Portfolio Management Practices in HDFC Bank Essay

August 26, 2017 Management

HDFC Bank Ltd is a major Indian fiscal services company based in Mumbai. The Bank is a publically held banking company engaged in supplying a broad scope of banking and fiscal services including commercial banking and exchequer operations. The Bank at nowadays has an enviable web of 2201 subdivisions and 7110 ATMs spread in 996 metropoliss across India. They besides have one abroad wholesale banking subdivision in Bahrain. a subdivision in Hong Kong and two representative offices in UAE and Kenya. The Bank has two subordinate companies. viz. HDFC Securities Ltd and HDB Financial Services Ltd. The Bank has three primary concern sections. viz. banking. sweeping banking and exchequer.

The Bank`s portions are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Ltd. The Bank`s American Depository Shares ( ADS ) are listed on the New York Stock Exchange ( NYSE ) and the Bank`s Global Depository Receipts ( GDRs ) are listed on Luxembourg Stock Exchange. HDFC Bank Ltd Was incorporated on August 30. 1994 by Housing Development Finance Corporation Ltd. In the twelvemonth 1994. Housing Development Finance Corporation Ltd was amongst the first to have an “in principle” blessing from the Reserve Bank of India to put up a bank in the private sector. as portion of the RBI`s liberalisation of the Indian Banking Industry. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. In the twelvemonth 1996. the Bank was appointed as the uncluttering bank by the NSCCL.

In the twelvemonth 2001. they became the first private sector bank to be authorized by the Central Board of Direct Taxes ( CBDT ) every bit good as the RBI to accept direct revenue enhancements. During the twelvemonth. the Bank made a strategic affiliation with a Bangalore-based concern solutions package developer. Tally Solutions Pvt Ltd for developing and offering merchandises and services easing online accounting and banking services to SMEs. During the twelvemonth 2001-02 the bank was listed on the New York Stock Exchange. In September 28. 2005. the Bank increased their interest in HDFC Securities Ltd from 29. 5 % to 55 % . Consequently. HDFC Securities Ltd became a subordinate of the Bank. During the twelvemonth 2007-08. the Bank added 77 new subdivisions take the sum to 761 subdivisions.

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The art and scientific discipline of doing determinations about investing mix and policy. fiting investings to aims. plus allotment for persons and establishments. and equilibrating hazard against public presentation.

Portfolio direction is all about strengths. failings. chances and menaces in the pick of debt vs. equity. domestic vs. international. growing vs. safety. and many other trade-offs encountered in the effort to maximise return at a given appetency for hazard. The significance of Portfolio Management is as follows: * Portfolio is a aggregation of plus.

* The plus may be physical or fiscal like portion. Chemical bonds. Unsecured bonds and Preference Shares etc. * The single investor or fund director would non wish to set all his money in the portions of one company. for that would amount to great hazard. * Main aim is to maximise portfolio return and at the same clip minimising the portfolio hazard by variegation. * Portfolio direction is the direction of assorted fiscal assets. which comprise the portfolio. * Harmonizing to Securities Exchange Board of India Act 1993. “Portfolio” means the entire retention of securities belonging to any individual. * Planing portfolios to accommodate investor demand frequently involves doing several projections sing the hereafter. based on the current information. * One of the key inputs in portfolio edifice is the hazard bearing ability of the investor. * Portfolios are built to accommodate the return outlooks and the hazard appetency of the investor.

The Basic aim is to maximise output and minimize hazard. The other aims are as follows: * Stability of Income: An investor considers stableness of income from his investing. He besides considers the stableness of buying power of income.

* Capital Growth: Capital grasp has become an of import investing rule. Investors seek growing stocks which provide a really big capital grasp by manner of rights. fillip and grasp in the market monetary value of the portion.

* Liquid: An investing is a liquid plus. It can be converted into hard currency with the aid of stock exchange. The portfolio should incorporate a planned proportion of high class and readily saleable investing.

* Safety: Safety means protection for investing against loss under reasonably fluctuations. In order to supply safety. a careful reappraisal of economic and industry tendencies is necessary. In other words. mistakes in portfolio are ineluctable and it requires extended variegation.

* Tax Incentives: Investors try to minimise their revenue enhancement liabilities from the investings. The portfolio director has to maintain a list of such investing avenues along with the return hazard. profile. revenue enhancement deductions. outputs and other returns.

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