project on hdfc loans

Presented To: Dr. Manjit Singh

Presented By: Pallavi Agarwal MFC- II Roll No.- 512

Contents                 

Objectives of the study Research methodology Company profile Business mission Capital structure Amalgamation Distribution Technology Management Business Loans Pre-requisites for loan Comparison of loans Customer satisfaction survey Suggestions Limitations Questionnaire

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.

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

SUGGESTIONS

TOOLS USED Comparative Study Analysis Statistical tools like pie charts & tables

COMPANY PROFILE The HDFC Bank Ltd. (BSE: 500180, NYSE: HDB) is a commercial bank of India, incorporated on 30th August 1994 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.

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.

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

Authorized

Issued Paid up

Paid up shares

year

capital

capital

(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

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.

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.

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.

ManagementStructure of Bank

HR HDFC

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.

Mr. Jagdish Capoor

Chairman Managing Director

Mr. Aditya Puri

Regional Head

Mr. Govind Pandey

Zonal Head

Mr. Vineet Arora

Cluster Head

Mr. Amit Gagneja

Branch Manager

Mr. Sanjeev Jindal

Assistant Manager

Mr. Vikas Chopra

Relation Manager

Mr. Manoj Mangla

Personal Banker, Teller, Co.-ex

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

'Best Bank' Award

Dun & Bradstreet – American 'Corporate Best Bank' Award Express Corporate Best Bank Award 2008 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

The Asian Banker Excellence in Retail Financial Services Awards

Best Retail Bank in India

Business The Bank operates in three segments:

Retail Banking

HDFC BANK Wholesale Banking

Treasury Services

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.

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.

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.

(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

(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 File finally reaches Mumbai (Head Office)

COMMON TERMS USED IN COMPARATIVE STATEMENTS

Rate Of Interest- 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 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: 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 5%. Penalty: 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 customer of the outstanding loan. Tenure: Tenure is the duration of time the loan is taken. Funding: 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: if the borrower does not pay the EMI at its due date then he will charged with fines. This is generally according to the time for which the payment is delayed.

COMPARATIVE STATEMENT OF HOME LOAN

PARTICULARS HDFC

ICICI

SBI

SBOP

R.O.I.(FIXED)

14.1%

15%

13.25%

13.75%

FLOATING

8.75%1 crore 9.00%

PROCESSING FEES

0.5%+service 0.5%+service tax tax

8%

NIL

8%

1%

Contd… PENALTY 2% p.m. on

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

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

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

20 years

20 years

10 years

10 years

CBC

100

225

225

225

FUNDING

85%

80%

80%

80%

MIN. AGE

18

21

21

21

MAX. AGE

65

65

70

65

the o/s amount upto 4 years & 4 years its nil TENURE

COMPARATIVE STATEMENT OF PERSONAL LOAN PARTICULARS HDFC R.O.I.(FIXED)

FLOATING

PROCESSING FEES

ICICI

SBI

SBOP

12.5%

N.A.

No Fixed

13.75%

14%

N.A.

13.5%

13%

2.25%

2.5%

0.5%

1%

Contd… PENALTY

TENURE

2% p.m. on the o/s amount 5 years

2% p.m. on the o/s amount 4 years

CBC

450

400

FUNDING

85%

N.A.

MIN. AGE

21

25

MAX. AGE

65

58

2% p.m. on the o/s amount 5 years 225 No Fixed

2% p.m. on the o/s amount 5 years 225 No Fixed

21

21

65

65

COMPARATIVE STATEMENT OF AUTO LOAN PARTICULARS HDFC

ICICI

R.O.I.(FIXED)

10.5%

N.A.

FLOATING

10.5%

N.A.

SBI

SBOP

11.75% For

1 year

11.25% 10.25%

8% Above 1 year 10% PROCESSING FEES

10 lacs-5000

Nil

0.5%

Contd… PENALTY

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

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

TENURE

3-5 years

5 years

CBC

450

400

FUNDING

90%

90%

MIN. AGE

21

21

MAX. AGE

65

65

2% p.m. on the o/s amount 7 years

2% p.m. on the o/s amount 7 years

225

225

85%

90%

21

21

65

65

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%

2%

N.A.

Nil

PROCESSING FEES

1%

Contd… PENALTY

3% p.m. on the o/s amount

N.A.

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

TENURE

4 years

N.A.

CBC

450

N.A.

225

225

FUNDING

85%

N.A.

85%

85%

MIN. AGE

18

N.A.

21

21

MAX. AGE

65

N.A.

65

65

7 years

2% p.m. on the o/s amount 7 years

COMPARATIVE STATEMENT OF LOAN AGAINST PROPERTY PARTICULARS HDFC

ICICI

SBI

SBOP

R.O.I.(FIXED)

15%

14.75%

No Fixed

FLOATING

13.5%

13.5%

13.5%

13.25%

1%

1%

1%

1%

PROCESSING FEES

No Fixed

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

TENURE

15 years

20 years

10 years

10 years

225

225

CBC

450

400

FUNDING

45-65%

65%

MIN. AGE

21

21

21

21

MAX. AGE

65

65

65

65

No Fixed

No Fixed

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 Sample extent Allahabad city

Occupation of respondents stu de n t

re t ire d 8% se lf e m p lo y e d

10% sa la rie d 47%

35%

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.

Types Loan lo a n a g a in of st tw o w he e le r lo a n

p ro p e rtyh o m e lo a n 8% 24%

12% a u to lo a n 34%

p e rso n a l lo a n 22%

34% customers are of Auto Loans, 24% are of Home loans, 22% are of personal loan, 12% are of Two Wheeler loans and 8% are of loan against property.

Bank from which loan service is being availed HSBC

7%

OTHERS

HDFC

12%

22%

IDBI

8% AXIS

10%

ICICI

13% SBOP

12%

SBI

16%

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.

Based on the customers experience would you like to prefer this bank in future probably

probably would

not 2%

30% definitely would 68%

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 the customers say they would Probably select this bank again, while 2% say they would probably not select this bank again.

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.

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

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.

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 about the statement and nearly 4% of the respondents disagree with the statement.

SUGGESTIONS  During the survey, it was found that the customer had to wait too long for the loans to get disbursed. The processing time is too long. Customer had to wait for 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. 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 paper work should be more friendly and clear.  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 after sales service should be improved up to satisfaction level of the customer.  Customers should be given proper information about EMI. 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 because majority of the customers were found out to be salaried in the survey.  Website of HDFC Bank should be up dated and should give more options and features to customers so that they can get maximum information sitting at home.  Bank should make efforts to attract more and more customers through increased advertisement.

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 did not cover the broad spectrum of customers.  Lack of expertise being a trainee in analyzing data.  The sample size had to be contained 100 respondents due to constraints on time.  Some respondents were not co-operative, did not respond to the questionnaires very well.  Some respondents gave biased information so as to promote their Bank in which they are dealing.

QUESTIONNAIRE

(Customer Survey) NAME:__________________ AGE:__________________ ADDRESS:___________________________________ SEX: Male / Female What is your annual income?

 a) b)

Below 1 lac 1-2 lac

What is your occupation ?

 a) b)



c) 2-3 lac d) above 3 lac

Salaried Self-Employed

c) Retired

What kind of loan you have taken? a) b) e)

Home loan c) Auto loan Personal loan d) Two wheeler loan If any other, specify ____________

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

Strongly disagree

Moderately disagree

Neither agree Moderately or disagree agree

5 Strongly agree



Bank has modern buildings and up to date infrastructure

1

2

3

5

Bank is located at a convenient location and has proper parking space

1

2

3



Average transaction time involved in transactions is acceptable

1

2

3



Employees have caring attitude towards their customers

1

2

3



My bondage with banker is very strong Bank is technology driven

1 1

2 2

3 3

4 4

5 5



Bank understands specific needs of customers and give individual attention

1

2

3

4

5



Customers have access to bank management in case of some serious problem

1

2

3

4

5



Employees are courteous and show willingness to help client

1

2

3

4

5





4

4

5

4

5

4

5



Bank is transparent in all the dealings and details are communicated properly

1

2

3

4

5



Bank has convenient banking hours

1

2

3

4

5



Bank is quick and efficient in transfer

1

2

3

4

5

1

2

3

4

5

Bank has an adequate branch network

1

2

3

4

5



Bank has an adequate skilled and trained Employees

1

2

3

4

5



Bank shows promptness in disbursement

1

2

3

4

5



Bank is quick in documentation process

1

2

3

4

5



Transaction cost involved is acceptable

1

2

3

4

5

of funds 

Bank have foolproof security arrangements to ensure safety



as compared to other banks



Additional staff and counters are deployed

1

2

1

2

3

4

5

4

5

during peak hours 

Bank has proper seating arrangement

 Any suggestions for improvement ______________________________________ ______________________________________ ______________________________________ Thank you.

3

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 Various pamphlets and brochures of HDFC bank