should be competitive pricing in terms of lower interest rates.
•    The bank should maintain proper record of customer’s credit history and rank them with credit rating scale.
•    The institute should try to focus on the present customers.
•    They should try to capture them by generating more and more referrals.
•    The bank should adopt the modern methods of banking like internet banking, investment banking and other latest techniques.
•    The bank should plan to introduce new schemes for attracting new customers and satisfying the present ones.
•    The bank should improve the customer services of the bank to a better extent.
•    The bank should try to maintain its rate of interests because it is the main source for attracting the customers to taking home loans from this institute.
•    Moreover, the formalities should be reduced and the processing time for the sanctioning of loan should also be reduced.
Limitations:
1.    There was the problem of time constraint as the time period for the research was limited due to shortage of time, I could not cover the number of employers I thought I would. If I had more time then I would have covered a large number of employers enabling me to get the opinions of a more diverse and larger number of correspondents. There by I could have included a more generalized view of the people in my report.
2.    Another, problem I faced was from the side of the management. The management of some of the HDFC I visited were not very cooperative. Due to this I did not get the true picture of the employee’s perception of their services, in some of the banks.
3.    The data for study covers focuses only on single bank HDFC, but its comparison has been made with other banks in respect to terms & conditions of the home loans. So, I found it difficult to compare the data interpretation of HDFC with other banks, in graphically way of comparison.
4.    As the employees of the bank are also its customers, so, they (officials) might be biased in giving true information.
5.    The junior employees of the bank also hesitate or feel cared in giving the correct information.
6.    The Bank might not have provided with complete and accurate figures due to the fear of leaking it out.
7.    The areas covered for the survey were confined to Chandigarh branch of HDFC only.
8.     The research was performed on a small sample of 20, which was assumed to be the representative of the whole population. This assumption might not hold good in some cases.

Analysis of Recruitemnt and Selection Procedure

Abstract:
The evidence on human resource management in overseas offices of Japanese multinational service-sector firms is far less abundant than that for manufacturing firms. Existing studies describe employment practices that vary, both between firms and over time. To supplement the existing body of evidence, the present study investigates employment practices at two Japanese financial services firms in the City of London through the use of interviews and questionnaire surveys. It focuses on those facets of the 'Japanese' management system that may be considered fundamental characteristics: recruitment and selection procedures, training methods, pay and promotion policies, employment security, company culture, and the position of workers within the overall organization. The study considers the implications of changes over time within the two firms when viewed in the context of the existing evidence; such comparison suggests that both corporate strategy and human resource management policy in Japanese financial organizations may have changed during the 1980s.
•    If people of poor caliber are hired, nothing much else can be accomplished and the bad will drive out good (or cause them to deteriorate).
•    The success of any organization depends on how effectively human resources are managed and utilized.
•    There are three themes in the HRM literature, which appears to have enhanced the potential importance of the selection decision in individual organization in the current operating environment.
•    Firstly, demographic trends and changes in the labor market have led to a less homogeneous workforce, which has placed increasing pressure on the notion of fairness in the selection. Secondly, the desire for a multi-skilled, flexible workforce. Thirdly, the link between a corporate strategy and HRM has led to the notion of strategic selection.
•    Manager makes difference. The quality of company front line sales manager has a direct and positive impact on company’s profit. So challenges are to develop and implement improved employees will provide better customer service.
•    With an objective to study the recruitment and selection procedure for front line sales, I visited two companies operating in FMCG sector by taking appointment with front line managers to know the recruitment and selection procedure in detail and did comparative analysis.
•    In my study one thing I observed is that companies have realized the fact that in the era of rapid technological changes, rising labour costs, shifting job requirements, rising education and expectation level among employees, there is need for both suitable and competent manpower in an organizations Finding of research are mentioned in detail in the following pages.
Objectives:
•    To study recruitment and selection methods being employed by Dabur and Britannia.
•    To make comparative analysis of recruitment and selection procedure at both these organization.
•    To suggest innovative ways to both organization to improve existing recruitment and selection procedure.
Conclusion:
Finding the right person for a right job has always been important and decisions to appoint an individual is one of the most crucial an employer will ever take. Front line sales force play a crucial role in consumer satisfaction and customer satisfaction has a direct and positive effect on company profits. So when recruiting entry level talent, companies must always seek both great sales people and great managers. By studying recruitment and selection procedure for front line sales. I noted that companies have focused in recent years on developing improved employee selection procedures to increase the likelihood that their employees will provide better customer service.
 After studying recruitment and selection procedure for front line sales at Dabur and Britannia, I realized that companies have adopted a very structured method of recruitment while some are still trying to improve on the basis of their experiences. In present circumstances, most firms prefer to rotate jobs of employees rather than recruiting from outside due to various advantages but Britannia has the preference for external candidates.
Selection tests are used widely by companies and need for psychological testing has taken a lead role in selection procedures. for front line sales various tests are used by different companies , I believe , whatever tests a company uses , it must be able to measure skills that company define compulsory for front line sales. Like Dabur uses features of different kind of tests to make one tests, according to them tests work better when combined in isolation.
Regarding interview round in selection process, I consider it most important because that’s the time where u can judge confidence level, communication skill and general awareness of person, which are very important for front line sales. Both the companies conduct structured interview which erodes chance of missing any information.
Another thing that I observed while doing comparative analysis between two companies was that Dabur carry the whole selection procedure in a very planned ,structured and systematic way where as Britannia the procedure so as to ensure manpower available in future.
Recommendations:
To Dabur:
Innovation is the last remaining competitive advantage in the rapidly changing technology and globalization in business environment and HR ;recruiting and selection procedure is not exempt from this fact. Now that the downturn in the economy is over and the “war for talent” is returning. Never be satisfied with the status quo , because any competitive advantage you might will have soon be gone, so develop programs and practices with a continuous improvement component.
1)    Individual managers performance should be measured and rewarded based on their recruiting and selection performance.
2)    Competitive analysis and side-by –side comparisons of your practices compared to your talent competitor’s practices should be used in order to develop and maintain a competitive advantage.
3)    Consistency of decision making can be improved by ensuring that the same people are involved at each stage of the selection process.
4)    I would recommend Dabur to have faith in new generation of professionals as I see a great potential and enthusiasm in them.  They have all the skills for front line sales except experience.
To Britannia:
1)    AS recommended to Dabur, Britannia should also give opportunity to young professionals who are not experienced.
2)    Britannia should consider more effective recruitment sources that can provide it with more choice and applicants of higher caliber.
3)    During all stages of selection procedure, HR manager should be equally involved like the area sales manager as it can enhance the quality of final decision.
4)    Reference checking is an important part of selection procedure which has been completely ignored at Britannia. So, I would like to suggest Britannia, it should not leave scope for any kind of risk and make reference checking part of their selection procedure.
5)    Lastly I would like to say that Britannia should not consider cost of selection procedure as an expense rather it should take it as investment which can help it to build quality manpower for future.

Analyzing Efficiency of Swaps as a Risk Hedging Tool

Analyzing Efficiency of Swaps as a Risk Hedging Tool in International Financial Market
Summary
Interest rate swaps, a financial innovation in recent years, are based upon the principle of comparative advantage. An interest rate swap is a useful tool for active liability management and for hedging against interest rate risk. The purpose of this Project is to carry out an analysis of the swap market and to find out what are the hindrances in the growth of the swap market in India.
Ever since the formal introduction of swaps in India took place in 1999, there is still a lull in the Indian swap market. The growth is observed to be picking up of late but there are certain regulatory constraints that stand in the way of its development. As a finance student I need to have knowledge over this issue, therefore I have selected this topic for my research project.
In the other part I have tried to discuss some case studies in which the corporates have entered into a swap and benefited from the deal. I have also tried to discuss the accounting treatment in the books of the corporates and the taxation issues . I have tried to analyze the growth of the swap market over the years and region wise classification of the same.
In the end of the project I have tried to discuss the recommendations to the swap market.
Conclusion:
The main constraints in the growth of swap market are:-
•    Non availability of acceptable benchmark rate
•    Lack of Awareness
•    Participants inertia
•    Lack of active market for floating rate loans
•    Lack of a developed term money market
Recommendations:
As the obstacles are tackled we would see that the derivative markets will evolve over time. Risk management systems should be set in place. Moreover for speculation one needs volatility and diverse views and as these emerge some players may be allowed to speculate, but the limits are likely to be strict and discouraging.
Overall, swaps are here to stay, and players will soon learn to use them effectively though in infancy now, the markets may evolve sooner than one may expect.
Limitations:
1.    Interviews with companies could not be conducted as the nature of information was highly confidential and experts were not willing to disclose such information.
2.    It was difficult to interview many experts in the field of risk management, as they were highly unapproachable.

Mergers and Acquitions

Summary
Mergers and acquisitions is an ongoing phenomenon where many M&A deals are happening everyday. It has been recognized as a significant and opportune path for growth and expansion of a company. India inc. has adopted this strategy for becoming a global player.
This dissertation topic on mergers and acquisitions is made keeping in mind these parameters. The objective of this project is to assemble the basics of M&A for better understanding of this trend. Mergers and Acquisition have helped Indian companies for world-wide recognition and more rapid growth. In this project detailed information has been gathered about the basics and concepts necessary for understanding Mergers and Acquisition.
After gathering and understanding of this phenomenon we proceed to analyze the Indian Telecomm Industry by using Porter’s model and SWOT analysis. Further, we analyze the strategy of overseas Acquisitions adopted by Ranbaxy Laboratories India. We have the recent acquisition of Terapia, one of the largest Romanian pharmaceutical companies by Ranbaxy laboratories as an example to highlight the advantages of mergers and Acquisition.
In the end, we conclude certain trends and suggestions for the Indian Pharmaceutical Industry as a whole which if followed will be beneficial for both the industry and respective companies for emerging as global leaders in this Industry.
Objectives:
•    To assemble comprehensive information about mergers and acquisitions.
•    To develop the concept and understand the various aspects pertaining to mergers and acquisitions.
•    To understand various motives behind M&A.
•    To analyze the strategy used by Ranbaxy Laboratories for its growth and expansion.
•    To envisage the strategy of overseas acquisition as a means of global expansion for the Indian Pharmaceutical Industry.
Conclusion:
India is among a few developing countries to have a globally competitive pharmaceutical industry. The study shows that the evolution, growth and internationalization of Indian pharmaceutical industry during past decades were critically linked to suitable national policies undertaken at appropriate times. These strategic government policies initiated domestic capability building in technology, skill and entrepreneurship developments related to pharmaceutical industry and were extremely successful in developing a globally competitive industry from a non-existent production base. The main lesson from India’s experience in pharmaceutical industry is that government intervention is indispensable for developing countries wanting to build their domestic base in such technology- intensive industries. Market forces do play an important role once the process of capacity building by government intervention achieves a critical level but they are incapable of initiating such a process. Had India left everything to the market forces to initiate its domestic capability building in a knowledge-based industry like pharmaceuticals then India would not have achieved the competitive strength it possess in the industry today. The industry might have continued to be dependent upon imports of bulk drugs and foreign firms, which are enjoying strong patent monopoly under the colonial patent act and might have continued to simply distribute imported drugs and charging maximum prices.
Other developing countries, following Indian experience, should start public sector enterprises to create required technologies, skills and production processes to manufacture drugs indigenously. Public investment in pharmaceutical research, research institutions and laboratory facilities, technical centers for specific entrepreneurial and skill creation like training of pharmaceutical scientists, engineers, and pharmacy practitioners, etc., are essential policy tools. With the emergence of TRIPs regime, adopting a soft patent regime is no more a viable policy tool for capacity building for these governments. However, these developing countries can target off-patented segment of life-saving drugs as a starting point and try to move upwards. As creating required technologies for this segment is very costly they can obtain these via licensing agreements from global players or from developing country players like India. As the cost of technology transfers from developed country multinationals may be higher and also they are may be less willingness, developing countries should strive to secure technology from their fellow countries like India. Since Indian firms have shown great intensity to undertake joint ventures in fellow developing countries under the ‘south-south’ cooperation pursued by developing countries in the past, the potential of such cooperation may still be relevant today. As far as Indian policy makers are concerned, this study suggests that they should encourage overseas acquisitions over Greenfield investment strategy as more effective internationalization strategies.
As far as competitive advantages of Indian pharmaceutical firms are concerned outward Greenfield investment in the form of developing trade supporting networks overseas offer the most important route of exploiting such advantages. Overseas acquisition not only enhance competitive advantages by providing access to new product portfolios, technology and skills, but also ensure an established marketing and distribution networks, an existing market and scope to benefit from operating synergies. The experience of Ranbaxy laboratories with three overseas acquisitions shows that these advantages have played an important role in enhancing competitive strength of the acquiring firm in targeted market.
This finding suggests that policy makers should take appropriate measures to remove barriers for Indian pharmaceutical companies to acquire overseas business. Besides according automatic approvals to overseas acquisition applications, India should develop a suitable support programme to help pharmaceutical firms in overseas acquisitions. This support framework may involve access to consultancy services in evaluating the acquisition opportunities in overseas market, provision of cheap credit for acquisition and insurance coverage against political risks, human resource development and management training to effectively integrate acquired entity in the face of cross-country differences in culture, business practices and legal system, etc. Since a large number of Indian pharmaceutical firms are acquiring companies abroad, establishing databases on such acquisitions and economic performances of acquired entities, are important for analyzing their contribution to national development. Finally, the study suggests s that Indian pharmaceutical enterprises may be better off by adopting overseas acquisition to enhance their global presence than undertaking overseas Greenfield investment.

Effectiveness of Welfare Activities for Employees

Effectiveness of Welfare Activities in BTPS for Employees
Summary
The research conducted was descriptive in nature. Badarpur division of National Thermal Power Corporation Limited was surveyed to attain the objectives of the research. The topic of the project done was “To understand various welfare programmes presently being followed in Badarpur thermal power station (BTPS).” The research was conducted keeping in mind the following objectives:
•    To develop an understanding of various welfare programmes in a public sector concern.
•    To determine the degree of awareness among employees for the existing welfare programmes.
•    To give recommendations for the betterment of the implemented welfare programmes.
To carry out this survey questionnaire method was used along with the interviews to obtain the required information. Random sampling was used as the mode of conducting the research. Care was taken that the respondents were as diversified as possible,
In carrying out this research a sample size of 100 employees was taken,
Keeping in mind the fact that most of the non-executive employees are unable to understand English language, questionnaire was filled by the researcher himself on behalf of those employees as per their opinion.   
Later on all the information so generated from the survey was compiled in the form of a presentable and highly comprehensible report.
The results of the study were then shown to the HR department of BTPS and their points of view were taken over issues which came out as a result of these studies. After that recommendations were also given to the HR department which the department kept with itself for further revision and implementation.
Some of the important findings are:
•    The awareness level among the employees is very high with a composite average of 85.80%.
•    Some employees are not satisfied with the following two policies. One is distribution of Gur (40%) and the Second is language of the forms to avail welfare benefits (20%).
•    Employees are satisfied with the facilities of subsidized canteen.
•    Most of the employees are not satisfied with the number of serving counters.
•    On days when some special dish is made, the distribution of food is not proper. Employees take this away to their homes and the people sitting in the canteen then have to face the shortage.
•    The quality and quantity of food is good.
•    Employees are highly motivated and satisfied with the current welfare activities.
Objective:
1)    To develop an understanding of various welfare programmes in a public sector concern.
2)    To determine the degree of awareness among employees for existing welfare programmes.
3)    To give recommendations for the betterment of existing welfare activities.
Limitation:
•    Survey on value in organization is a very good tool to understand the current status of the growth and it should be conducted in each project. But there is a limitation with my project that it must be done in the campus BTPS only.
•    Only plant area was covered in the survey while the residential areas can also be covered.
•    Employees can only be requested to fill the survey form. It was neither compulsory nor directed by a senior, to fill the form. Because of which, many employees refused to fill the form which resulted in less number of feedback.
Recommendations:
•    Proper assistance should be provided to whatever form.
•    Company should more concern about the canteen facilities.
•    Company should more concern about health of those employees who work in dust prone area. Because there are a considerable percentage of employees whose complain that they are not got GUR on time.

Conclusions:
NTPC Limited is undoubtedly ‘India’s biggest power generating company’ but the force that makes it the number 1 is the people working day and night to make it reach heights. However, if care is not taken there would be no employees left to carry on the name of the organization. The people are the real force and glory for the success of any organization and if their needs are not met, whether monetary or psychological then it is difficult to retain even the best in the industry.
Employees need to be motivated at each level; the attitude to work in teams should be in-born as success can not rely on the shoulders of a single human being. Welfare, is one of the crucial practices and must be a part of employee life cycle because it not only help employees to rejuvenate themselves and but also make them competent enough and ready to take up new challenges. In the age of diversity and cut- throat competition one can no- longer rely on mere modern technology or employee qualifications.