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From Fig 5.7 it is seen that 65% of the respondents felt that increasing interest rates in India is a potential threat to HDFC Bank Ltd and 35% of the respondents identified intense competition as a threat to HDFC Bank Ltd.

In the Indian banking sector consolidation is likely to gain prominence in the near future. Despite the liberalization process, state- owned banks dominate the industry, accounting for three- quarter of bank assets. The consolidation process in recent years has primarily been confined to a few mergers in the private sector segment, although some recent consolidation in the state- owned segment is evident as well.

In July 2008, State Bank of India (SBI) simultaneously opened 101 branches across India. With this, the SBI's network of Branches touched 10486, reaching the remotest areas of the country. SBI plans to add 2000 branches during fy2008-09 out of which more than 1000 branches are marked for semi-urban and rural areas. SBI aims to reach its banking services to 1,00,000 unbanked villages by 2010. Moreover, according to SBI's chairman O.P. Bhatt , the merger of the State Bank of India (SBI) and the State Bank of Saurashtra (SBS) is awaiting the final approval from the finance ministry.

Moreover, banks in India have also been looking for cross-border mergers. According to a new survey conducted by consultancy major PriceWaterhouseCoopers (PwC), about 28% of Indian financial services firms expect to buy stakes in European groups in the next five years and the same percentage intend to enter North America. As a result, HDFC Bank could face increased competition in India. Intense competition could adversely affect the margins of the bank.

In June 2008, the Reserve Bank of India lifted the repurchase rate by 0.5% point to 8.5% and adjusted the cash-reserve ratio by a similar margin to 8.75 percent. This was the biggest move since 2000. The surge in crude-oil prices that pushed inflation to a 13-year high was the prime reason behind the increase in interest rates. Higher fuel prices accounted for most of the 11.05% wholesale rate of inflation during the first week of June 2008. As of July 2008, wholesale rate of inflation is well above 11.6%. The central bank may raise interest rates by an additional quarter percentage point in the July 29 policy meeting. Rising interest rates may cool-off the demand for bank credit. Housing loans, auto loans and corporate loans are expected to be hit hard in the quarters to come. This could affect HDFC Bank's loan off-take and profit margins.

Q.7 Which of the following are the most important growth measures that you use to assess the growth of your bank?

From Fig 5.7 it is seen that 23% of the respondents identified that operating profit is the most important growth measure that should be used to assess the growth of a bank, followed by increase in customer base and nearly 39% of the respondents voted for the profit parameter as an important measure to assess the growth of bank本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。