project on hdfc loans

(1)

Presented To:

Dr. Manjit Singh

Presented By:

Pallavi Agarwal

MFC- II

Roll No.- 512

(2)

OBJECTIVES OF

THE STUDY

The objective of the study is divided into two parts:

Primary Objective:

The main objective of the study is to find out the tariff charges, percentage of

funding, tenure of loan and other charges charged by other banks in

comparison to HDFC Bank. The aim of the study is to help HDFC to know

where it lacks in Loans and how far the performance of other banks is better,

so that HDFC figure out the common problems being faced by customers

while dealing in the Loan Department so that further HDFC can improves its

services and schemes offered by them to their customers.

Secondary objective:

The secondary objective of the study is to find out the extent to which customer

expectations match HDFC performance in Loan services. This was done to

help HDFC to recognize their faults in customer dealing .As in this

competitive world customer satisfaction is more important than huge profits so

customer satisfaction survey will help it in finding out its position.

(4)

RESEARCH METHODOLOGY

PRIMARY DATA _{Questionnaire} Open and close ended questions _Interview _{Personal visits to} Various banks SECONDARY DATA _{Website of HDFC}

_{Pamphlets & Brochures} _Magazines

_{Articles & News papers}

TOOLS USED _Comparative Study Analysis _{Statistical tools} like pie charts & tables

(5)

COMPANY PROFILE

The

HDFC Bank Ltd.

(BSE: 500180, NYSE:

_{(BSE: 500180, NYSE:}

HDB)

is a commercial bank of India, incorporated

on

30

thth

August 1994

_{August 1994}

in the name of ‘HDFC Bank

_{in the name of ‘HDFC Bank}

Limited’, with its registered office in Mumbai, India ,

after the Reserve Bank of India allowed establishing

private sector banks. HDFC Bank commenced

operations as a Scheduled Commercial Bank on

16th

January 1995

.

The Bank was promoted by the

Housing Development Finance Corporation, a

premier housing finance company (set up in 1977) of

India.

(6)

BUSINESS

MISSION

HDFC Bank's mission is to be a World-Class Indian

Bank. The objective is to build sound customer franchises

across distinct businesses so as to be the

preferred

provider of banking services

for target retail and

wholesale customer segments. HDFC Bank's business

philosophy is based on

four core values

- Operational

Excellence, Customer Focus, Product Leadership and

People.

(7)

CAPITAL

STRUCTURE

 The present Authorized Share Capital of the Bank is Rs. 550,00,00,000/-  Paid up Share Capital as on March 31,2009 is Rs.

425,38,41,090/-From year To year Authorized capital Issued Paid up capital Paid up shares (nos.) 2008 2009 550.00 425.38 425384109 2007 2008 450.00 354.43 354432920 2006 2007 450.00 319.39 319389608 2005 2006 450.00 313.14 313142408 2004 2005 450.00 309.88 309875308 2003 2004 450.00 284.79 284791713

(8)

AMALGAMATION

In a milestone transaction in the Indian banking industry,

Times

Bank Limited

(another new private sector bank promoted by Bennett,

Coleman & Co./Times Group) was merged with HDFC Bank Ltd.,

effective

February 26, 2000

. As per the scheme of amalgamation

approved by the shareholders of both banks and the RBI,

shareholders of Times Bank received

1 share of HDFC Bank for

every 5.75 shares of Times Bank

. RBI, has approved the scheme of

amalgamation of

Centurian Bank of Punjab

with HDFC Bank with

effect from

23 May,2008

. As per the scheme of amalgamation,

shareholders of CBoP received

1 share of HDFC Bank for every 29

shares of CBoP

. The merger made HDFC Bank the seventh largest in

India in terms of assets.

(9)

HDFC Bank is headquartered in Mumbai. The Bank at

present has an enviable network of over

1416 branches

spread over 550 cities

across India. Customers in over 500

locations are also serviced through Telephone Banking. The

Bank also has a network of about over

3382 networked

ATMs

across these cities while it has just 1054 in 2006.

(10)

TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms

of IT and communication systems. All the bank's branches have

online connectivity, which enables the bank to offer speedy funds

transfer facilities to its customers. The Bank has made substantial

efforts and investments in acquiring the best technology available

internationally, to build the infrastructure for a world-class bank.

In terms of software, the

Corporate Banking business is supported

by Flex cube, while the Retail Banking business by Fin ware

,

both from i-flex Solutions Ltd. The system is open, scaleable and

web enabled.

(11)

Management- HR

Structure of HDFC

Bank

Mr. Jagdish Capoor

took over as the

bank's Chairman

in July 2001. Prior to this, Mr. Capoor was a Deputy

Governor of the Reserve Bank of India.

The Managing Director, Mr. Aditya Puri

, has been a

professional banker for over 25 years, and before

joining HDFC Bank in 1994 was heading Citibank's

operations in Malaysia.

(12)

Chairman Mr. Jagdish Capoor Managing Director Mr. Aditya Puri

Regional Head Mr. Govind Pandey

Zonal Head Mr. Vineet Arora

Cluster Head Mr. Amit Gagneja

Branch Manager Assistant Manager Relation Manager Mr. Sanjeev Jindal Mr. Vikas Chopra Mr. Manoj Mangla

(13)

(14)

Awards Given to HDFC Bank



Business Today-Monitor Group

survey One of India's "Most Innovative Companies" Financial Express-Ernst & Young

Award

Best Bank Award in the Private Sector category

Global HR Excellence Awards - Asia

Pacific HRM Congress: 'Employer Brand of the Year 2008 -2009' Award & First Runner up Business Today 'Best Bank' Award

Dun & Bradstreet – American

Express Corporate Best Bank Award 2008

'Corporate Best Bank' Award

Outlook Money & NDTV Profit Best Bank Award in the Private sector category

Asian Banker Our Managing Director Aditya Puri wins the Leadership Achievement Award for India

(15)

Business

The Bank operates in three segments:

Wholesale Banking Treasury Services Retail Banking HDFC BANK

(16)

LOANS

Majority of the people are under the burden of piled up debt, which

make them avail various loans just to consolidate their debt. By

seeing its sudden importance many financial institutions and firms

have started giving these loans on very affordable and nominal

rates.

Lenders first calculate the amt. you can borrow and that entirely

depends upon the salary, expenditure and saving you have.

Ones the loan is decided the next step is calculate the time frame,

which can usually range from 1 to 25 years. There are few points to

be kept in mind while availing the debt consolidation loan.



_{If possible consult any}

_{financial expert or broker}

_{for the exact}

information so that there is no problem in the future.

(17)

Contd…



Always choose the

best and top rated financial firm

for

getting the loan, as this will let you get the loan at very

affordable interest and amount.



Try to make

every installment on time

so that there is no

payment issue in the future. And also keep the track of all

the payments made by you so that there is no confusion in

the end.



Try to use the

advice of the people who have already availed

the loan

as they can guide you with their experiences.

Therefore the person must keep all these points in the mind in

order to get the full and fruitful usage of the loan amount.

Thus, if you are buried under the piled up debt then debt

consolidation loans are there for you to sail you out but opt

for the best and trusted policy and company.

(18)

(19)

(20)

(21)

(22)

(23)

(24)

(25)

(26)

(27)

(28)

(29)

PRE REQUISITES FOR

ALL LOANS

A) SUPPORTING ‘DOCUMENTS’ REQUIRED TAKING A LOAN

In Case Of Salaried Employees:

ID proof - Pan card /driving license / employee I-card / voter ID / passport.

Residence proof - Electricity bill / telephone bill / water bill / ration card.

Latest 3 Months Salary Slip with all deductions

Form no.16 for income tax return

Bank statement for the last six months

One photo self attested

In Case Self-employed:

ID proof- Pan card /driving license / employee I-card / voter ID / passport.

Residence proof- Electricity bill / telephone bill / water bill / ration card.

Financial statement of the business / profession along with copies of Individual

Tax Returns for the last three years certified by Chartered Accountant

Income tax return + computation not more than 2 years old.

Bank Statement not more than 6 months old.

(30)

(B)

ELIGIBILITY CRITERIA

In Case Of Salaried Employees:

Minimum age of Applicant: 21 years

Maximum age of Applicant at loan maturity: 60 years

Minimum employment: 1 year in current employment and minimum 2 years

of employment

Minimum Annual Income: Rs 100000 net annual income

Telephone: Must at residence

In Case Self-employed:

Minimum age of Applicant: 21 years

Maximum age of Applicant at loan maturity: 65 years

Minimum employment: At least 3 years in business

Minimum Annual Income: Rs.100000 per annum

Telephone: Must at residence

(31)

(C)

FILE MOVEMENT IN LOANS FOR

VERIFICATION

Documents collected from customer and sent to the credit agency File sent for login at CPA

File sent for Field Investigation (FI) for verification

Risk Intelligence & Control agency (RIC) checks the customer’s background Credit Appraisal Memo (CAM) is prepared

File reaches the credit manager for approval or rejection File again reaches bank for disbursal

Money given to customer

(32)

(33)

COMMON TERMS USED IN

COMPARATIVE

STATEMENTS

Rate Of

Interest-Rate Of Interest- Fixed rate of interest as the name suggests, is the rate that Fixed rate of interest as the name suggests, is the rate that remains fixed throughout the tenure of the loan. The rate does not normally

remains fixed throughout the tenure of the loan. The rate does not normally

change till the full repayment of the loan. Floating rate is the rate which

moves upward or downward depending upon the market forces.

Processing fees:

Processing fees: A Processing fees are stamp charges. It is charged on the A Processing fees are stamp charges. It is charged on the loan amount when the loan is sanctioned. It starts from 0.5 % and goes till

loan amount when the loan is sanctioned. It starts from 0.5 % and goes till

5%.

Penalty:

Penalty: Penalty is also known as pre closure charges. If the repayment of the Penalty is also known as pre closure charges. If the repayment of the loan is done before the tenure, then penalty charges are charged from the

loan is done before the tenure, then penalty charges are charged from the

customer of the outstanding loan.

Tenure:

Tenure: Tenure is the duration of time the loan is taken. Tenure is the duration of time the loan is taken.

Funding:

Funding: Funding means maximum percentage of loan to fund to the Funding means maximum percentage of loan to fund to the

customer. Generally a small amount of margin is kept with the bank, rest is

given to the customer.

Charges for late payment of EMI

Charges for late payment of EMI:: if the borrower does not pay the EMI at its if the borrower does not pay the EMI at its due date then he will charged with fines. This is generally according to the

due date then he will charged with fines. This is generally according to the

time for which the payment is delayed.

(34)

COMPARATIVE STATEMENT

OF HOME LOAN

PARTICULARS HDFC ICICI SBI SBOP R.O.I.(FIXED) 14.1% 15% 13.25% 13.75% FLOATING For salaried 8.75%<15 lacs 9.00%>15 lacs Self employed 9.00% 8.75%<20 lacs 9.25% upto 1 crore 9.75%>1 crore 8% 8% PROCESSING

(35)

Contd…

PENALTY 2% p.m. on the o/s

amount upto 4 years & 4 years its nil

2% p.m. on the o/s amount 2% p.m. on the o/s amount 2% p.m. on the o/s amount

TENURE 20 years 20 years 10 years 10 years

CBC 100 225 225 225

FUNDING 85% 80% 80% 80%

MIN. AGE 18 21 21 21

(36)

COMPARATIVE STATEMENT

OF PERSONAL LOAN

PARTICULARS HDFC ICICI SBI SBOP R.O.I.(FIXED) 12.5% N.A. No Fixed 13.75%

FLOATING 14% N.A. 13.5% 13%

PROCESSING FEES

(37)

Contd…

PENALTY 2% p.m. on the o/s amount 2% p.m. on the o/s amount 2% p.m. on the o/s amount 2% p.m. on the o/s amount

CBC 450 400 225 225

FUNDING 85% N.A. No Fixed No Fixed

MIN. AGE 21 25 21 21

(38)

COMPARATIVE STATEMENT

OF AUTO LOAN

PARTICULARS HDFC ICICI SBI SBOP R.O.I.(FIXED) 10.5% N.A. 11.75% 11.25%

FLOATING 10.5% N.A. For 1 year

8% Above 1 year 10% 10.25% PROCESSING

FEES <2 lacs-2000_{2-4 lacs-3000}

>4 lacs-3500

<2.5 lacs-2500 2.5-5 lacs-3100 5-10 lacs-4000

(39)

Contd…

TENURE 3-5 years 5 years 7 years 7 years

CBC 450 400 225 225

FUNDING 90% 90% 85% 90%

MIN. AGE 21 21 21 21

(40)

COMPARATIVE STATEMENT

OF TWO WHEELER LOAN

PARTICULARS HDFC ICICI SBI SBOP

R.O.I.(FIXED) 12.75% N.A. No Fixed 14%

FLOATING 14% N.A. 15.5% 13.25%

PROCESSING

(41)

Contd…

PENALTY 3% p.m. on the o/s amount N.A. 2% p.m. on the o/s amount 2% p.m. on the o/s amount

TENURE 4 years N.A. 7 years 7 years

CBC 450 N.A. 225 225

FUNDING 85% N.A. 85% 85%

MIN. AGE 18 N.A. 21 21

(42)

COMPARATIVE STATEMENT

OF LOAN AGAINST PROPERTY

PARTICULARS HDFC ICICI SBI SBOP

R.O.I.(FIXED) 15% 14.75% No Fixed No Fixed

FLOATING 13.5% 13.5% 13.5% 13.25%

PROCESSING

(43)

Contd…

CBC 450 400 225 225

FUNDING 45-65% 65% No Fixed No Fixed

MIN. AGE 21 21 21 21

(44)

CUSTOMER

SATISFACTION SURVEY

In the study, a random sample of only existing customers of the

HDFC Bank was taken. The customers studied under this survey

were mostly walk-in customers. Proper care was taken to

approach those customers who could easily fill up the

questionnaire and were rational in their response. But there

could be some errors in the analysis, which could have crept into

due to lazy respondents, human errors and other factors.

Sampling procedure

convenience sampling

Sample size

100

100 Sample extent

(45)

Occupation of respondents

salaried

4 7 %

retired

8 %

self em p lo yed

3 5 %

stu den t

1 0 %

Maximum numbers of customer i.e. 47% belong to

salaried class, 35% of the customers are self- employed, 08% of the customer are retired and 10% are students.

(46)

Types of Loan

au to lo an

3 4 %

p erso n al lo an

_{2 2 %}

ho m e lo an

2 4 %

tw o w heeler

lo an

1 2 %

lo an ag ain st

pro perty

8 %

34% customers are of Auto Loans, 24% are of Home loans, 22% are of personal loan, 12% are of Two Wheeler loans

(47)

Bank from which loan service is

being availed

ICICI 13% SBI 16% SBOP 12% AXIS 10% IDBI 8% HSBC 7% OTHERS 12% HDFC_22%

22% have taken the loan from HDFC Bank,13% from ICICI,16% from SBI,12% from SBOP,10% from AXIS,8% from IDBI,7% from HSBC and 12% from others.

(48)

Based on the customers

experience would you like to

prefer this bank in future

probably not 2% definitely would 68% probably would 30%

Majority of the HDFC Bank loan holders i.e. 68% say that they would definitely select this bank again in future for further services. 30% of

(49)

Bank is quick in documentation

process

As far as documentation process is concerned, 61% of the

respondents has positive feedback i.e. bank is quick in process as compare to 5% of respondents who has negative feedback.

(50)

Bank shows promptness in

disbursements

This chart indicates that 61% of the respondents have a view that bank shows promptness in disbursement as compare to the very few respondents who has mixed kind of response

(51)

Bank has convenient banking

hours

Here the view is different; the response was quite mixed up as only 8% strongly agreed with it while 28% moderately disagreed with it.

(52)

Bank is transparent in all the

dealings and details are

communicated properly

Above chart shows that around 54% of the respondents agree with the statement where as 30% of the respondents have no stand

(53)

SUGGESTIONS

 _{During the survey, it was found that the customer had to wait too long for the}_{During the survey, it was found that the customer had to wait too long for the}

loans to get disbursed.

loans to get disbursed. The processing time is too long.The processing time is too long. Customer had to wait for Customer had to wait for their loan processing done by the staff. Efforts should be made to reduce it

their loan processing done by the staff. Efforts should be made to reduce it

 _{It was found out that there is lot of formalities in the loan disbursement process.}_{It was found out that there is lot of formalities in the loan disbursement process.}

Too much documentation is done. Customer is not aware of all the formalities to

be done which he is asked to do. Reading loan agreement at the time of taking

loan is time consuming. Therefore

loan is time consuming. Therefore paper work should be more friendly and clear.paper work should be more friendly and clear.

 _{After sales service is not up to the mark. Customers facing problems are not}_{After sales service is not up to the mark. Customers facing problems are not}

attended on time. Staff is generally co-operative only at the time of loan is

sanctioned and disbursed. Therefore

sanctioned and disbursed. Therefore after sales service should be improvedafter sales service should be improved up to up to satisfaction level of the customer.

satisfaction level of the customer.

 _{Customers should be given proper information about EMI.}_{Customers should be given proper information about EMI.}_{They are generally}_{They are generally}

not told how their EMI are calculated. They should know its calculation and its

amount.

 _{Public dealing hours should be increased to some later time period}_{Public dealing hours should be increased to some later time period}_because_because

majority of the customers were found out to be salaried in the survey.

 _{Website of HDFC Bank should be up dated}_{Website of HDFC Bank should be up dated}_{and should give more options and}_{and should give more options and}

features to customers so that they can get maximum information sitting at home

features to customers so that they can get maximum information sitting at home..

 _{Bank should make efforts to}_{Bank should make efforts to}_{attract more and more customers}_{attract more and more customers}_{through increased}_{through increased}

advertisement.

(54)

LIMITATIONS OF THE

STUDY

While working on the project following limitations and

constraints were found.

 _{As the study was done within a branch of HDFC Bank it}_{As the study was done within a branch of HDFC Bank it}

did not cover the broad spectrum of customers.did not cover the broad spectrum of customers.

 _{Lack of expertise being a trainee in analyzing data.}_{Lack of expertise being a trainee in analyzing data.}

_{The sample size had to be contained 100 respondents}_{The sample size had to be contained 100 respondents}

due to constraints on time.

_{Some respondents were not co-operative, did not}_{Some respondents were not co-operative, did not}

respond to the questionnaires very well.

_{Some respondents gave biased information so as to}_{Some respondents gave biased information so as to}

promote their Bank in which they are dealing.

(55)

QUESTIONNAIRE

(Customer Survey)

NAME:__________________ AGE:__________________

ADDRESS:___________________________________ SEX: Male / Female

 _{What is your annual income?}

a) Below 1 lac c) 2-3 lac

b) 1-2 lac d) above 3 lac

 _{What is your occupation ?}

a) Salaried c) Retired

b) Self-Employed

 _{What kind of loan you have taken?}

a) Home loan c) Auto loan

b) Personal loan d) Two wheeler loan

(56)

 _{What is the:}

Amount of loan: ________________

Tenure: _______________________ From which bank you have taken?

 _{Since when}

a) Less than 2 years b) Less than 5 years

c) More than 5 years

 Based on your experience, would you select this bank for any service again in future?

a) Definitely would c) Probably not

b) Probably would d) Definitely not

Please rate how would you compare the following attributes for customer convienence.

Given below are set of statements kindly give your

choice:-1 2 3 4 5 Strongly disagree Moderately disagree Neither agree or disagree Moderately agree Strongly agree

(57)

 Bank has modern buildings and up to date 1 2 3 4 5

infrastructure

 Bank is located at a convenient location 1 2 3 4 5

and has proper parking space

 Average transaction time involved in 1 2 3 4 5

transactions is acceptable

 Employees have caring attitude towards 1 2 3 4 5

their customers

 My bondage with banker is very strong 1 2 3 4 5  Bank is technology driven 1 2 3 4 5

 Bank understands specific needs of 1 2 3 4 5

customers and give individual attention

 Customers have access to bank management 1 2 3 4 5

in case of some serious problem

 Employees are courteous and show 1 2 3 4 5

(58)

 Bank is transparent in all the dealings 1 2 3 4 5

and details are communicated properly

 Bank has convenient banking hours 1 2 3 4 5

 Bank is quick and efficient in transfer 1 2 3 4 5

of funds

 Bank have foolproof security 1 2 3 4 5

arrangements to ensure safety

 Bank has an adequate branch network 1 2 3 4 5

 Bank has an adequate skilled and trained 1 2 3 4 5

Employees

 Bank shows promptness in disbursement 1 2 3 4 5

 Bank is quick in documentation process 1 2 3 4 5

(59)

 Additional staff and counters are deployed 1 2 3 4 5

during peak hours

 Bank has proper seating 1 2 3 4 5 arrangement

_{Any suggestions for improvement}

______________________________________ ______________________________________ ______________________________________

(60)

BIBLIOGRAPHY

 http://www.hdfcbaknk.com/personal/loans/auto_loans.htm  http://www.hdfcbaknk.com/personal/loans/personal_loans.htm  http://www.hdfcbaknk.com/personal/loans/home_loans.htm  http://www.hdfcbaknk.com/personal/loans/twowheeler_loans.htm  http://www.hdfcbaknk.com/personal/loans/loanagainstproperty.htm  http://www.icicibank.com  http://www.statebankofindia.com  http://www.statebankofpatiala.com

(61)

project on hdfc loans

Presented To:

Dr. Manjit Singh

Presented By:

Pallavi Agarwal

MFC- II

Roll No.- 512

Contents

OBJECTIVES OF

OBJECTIVES OF

THE STUDY

THE STUDY

RESEARCH METHODOLOGY

COMPANY PROFILE

COMPANY PROFILE

The

The

HDFC Bank Ltd.

HDFC Bank Ltd.

(BSE: 500180, NYSE:

(BSE: 500180, NYSE:

HDB)

HDB)

is a commercial bank of India, incorporated

is a commercial bank of India, incorporated

on

on

30

30

August 1994

August 1994

in the name of ‘HDFC Bank

in the name of ‘HDFC Bank

Limited’, with its registered office in Mumbai, India ,

Limited’, with its registered office in Mumbai, India ,

after the Reserve Bank of India allowed establishing

after the Reserve Bank of India allowed establishing

private sector banks. HDFC Bank commenced

private sector banks. HDFC Bank commenced

operations as a Scheduled Commercial Bank on

operations as a Scheduled Commercial Bank on

16th

16th

January 1995

January 1995

.

.

The Bank was promoted by the

The Bank was promoted by the

Housing Development Finance Corporation, a

Housing Development Finance Corporation, a

premier housing finance company (set up in 1977) of

premier housing finance company (set up in 1977) of

India.

BUSINESS

BUSINESS

MISSION

MISSION

HDFC Bank's mission is to be a World-Class Indian

HDFC Bank's mission is to be a World-Class Indian

Bank. The objective is to build sound customer franchises

Bank. The objective is to build sound customer franchises

across distinct businesses so as to be the

across distinct businesses so as to be the

preferred

preferred

provider of banking services

provider of banking services

for target retail and

for target retail and

wholesale customer segments. HDFC Bank's business

wholesale customer segments. HDFC Bank's business

philosophy is based on

philosophy is based on

four core values

four core values

- Operational

- Operational

Excellence, Customer Focus, Product Leadership and

Excellence, Customer Focus, Product Leadership and

_{(BSE: 500180, NYSE:}

_{August 1994}

_{in the name of ‘HDFC Bank}